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Future Policy Benefits
 3 Months Ended
Mar. 31, 2023
Insurance [Abstract]  
Future Policy Benefits Future Policy Benefits
The following table summarizes balances and changes in the present value of expected net premiums and the present value of the expected FPB for nonparticipating traditional contracts:
March 31, 2023December 31, 2022December 31, 2021
Expected net premiums(Dollars in millions)
Balance, beginning of year$797 $1,020 $1,152 
Beginning balance of original discount rate974 1,045 1,131 
     Effect of actual variances from expected experience3 33 25 
Balance adjusted for variances from expectation977 1,078 1,156 
     Interest accrual5 20 22 
     Net premiums collected(30)(124)(133)
Ending Balance at original discount rate952 974 1,045 
     Effect of changes in discount rate assumptions(158)(177)(25)
Balance, end of year$794 $797 $1,020 
Expected FPB
Balance, beginning of year$2,151 $2,772 $3,105 
Beginning balance of original discount rate2,665 2,806 2,995 
     Effect of actual variances from expected experience(7)13 (14)
Balance adjusted for variances from expectation2,658 $2,819 $2,981 
     Interest accrual14 59 62 
     Benefits payments(48)(213)(237)
Ending Balance at original discount rate2,624 $2,665 $2,806 
     Effect of changes in discount rate assumptions(448)(514)(34)
Balance, end of year$2,176 $2,151 $2,772 
Net liability for future policy benefits$1,382 $1,354 $1,752 
Less: Reinsurance recoverable510 515 670 
Net liability for future policy benefits, after reinsurance recoverable$872 $839 $1,082 
Weighted-average duration of liability for future policyholder benefits (years)7.537.588.54
The following tables summarize balances and changes in the present value of the expected FPB for limited-payment contracts:
March 31, 2023
Immediate annuitiesPRT
(Dollars in millions)
Balance, beginning of year$1,429 $2,165 
Beginning balance of original discount rate1,858 2,475 
     Effect of changes in cash flow assumptions— (1)
     Effect of actual variances from expected experience(7)(3)
Balance adjusted for variances from expectation1,851 2,471 
     Issuances5 268 
     Interest accrual16 23 
     Benefits payments(31)(55)
Ending Balance at original discount rate1,841 2,707 
     Effect of changes in discount rate assumptions(389)(251)
Balance, end of year$1,452 $2,456 
Net liability for future policy benefits$1,452 $2,456 
Less: Reinsurance recoverable204 — 
Net liability for future policy benefits, after reinsurance recoverable$1,248 $2,456 
Weighted-average duration of liability for future policyholder benefits (years)12.188.07

December 31, 2022
Immediate annuitiesPRT
(Dollars in millions)
Balance, beginning of year$1,954 $1,148 
Beginning balance of original discount rate1,935 1,151 
     Effect of changes in cash flow assumptions— (20)
     Effect of actual variances from expected experience(26)2 
Balance adjusted for variances from expectation$1,909 $1,133 
     Issuances26 1,418 
     Interest accrual60 50 
     Benefits payments(137)(126)
Ending Balance at original discount rate$1,858 $2,475 
     Effect of changes in discount rate assumptions(429)(310)
Balance, end of year$1,429 $2,165 
Net liability for future policy benefits$1,429 $2,165 
Less: Reinsurance recoverable218 — 
Net liability for future policy benefits, after reinsurance recoverable$1,211 $2,165 
Weighted-average duration of liability for future policyholder benefits (years)11.768.09
December 31, 2021
Immediate annuitiesPRT
(Dollars in millions)
Balance, beginning of year$2,153 $— 
Beginning balance of original discount rate2,040 — 
     Effect of actual variances from expected experience(47)— 
Balance adjusted for variances from expectation$1,993 $— 
     Issuances18 1,155 
     Interest accrual60 2 
     Benefits payments(136)(6)
Ending Balance at original discount rate$1,935 $1,151 
     Effect of changes in discount rate assumptions19 (3)
Balance, end of year$1,954 $1,148 
Net liability for future policy benefits$1,954 $1,148 
Less: Reinsurance recoverable293 — 
Net liability for future policy benefits, after reinsurance recoverable$1,661 $1,148 
Weighted-average duration of liability for future policyholder benefits (years)13.618.75
The following tables summarize balances and changes in the liability for DPL for limited-payment contracts:
March 31, 2023December 31, 2022December 31, 2021
Immediate annuitiesPRTImmediate annuitiesPRTImmediate annuitiesPRT
(In millions)
Balance, beginning of year$69 $4 $57 $7 $22 $— 
Effect of modeling changes4 — — — — — 
Effect of changes in cash flow assumptions— — — (2)— — 
Effect of actual variances from expected experience4 — 16 — 39 — 
Balance adjusted for variances from expectation77 4 73 5 61 — 
     Issuances1 — 1 — $— $7 
     Interest accrual1 — 2 — 2 — 
     Amortization(2)— (7)(1)(6)— 
Balance, end of year$77 $4 $69 $4 $57 $7 
The following table reconciles the net FPB to the FPB in the unaudited Condensed Consolidated Balance Sheets. The DPL for Immediate Annuities and PRT is presented together with the FPB in the unaudited Condensed Consolidated Balance Sheets and has been included as a reconciling item in the table below:
March 31, 2023December 31, 2022December 31, 2021
(In millions)
Traditional Life$1,382 $1,354 $1,752 
Immediate annuities 1,452 1,429 1,954 
PRT2,456 2,165 1,148 
Immediate annuities DPL77 69 57 
PRT DPL4 4 7 
Total$5,371 $5,021 $4,918 
The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for nonparticipating traditional and limited-payment contracts:
UndiscountedDiscounted
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Traditional Life(In millions)
Expected future benefit payments$3,073 $3,265 $2,155 $2,734 
Expected future gross premiums1,142 1,289 839 1,129 
Immediate annuities
Expected future benefit payments$3,402 $3,545 $1,452 $1,923 
Expected future gross premiums— — — — 
PRT
Expected future benefit payments$3,916 $2,289 $2,708 $1,665 
Expected future gross premiums— — — — 
The following table summarizes the amount of revenue and interest related to nonparticipating traditional and limited-payment contracts recognized in the unaudited Condensed Consolidated Statements of Operations:
Gross Premiums (a)Interest Expense (b)
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
(In millions)
Traditional Life$32 $36 $9 $10 
Immediate annuities6 7 16 15 
PRT263 525 23 7 
Total$301 $568 $48 $32 
(a) Included in Life insurance premiums and other fees on the Condensed Consolidated Statements of Operations.
(b Included in Benefits and other changes in policy reserves (Remeasurement gains (losses) (a)) on the Condensed Consolidated Statements of Operations.
The following table presents the weighted-average interest rate:
March 31, 2023December 31, 2022December 31, 2021
Traditional Life
Interest accretion rate2.33 %2.32 %2.29 %
Current discount rate4.96 %5.37 %2.41 %
Immediate annuities
Interest accretion rate3.11 %3.07 %3.04 %
Current discount rate5.02 %5.21 %3.07 %
PRT
Interest accretion rate3.82 %3.20 %1.20 %
Current discount rate5.08 %5.40 %2.79 %
The following tables summarize the actual experience and expected experience for mortality and lapses of the FPB:
March 31, 2023
Traditional LifeImmediate annuities PRT
Mortality
Actual experience1.4 %3.2 %2.7 %
Expected experience1.4 %1.7 %2.1 %
Lapses
Actual experience0.1 %— %— %
Expected experience0.2 %— %— %
December 31, 2022
Traditional LifeImmediate annuities PRT
Mortality
Actual experience1.5 %3.0 %1.9 %
Expected experience1.3 %1.9 %2.5 %
Lapses
Actual experience— %— %— %
Expected experience0.3 %— %— %
December 31, 2021
Traditional LifeImmediate annuities PRT
Mortality
Actual experience1.7 %4.2 %— %
Expected experience1.3 %2.0 %— %
Lapses
Actual experience0.1 %— %— %
Expected experience0.3 %— %— %
The following table provides additional information for periods in which a cohort has an NPR > 100% (and; therefore, capped at 100%) (dollars in millions):
March 31, 2023December 31, 2022
Cohort XDescriptionCohort XDescription
Net Premium Ratio before capping101 %Term with ROP Non-NY Cohort100 %Term with ROP Non-NY Cohort
Reserves before NP Ratio capping$1,208 Term with ROP Non-NY Cohort$1,172 Term with ROP Non-NY Cohort
Reserves after NP Ratio capping$1,211 Term with ROP Non-NY Cohort$1,173 Term with ROP Non-NY Cohort
Loss Expense$2 Term with ROP Non-NY Cohort$— Term with ROP Non-NY Cohort
F&G realized actual-to-expected experience variances and made changes to assumptions during the three months ended March 31, 2023 and the year ended December 31, 2022 as follows:
Traditional life
Significant assumption inputs to the calculation of the FPB for traditional life include mortality, lapses (including lapses due to nonpayment of premium and surrenders for cash surrender value), and discount rates (both accretion and current). We review the cash flow assumptions annually, typically in the third quarter. Market data that underlies current discount rates was updated in the first quarter of 2023 from that utilized in 2022 resulting in decreased discount rates that drove a material increase to the FPB.
In 2022, F&G similarly undertook a review in the third quarter of the significant cash flow assumptions and did not make any changes to mortality or lapses.
Market data that underlies current discount rates was updated from 2021 and increased significantly year-over-year, resulting in a material decrease to the FPB. Impacts to expected net premiums and expected future policy benefits due to discount rate changes in 2022 can be observed in the FPB roll forward tables at December 31, 2022.
Immediate annuities (life contingent)
Significant assumption inputs to the calculation of the FPB for immediate annuities (life contingent) include mortality and discount rates (both accretion and current). We review the cash flow assumptions annually, typically in the third quarter. Market data that underlies current discount rates was updated in the first quarter of 2023 from that utilized in 2022, resulting in decreased discount rates that drove a material increase to the FPB.
In 2022, F&G similarly undertook a review of the significant cash flow assumptions and did not make any changes to mortality. Market data that underlies current discount rates was updated from 2021 and increased significantly year-over-year, resulting in a material decrease to the FPB. Impacts to expected future policy
benefits due to assumption changes in 2022 can be observed in the FPB roll forward tables at December 31, 2022.
PRT (life contingent)
Significant assumption inputs to the calculation of the FPB for PRT (life contingent) include mortality and discount rates (both accretion and current). We review the cash flow assumptions annually, typically in the third quarter. Market data that underlies current discount rates was updated in the first quarter of 2023 from 2022 resulting in decreased discount rates that drove a material increase to the FPB.
In 2022, F&G similarly undertook a review of the significant cash flow assumption and did not make any changes to mortality. Market data that underlies current discount rates was updated from 2021 and increased significantly year-over-year, resulting in a material decrease to the FPB. Impacts to expected future policy benefits due to assumption changes in 2022 can be observed in the FPB roll forward tables at December 31, 2022.
Premium deficiency testing
F&G conducts annual premium deficiency testing for its long-duration contracts except for the FPB for nonparticipating traditional and limited-payment contracts. F&G also conducts annual premium deficiency testing for the VOBA of all long-duration contracts. Premium deficiency testing is performed by reviewing assumptions used to calculate the insurance liabilities and determining whether the sum of the existing contract liabilities and the present value of future gross premiums is sufficient to cover the present value of future benefits to be paid to or on behalf of policyholders and settlement costs and recover unamortized present value of future profits. Anticipated investment income, based on F&G’s experience, is considered when performing premium deficiency testing for long-duration contracts. During 2023 and 2022, F&G was not required to establish any additional liabilities as a result of premium deficiency testing.