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Transition (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Changes and Error Corrections [Abstract]

Summary of Changes in FPB, VOBA, DAC, DSI, URL and MRB

Impacts of adoption of ASU 2018-12 on Financial Statements

The following tables summarize the impacts of the adoption of ASU 2018-12 on our accompanying unaudited Condensed Consolidated Balance Sheet and unaudited Condensed Consolidated Statement of Operations.

Condensed Consolidated Balance Sheet

			December 31, 2022
			As Previously Reported						Adjustments						As adjusted
									(Unaudited)						(Unaudited)
			(In millions)
ASSETS
Reinsurance recoverable, net of allowance for credit losses			$	5,588					$	(170)					$	5,418
Goodwill			4,642						(7)						4,635
Prepaid expenses and other assets			2,231						(163)						2,068
Market risk benefits asset			—						117						117
Other intangible assets, net			4,034						(223)						3,811
Total assets			$	16,495					$	(446)					$	16,049
LIABILITIES AND EQUITY
Liabilities:
Contractholder funds			$	41,233					$	(390)					$	40,843
Future policy benefits			5,923						(902)						5,021
Accounts payable and accrued liabilities			2,352						(26)						2,326
Market risk benefits liability			—						282						282
Total liabilities			$	49,508					$	(1,036)					$	48,472
Equity:
Additional paid-in capital			$	5,876					$	(6)					$	5,870
Retained earnings			4,714						511						5,225
Accumulated other comprehensive (loss) earnings			(2,862)						(8)						(2,870)
Non-controlling interests			360						93						453
Total equity			$	8,088					$	590					$	8,678

Condensed Consolidated Statement of Operations

			Three months ended March 31, 2022
			As Previously Reported						Adjustments						As adjusted
			(Unaudited)
Revenues:			(In millions)
Escrow, title-related and other fees			$	1,290					$	2					$	1,292
Expenses:
Benefits and other changes in policy reserves			$	208					$	(5)					$	203
Market risk benefit losses			—						70						70
Depreciation and amortization			182						(67)						115
Income tax expense			155						1						156
Net earnings attributable to Fidelity National Financial, Inc. common shareholders			$	397					$	3					$	400
Earnings per share
Basic
Net earnings per share attributable to common shareholders, basic			$	1.41					$	0.01					$	1.42
Diluted
Net earnings per share attributable to common shareholders, diluted			$	1.40					$	0.01					$	1.41

The following table summarizes the balance of and changes in the FPB on January 1, 2021 due to adoption of ASU 2018-12:

			Immediate annuities						Traditional Life						Total (3)
			(In millions)
Balance, December 31, 2020			$	1,861					$	2,144					$	4,005
Cumulative effect of retrospective adoption (1)			201						(279)						(78)
Effect of remeasurement of liability at current discount rate (2)			113						88						201
Balance, January 1, 2021			$	2,175					$	1,953					$	4,128
Less: Reinsurance Recoverable			322						793						1,115
Balance, January 1, 2021, net of reinsurance			$	1,853					$	1,160					$	3,013
(1) Adjustments for the cumulative effect of adoption of the new measurement guidance under the full retrospective method for contract issue years from the FNF Acquisition Date through December 31, 2020, net of the effects of any change in the DPL.
(2) The remeasurement of the liability at the current discount rate is reflected as an adjustment to opening AOCI upon the adoption of ASU 2018-12.
(3) PRT was not written as of the transition date, January 1, 2021, and as a result is not presented in the transition adjustment roll forward.

The following table summarizes the balance of and changes in VOBA on January 1, 2021 due to adoption of ASU 2018-12:

			FIA						Fixed rate annuities						Immediate annuities						Universal Life						Traditional Life						Total
			(In millions)
Balance, December 31, 2020			$	1,208					$	15					$	86					$	139					$	18					$	1,466
Adjustment for reversal of AOCI adjustments (1)			208						24						—						29						22						283
Cumulative effect of retrospective adoption (2)			(14)						7						(5)						(9)						(1)						(22)
Transition opening balance adjustment			69						2						144						5						43						263
Balance, January 1, 2021			$	1,471					$	48					$	225					$	164					$	82					$	1,990
(1) Prior period "shadow" adjustments in AOCI have been reversed upon the adoption of ASU 2018-12 from opening AOCI.
(2) Adjustments for the cumulative effect of adoption of the simplified amortization methodology under the full retrospective method for contract issue years from the FNF acquisition date through December 31, 2020
(3) Adjustments for the change in VOBA due to the full retrospective adjustment of carrying amounts of acquired contracts as of the FNF Acquisition Date due to the adoption of ASU 2018-12.

The following table summarizes the balance of and changes in DAC on January 1, 2021 due to adoption of ASU 2018-12:

			FIA						Fixed rate annuities						Universal Life						Total
			(In millions)
Balance, December 31, 2020			$	167					$	14					$	41					$	222
Adjustment for reversal of AOCI adjustments (1)			15						2						8						25
Cumulative effect of retrospective adoption (2)			(1)						—						(1)						(2)
Balance, January 1, 2021			$	181					$	16					$	48					$	245
(1) Prior period "shadow" adjustments in AOCI have been reversed upon the adoption of ASU 2018-12 from opening AOCI.
(2) Adjustments for the cumulative effect of adoption of the simplified amortization methodology under the full retrospective method for contract issue years from the FNF acquisition date through December 31, 2020.

The following table summarizes the balance of and changes in DSI on January 1, 2021 due to adoption of ASU 2018-12:

			FIA																		Total
			(In millions)
Balance, December 31, 2020			$	36																	$	36
Adjustment for reversal of AOCI adjustments (1)			5																		5
Cumulative effect of retrospective adoption (2)			4																		4
Balance, January 1, 2021			$	45																	$	45
(1) Prior period "shadow" adjustments in AOCI have been reversed upon the adoption of ASU 2018-12 from opening AOCI.
(2) Adjustments for the cumulative effect of adoption of the simplified amortization methodology under the full retrospective method for contract issue years from the FNF acquisition date through December 31, 2020.

The following table summarizes the balance of and changes in URL on January 1, 2021 due to adoption of ASU 2018-12:

															Universal Life						Total
															(In millions)
Balance, December 31, 2020															$	2					$	2
Adjustment for reversal of AOCI adjustments (1)															25						25
Cumulative effect of retrospective adoption (2)															2						2
Balance, January 1, 2021															$	29					$	29
(1) Prior period "shadow" adjustments in AOCI have been reversed upon the adoption of ASU 2018-12 from opening AOCI.
(2) Adjustments for the cumulative effect of adoption of the simplified amortization methodology under the full retrospective method for contract issue years from the FNF acquisition date through December 31, 2020.

The following table summarizes the balance of and changes in the asset and liability position of MRBs on January 1, 2021 due to adoption of ASU 2018-12:

			FIA						Fixed rate annuities						Total
			(In millions)
Balance, December 31, 2020 - Carrying amount of MRBs under prior guidance (1)			$	531					$	—					$	531
Adjustment for reversal of AOCI adjustments (2)			(116)						—						(116)
Cumulative effect of the changes in the instrument-specific credit risk between the original contract issuance date and the transition date (3)			159						—						159
Remaining cumulative difference (exclusive of the instrument specific credit risk change) between June 1, 2020 carrying amount and fair value measurement for the MRBs (4)			(96)						1						(95)
Balance, January 1, 2021 - Market risk benefits at fair value			$	478					$	1					$	479
Less: Reinsurance Recoverable			—						—						—
Balance, January 1, 2021, net of reinsurance			$	478					$	1					$	479
(1) The pre-adoption balance as of December 31, 2020 balance for MRBs represents the contract features that meet the definition of an MRB under ASU 2018-12 and the related carrying amount of those features prior to the ASU. Those contract features were previously accounted for at fair value as a derivative or embedded derivative under ASC 815 or as an additional liability for annuitization benefits or death or other insurance benefits under ASC 944.
(2) Prior period "shadow" adjustments in AOCI have been reversed upon the adoption of ASU 2018-12 from opening AOCI.
(3) The cumulative effective of the change in instrument-specific credit risk between the FNF Acquisition Date or, if later, the original contract issuance date and the transition date to ASU 2018-12, which is recorded as an adjustment to opening AOCI.
(4) The cumulative difference (exclusive of instrument-specific credit risk change) between the pre-adoption carrying amount and the fair value measurement for MRBs is recorded as an adjustment to opening retained earnings.

Effect of Transition Adjustments On Equity

The following table presents the effect of transition adjustments on Equity on January 1, 2021 due to the adoption of ASU 2018-12:

			January 1, 2021
			Retained Earnings						AOCI
			(In millions)
Contractholder funds			$	100					$	115
MRB			29						(159)
FPB			(15)						(159)
VOBA			(21)						233
DAC			(1)						5
Increase to Equity, gross of tax			$	92					$	35
Tax impact			19						9
Increase to Equity, net of tax			$	73					$	26

X

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Accounting Standards Update and Change In Accounting Principle Effect On Equity

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Tabular disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.

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Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
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-Publisher FASB
-Name Accounting Standards Codification
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-Section 45
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-URI https://asc.fasb.org/extlink&oid=126900757&loc=d3e765-108305

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-Publisher FASB
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