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Contractholder Funds

6 Months Ended

Jun. 30, 2023

Insurance [Abstract]

Contractholder Funds

Market Risk Benefits

The following table presents the balances of and changes in MRBs associated with FIAs and fixed rate annuities for the six months ended June 30, 2023 and the years ended December 31, 2022 and December 31, 2021:

			June 30, 2023												December 31, 2022												December 31, 2021
			FIA						Fixed rate annuities						FIA						Fixed rate annuities						FIA						Fixed rate annuities
			(Dollars in millions)
Balance, beginning of period			$	164					$	1					$	426					$	2					$	478					$	1
Balance, beginning of period, before effect of changes in the instrument-specific credit risk			$	102					$	1					$	280					$	1					$	320					$	1
Issuances and benefit payments			(8)						—						(21)						—						(9)						—
Attributed fees collected and interest accrual			68						—						107						1						99						1
Actual policyholder behavior different from expected			11						—						43						—						(22)						—
Changes in assumptions and other			1						—						(76)						—						—						—
Effects of market related movements			(38)						—						(231)						(1)						(108)						(1)
Balance, end of period, before effect of changes in the instrument-specific credit risk			$	136					$	1					$	102					$	1					$	280					$	1
Effect of changes in the instrument-specific credit risk			58						—						62						—						146						1
Balance, end of period			$	194					$	1					$	164					$	1					$	426					$	2
Weighted-average attained age of policyholders weighted by total AV (years)			68.41						72.67						68.59						72.88						68.95						73.10
Net amount at risk			$	1,006					$	3					$	952					$	3					$	1,304					$	4

The following table reconciles MRBs by amounts in an asset position and amounts in a liability position to the MRB amounts in the accompanying unaudited Condensed Consolidated Balance Sheets:

			June 30, 2023																		December 31, 2022																		December 31, 2021
			Asset						Liability						Net						Asset						Liability						Net						Asset						Liability						Net
			(In millions)
FIA			$	118					$	312					$	194					$	117					$	281					$	164					$	41					$	467					$	426
Fixed rate annuities			—						1						1						—						1						1						—						2						2
Total			$	118					$	313					$	195					$	117					$	282					$	165					$	41					$	469					$	428

For the six months ended June 30, 2023, the following notable changes were made to the inputs to the fair value estimates of MRB calculations:

•Risk-free rates increased slightly, leading to a decrease in the MRB associated with FIA and fixed rate annuities.

•Increases in the equity market related projections resulted in a decrease in the net amount at risk associated with FIAs, leading to a decrease in the value of the associated MRBs.

•F&G’s credit spread increased slightly, leading to a corresponding decrease in the MRBs associated with both FIA and fixed rate annuities.

In 2022, the following notable changes were made to the inputs to the fair value estimates of MRB calculations:

•Risk-free rates increased significantly, leading to a decrease in the MRBs associated with both FIA and fixed rate annuities.

•Decreases in the equity markets resulted in an increase in the net amount at risk associated with FIAs, leading to an increase in the value of the associated MRBs.

•Volatility indices increased, leading to an increase in the MRBs associated with FIAs.

•Cash flow assumptions for mortality and full and partial surrenders were unchanged during the annual third quarter review. The GMWB utilization assumption was revised in the second quarter of 2022 to reflect additional internal and industry experience for the first several contract years. This assumption update led to a decrease in the MRBs.

•F&G’s credit spread increased during the year, leading to a corresponding decrease in the MRBs value. Credit spreads on the block of business remain lower than the at-issue or at-purchase credit spreads, but the level has decreased since the beginning of 2022.

In 2021, the following notable changes were made to the inputs to the fair value estimates of MRB calculations:

•    Risk-free rates increased moderately, leading to a decrease in the MRBs associated with both FIA and fixed

rate annuities.

•Increases in the equity markets resulted in a decrease in the net amount at risk associated with FIA and fixed rate annuities, leading to a decrease in the value of the associated MRBs.

Contractholder Funds

The following tables summarize balances of and changes in contractholder funds’ account balances:

			June 30, 2023
			FIA						Fixed rate annuities						Universal Life						FABN (b)						FHLB (b)
			(Dollars in millions)
Balance, beginning of year			$	24,766					$	9,358					$	2,112					$	2,613					$	1,982
Issuances			2,415						2,584						99						—						456
Premiums received			52						1						180						—						—
Policy charges (a)			(87)						—						(124)						—						—
Surrenders and withdrawals			(876)						(520)						(45)						—						—
Benefit payments			(254)						(118)						(16)						(27)						(323)
Interest credited			69						179						20						27						25
Other			23						(1)						—						—						3
Balance, end of year			$	26,108					$	11,483					$	2,226					$	2,613					$	2,143
Embedded derivative adjustment (c)			98						—						73						—						—
Gross Liability, end of period			$	26,206					$	11,483					$	2,299					$	2,613					$	2,143
Less: Reinsurance			(17)						(5,431)						(924)						—						—
Net Liability, after Reinsurance			$	26,189					$	6,052					$	1,375					$	2,613					$	2,143
Weighted-average crediting rate			1.10		%				7.07		%				3.85		%				N/A						N/A
Net amount at risk (d)			N/A						N/A						53,401						N/A						N/A
Cash surrender value			24,337						10,707						1,760						N/A						N/A

(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.

(b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.

(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.

(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.

			December 31, 2022
			FIA						Fixed rate annuities						Universal Life						FABN (b)						FHLB (b)
			(Dollars in millions)
Balance, beginning of year			21,997						6,367						1,907						1,904						1,543
Issuances			4,462						3,758						167						700						1,192
Premiums received			106						3						295						—						—
Policy charges (a)			(166)						(1)						(209)						—						—
Surrenders and withdrawals			(1,322)						(797)						(74)						—						—
Benefit payments			(485)						(192)						(22)						(35)						(789)
Interest credited			198						220						48						45						36
Other			(24)						—						—						(1)						—
Balance, end of year			$	24,766					$	9,358					$	2,112					$	2,613					$	1,982
Embedded derivative adjustment (c)			(343)						—						15						—						—
Gross Liability, end of period			$	24,423					$	9,358					$	2,127					$	2,613					$	1,982
Less: Reinsurance			(17)						(3,723)						(947)						—						—
Net Liability, after Reinsurance			$	24,406					$	5,635					$	1,180					$	2,613					$	1,982
Weighted-average crediting rate			0.85		%				2.84		%				2.39		%				N/A						N/A
Net amount at risk (d)			N/A						N/A						53,348						N/A						N/A
Cash surrender value			188						5,992						1,698						N/A						N/A

(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.

(b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.

(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.

(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.

			December 31, 2021
			FIA						Fixed rate annuities						Universal Life						FABN (b)						FHLB (b)
			(Dollars in millions)
Balance, beginning of year			$	18,703					$	5,142					$	1,696					$	—					$	1,203
Issuances			4,400						1,743						114						1,899						759
Premiums received			103						3						233						—						—
Policy charges (a)			(148)						(1)						(167)						—						—
Surrenders and withdrawals			(1,303)						(543)						(68)						—						—
Benefit payments			(440)						(145)						(19)						(7)						(447)
Interest credited			686						167						118						12						30
Other			(4)						1						—						—						(2)
Balance, end of year			$	21,997					$	6,367					$	1,907					$	1,904					$	1,543
Embedded derivative adjustment (c)			603						—						74						—						—
Gross Liability, end of period			$	22,600					$	6,367					$	1,981					$	1,904					$	1,543
Less: Reinsurance			(17)						(1,692)						(984)						—						—
Net Liability, after Reinsurance			$	22,583					$	4,675					$	997					$	1,904					$	1,543
Weighted-average crediting rate			3.43		%				2.94		%				6.77		%				N/A						N/A
Net amount at risk (d)			N/A						N/A						41,326						N/A						N/A
Cash surrender value			20,455						5,992						1,572						N/A						N/A

(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.

(b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.

(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.

(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.

The following table reconciles contractholder funds’ account balances to the contractholder funds liability in the accompanying unaudited Condensed Consolidated Balance Sheets:

			June 30, 2023						December 31, 2022						December 31, 2021
			(In millions)
FIA			$	26,206					$	24,423					$	22,600
Fixed rate annuities			11,483						9,358						6,367
Immediate annuities			317						332						352
Universal life			2,299						2,127						1,981
Traditional life			5						5						5
Funding Agreement-FABN			2,613						2,613						1,904
FHLB			2,143						1,982						1,543
PRT			4						3						1
Total			$	45,070					$	40,843					$	34,753

The following tables present the account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums:

			June 30, 2023
			At Guaranteed Minimum						1 Basis Point-50 Basis Points Above						51 Basis Points-150 Basis Points Above						Greater Than 150 Basis Points Above						Total
FIA			(In millions)
0.00%-1.50%			$	23,749					$	796					$	403					$	663					$	25,611
1.51%-2.50%			141						—						1						—						142
Greater than 2.50%			353						—						2						—						355
Total			$	24,243					$	796					$	406					$	663					$	26,108
Fixed Rate Annuities
0.00%-1.50%			$	17					$	30					$	1,838					$	8,287					$	10,172
1.51%-2.50%			8						13						28						313						362
Greater than 2.50%			934						3						4						8						949
Total			$	959					$	46					$	1,870					$	8,608					$	11,483
Universal Life
0.00%-1.50%			$	1,822					$	4					$	—					$	18					$	1,844
1.51%-2.50%			—						—						—						—						—
Greater than 2.50%			346						35						1						—						382
Total			$	2,168					$	39					$	1					$	18					$	2,226

			December 31, 2022
			At Guaranteed Minimum						1 Basis Point-50 Basis Points Above						51 Basis Points-150 Basis Points Above						Greater Than 150 Basis Points Above						Total
FIA			(In millions)
0.00%-1.50%			$	22,848					$	801					$	410					$	151					$	24,210
1.51%-2.50%			162						—						1						—						163
Greater than 2.50%			390						—						3						—						393
Total			$	23,400					$	801					$	414					$	151					$	24,766
Fixed Rate Annuities
0.00%-1.50%			$	10					$	32					$	1,871					$	6,379					$	8,292
1.51%-2.50%			9						14						30						1						54
Greater than 2.50%			997						4						4						7						1,012
Total			$	1,016					$	50					$	1,905					$	6,387					$	9,358
Universal Life
0.00%-1.50%			$	1,701					$	3					$	—					$	17					$	1,721
1.51%-2.50%			—						—						—						—						—
Greater than 2.50%			346						44						1						—						391
Total			$	2,047					$	47					$	1					$	17					$	2,112

			December 31, 2021
			At Guaranteed Minimum						1 Basis Point-50 Basis Points Above						51 Basis Points-150 Basis Points Above						Greater Than 150 Basis Points Above						Total
FIA			(In millions)
0.00%-1.50%			$	20,162					$	803					$	388					$	—					$	21,353
1.51%-2.50%			171						11						25						—						207
Greater than 2.50%			431						3						3						—						437
Total			$	20,764					$	817					$	416					$	—					$	21,997
Fixed Rate Annuities
0.00%-1.50%			$	2					$	28					$	1,928					$	3,219					$	5,177
1.51%-2.50%			9						15						37						1						62
Greater than 2.50%			954						142						25						7						1,128
Total			$	965					$	185					$	1,990					$	3,227					$	6,367
Universal Life
0.00%-1.50%			$	1,486					$	2					$	—					$	13					$	1,501
1.51%-2.50%			—						—						—						—						—
Greater than 2.50%			359						46						1						—						406
Total			$	1,845					$	48					$	1					$	13					$	1,907

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- References

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- Definition

The entire disclosure for long duration contracts. This may include the information pertinent to an understanding of the types of traditional and nontraditional insurance and investment contracts sold and serviced, including the nature and amount of estimated guaranteed obligations pertaining to such contracts and the assumptions underlying such estimated amounts, hedging strategies, and sales inducements offered.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (u)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480016/944-40-65-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//944/tableOfContent

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