XML 31 R20.htm IDEA: XBRL DOCUMENT v3.23.3
Value of Business Acquired, Deferred Acquisition Costs and Deferred Sales Inducements
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Value of Business Acquired, Deferred Acquisition Costs and Deferred Sales Inducements Value of Business Acquired, Deferred Acquisition Costs and Deferred Sales Inducements
The following table reconciles to Other intangible assets, net, on the unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022.
September 30, 2023December 31, 2022
(In millions)
Customer relationships and contracts$190 $202 
VOBA1,487 1,615 
DAC2,012 1,411 
DSI297 200 
Value of distribution asset90 100 
Computer software272 196 
Definite lived trademarks, tradenames, and other30 27 
Indefinite lived tradenames and other61 60 
Total Other intangible assets, net$4,439 $3,811 
The following tables roll forward VOBA by product for the nine months ended September 30, 2023 and September 30, 2022.
FIAFixed Rate AnnuitiesImmediate AnnuitiesUniversal LifeTraditional LifeTotal
(In millions)
Balance at January 1, 2023
$1,166 $32 $201 $143 $73 $1,615 
Amortization(106)(4)(8)(7)(3)(128)
Balance at September 30, 2023
$1,060 $28 $193 $136 $70 $1,487 
FIAFixed Rate AnnuitiesImmediate AnnuitiesUniversal LifeTraditional LifeTotal
(In millions)
Balance at January 1, 2022
$1,314 $39 $212 $153 $25 $1,743 
Amortization(113)(5)(9)(7)(2)(136)
Shadow Premium Deficiency Testing (“PDT”)— — — — 52 52 
Balance at September 30, 2022
$1,201 $34 $203 $146 $75 $1,659 

VOBA amortization expense of $128 million and $136 million was recorded in Depreciation and amortization on the unaudited Condensed Consolidated Statements of Earnings for the nine months ended September 30, 2023 and September 30, 2022, respectively.
The following table presents a reconciliation of VOBA to the table above, which is included in Other intangible assets, net in the unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022:
September 30, 2023December 31, 2022
(In millions)
FIA$1,060 $1,166 
Fixed Rate Annuities28 32 
Immediate Annuities193 201 
Universal Life136 143 
Traditional Life70 73 
Total$1,487 $1,615 


The following tables roll forward DAC by product for the nine months ended September 30, 2023 and September 30, 2022.
FIAFixed Rate AnnuitiesUniversal LifeTotal (a)
(In millions)
Balance at January 1, 2023
$971 $83 $348 $1,402 
Capitalization371 119 167 657 
Amortization(75)(35)(25)(135)
Reinsurance related adjustments— 79 — 79 
Balance at September 30, 2023
$1,267 $246 $490 $2,003 
FIAFixed Rate AnnuitiesUniversal LifeTotal (a)
(In millions)
Balance at January 1, 2022
$564 $38 $173 $775 
Capitalization331 41 141 513 
Amortization(47)(7)(15)(69)
Balance at September 30, 2022
$848 $72 $299 $1,219 
(a) Excludes insignificant amounts of DAC related to Funding Agreement Backed Note (“FABN”)
DAC amortization expense of $135 million and $69 million was recorded in Depreciation and amortization on the unaudited Condensed Consolidated Statements of Earnings for the nine months ended September 30, 2023 and September 30, 2022, respectively.
The following table presents a reconciliation of DAC to the table above, which is included in Other intangible assets, net in the unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022:
September 30, 2023December 31, 2022
(In millions)
FIA$1,267 $971 
Fixed Rate Annuities246 83 
Universal Life490 348 
Funding Agreements9 9 
Total$2,012 $1,411 
The following tables roll forward DSI for the nine months ended September 30, 2023 and September 30, 2022:
FIATotal
(In millions)
Balance at January 1, 2023
$200 $200 
Capitalization112 112 
Amortization(15)(15)
Balance at September 30, 2023
$297 $297 
FIATotal
(In millions)
Balance at January 1, 2022
$127 $127 
Capitalization60 60 
Amortization(10)(10)
Balance at September 30, 2022
$177 $177 
DSI amortization expense of $15 million and $10 million was recorded in Depreciation and amortization on the unaudited Condensed Consolidated Statements of Earnings for the nine months ended September 30, 2023 and September 30, 2022, respectively.
The following table presents a reconciliation of DSI to the table above, which is included in Other intangible assets, net in the unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022:
September 30, 2023December 31, 2022
(In millions)
FIA$297 $200 
Total$297 $200 
The cash flow assumptions used to amortize VOBA and DAC were consistent with the assumptions used to estimate the FPB for life contingent immediate annuity and PRT contracts, and will be reviewed and unlocked, if applicable, in the same period as those balances. For nonparticipating traditional life contracts, the VOBA amortization is straight-line, without the use of cash flow assumptions. For FIA contracts, the cash flow assumptions used to amortize VOBA, DAC, and DSI were consistent with the assumptions used to estimate the value of the embedded derivative and MRBs, and will be reviewed and unlocked, if applicable, in the same period as those balances. For fixed rate annuities and IUL the cash flow assumptions used to amortize VOBA, DAC and DSI reflect the company’s best estimates for policyholder behavior, consistent with the development of assumptions for FIA, immediate annuity, and PRT.
F&G reviews cash flow assumptions annually, generally in the third quarter. In 2023, F&G undertook a review of all significant assumptions and revised several assumptions relating to our deferred annuities (FIA and fixed rate annuities) including surrender rates, partial withdrawal rates, mortality improvement, and option budgets. All updates to these assumptions brought F&G more in line with Company and overall industry experience since the prior assumption update.
For the in-force liabilities as of September 30, 2023, the estimated amortization expense for VOBA in future fiscal periods is as follows:
Estimated Amortization Expense
Fiscal Year(In millions)
2023$40 
2024152 
2025140 
2026128 
2027116 
Thereafter911