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F&G Insurance Subsidiary Financial Information and Regulatory Matters | 9 Months Ended
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Sep. 30, 2024
Insurance [Abstract] |
F&G Insurance Subsidiary Financial Information and Regulatory Matters | Summary of Reserve for Title Claim Losses A summary of the reserve for title claim losses follows:
| Nine months ended September 30,
| 2024 |  | 2023
| (In millions)
Beginning balance | $ | 1,770 |  |  | $ | 1,810 |
Change in insurance recoverable | (14) |  |  | (1) |
Claim loss provision related to: |  |  |
Current year | 168 |  |  | 157 |
Total title claim loss provision | 168 |  |  | 157 |
Claims paid, net of recoupments related to: |  |  |
Current year | (13) |  |  | (8) |
Prior years | (191) |  |  | (190) |
Total title claims paid, net of recoupments | (204) |  |  | (198) |
Ending balance of claim loss reserve for title insurance | $ | 1,720 |  |  | $ | 1,768 |
Provision for title insurance claim losses as a percentage of title insurance premiums | 4.5 | % |  | 4.5 | %
Several lawsuits were filed by various parties against Chicago Title Company and Chicago Title Insurance Company as its principal (collectively, the “Named Companies”) by plaintiffs claiming they were investors who were solicited by Gina Champion-Cain through her former company, ANI Development LLC (“ANI”), or other affiliates to provide funds placed in an escrow account that purportedly were to be used for high-interest, short-term loans to parties seeking to acquire California alcoholic beverage licenses. Plaintiffs further alleged that employees of Chicago Title Company assisted Ms. Champion-Cain and her entities in diverting the funds placed into an escrow account maintained by Chicago Title Company into which some of the plaintiffs’ funds were deposited. In connection with the alcoholic beverage license scheme, the SEC filed a civil enforcement proceeding asserting claims for securities fraud against Champion-Cain and ANI in a lawsuit styled, Securities and Exchange Commission v. Gina Champion-Cain and ANI Development, LLC, pending in the United States District Court for the Southern District of California. The receiver, who was appointed by the court to preserve the assets of the defendant affiliated entities, then filed a lawsuit in San Diego County Superior Court against the Named Companies seeking damages in a lawsuit styled, Krista Freitag v. Chicago Title Co. and Chicago Title Ins. Co. The Named Companies reached a global settlement with the receiver and several other investor claimants and jointly sought court approval of the global settlement and entry of an order barring any claims against the Named Companies related to the alcoholic beverage license scheme. On November 23, 2022, the federal court overruled any objections by non-joining investors and entered an order approving the global settlement barring further claims against the Named Companies (“Settlement and Bar Order”). After her receipt of the settlement funds, the receiver dismissed the lawsuit against the Named Companies. Some of the non-joining investor claimants who objected to entry of the Settlement and Bar Order appealed the decision to the United States Court of Appeals for the Ninth Circuit by (Cases 22-56206, 22-56208, and 23-55083). Appellate oral argument was held on August 13, 2024, and a decision is pending with the court. Chicago Title Company has also resolved a number of other pre-suit claims and previously-disclosed lawsuits from both individual and groups of alleged investors under confidential terms. Based on the facts and circumstances of the remaining claims, including the settlements already reached, we have recorded reserves included in our reserve for title claim losses, which we believe are adequate to cover losses related to this matter, and believe that our reserves for title claim losses are adequate. We continually upda te loss reserve estimates as new information becomes known, new loss patterns emerge, or as other contributing factors are considered and incorporated into the analysis of reserve for claim losses. Estimating future title loss payments is difficult because of the complex nature of title claims, the long periods of time over which claims are paid, significantly varying dollar amounts of individual claims, and other factors. Due to the uncertainty inherent in the process and to the judgment used by management, the ultimate liability may be greater or less than our current reserves. If actual claims loss development varies from what is currently expected and is not offset by other factors, additional reserve adjustments may be required in future periods to maintain our recorded reserve within a reasonable range of our actuary's central estimate. F&G Insurance Subsidiary Financial Information and Regulatory Matters Our U.S. insurance subsidiaries, FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re file financial statements with state insurance regulatory authorities and, with the exception of Raven Re, with the National Association of Insurance Commissioners (“NAIC”) that are prepared in accordance with Statutory Accounting Principles (“SAP”) prescribed or permitted by such authorities, which may vary materially from GAAP. Prescribed SAP includes the Accounting Practices and Procedures Manual of the NAIC as well as state laws, regulations and administrative rules. Permitted SAP encompasses all accounting practices not so prescribed. The principal differences between SAP financial statements and financial statements prepared in accordance with GAAP are that SAP financial statements do not reflect VOBA, DAC, and DSI, some bond portfolios may be carried at amortized cost, assets and liabilities are presented net of reinsurance, contractholder liabilities are generally valued using more conservative assumptions and certain assets are non-admitted. Accordingly, SAP operating results and SAP capital and surplus may differ substantially from amounts reported in the GAAP basis financial statements for comparable items. Our non-U.S. insurance subsidiaries, F&G Cayman Re Ltd (“F&G Cayman Re”) and F&G Life Re Ltd (Bermuda), file financial statements with their respective regulators. U.S. Companies Our principal insurance subsidiaries' statutory financial statements are based on a December 31 year end. Statutory net income for the three and nine months ended September 30, 2024 and September 30, 2023, and statutory capital and surplus as ofSeptember 30, 2024 and December 31, 2023 of our insurance subsidiaries were as follows (in millions):
| Subsidiary (state of domicile) (a)
| FGL Insurance (IA) |  | FGL NY Insurance (NY) |  | Raven Re (VT) |  | Corbeau Re (VT)
Statutory net income (loss): |  |  |  |  |  |  |
For the three months ended September 30, 2024 | $ | (6) |  |  | $ | 1 |  |  | $ | 13 |  |  | $ | 5 |
For the three months ended September 30, 2023 | 94 |  |  | (1) |  |  | 14 |  |  | — |
For the nine months ended September 30, 2024 | 71 |  |  | 7 |  |  | 41 |  |  | (394) |
For the nine months ended September 30, 2023 | 54 |  |  | 4 |  |  | 42 |  |  | — |
Statutory capital and surplus: |  |  |  |  |  |  |
September 30, 2024 | $ | 1,704 |  |  | $ | 95 |  |  | $ | 156 |  |  | $ | 139 |
December 31, 2023 | 2,009 |  |  | 86 |  |  | 140 |  |  | 171 |
(a) FGL NY Insurance, Raven Re, and Corbeau Re are subsidiaries of FGL Insurance, and the columns should not be added together. Corbeau Re was incorporated on September 1, 2023. Non-U.S. Companies Our non-U.S. insurance subsidiaries, F&G Cayman Re and F&G Life Re, file financial statements with their respective regulators. As of and for the annual period ended December 31, 2023, F&G Cayman Re began to file financial statements that are prepared in accordance with SAP prescribed or permitted by such authorities, which may vary materially from GAAP. Accordingly, SAP operating results and SAP capital and surplus may differ substantially from amounts reported in the GAAP basis financial statements for comparable items. F&G Cayman Re has two permitted practices which have been approved by the Cayman Islands Monetary Authority (“CIMA”). F&G Cayman Re has a permitted practice approved by CIMA to include, as an admitted asset, the value of the letters of credit (“LOCs”) acquired to support reinsurance transactions. Also, F&G Cayman Re has a permitted practice, approved by CIMA, for PRT reinsurance transactions to use U.S. statutory book value adjusted for best estimate reserve calculations (consistent with GAAP prior to ASU 2018-12, Financial Services-Insurance (Topic 944), Targeted Improvements to the Accounting for Long-Duration Contracts). These reserve calculations will be subject to annual assumption reviews consistent with other GAAP liability balances. If F&G Cayman Re had not been permitted to calculate PRT assumed reserves using best estimate reserve calculations or include the value of the LOCs as an admitted asset, statutory surplus would be $29 million and $102 million as of September 30, 2024 and December 31, 2023, respectively. Without such permitted statutory accounting practices, F&G Cayman Re’s risk-based capital would fall below the minimum regulatory requirements as of September 30, 2024 and December 31, 2023. F&G Life Re files financial statements based on GAAP. Net income and capital and surplus of our wholly owned Cayman Islands and Bermuda regulated insurance subsidiaries under SAP and GAAP, respectively, were as follows (in millions):
| Subsidiary (country of domicile)
| F&G Cayman Re (Cayman Islands) |  | F&G Life Re (Bermuda)
Statutory net income (loss): |  |  |
For the three months ended September 30, 2024 | $ | (11) |  |  | $ | 102 |
For the three months ended September 30, 2023 | 6 |  |  | (80) |
For the nine months ended September 30, 2024 | $ | (27) |  |  | $ | 181 |
For the nine months ended September 30, 2023 | 13 |  |  | (6) |
Statutory capital and surplus: |  |  |
September 30, 2024 | $ | 625 |  |  | $ | 195 |
December 31, 2023 | 543 |  | 11
There have been no material changes to the prescribed and permitted practices for our U.S. insurance subsidiaries, which were detailed in our Annual Report on Form 10-K, and no other significant changes in the regulatory status of our insurance subsidiaries as of September 30, 2024. The prescribed and permitted statutory accounting practices have no impact on our unaudited Condensed Consolidated Financial Statements, which are prepared in accordance with GAAP.

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