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INSURANCE LIABILITIES | 9 Months Ended
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Sep. 30, 2022
Insurance [Abstract] |
INSURANCE LIABILITIES | INSURANCE LIABILITIES Variable Annuity Contracts – GMDB, GMIB, GIB and GWBL and Other Features The Company has certain variable annuity contracts with GMDB, GMIB, GIB and GWBL and other features in-force that guarantee one of the following: •Return of Premium: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals); •Ratchet: the benefit is the greatest of current account value, premiums paid (adjusted for withdrawals), or the highest account value on any anniversary up to contractually specified ages (adjusted for withdrawals); •Roll-Up: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals) accumulated at contractually specified interest rates up to specified ages; •Combo: the benefit is the greater of the ratchet benefit or the roll-up benefit, which may include either a five year or an annual reset; or •Withdrawal: the withdrawal is guaranteed up to a maximum amount per year for life. Liabilities for Variable Annuity Contracts with GMDB and GMIB Features without NLG Rider Feature The change in the liabilities for variable annuity contracts with GMDB and GMIB features and without a NLG feature are summarized in the tables below. The amounts for the direct contracts (before reinsurance ceded) and assumed contracts are reflected in the consolidated balance sheets in future policy benefits and other policyholders’ liabilities. The amounts for the ceded contracts are reflected in the consolidated balance sheets in amounts due from reinsurers. The amounts for the ceded GMIB that are reflected in the consolidated balance sheets in GMIB reinsurance contract asset are at fair value. Change in Liability for Variable Annuity Contracts with GMDB and GMIB Features and No NLG Feature Three and Nine Months Ended September 30, 2022 and 2021
| GMDB |  | GMIB
| Direct |  | Assumed (1) (2) |  | Ceded |  | Direct |  | Assumed (1) (2) |  | Ceded
| (in millions)
Balance, July 1, 2022 | $ | 5,096 |  |  | $ | — |  |  | $ | (2,276) |  |  | $ | 6,165 |  |  | $ | — |  |  | $ | (3,707) |
Paid guarantee benefits | (152) |  |  | — |  |  | 63 |  |  | (171) |  |  | — |  |  | 46 |
Other changes in reserve | 379 |  |  | — |  |  | (147) |  |  | (312) |  |  | — |  |  | 341 |
Balance, September 30, 2022 | $ | 5,323 |  |  | $ | — |  |  | $ | (2,360) |  |  | $ | 5,682 |  |  | $ | — |  |  | $ | (3,320) |
Balance, July 1, 2021 | $ | 5,091 |  |  | $ | — |  |  | $ | (2,262) |  |  | $ | 5,905 |  |  | $ | — |  |  | $ | (4,168) |
Paid guarantee benefits | (103) |  |  | — |  |  | 41 |  |  | (87) |  |  | — |  |  | 16 |
Other changes in reserve | (6) |  |  | — |  |  | 2 |  |  | 131 |  |  | — |  |  | 89 |
Impact of the Venerable Transaction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Balance, September 30, 2021 | $ | 4,982 |  |  | $ | — |  |  | $ | (2,219) |  |  | $ | 5,949 |  |  | $ | — |  |  | $ | (4,063) |
| GMDB |  | GMIB
| Direct |  | Assumed (1) (2) |  | Ceded |  | Direct |  | Assumed (1) (2) |  | Ceded
| (in millions)
Balance, January 1, 2022 | $ | 4,951 |  |  | $ | — |  |  | $ | (2,216) |  |  | $ | 5,892 |  |  | $ | — |  |  | $ | (3,968) |
Paid guarantee benefits | (433) |  |  | — |  |  | 180 |  |  | (437) |  |  | — |  |  | 53 |
Other changes in reserve | 805 |  |  | — |  |  | (324) |  |  | 227 |  |  | — |  |  | 595 |
Balance, September 30, 2022 | $ | 5,323 |  |  | $ | — |  |  | $ | (2,360) |  |  | $ | 5,682 |  |  | $ | — |  |  | $ | (3,320) |
Balance, January 1, 2021 | $ | 5,097 |  |  | $ | 72 |  |  | $ | (88) |  |  | $ | 6,026 |  |  | $ | 196 |  |  | $ | (2,488) |
Paid guarantee benefits | (350) |  |  | (12) |  |  | 64 |  |  | (271) |  |  | (49) |  |  | 41 |
Other changes in reserve | 235 |  |  | 14 |  |  | (19) |  |  | 194 |  |  | (7) |  |  | 525 |
Impact of the Venerable Transaction | — |  |  | (74) |  |  | (2,176) |  |  | — |  |  | (140) |  |  | (2,141) |
Balance, September 30, 2021 | $ | 4,982 |  |  | $ | — |  |  | $ | (2,219) |  |  | $ | 5,949 |  |  | $ | — |  |  | $ | (4,063) |
______________ (1)Change in Assumed is driven by the sale of CSLRC to Venerable. (2)Includes the impact as of June 1, 2021 on the ceded reserves to Venerable. See Note 1 of the Notes to these Consolidated Financial Statements for details of the Venerable Transaction. Liabilities for Embedded and Freestanding Insurance Related Derivatives The liability for the GMxB derivative features, the liability for SCS, SIO, MSO and IUL indexed features and the asset and liability for the GMIB reinsurance contracts and amounts due from reinsurers related to GMIB NLG product features (GMIB NLG Reinsurance) are considered embedded or freestanding insurance derivatives and are reported at fair value. For the fair value of the assets and liabilities associated with these embedded or freestanding insurance derivatives, see Note 7 of the Notes to these Consolidated Financial Statements. Account Values and Net Amount at Risk Account Values and NAR for direct variable annuity contracts in force with GMDB and GMIB features as of September 30, 2022 are presented in the following tables by guarantee type. For contracts with the GMDB feature, the NAR in the event of death is the amount by which the GMDB feature exceeds the related Account Values. For contracts with the GMIB feature, the NAR in the event of annuitization is the amount by which the present value of the GMIB benefits exceed the related Account Values, taking into account the relationship between current annuity purchase rates and the GMIB guaranteed annuity purchase rates. Since variable annuity contracts with GMDB features may also offer GMIB guarantees in the same contract, the GMDB and GMIB amounts listed are not mutually exclusive. Direct Variable Annuity Contracts with GMDB and GMIB Features as of September 30, 2022
| Guarantee Type
| Return of Premium |  | Ratchet |  | Roll-Up |  | Combo |  | Total
| (in millions, except age and interest rate)
Variable annuity contracts with GMDB features |  |  |  |  |  |  |  |  |
Account Values invested in: |  |  |  |  |  |  |  |  |
General Account | $ | 16,657 |  | $ | 94 |  | $ | 48 |  | $ | 148 |  | $ | 16,947
Separate Accounts | 44,879 |  | 7,213 |  | 2,384 |  | 24,547 |  | 79,023
Total Account Values | $ | 61,536 |  | $ | 7,307 |  | $ | 2,432 |  | $ | 24,695 |  | $ | 95,970
NAR, gross | $ | 1,176 |  |  | $ | 1,802 |  |  | $ | 1,975 |  | $ | 24,164 |  | $ | 29,117
NAR, net of amounts reinsured | $ | 1,164 |  |  | $ | 1,630 |  |  | $ | 1,439 |  | $ | 13,074 |  | $ | 17,307
Average attained age of policyholders (in years) | 51.6 |  |  | 69.6 |  |  | 76.0 |  |  | 71.6 |  |  | 55.4 |
Percentage of policyholders over age 70 | 12.1 | % |  | 52.1 | % |  | 74.2 | % |  | 60.0 | % |  | 21.1 | %
Range of contractually specified interest rates | N/A |  | N/A |  | 3% - 6% |  | 3% - 6.5% |  | 3% - 6.5%
Variable annuity contracts with GMIB features |  |  |  |  |  |  |  |  |
Account Values invested in: |  |  |  |  |  |  |  |  |
General Account | $ | — |  |  | $ | — |  |  | $ | 14 |  | $ | 193 |  | $ | 207
Separate Accounts | — |  |  | — |  |  | 20,235 |  | 25,771 |  | 46,006
Total Account Values | $ | — |  |  | $ | — |  |  | $ | 20,249 |  | $ | 25,964 |  | $ | 46,213
NAR, gross | $ | — |  | $ | — |  | $ | 546 |  | $ | 8,237 |  | $ | 8,783
NAR, net of amounts reinsured | $ | — |  | $ | — |  | $ | 176 |  | $ | 3,377 |  | $ | 3,553
Average attained age of policyholders (in years) | N/A |  | N/A |  | 65.6 |  |  | 71.3 |  |  | 69.1 |
Weighted average years remaining until annuitization | N/A |  | N/A |  | 5.6 |  |  | 0.5 |  |  | 2.4 |
Range of contractually specified interest rates | N/A |  | N/A |  | 3% - 6% |  | 3% - 6.5% |  | 3% - 6.5%
For more information about the reinsurance programs of the Company’s GMDB and GMIB exposure, see “Reinsurance” in Note 11 of the Notes to the Consolidated Financial Statements 2021 Form 10-K. Separate Accounts Investments by Investment Category Underlying Variable Annuity Contracts with GMDB and GMIB Features The total Account Values of variable annuity contracts with GMDB and GMIB features include amounts allocated to the guaranteed interest option, which is part of the General Account and variable investment options that invest through Separate Accounts in variable insurance trusts. The following table presents the aggregate fair value of assets, by major investment category, held by Separate Accounts that support variable annuity contracts with GMDB and GMIB features. The investment performance of the assets impacts the related Account Values and, consequently, the NAR associated with the GMDB and GMIB benefits and guarantees. Because the Company’s variable annuity contracts offer both GMDB and GMIB features, GMDB and GMIB amounts are not mutually exclusive. Investment in Variable Insurance Trust Mutual Funds
| September 30, 2022 |  | December 31, 2021
Mutual Fund Type | GMDB |  | GMIB |  | GMDB |  | GMIB
| (in millions)
Equity | $ | 37,285 |  |  | $ | 13,460 |  |  | $ | 52,771 |  |  | $ | 20,015 |
Fixed income | 4,474 |  |  | 2,028 |  |  | 5,391 |  |  | 2,507 |
Balanced | 36,134 |  |  | 30,264 |  |  | 48,390 |  |  | 40,491 |
Other | 1,130 |  |  | 254 |  |  | 1,025 |  |  | 263 |
Total | $ | 79,023 |  |  | $ | 46,006 |  |  | $ | 107,577 |  |  | $ | 63,276 |
Hedging Programs for GMDB, GMIB, GIB and Other Features The Company has a program intended to hedge certain risks associated first with the GMDB feature and with the GMIB feature of the Accumulator series of variable annuity products. The program has also been extended to cover other guaranteed benefits as they have been made available. This program utilizes derivative contracts, such as exchange-traded equity, currency and interest rate futures contracts, total return and/or equity swaps, interest rate swap and floor contracts, swaptions, variance swaps as well as equity options, that collectively are managed in an effort to reduce the economic impact of unfavorable changes in guaranteed benefits’ exposures attributable to movements in the capital markets. At the present time, this program hedges certain economic risks on products sold from 2001 forward, to the extent such risks are not externally reinsured. These programs do not qualify for hedge accounting treatment. Therefore, gains (losses) on the derivatives contracts used in these programs, including current period changes in fair value, are recognized in net derivative gains (losses) in the period in which they occur, and may contribute to income (loss) volatility. Variable and Interest-Sensitive Life Insurance Policies – NLG The NLG feature contained in variable and interest-sensitive life insurance policies keeps them in force in situations where the policy value is not sufficient to cover monthly charges then due. The NLG remains in effect so long as the policy meets a contractually specified premium funding test and certain other requirements. The change in the NLG liabilities, reflected in future policy benefits and other policyholders’ liabilities in the consolidated balance sheets, is summarized in the table below.
| Direct Liability (1)
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021 |  |
| (in millions)
Beginning balance | $ | 1,134 |  |  | $ | 1,070 |  |  | $ | 1,096 |  |  | $ | 1,022 |  |  |
Paid guarantee benefits | (46) |  |  | (24) |  |  | (62) |  |  | (52) |  |  |
Other changes in reserves | 74 |  |  | 38 |  |  | 128 |  |  | 114 |  |  |
Ending balance | $ | 1,162 |  |  | $ | 1,084 |  |  | $ | 1,162 |  |  | $ | 1,084 |  |  |
_____________ (1)There were no amounts of reinsurance ceded in any period presented.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -URI https://asc.fasb.org/topic&trid=2303980 + Details
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