CLOSED BLOCK

9 Months Ended

Sep. 30, 2022

As a result of demutualization, the Company’s Closed Block was established in 1992 for the benefit of certain individual participating policies that were in force on that date. Assets, liabilities and earnings of the Closed Block are specifically identified to support its participating policyholders.

Assets allocated to the Closed Block inure solely to the benefit of the Closed Block policyholders and will not revert to the benefit of the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of the Company’s General Account, any of its Separate Accounts or any affiliate of the Company without the approval of the New York State Department of Financial Services (the “NYDFS”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the General Account. For more information on the Closed Block, see Note 6 to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2021.

Summarized financial information for the Company’s Closed Block is as follows:



	September 30, 2022		December 31, 2021
	(in millions)
Closed Block Liabilities:
Future policy benefits, policyholders’ account balances and other	$	5,750	$	5,928
Policyholder dividend obligation	—		—
Other liabilities	74		39
Total Closed Block liabilities	5,824		5,967

Assets Designated to the Closed Block:
Fixed maturities AFS, at fair value (amortized cost of $3,190 and $3,185) (allowance for credit losses of $0 and $0)	2,932		3,390
Mortgage loans on real estate (net of allowance for credit losses of $4 and $4)	1,687		1,771
Policy loans	575		602
Cash and other invested assets	—		63
Other assets	154		90
Total assets designated to the Closed Block	5,348		5,916

Excess of Closed Block liabilities over assets designated to the Closed Block	476		51
Amounts included in AOCI:
Net unrealized investment gains (losses), net of policyholders’ dividend obligation: $0 and $0; and net of income tax: $54 and $(43)	(193)		172
Maximum future earnings to be recognized from Closed Block assets and liabilities	$	283	$	223

The Company’s Closed Block revenues and expenses were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021			2022		2021
	(in millions)
Revenues:
Premiums and other income	$	29	$	33		$	93	$	109
Net investment income (loss)	52		59			164		179
Investment gains (losses), net	(1)		—			(2)		2
Total revenues	80		92			255		290

Benefits and Other Deductions:
Policyholders’ benefits and dividends	92		108			248		304
Other operating costs and expenses	—		2			—		3
Total benefits and other deductions	92		110			248		307
Net income (loss), before income taxes	(12)		(18)			7		(17)
Income tax (expense) benefit	(5)		(2)			(1)		(3)
Net income (loss)	$	(17)	$	(20)		$	6	$	(20)

A reconciliation of the Company’s policyholder dividend obligation follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021			2022		2021
	(in millions)
Beginning balance	$	—	$	72		$	—	$	160
Unrealized investment gains (losses)	—		(47)			—		(135)
Ending balance	$	—	$	25		$	—	$	25