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REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

9 Months Ended

Sep. 30, 2025

Accounting Changes and Error Corrections [Abstract]

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

During the period ended March 31, 2025, the Company identified an immaterial error related to the initial bookkeeping of ceded accrued fees within policyholders’ account balance ultimately impacting the initial deposit accounting of a reinsurance transaction. The impact of this error to prior periods’ financial statements was not considered to be material. To improve the consistency and comparability of the financial statements, management voluntarily revised the financial statements to include the revisions discussed herein. As a result of the determination to revise previously issued financial statements for the deposit accounting discussed above, management also has corrected other previously identified but uncorrected errors and errors recorded in incorrect periods including, a) pension liability overstatement due to a reconciling item, b) incorrect FX impacting the FABN carrying value, c) incorrect inputs ratio in our MRB modeling and incorrect inputs in the deposit accounting calculation, d) the hedging impact of Treasury Inflation-Protected Securities (TIPS) hedging income was incorrectly recorded in Accumulated other comprehensive income, e) error in the manual accrual in an input calculation in the treasury package overstating Policyholders’ account balance and Interest credited to policyholders, f) incorrect actuarial indication impacting the Liability for MRB and purchased MRB, and g) incorrect allocation of earned premiums to loss ratio impacting reserves.

Management assessed the materiality of this change within prior period financial statements based upon SEC Staff Accounting Bulletin Number 99, Materiality, which is since codified in ASC 250, Accounting Changes and Error Corrections. The prior period comparative financial statements that are presented herein have been revised.

The following tables present line items for prior period financial statements that have been affected by the revision. For these line items, the tables detail the amounts as previously reported, the impact upon those line items due to the revision, and the amounts as currently revised within the financial statements.

									September 30, 2024
																																	As Previously Reported																		Impact of Revisions						As Revised
																																	(in millions)
Consolidated Balance Sheets:
ASSETS
Investments:
Amounts due from reinsurers																																	$	8,222																	$	(154)					$	8,068
Current and deferred income taxes																																	1,701																		6						1,707
Total Assets																																	$	298,989																	$	(148)					$	298,841
LIABILITIES
Policyholders’ account balances																																	$	107,433																	$	(29)					$	107,404
Amounts due to reinsurers																																	1,421																		5						1,426
Other liabilities																																	6,645																		(105)						6,540
Total Liabilities																																	292,791																		(129)						292,662
EQUITY
Retained earnings																																	9,977																		(13)						9,964
Accumulated other comprehensive income (loss)																																	(6,595)																		(6)						(6,601)
Total equity attributable to Holdings																																	3,220																		(19)						3,201
Total Equity																																	4,975																		(19)						4,956
Total Equity and Redeemable NCI																																	6,198																		(19)						6,179
Total Liabilities, Redeemable Noncontrolling Interest and Equity																																	$	298,989																	$	(148)					$	298,841

			Three Months Ended September 30, 2024																		Nine Months Ended September 30, 2024
			As Previously Reported																		Impact of Revisions						As Revised						As Previously Reported																		Impact of Revisions						As Revised
			(in millions, except per share data)
Consolidated Statements of Income (Loss)
REVENUES
Premiums			$	313																	$	(1)					$	312					$	870																	$	9					$	879
Net investment income (loss)			1,309																		(1)						1,308						3,694																		(9)						3,685
Other income			301																		(1)						300						989																		(6)						983
Total revenues			3,076																		(3)						3,073						8,816																		(6)						8,810
BENEFITS AND OTHER DEDUCTIONS
Remeasurement of liability for future policy benefits			16																		(17)						(1)						9																		(12)						(3)
Change in market risk benefits and purchased market risk benefits			79																		18						97						(1,154)																		31						(1,123)
Interest credited to policyholders’ account balances			708																		(7)						701						1,879																		—						1,879
Total benefits and other deductions			3,090																		(6)						3,084						7,902																		19						7,921
Income (loss) from continuing operations, before income taxes			(14)																		3						(11)						914																		(25)						889
Income tax (expense) benefit			40																		(1)						39						(106)																		5						(101)
Net income (loss)			26																		2						28						808																		(20)						788
Net income (loss) attributable to Holdings			(134)																		2						(132)						408																		(20)						388
Net income (loss) available to Holdings’ common shareholders			$	(148)																	$	2					$	(146)					$	354																	$	(20)					$	334
EARNINGS PER COMMON SHARE
Basic			$	(0.47)																	$	0.01					$	(0.46)					$	1.09																	$	(0.06)					$	1.03
Diluted			$	(0.47)																	$	0.01					$	(0.46)					$	1.08																	$	(0.06)					$	1.02

			Three Months Ended September 30, 2024																		Nine Months Ended September 30, 2024
			As Previously Reported																		Impact of Revisions						As Revised						As Previously Reported																		Impact of Revisions						As Revised
			(in millions)
Consolidated Statements of Comprehensive Income (Loss)
Net income (loss)			$	26																	$	2					$	28					$	808																	$	(20)					$	788
Other comprehensive income (loss) net of income taxes:
Change in unrealized gains (losses), net of reclassification adjustment			2,255																		1						2,256						1,334																		—						1,334
Change in market risk benefits - instrument-specific credit risk			(5)																		25						20						(133)																		14						(119)
Change in defined benefit plan related items not yet recognized in periodic benefit cost, net of reclassification adjustment			11																		(1)						10						29																		—						29
Foreign currency translation adjustment			20																		(1)						19						17																		—						17
Total other comprehensive income (loss), net of income taxes			2,058																		24						2,082						1,189																		14						1,203
Comprehensive income (loss)			2,084																		26						2,110						1,997																		(6)						1,991
Comprehensive income (loss) attributable to Holdings			$	1,916																	$	26					$	1,942					$	1,590																	$	(6)					$	1,584

			Three Months Ended September 30, 2024																		Nine Months Ended September 30, 2024
			As Previously Reported						Impact of Revisions						As Revised						As Previously Reported						Impact of Revisions						As Revised
			(in millions)
Consolidated Statements of Equity:
Equity, beginning of period			$	3,385					$	(46)					$	3,339					$	4,388					$	(13)					$	4,375
Total Holdings’ equity, beginning of period			1,644						(46)						1,598						2,649						(13)						2,636
Retained earnings, beginning of year			10,317						(16)						10,301						10,243						7						10,250
Net income (loss) attributable to Holdings			(134)						2						(132)						408						(20)						388
Other			(2)						1						(1)						(1)						—						(1)
Retained earnings, end of period			9,977						(13)						9,964						9,977						(13)						9,964
Accumulated other comprehensive income (loss), beginning of year			(8,645)						(30)						(8,675)						(7,777)						(20)						(7,797)
Other comprehensive income (loss)			2,050						24						2,074						1,182						14						1,196
Accumulated other comprehensive income (loss), end of period			(6,595)						(6)						(6,601)						(6,595)						(6)						(6,601)
Total Holdings’ equity, end of period			3,220						(19)						3,201						3,220						(19)						3,201
Total equity, end of period			$	4,975					$	(19)					$	4,956					$	4,975					$	(19)					$	4,956

									Nine Months Ended September 30, 2024
																																	As Previously Reported																		Impact of Revisions						As Revised
																																	(in millions)
Consolidated Statements of Cash Flows:
Cash flows from operating activities:
Net income (loss)																																	$	808																	$	(20)					$	788
Adjustments to reconcile Net income (loss) to Net cash provided by (used in) operating activities:
Amortization and depreciation																																	640																		6						646
Remeasurement of liability for future policy benefits																																	9																		(12)						(3)
Change in market risk benefits																																	(1,154)																		31						(1,123)
Reinsurance recoverable																																	(612)																		(2)						(614)
Current and deferred income taxes																																	181																		(5)						176
Other, net																																	255																		2						257
Net cash provided by (used in) operating activities																																	$	1,606																	$	—					$	1,606

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- Definition

The entire disclosure for reporting error correction.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-7

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