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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense (benefit) consisted of the following for the periods indicated:
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Current tax expense (benefit): |  |  |  |  |
Federal | $ | 1 |  |  | $ | 1 |  |  | $ | 2 |
Foreign | 1 |  |  | 9 |  |  | 4 |
State | 13 |  |  | 5 |  |  | 5 |
Total current tax expense (benefit) | 15 |  |  | 15 |  |  | 11 |
Deferred tax expense (benefit): |  |  |  |  |
Federal | 95 |  |  | 38 |  |  | (50) |
State | (6) |  |  | 4 |  |  | (12) |
Total deferred tax expense (benefit) | 89 |  |  | 42 |  |  | (62) |
Total income tax expense (benefit) | $ | 104 |  |  | $ | 57 |  |  | $ | (51) |
Income before income taxes consisted of the following for the periods indicated:
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Income: |  |  |  |  |
Domestic | $ | 834 |  |  | $ | 772 |  |  | $ | 668 |
Foreign | 3 |  |  | 27 |  |  | 10 |
Total income before income taxes | $ | 837 |  |  | $ | 799 |  |  | $ | 678 |
Income taxes were different from the amount computed by applying the federal income tax rate to Income before income taxes for the following reasons for the periods indicated:
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
| Amount | Percent |  | Amount | Percent |  | Amount | Percent
U.S Federal Statutory Rate | $ | 176 |  | 21.0 | % |  | $ | 168 |  | 21.0 | % |  | $ | 142 |  | 21.0 | %
State and Local Income Taxes, Net of Federal Income Tax Effect | 2 |  | 0.2 | % |  | 9 |  | 1.1 | % |  | (7) |  | (1.0) | %
Foreign Tax Effects | 1 |  | 0.1 | % |  | 9 |  | 1.1 | % |  | 4 |  | 0.6 | %
Tax Credits |  |  |  |  |  |  |  |
Foreign tax credits | (20) |  | (2.4) | % |  | (22) |  | (2.8) | % |  | (18) |  | (2.7) | %
Research and development tax credits | (5) |  | (0.6) | % |  | (6) |  | (0.8) | % |  | (3) |  | (0.4) | %
Nontaxable or Nondeductible Items |  |  |  |  |  |  |  |
Dividends received deduction | (36) |  | (4.3) | % |  | (49) |  | (6.1) | % |  | (38) |  | (5.6) | %
Noncontrolling interest | (17) |  | (2.0) | % |  | (16) |  | (2.0) | % |  | (22) |  | (3.3) | %
Nontaxable foreign subsidiary gain | — |  | — | % |  | — |  | — | % |  | (10) |  | (1.5) | %
Executive compensation disallowed under §162(m) | 6 |  | 0.7 | % |  | 6 |  | 0.8 | % |  | 8 |  | 1.2 | %
Other | (1) |  | (0.1) | % |  | (4) |  | (0.5) | % |  | (2) |  | (0.3) | %
Other Adjustments |  |  |  |  |  |  |  |
Security Life of Denver Company capital loss carryback(1) | — |  | — | % |  | (38) |  | (4.8) | % |  | (92) |  | (13.6) | %
Other | (2) |  | (0.2) | % |  | — |  | — | % |  | (13) |  | (1.9) | %
Effective tax rate | $ | 104 |  | 12.4 | % |  | $ | 57 |  | 7.1 | % |  | $ | (51) |  | (7.5) | %
(1) See Other Tax Matters section below Current Income Tax The Company had a current income tax receivable of $8 and $12 as of December 31, 2025 and 2024, respectively, which is included in Other assets on the Consolidated Balance Sheets. The Company had an immaterial amount of net taxes paid for the years ended December 31, 2025, 2024 and 2023. Temporary Differences The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities were as follows as of the dates indicated:
| December 31,
| 2025 |  | 2024
Deferred tax assets |  |  |
Federal and state loss carryforwards | $ | 1,167 |  |  | $ | 1,421 |
Net unrealized investment losses | 351 |  |  | 522 |
Compensation and benefits | 175 |  |  | 161 |
Current discount rate | 156 |  |  | 165 |
Tax credits | 155 |  |  | 154 |
Other assets | 280 |  |  | 222 |
Total gross assets before valuation allowance | 2,284 |  |  | 2,645 |
Less: Valuation allowance | 75 |  |  | 96 |
Assets, net of valuation allowance | 2,209 |  |  | 2,549 |
Deferred tax liabilities |  |  |
Deferred policy acquisition costs | (277) |  |  | (324) |
Other liabilities | (61) |  |  | (91) |
Total gross liabilities | (338) |  |  | (415) |
Net deferred income tax asset | $ | 1,871 |  |  | $ | 2,134 |
The following table sets forth the federal, state and credit carryforwards for tax purposes as of the dates indicated:
| December 31,
| 2025 |  | 2024
Federal net operating loss carryforward | $ | 5,186 |  | (1) | $ | 6,335 |
State net operating loss carryforward | 2,148 |  | (2) | 2,412 |
Credit carryforward | 155 |  | (3) | 154 |
(1) Approximately $2,419 of the net operating loss carryforwards ("NOL") are not subject to expiration. $2,767 of the NOLs expire between 2026 and 2037. (2) Approximately $503 of the NOLs not subject to expiration. $1,645 of the NOLs expire between 2026 and 2045. (3) Expires between 2026 and 2045. Valuation allowances are provided when it is considered more likely than not that some portion or all of the deferred tax assets ("DTA") will not be realized. As of December 31, 2025 and 2024, the Company had a total valuation allowance of $75 and $96, respectively. As of December 31, 2025 and 2024, $198 and $219, respectively, of this valuation allowance was allocated to continuing operations and $(123) was allocated to Other comprehensive income (loss) related to realized and unrealized capital losses at the end of each period. Significant judgment is required to evaluate the need for a valuation allowance against DTAs. The Company reviews all available positive and negative evidence to determine if a valuation allowance is recorded, including historical and projected pre-tax book income, tax planning strategies and reversals of temporary differences. As of December 31, 2025 and 2024, the Company had net unrealized capital losses of $1.7 billion and $2.5 billion, respectively, in AOCI. The Company expects this DTA to be utilized by its hold-to-maturity tax planning strategy. Additionally, income before income taxes available to the Company remained positive for the period. After evaluating the positive and negative evidence, the Company did not change its judgment regarding the realization of DTAs in 2025. The valuation allowance as of December 31, 2025 of $75 was against certain historic state net operating losses that were below more likely than not to be utilized. The Company will continue to assess all available evidence during future periods to evaluate any changes to the realization of these DTAs. Other Tax Matters On January 4, 2021, the Company completed a series of transactions pursuant to a Master Transaction Agreement with Resolution Life U.S. Holdings Inc. ("Resolution Life US"). As a part of these transactions, Resolution Life US acquired the Company's wholly owned subsidiary, SLD. SLD generated capital losses in the 2023 and 2022 tax years, which are included in the tax return for the Company. The Company recorded a $38 and $92 tax benefit in 2024 and 2023, respectively, resulting in a decrease to the effective tax rate. Unrecognized Tax Benefits Reconciliations of the change in the unrecognized income tax benefits were as follows for the periods indicated:
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Balance at beginning of period | $ | 24 |  |  | $ | 27 |  |  | $ | 33 |
Additions (reductions) for tax positions related to current year | — |  |  | — |  |  | — |
Additions (reductions) for tax positions related to prior years | (3) |  |  | (3) |  |  | (6) |
Balance at end of period | $ | 21 |  |  | $ | 24 |  |  | $ | 27 |
Interest and Penalties The Company recognizes interest expense and penalties, if applicable, related to unrecognized tax benefits in tax expense net of federal income tax. The total amounts of gross accrued interest and penalties on the Company's Consolidated Balance Sheets as of December 31, 2025 and 2024 were immaterial. The Company recognized an immaterial amount of gross interest (benefit) related to unrecognized tax in its Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023. The timing of the payment of the remaining accrued interest and penalties cannot be reasonably estimated. Tax Regulatory Matters For the tax years 2023 through 2025, the Company participates in the Internal Revenue Service ("IRS") Compliance Assurance Process ("CAP"), which is a continuous audit program provided by the IRS. For the 2023 tax year, the Company is in the Compliance Maintenance Bridge ("Bridge") phase of CAP. In the Bridge phase, the IRS did not conduct any review or provide any letters of assurance for that tax year. For the 2024 and 2025 tax years, the Company is in the Compliance Maintenance Bridge Plus ("Bridge Plus") phase of CAP. In the Bridge Plus phase, the IRS will review the tax return and issue either a full or partial acceptance letter upon completion of review. The Company received a partial acceptance letter for the 2024 tax year and does not anticipate any material adjustments to its tax return as filed. The Company filed amended federal income tax returns for tax years 2012 through 2018 to claim a foreign tax credit instead of utilizing a foreign tax deduction. The Company does not anticipate an adjustment to its claim as filed. The audit of the claim is ongoing. Tax Legislative Matters In August 2022, the Inflation Reduction Act was signed into law creating the corporate alternative minimum tax ("CAMT"). In September 2024, the Department of Treasury issued proposed regulations providing additional guidance on the CAMT. While the Company does not expect to be subject to the CAMT for 2025, the Company continues to review the proposed regulations, and its CAMT determination will need to be evaluated in light of future guidance. In July 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law, which includes changes to the Internal Revenue Code. The OBBBA did not have a material impact on the Company's financial statements.

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