Insurance

3 Months Ended

Mar. 31, 2023

Liability for Future Policy Benefits

Information regarding LFPBs for non-participating traditional and limited-payment contracts was as follows:


	Three Months Ended March 31,
	2023									2022
	Term and Whole Life Insurance			Income Annuities			Structured Settlement and Pension Risk Transfer Annuities			Term and Whole Life Insurance			Income Annuities			Structured Settlement and Pension Risk Transfer Annuities
	(Dollars in millions)
Present value of expected net premiums:
Balance, beginning of period	$	2,871		$	—		$	—		$	3,325		$	—		$	—
Beginning balance at original discount rate	3,212			—			—			3,051			—			—
Effect of model refinements	—			—			—			122			—			—
Effect of changes in cash flow assumptions	—			—			—			(1)			—			—
Effect of actual variances from expected experience	(9)			—			—			77			—			—
Adjusted beginning of period balance	3,203			—			—			3,249			—			—
Issuances	24			—			—			20			—			—
Interest accrual	28			—			—			28			—			—
Net premiums collected	(90)			—			—			(107)			—			—
Ending balance at original discount rate	3,165			—			—			3,190			—			—
Effect of changes in discount rate assumptions	(270)			—			—			26			—			—
Balance, end of period	$	2,895		$	—		$	—		$	3,216		$	—		$	—
Present value of expected future policy benefits:
Balance, beginning of period	$	5,279		$	3,512		$	6,793		$	6,426		$	4,333		$	10,171
Beginning balance at original discount rate	5,922			3,897			7,410			5,820			3,865			8,165
Effect of model refinements	—			—			—			135			—			—
Effect of changes in cash flow assumptions	—			—			—			—			—			—
Effect of actual variances from expected experience	(9)			(31)			(31)			85			(9)			(22)
Adjusted beginning of period balance	5,913			3,866			7,379			6,040			3,856			8,143
Issuances	24			78			—			22			43			—
Interest accrual	54			36			80			56			37			87
Benefit payments	(131)			(89)			(146)			(208)			(93)			(161)
Ending balance at original discount rate	5,860			3,891			7,313			5,910			3,843			8,069
Effect of changes in discount rate assumptions	(501)			(287)			(385)			86			110			820
Balance, end of period	$	5,359		$	3,604		$	6,928		$	5,996		$	3,953		$	8,889
Net liability for future policy benefits, end of period	$	2,464		$	3,604		$	6,928		$	2,780		$	3,953		$	8,889
Less: Reinsurance recoverable, end of period	43			26			69			61			25			82
Net liability for future policy benefits, after reinsurance recoverable	$	2,421		$	3,578		$	6,859		$	2,719		$	3,928		$	8,807
Weighted-average duration of liability	8.4 years			8.4 years			11.6 years			8.4 years			8.5 years			12.7 years
Weighted-average interest accretion rate	3.96		%	3.87		%	4.46		%	3.98		%	3.95		%	4.45		%
Gross premiums or assessments recognized during period	$	153		$	102		$	—		$	171		$	45		$	—
Expected future gross premiums, undiscounted	$	6,618		$	—		$	—		$	6,954		$	—		$	—
Expected future gross premiums, discounted	$	4,905		$	—		$	—		$	5,138		$	—		$	—
Expected future benefit payments, undiscounted	$	8,099		$	5,375		$	14,224		$	8,195		$	5,479		$	17,046
Expected future benefit payments, discounted	$	5,860		$	3,891		$	7,313		$	5,910		$	3,843		$	8,069

Information regarding the additional insurance liabilities for universal life-type contracts with secondary guarantees was as follows:


	Three Months Ended March 31,
	2023			2022
	(Dollars in millions)
Balance, beginning of period	$	6,935		$	7,168
Beginning balance before the effect of unrealized gains and losses	7,175			6,731
Effect of changes in cash flow assumptions	—			—
Effect of actual variances from expected experience	34			66
Adjusted beginning of period balance	7,209			6,797
Interest accrual	87			81
Net assessments collected	101			110
Benefit payments	(103)			(159)
Effect of realized capital gains (losses)	—			1
Ending balance before the effect of unrealized gains and losses	7,294			6,830
Effect of unrealized gains and losses	(171)			156
Balance, end of period	7,123			6,986
Less: Reinsurance recoverable, end of period	1,397			1,304
Net additional liability, after reinsurance recoverable	$	5,726		$	5,682
Weighted-average duration of liability	6.7 years			6.7 years
Weighted-average interest accretion rate	4.91		%	4.90		%
Gross premiums or assessments recognized during period	$	—		$	—

A reconciliation of the net LFPBs for nonparticipating traditional and limited-payment contracts and the additional insurance liabilities for universal life-type contracts with secondary guarantees reported in the preceding rollforward tables to LFPBs on the consolidated balance sheets was as follows at:


	March 31,
	2023		2022
	(In millions)
Liabilities reported in the preceding rollforward tables	$	20,119	$	22,608
Long-term care insurance (1)	5,763		6,708
ULSG liability for profits followed by losses	2,654		3,461
Participating whole life insurance (2)	2,986		2,788
Deferred profit liabilities	373		378
Other	391		430
Total liability for future policy benefits	$	32,286	$	36,373

_______________

(1)Includes liabilities related to fully reinsured individual long-term care insurance. See Note 3.

(2)Participating whole life insurance uses an interest assumption based on the non-forfeiture interest rate, ranging from 3.5% to 4.5%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts, and also includes a liability for terminal dividends. Participating whole life insurance represented 3% of the Company’s life insurance in-force at both March 31, 2023 and 2022, and 39% and 34% of gross traditional life insurance premiums for the three months ended March 31, 2023 and 2022, respectively.

Information regarding LFPBs for non-participating traditional and limited-payment contracts was as follows:


	Years Ended December 31,
	2022						2021
	Term and Whole Life Insurance		Income Annuities		Structured Settlement and Pension Risk Transfer Annuities		Term and Whole Life Insurance		Income Annuities		Structured Settlement and Pension Risk Transfer Annuities
	(Dollars in millions)
Present value of expected net premiums:
Balance, beginning of year	$	3,325	$	—	$	—	$	3,448	$	—	$	—
Beginning balance at original discount rate	3,051		—		—		2,994		—		—
Effect of model refinements	122		—		—		—		—		—
Effect of changes in cash flow assumptions	137		—		—		70		—		—
Effect of actual variances from expected experience	119		—		—		153		—		—
Adjusted beginning of year balance	3,429		—		—		3,217		—		—
Issuances	93		—		—		113		—		—
Interest accrual	116		—		—		111		—		—
Net premiums collected	(426)		—		—		(390)		—		—
Ending balance at original discount rate	3,212		—		—		3,051		—		—
Effect of changes in discount rate assumptions	(341)		—		—		274		—		—
Balance, end of year	$	2,871	$	—	$	—	$	3,325	$	—	$	—
Present value of expected future policy benefits:
Balance, beginning of year	$	6,426	$	4,333	$	10,171	$	6,852	$	4,691	$	11,301
Beginning balance at original discount rate	5,820		3,865		8,165		5,862		3,938		8,531
Effect of model refinements	135		—		(278)		—		—		—
Effect of changes in cash flow assumptions	157		56		(157)		70		(41)		(41)
Effect of actual variances from expected experience	155		(22)		(23)		153		(6)		(16)
Adjusted beginning of year balance	6,267		3,899		7,707		6,085		3,891		8,474
Issuances	101		224		—		128		198		—
Interest accrual	222		146		327		222		150		359
Benefit payments	(668)		(372)		(624)		(615)		(374)		(668)
Ending balance at original discount rate	5,922		3,897		7,410		5,820		3,865		8,165
Effect of changes in discount rate assumptions	(643)		(385)		(617)		606		468		2,006
Balance, end of year	$	5,279	$	3,512	$	6,793	$	6,426	$	4,333	$	10,171
Net liability for future policy benefits, end of year	$	2,408	$	3,512	$	6,793	$	3,101	$	4,333	$	10,171
Less: Reinsurance recoverable, end of year	45		24		68		64		27		93
Net liability for future policy benefits, after reinsurance recoverable	$	2,363	$	3,488	$	6,725	$	3,037	$	4,306	$	10,078

Policyholder Account Balances

Information regarding policyholder account balances was as follows:


	Universal Life Insurance			Variable Annuities (1)			Index-linked Annuities			Fixed Rate Annuities			ULSG			Company-Owned Life Insurance (1)
	(Dollars in millions)
Three Months Ended March 31, 2023
Balance, beginning of period	$	2,658		$	4,908		$	33,896		$	14,274		$	5,307		$	641
Premiums and deposits	55			27			1,677			912			171			—
Surrenders and withdrawals	(70)			(177)			(785)			(506)			(6)			—
Benefit payments	(25)			(36)			(50)			(102)			(38)			(2)
Net transfers from (to) separate account	12			11			—			—			—			—
Interest credited	22			41			96			106			43			7
Policy charges	(57)			(7)			(2)			—			(258)			(2)
Changes related to embedded derivatives	—			—			1,090			—			—			—

Balance, end of period	$	2,595		$	4,767		$	35,922		$	14,684		$	5,219		$	644
Weighted-average crediting rate (2)	0.84		%	0.85		%	0.32		%	0.73		%	0.82		%	1.09		%
Three Months Ended March 31, 2022
Balance, beginning of period	$	2,694		$	4,743		$	32,000		$	11,849		$	5,569		$	646
Premiums and deposits	55			49			1,594			44			176			—
Surrenders and withdrawals	(21)			(131)			(473)			(155)			(10)			—
Benefit payments	(20)			(34)			(36)			(83)			(23)			(3)
Net transfers from (to) separate account	15			85			—			—			—			2
Interest credited	4			44			71			72			63			7
Policy charges	(56)			(7)			(2)			—			(263)			(2)
Changes related to embedded derivatives	—			—			(756)			—			—			—

Balance, end of period	$	2,671		$	4,749		$	32,398		$	11,727		$	5,512		$	650
Weighted-average crediting rate (2)	0.15		%	0.93		%	0.27		%	0.61		%	1.14		%	0.93		%

_______________

(1)Includes liabilities related to separate account products where the contract holder elected a general account investment option.

(2)Excludes the effects of embedded derivatives related to index-linked crediting rates.

A reconciliation of policyholder account balances reported in the preceding rollforward table to the liability for policyholder account balances on the consolidated balance sheets was as follows at:


	March 31,
	2023		2022
	(In millions)
Policyholder account balances reported in the preceding rollforward table	$	63,831	$	57,707
Funding agreements classified as investment contracts	11,151		7,705
Other investment contract liabilities	1,138		1,299
Total policyholder account balances	$	76,120	$	66,711

The balance of account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums was as follows at:


Range of Guaranteed Minimum Crediting Rate	At Guaranteed Minimum		1 to 50 Basis Points Above		51 to 150 Basis Points Above		Greater than 150 Basis Points Above		Total
	(In millions)
March 31, 2023
Annuities (1) (3):
Less than 2.00%	$	791	$	289	$	442	$	6,688	$	8,210
2.00% to 3.99%	5,574		4,745		737		12		11,068
Greater than 3.99%	512		—		—		—		512
Total	$	6,877	$	5,034	$	1,179	$	6,700	$	19,790
Life insurance (2) (3):
Less than 2.00%	$	—	$	—	$	—	$	183	$	183
2.00% to 3.99%	—		502		50		150		702
Greater than 3.99%	1,630		—		—		—		1,630
Total	$	1,630	$	502	$	50	$	333	$	2,515
ULSG (3):
Less than 2.00%	$	—	$	—	$	—	$	—	$	—
2.00% to 3.99%	1,200		1,552		1,706		264		4,722
Greater than 3.99%	521		—		—		—		521
Total	$	1,721	$	1,552	$	1,706	$	264	$	5,243
December 31, 2022
Annuities (1) (3):
Less than 2.00%	$	861	$	317	$	369	$	5,821	$	7,368
2.00% to 3.99%	6,119		4,872		596		10		11,597
Greater than 3.99%	525		—		—		—		525
Total	$	7,505	$	5,189	$	965	$	5,831	$	19,490
Life insurance (2) (3):
Less than 2.00%	$	—	$	—	$	—	$	172	$	172
2.00% to 3.99%	—		510		87		154		751
Greater than 3.99%	1,657		—		—		—		1,657
Total	$	1,657	$	510	$	87	$	326	$	2,580
ULSG (3):
Less than 2.00%	$	—	$	—	$	—	$	—	$	—
2.00% to 3.99%	1,225		1,581		1,729		266		4,801
Greater than 3.99%	527		—		—		—		527
Total	$	1,752	$	1,581	$	1,729	$	266	$	5,328

_______________

(1)Includes policyholder account balances for fixed rate annuities and the fixed account portion of variable annuities.

(2)Includes policyholder account balances for retained asset accounts, universal life policies and the fixed account portion of universal variable life insurance policies.

(3)Amounts are gross of policy loans and net of excess interest reserves.

Market Risk Benefits

Information regarding MRB assets and liabilities associated with variable annuities was as follows:


	Three Months Ended March 31,				Years Ended December 31,
	2023		2022		2022		2021
	(Dollars in millions)
Balance, beginning of period	$	9,974	$	15,698	$	15,698	$	18,388
Balance, beginning of period, before effect of changes in nonperformance risk	8,230		11,611		11,611		14,934
Decrements	(28)		34		16		(68)
Effect of changes in future expected assumptions	—		—		210		41
Effect of actual different from expected experience	122		—		(48)		(86)
Effect of changes in interest rates	880		(2,860)		(8,394)		(1,829)
Effect of changes in fund returns	(1,002)		1,183		3,807		(2,578)
Issuances	(3)		(11)		(47)		(96)
Effect of changes in risk margin	9		(50)		(152)		(128)
Aging of the block and other	326		276		1,227		1,421
Balance, end of period, before effect of changes in nonperformance risk	8,534		10,183		8,230		11,611
Effect of changes in nonperformance risk	1,752		3,159		1,744		4,087
Balance, end of period	10,286		13,342		9,974		15,698
Less: Reinsurance recoverable, end of period	71		93		71		118
Balance, end of period, net of reinsurance (1)	$	10,215	$	13,249	$	9,903	$	15,580
Weighted-average attained age of contract holder	72.1 years		71.5 years		71.8 years		71.1 years

_______________

(1)Amounts represent the sum of MRB assets and MRB liabilities presented on the consolidated balance sheets at March 31, 2023 and 2022, with the exception of $4 million and $4 million, respectively, of index-linked annuities not included in this table, and at December 31, 2022 and 2021, with the exception of $3 million and $5 million, respectively, of index-linked annuities not included in this table.

Separate Accounts

Information regarding separate account liabilities was as follows:


	Three Months Ended March 31,
	2023						2022
	Variable Annuities		Universal Life Insurance		Company-Owned Life Insurance		Variable Annuities		Universal Life Insurance		Company-Owned Life Insurance
	(In millions)
Balance, beginning of period	$	77,653	$	5,218	$	1,932	$	105,023	$	6,862	$	2,384
Premiums and deposits	216		43		—		432		45		—
Surrenders and withdrawals	(1,496)		(41)		(3)		(1,744)		(51)		(7)
Benefit payments	(383)		(14)		(10)		(371)		(16)		(10)
Investment performance	4,310		341		111		(6,906)		(514)		(138)
Policy charges	(519)		(52)		(11)		(580)		(49)		(11)
Net transfers from (to) general account	(11)		(12)		—		(85)		(15)		(2)
Other	—		—		—		14		—		(1)
Balance, end of period	$	79,770	$	5,483	$	2,019	$	95,783	$	6,262	$	2,215

A reconciliation of separate account liabilities reported in the preceding rollforward table to the separate account liabilities balance on the consolidated balance sheets was as follows at:


	March 31,
	2023		2022
	(In millions)
Separate account liabilities reported in the preceding rollforward table	$	87,272	$	104,260
Variable income annuities	150		161
Pension risk transfer annuities	18		20
Total separate account liabilities	$	87,440	$	104,441

The aggregate estimated fair value of assets, by major investment asset category, supporting separate accounts was as follows at:



	March 31, 2023		December 31, 2022
	(In millions)
Equity securities	$	87,164	$	84,667

Fixed maturity securities	260		278
Cash and cash equivalents	9		9
Other assets	7		11
Total aggregate estimated fair value of assets	$	87,440	$	84,965

Net Amount at Risk and Cash Surrender Values

Information regarding the net amount at risk (“NAR”) and cash surrender value (“CSV”) for insurance products was as follows at:


	Universal Life Insurance		Variable Annuities		Index-linked Annuities		Fixed Rate Annuities		ULSG		Company-Owned Life Insurance
	(In millions)
March 31, 2023
Account balances reported in the preceding rollforward tables:
Policyholder account balances	$	2,595	$	4,767	$	35,922	$	14,684	$	5,219	$	644
Separate account liabilities	5,483		79,770		—		—		—		2,019
Total account balances	$	8,078	$	84,537	$	35,922	$	14,684	$	5,219	$	2,663
Net amount at risk	$	37,420	$	14,894	N/A		N/A		$	70,062	$	3,422
Cash surrender value	$	7,449	$	84,090	$	33,567	$	14,106	$	6,203	$	2,443
March 31, 2022
Account balances reported in the preceding rollforward tables:
Policyholder account balances	$	2,671	$	4,749	$	32,398	$	11,727	$	5,512	$	650
Separate account liabilities	6,262		95,783		—		—		—		2,215
Total account balances	$	8,933	$	100,532	$	32,398	$	11,727	$	5,512	$	2,865
Net amount at risk	$	39,142	$	9,266	N/A		N/A		$	72,059	$	3,508
Cash surrender value	$	8,283	$	100,351	$	29,442	$	10,993	$	6,400	$	2,636

Products may contain both separate account and general account fund options; accordingly, net amount at risk and cash surrender value reported in the table above relate to the total account balance for each respective product grouping.