Reinsurance

12 Months Ended

Dec. 31, 2022

7. Reinsurance

The following summarizes the effect of reinsurance on premiums and future policy and other policy benefits on the consolidated statements of income (loss):


	Successor		Predecessor
(In millions)	Year Ended December 31, 2022		Year Ended December 31, 2021		Year Ended December 31, 2020
Premiums
Direct	$	11,373	$	13,989	$	5,691
Reinsurance assumed	377		388		413
Reinsurance ceded	(112)		(115)		(141)
Total premiums	$	11,638	$	14,262	$	5,963

Future policy and other policy benefits
Direct	$	12,018	$	15,482	$	7,016
Reinsurance assumed	398		503		522
Reinsurance ceded	(106)		(251)		(351)
Total future policy and other policy benefits	$	12,310	$	15,734	$	7,187

Reinsurance typically provides for recapture rights on the part of the ceding company for certain events of default. Additionally, some agreements require us to place assets in trust accounts for the benefit of the ceding entity. The required minimum assets are equal to or greater than statutory reserves, as defined by the agreement, and were $12,643 million and $6,380 million as of December 31, 2022 and 2021, respectively. Although we own the assets placed in trust, their use is restricted based on the trust agreement terms. If the statutory book value of the assets, or in certain cases fair value, in a trust declines because of impairments or other reasons, we may be required to contribute additional assets to the trust. In addition, the assets within a trust may be subject to a pledge in favor of the applicable reinsurance company.

Reinsurance transactions

We have entered into various coinsurance and modco agreements to reinsure blocks of fixed deferred and fixed indexed and pension group annuities. We did not have any block reinsurance transactions during the years ended December 31, 2022 or 2021. The following summarizes our block reinsurance agreements at inception:


	Predecessor
(In millions)	Year Ended December 31, 2020
Liabilities assumed	$	27,439
Less: Assets received	28,805

Net cost of reinsurance	$	(1,366)


Unearned revenue reserve1	(1,366)



1 Included within interest sensitive contract liabilities on the consolidated balance sheets.

Unearned revenue reserve balances are amortized over the life of the reinsurance agreements on a basis consistent with our DAC amortization policy.

Effective July 1, 2020, we restructured our reinsurance agreement with Mass Mutual Life Insurance Company (MassMutual). MassMutual recaptured the existing coinsurance agreement and we immediately entered into a new funds withheld coinsurance agreement with our ALRe subsidiary. As a result, we recorded a $5,021 million increase in funds withheld at interest and a corresponding decrease in assets, primarily consisting of investments and cash.

Global Atlantic – We have a 100% coinsurance and assumption agreement with Global Atlantic. The agreement ceded all existing open block life insurance business issued by Athene Annuity and Life Company (AAIA), with the exception of enhanced guarantee universal life insurance products. We also entered into a 100% coinsurance agreement with Global Atlantic to cede all policy liabilities of the ILICO Closed Block. The ILICO Closed Block consists primarily of participating whole life insurance policies. We also have an excess of loss arrangement with Global Atlantic to reimburse us for any payments required from our general assets to meet the contractual obligations of the AmerUs Closed Block not covered by existing reinsurance through Athene Re USA IV. The AmerUs Closed Block consists primarily of participating whole life insurance policies. Since all liabilities were covered by the existing reinsurance at close, no reinsurance premiums were ceded. The assets backing the AmerUs Closed Block are managed, on AAIA’s behalf, by Goldman Sachs Asset Management.

As of December 31, 2022 and 2021, Global Atlantic maintained a series of trust and custody accounts under the terms of these agreements with assets equal to or greater than a required aggregate statutory balance of $2,745 million and $2,854 million, respectively.

Protective Life Insurance Company (Protective) – We reinsured substantially all of the existing life and health business of Athene Annuity & Life Assurance Company (AADE) to Protective under a coinsurance agreement in 2011. As of December 31, 2022 and 2021, Protective maintained a trust for our benefit with assets having a fair value of $1,203 million and $1,624 million, respectively.

Reinsurance Recoverables—The following summarizes our reinsurance recoverable:


	Successor		Predecessor
(In millions)	December 31, 2022		December 31, 2021
Global Atlantic	$	2,461	$	2,916
Protective	1,581		1,515
Brighthouse Financial	226		—
Other1	99		163
Reinsurance recoverable	$	4,367	$	4,594

1 Represents all other reinsurers, with no single reinsurer having a carrying value in excess of 5% of total recoverable.