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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Schedule of Components of Income Tax Expense | Our income tax expense is as follows:
| Successor |  |  | Predecessor
| Year Ended December 31, |  | Period From May 25 to December 31, |  |  | Period From January 1 to May 24,
| 2024 |  | 2023 |  | 2022 |  |  | 2022
| (Dollars in millions)
Current tax expense (recovery) | $ | 93 |  |  | $ | (9) |  |  | $ | 21 |  |  |  | $ | 57 |
Deferred tax expense (recovery) | (263) |  |  | 56 |  |  | 53 |  |  |  | (24) |
Total income tax expense (recovery) | $ | (170) |  |  | $ | 47 |  |  | $ | 74 |  |  |  | $ | 33 |
Income tax expense (recovery) differed from the amount computed at the statutory federal income tax rate of 21% is as follows:
| Successor |  |  | Predecessor
| Year Ended December 31, |  | Period From May 25 to December 31, |  |  | Period From January 1 to May 24,
| 2024 |  | 2023 |  | 2022 |  |  | 2022
| (Dollars in millions)
Net income (loss) before income taxes | $ | 510 |  |  | $ | 444 |  |  | $ | 400 |  |  |  | $ | 166 |
Income tax at statutory rate | $ | 107 |  |  | $ | 93 |  |  | $ | 84 |  |  |  | $ | 35 |
Tax effect of: |  |  |  |  |  |  |  |
Change in tax rates and imposition of new tax legislation | (292) |  |  | (35) |  |  | — |  |  |  | — |
Tax credits | (3) |  |  | (12) |  |  | (11) |  |  |  | (1) |
Valuation allowance | 18 |  |  | — |  |  | — |  |  |  | — |
Other | — |  |  | 1 |  |  | 1 |  |  |  | (1) |
Total income tax expense (recovery) | $ | (170) |  |  | $ | 47 |  |  | $ | 74 |  |  |  | $ | 33 |
Schedule of Reconciliation of Effective Income Tax Rate | The following table presents a reconciliation of the statutory income tax rate to the effective income tax rate:
| Successor |  |  | Predecessor
| Year Ended December 31, |  | Period From May 25 to December 31, |  |  | Period From January 1 to May 24,
| 2024 |  | 2023 |  | 2022 |  |  | 2022
Statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | % |  |  | 21.0 | %
Increase (reduction) in rate resulting from: |  |  |  |  |  |  |  |
Change in tax rates and imposition of new tax legislation | (57.4) | % |  | (8.0) | % |  | — | % |  |  | — | %
Tax credits | (0.6) | % |  | (2.7) | % |  | (2.8) | % |  |  | (0.5) | %
Valuation allowance | 3.5 | % |  | — | % |  | — | % |  |  | — | %
Other | 0.2 | % |  | 0.4 | % |  | 0.4 | % |  |  | (0.7) | %
Effective income tax rate | (33.3) | % |  | 10.7 | % |  | 18.6 | % |  |  | 19.8 | %
Schedule of Deferred Tax Assets | The tax effects of temporary differences that gave rise to the deferred tax assets and liabilities are shown below:
| December 31,
| 2024 |  | 2023
| (Dollars in millions)
Deferred tax assets |  |  |
Investments | $ | 1,445 |  |  | $ | 291 |
Value of business acquired and other intangible assets | — |  |  | 109 |
Policyholders' account balances | 60 |  |  | 58 |
Bermuda DTA | 377 |  |  | 35 |
Reinsurance recoverables | 3,920 |  |  | — |
Loss carryforwards | 624 |  |  | 28 |
Tax credit carryforwards | 88 |  |  | 3 |
Other | 45 |  |  | — |
Gross deferred tax assets | 6,559 |  |  | 524 |
Valuation allowance | (21) |  |  | (5) |
Deferred tax assets after valuation allowance | 6,538 |  |  | 519 |
Deferred tax liabilities |  |  |
Deferred acquisition costs | 198 |  |  | 4 |
Pension assets | 64 |  |  | 49 |
Value of business acquired and other intangible assets | 2,060 |  |  | — |
Future policy benefits | 4,153 |  |  | 138 |
Other | — |  |  | 37 |
Gross deferred tax liabilities | 6,475 |  |  | 228 |
Total net deferred tax asset | $ | 63 |  |  | $ | 291 |
Below is a reconciliation of deferred tax assets (liabilities) as reported on the financial statements:
| December 31,
| 2024 |  | 2023
| (Dollars in millions)
Deferred tax assets | $ | 529 |  |  | $ | 291 |
Deferred tax liabilities | 466 |  |  | — |
Total net deferred tax asset | $ | 63 |  |  | $ | 291 |

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