Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 26, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-31901 | |
Entity Registrant Name | PROTECTIVE LIFE INSURANCE CO | |
Entity Incorporation, State or Country Code | TN | |
Entity Tax Identification Number | 63-0169720 | |
Entity Address, Address Line One | 2801 Highway 280 South | |
Entity Address, City or Town | Birmingham | |
Entity Address, State or Province | AL | |
Entity Address, Postal Zip Code | 35223 | |
City Area Code | 205 | |
Local Phone Number | 268-1000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,000,000 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Central Index Key | 0000310826 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues | ||||
Gross premiums and policy fees | $ 1,054 | $ 1,045 | $ 3,175 | $ 2,950 |
Reinsurance ceded | (311) | (287) | (954) | (683) |
Net premiums and policy fees | 743 | 758 | 2,221 | 2,267 |
Net investment income | 753 | 740 | 2,215 | 2,236 |
Realized gains (losses) | 67 | 111 | 161 | (224) |
Other income | 89 | 115 | 277 | 354 |
Total revenues | 1,652 | 1,724 | 4,874 | 4,633 |
Benefits and expenses | ||||
Benefits and settlement expenses, net of reinsurance ceded: (three and nine months 2021 - $394 and $1,074; three and nine months 2020 - $246 and $565) | 1,350 | 1,259 | 3,748 | 3,737 |
Amortization of deferred policy acquisition costs and value of business acquired | 91 | 110 | 233 | 145 |
Other operating expenses, net of reinsurance ceded: (three and nine months 2021 - $54 and $162; three and nine months 2020 - $52 and $171) | 152 | 195 | 506 | 576 |
Total benefits and expenses | 1,593 | 1,564 | 4,487 | 4,458 |
Income before income tax | 59 | 160 | 387 | 175 |
Income tax expense | 10 | 29 | 74 | 31 |
Net income | $ 49 | $ 131 | $ 313 | $ 144 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Benefit and settlement expenses, reinsurance ceded | $ 394 | $ 246 | $ 1,074 | $ 565 |
Other operating expenses, insurance ceded | $ 54 | $ 52 | $ 162 | $ 171 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 49 | $ 131 | $ 313 | $ 144 |
Other comprehensive income (loss): | ||||
Change in net unrealized gains (losses) on investments, net of income tax: (three and nine months 2021 - $(70) and $(257); three and nine months 2020 - $128 and $336) | (263) | 482 | (967) | 1,264 |
Reclassification adjustment for investment amounts included in net income, net of income tax: (three and nine months 2021 - $(1) and $(10); three and nine months 2020 - $7 and $16) | (5) | 28 | (39) | 60 |
Change in net expected credit losses, net of income tax: (three and nine months 2021 - $— and $—; three and nine months 2020 -$8 and $7) | (1) | 28 | (1) | 26 |
Change in accumulated (loss) gain - derivatives, net of income tax: (three and nine months 2021 - $— and $—; three and nine months 2020 - $— and $—) | (2) | 1 | 1 | (1) |
Reclassification adjustment for derivative amounts included in net income, net of income tax: (three and nine months 2021 - $— and $—; three and nine months 2020 - $— and $—) | 1 | 0 | 1 | 2 |
Total other comprehensive income (loss) | (270) | 539 | (1,005) | 1,351 |
Total comprehensive income (loss) | $ (221) | $ 670 | $ (692) | $ 1,495 |
CONSOLIDATED CONDENSED STATEM_4
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Change in net unrealized gains (losses) on investments, income tax expense (benefit) | $ (70) | $ 128 | $ (257) | $ 336 |
Reclassification adjustment for investment amounts included in net income, income tax expense (benefit) | (1) | 7 | (10) | 16 |
Change in net expected credit losses, tax expense (benefit) | 0 | 8 | 0 | 7 |
Change in accumulated (loss) gain - derivatives, income tax expense (benefit) | 0 | 0 | 0 | 0 |
Reclassification adjustment for derivative amounts included in net income, income tax | $ 0 | $ 0 | $ 0 | $ 0 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Fixed maturities, at fair value (amortized cost: 2021 - $68,323; 2020 - $65,696; allowance for credit losses: 2021 - $2; 2020 - $23) | $ 73,616 | $ 72,595 |
Equity securities, at fair value (cost: 2021 - $740; 2020 - $635) | 772 | 667 |
Commercial mortgage loans, net of allowance for credit losses (allowance for credit losses: 2021 - $103; 2020 - $222) | 10,506 | 10,006 |
Investment real estate, net of accumulated depreciation | 10 | 10 |
Policy loans | 1,543 | 1,593 |
Other long-term investments | 2,916 | 3,241 |
Short-term investments | 629 | 462 |
Total investments | 89,992 | 88,574 |
Cash | 409 | 656 |
Accrued investment income | 731 | 707 |
Accounts and premiums receivable | 197 | 127 |
Reinsurance receivables, net of allowance for credit losses (allowance for credit losses: 2021 - $91; 2020 - $94) | 4,621 | 4,596 |
Deferred acquisitions costs and value of business acquired | 3,733 | 3,420 |
Goodwill | 826 | 826 |
Other intangibles, net of accumulated amortization (2021 - $354; 2020 - $312) | 504 | 540 |
Property and equipment, net of accumulated depreciation (2021 - $74; 2020 - $61) | 207 | 204 |
Other assets | 248 | 270 |
Assets related to separate accounts | ||
Variable annuity | 13,112 | 12,378 |
Variable universal life | 1,756 | 1,287 |
Reinsurance assumed | 13,891 | 13,325 |
Total assets | 130,227 | 126,910 |
Liabilities | ||
Future policy benefits and claims | 53,995 | 54,107 |
Unearned premiums | 814 | 782 |
Total policy liabilities and accruals | 54,809 | 54,889 |
Stable value product account balances | 8,237 | 6,056 |
Annuity account balances | 15,841 | 15,478 |
Other policyholders’ funds | 1,798 | 1,865 |
Other liabilities | 4,987 | 5,622 |
Deferred income taxes | 1,483 | 1,779 |
Subordinated debt | 110 | 110 |
Secured financing liabilities | 1,270 | 496 |
Liabilities related to separate accounts | ||
Variable annuity | 13,112 | 12,378 |
Variable universal life | 1,756 | 1,287 |
Reinsurance assumed | 13,891 | 13,325 |
Total liabilities | 117,294 | 113,285 |
Commitments and contingencies - Note 11 | ||
Shareowner’s equity | ||
Preferred Stock; $1 par value, shares authorized: 2,000; Liquidation preference: $2,000 | 0 | 0 |
Common Stock, $1 par value, shares authorized and issued: 2021 and 2020 - 5,000,000 | 5 | 5 |
Additional paid-in-capital | 8,525 | 8,525 |
Retained earnings | 1,860 | 1,547 |
Accumulated other comprehensive income (loss): | ||
Net unrealized gains (losses) on investments, net of income tax: (2021 - $678; 2020 - $946) | 2,552 | 3,558 |
Net unrealized gains (losses) on investments with an allowance for credit losses, net of income tax: (2021 - $(1); 2020 - $(1)) | (3) | (2) |
Accumulated gain (loss) - derivatives, net of income tax: (2021 - $(2); 2020 - $(2)) | (6) | (8) |
Total shareowner’s equity | 12,933 | 13,625 |
Total liabilities and shareowner’s equity | $ 130,227 | $ 126,910 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, amortized cost | $ 68,323,000 | $ 65,696,000 |
Fixed maturities, allowance for credit losses | 2,000 | 23,000 |
Equity securities, cost | 740,000 | 635,000 |
Commercial mortgage loans, allowance for credit losses | 103,000 | 222,000 |
Reinsurance receivables, allowance for credit loss | 91,000 | 94,000 |
Other intangibles, accumulated amortization | 354,000 | 312,000 |
Property and equipment, accumulated depreciation | $ 74,000 | $ 61,000 |
Preferred Stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred Stock, shares authorized (in shares) | 2,000 | 2,000 |
Preferred stock, liquidation preference | $ 2 | $ 2 |
Common Stock, par value (in dollars per share) | $ 1 | $ 1 |
Common Stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Common Stock, shares issued (in shares) | 5,000,000 | 5,000,000 |
Net unrealized gains (losses) on investments, income tax | $ 678,000 | $ 946,000 |
Net unrealized gains (losses) on investments with an allowance for credit losses, tax expense (benefit) | (1,000) | (1,000) |
Accumulated gain (loss) - derivatives, income tax expense (benefit) | $ (2,000) | $ (2,000) |
CONSOLIDATED CONDENSED STATEM_5
CONSOLIDATED CONDENSED STATEMENTS OF SHAREOWNER'S EQUITY - USD ($) $ in Millions | Total | Cumulative effect adjustments | Preferred Stock | Common Stock | Additional Paid-In-Capital | Retained Earnings | Retained EarningsCumulative effect adjustments | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2019 | $ 11,274 | $ (138) | $ 0 | $ 5 | $ 8,405 | $ 1,451 | $ (138) | $ 1,413 |
Increase (decrease) in shareowner's equity | ||||||||
Net income | 144 | 144 | ||||||
Other comprehensive income (loss) | 1,351 | 1,351 | ||||||
Comprehensive income (loss) | 1,495 | |||||||
Capital contributions | 100 | 100 | ||||||
Ending balance at Sep. 30, 2020 | 12,731 | 0 | 5 | 8,505 | 1,457 | 2,764 | ||
Beginning balance at Jun. 30, 2020 | 12,061 | 0 | 5 | 8,505 | 1,326 | 2,225 | ||
Increase (decrease) in shareowner's equity | ||||||||
Net income | 131 | 131 | ||||||
Other comprehensive income (loss) | 539 | 539 | ||||||
Comprehensive income (loss) | 670 | |||||||
Ending balance at Sep. 30, 2020 | 12,731 | 0 | 5 | 8,505 | 1,457 | 2,764 | ||
Beginning balance at Dec. 31, 2020 | 13,625 | 0 | 5 | 8,525 | 1,547 | 3,548 | ||
Increase (decrease) in shareowner's equity | ||||||||
Net income | 313 | 313 | ||||||
Other comprehensive income (loss) | (1,005) | (1,005) | ||||||
Comprehensive income (loss) | (692) | |||||||
Ending balance at Sep. 30, 2021 | 12,933 | 0 | 5 | 8,525 | 1,860 | 2,543 | ||
Beginning balance at Jun. 30, 2021 | 13,154 | 0 | 5 | 8,525 | 1,811 | 2,813 | ||
Increase (decrease) in shareowner's equity | ||||||||
Net income | 49 | 49 | ||||||
Other comprehensive income (loss) | (270) | (270) | ||||||
Comprehensive income (loss) | (221) | |||||||
Ending balance at Sep. 30, 2021 | $ 12,933 | $ 0 | $ 5 | $ 8,525 | $ 1,860 | $ 2,543 |
CONSOLIDATED CONDENSED STATEM_6
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | ||
Net income | $ 313 | $ 144 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Realized (gains) losses | (161) | 224 |
Amortization of deferred acquisition costs and value of business acquired | 233 | 145 |
Capitalization of deferred acquisition costs | (400) | (354) |
Depreciation and amortization expense | 57 | 57 |
Deferred income tax | (44) | 26 |
Accrued income tax | (104) | 7 |
Interest credited to universal life and investment products | 1,100 | 1,156 |
Policy fees assessed on universal life and investment products | (1,364) | (1,338) |
Change in reinsurance receivables | (25) | 45 |
Change in accrued investment income and other receivables | (58) | 4 |
Change in policy liabilities and other policyholders’ funds of traditional life and health products | (373) | (748) |
Trading securities: | ||
Maturities and principal reductions of investments | 122 | 69 |
Sale of investments | 310 | 493 |
Cost of investments acquired | (467) | (720) |
Other net change in trading securities | (5) | 20 |
Amortization of premiums and accretion of discounts on investments and commercial mortgage loans | 191 | 235 |
Change in other liabilities | (102) | 481 |
Other, net | 6 | 89 |
Net cash (used in) provided by operating activities | (771) | 35 |
Cash flows from investing activities | ||
Maturities and principal reductions of investments, available-for-sale | 4,919 | 3,259 |
Sale of investments, available-for-sale | 2,644 | 2,610 |
Cost of investments acquired, available-for-sale | (10,455) | (7,394) |
Commercial mortgage loans: | ||
New lendings | (1,454) | (1,054) |
Repayments | 1,049 | 484 |
Change in policy loans, net | 50 | 35 |
Change in other long-term investments, net | (179) | 201 |
Change in short-term investments, net | (156) | 95 |
Net unsettled security transactions | 140 | 105 |
Purchase of property, equipment, and intangibles | (27) | (25) |
Net cash used in investing activities | (3,469) | (1,684) |
Cash flows from financing activities | ||
Change in secured financing liabilities | 774 | |
Change in secured financing liabilities | (103) | |
Deposits to universal life and investment contracts | 6,563 | 5,041 |
Withdrawals from universal life and investment contracts | (3,296) | (3,053) |
Other financing activities, net | (48) | 0 |
Net cash provided by financing activities | 3,993 | 1,885 |
Change in cash | (247) | 236 |
Cash at beginning of period | 656 | 213 |
Cash at end of period | $ 409 | $ 449 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Basis of Presentation Protective Life Insurance Company (the “Company”), a stock life insurance company, was founded in 1907. The Company is a wholly owned subsidiary of Protective Life Corporation (“PLC”), an insurance holding company. PLC is a wholly owned subsidiary of Dai-ichi Life Holdings, Inc., a kabushiki kaisha (“Dai-ichi Life”). The Company markets individual life insurance, guaranteed investment contracts, guaranteed funding agreements, fixed and variable annuities, and extended service contracts throughout the United States. The Company also maintains a separate segment devoted to the acquisition of insurance policies from other companies. PLC is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. These consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim periods presented herein. In the opinion of management, the accompanying consolidated condensed financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair presentation of the results for the interim periods presented. Operating results for the three and nine months ended September 30, 2021, are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021. The year-end consolidated condensed financial data included herein was derived from audited financial statements but this report does not include all disclosures required by GAAP. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors. Shades Creek Captive Insurance Company (“Shades Creek”) was a direct wholly owned insurance subsidiary of PLC through December 31, 2020. On January 1, 2021, Shades Creek was merged with and into the Company, with the Company being the surviving entity. The Company accounted for the transaction pursuant to Accounting Standards Codification (“ASC”) 805-50 “Transactions between Entities under Common Control”. The transferred assets and liabilities of Shades Creek were recorded by the Company at their carrying value at the date of transfer. In accordance with ASC 805-50, all prior financial information has been recast to reflect this transaction as of the earliest period presented under common control, January 1, 2020. Beginning in the first quarter of 2020, the outbreak of COVID-19 created significant economic and social disruption and impacted various operational and financial aspects of the Company’s business. The pandemic may continue to impact the Company’s earnings based on, amongst other factors, the volume and severity of claims related to COVID-19 and the financial disruption caused by the pandemic, which could impact the Company’s investment portfolio. Entities Included The consolidated condensed financial statements in this report include the accounts of Protective Life Insurance Company and its wholly owned subsidiaries and affiliate companies, which are consolidated in consideration of the Company’s voting interest or its power to direct the activities of the affiliate company. Intercompany balances and transactions have been eliminated. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies For a full description of the Company's significant accounting policies, refer to Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. There were no significant changes to the Company’s accounting policies during the nine months ended September 30, 2021. Accounting Pronouncements Recently Adopted Accounting Standards Update (“ASU” or “Update”) No. 2019-12 – Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this Update remove certain exceptions to the general principles in Topic 740 related to intraperiod tax allocations, interim tax calculations, and outside basis differences. The amendments also clarify and amend guidance in certain other areas of Topic 740 in order to eliminate diversity in practice. The amendments in this Update are effective for public business entities in fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of this Update did not have a material impact on the Company’s operations and financial results. Accounting Pronouncements Not Yet Adopted ASU No. 2018-12 - Financial Services - Insurance (Topic 944): Targeted Improvements to Accounting for Long-Duration Contracts. The amendments in this Update are designed to make improvements to the existing recognition, measurement, presentation, and disclosure requirements for certain long-duration contracts issued by an insurance company. The new amendments require insurance entities to provide a more current measure of the liability for future policy benefits for traditional and limited-payment contracts by regularly refining the liability for actual past experience and updated future assumptions. This differs from current requirements where assumptions are locked-in at contract issuance for these contract types. In addition, the updated liability will be discounted using an upper-medium grade (low-credit-risk) fixed income instrument yield that reflects the characteristics of the liability which differs from currently used rates based on the invested assets supporting the liability. In addition, the amendments introduce new requirements to assess market-based insurance contract options and guarantees for Market Risk Benefits and measure them at fair value. This Update also requires insurance entities to amortize deferred acquisition costs on a constant-level basis over the expected life of the contract. Finally, this Update requires new disclosures including liability rollforwards and information about significant inputs, judgments, assumptions, and methods used in the measurement. In November 2020, FASB issued ASU No. 2020-11 - Financial Services - Insurance (Topic 944); Effective Date and Early Application |
INVESTMENT OPERATIONS
INVESTMENT OPERATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT OPERATIONS | INVESTMENT OPERATIONS Net realized gains (losses) are summarized as follows: For The For The 2021 2020 2021 2020 (Dollars In Millions) Fixed maturities $ 5 $ 3 $ 44 $ 45 Equity securities — 16 3 (1) Modco trading portfolios (25) 45 (69) 108 Change in net expected credit losses - fixed maturities — (38) 5 (121) Commercial mortgage loans 37 (2) 129 (101) Other investments (1) (1) (1) (2) Realized gains (losses) - investments 16 23 111 (72) Realized gains (losses) - derivatives (1) 51 88 50 (152) Realized gains (losses) $ 67 $ 111 $ 161 $ (224) (1) See Note 5, Derivative Financial Instruments The chart below summarizes the sales proceeds and gains (losses) realized on securities classified as available-for-sale (“AFS”). For The For The 2021 2020 2021 2020 (Dollars In Millions) Securities in an unrealized gain position: Sales proceeds $ 232 $ 515 $ 1,443 $ 1,454 Realized gains $ 5 $ 3 $ 45 $ 50 Securities in an unrealized loss position: Sales proceeds $ 12 $ 8 $ 35 $ 33 Realized losses $ — $ — $ (1) $ (5) The net gains (losses) from equity securities still held at period end, was $(4) million and $17 million for the three months ended September 30, 2021 and 2020, respectively, and $(1) million and $(1) million for the nine months ended September 30, 2021 and 2020, respectively. The Company recognized gains of $4 million and $4 million on equity securities sold during the period for the three and nine months ended September 30, 2021, respectively, and immaterial gains (losses) on equity securities sold during the three and nine months ended September 30, 2020. The amortized cost, gross unrealized gains, gross unrealized losses, allowance for expected credit losses, and fair value of the Company’s investments classified as AFS are as follows: As of September 30, 2021 Amortized Gross Gross Allowance Fair (Dollars In Millions) Fixed maturities: Residential mortgage-backed securities $ 7,345 $ 59 $ (58) $ — $ 7,346 Commercial mortgage-backed securities 2,196 98 (6) (1) 2,287 Other asset-backed securities 1,438 39 (1) — 1,476 U.S. government-related securities 821 15 (24) — 812 Other government-related securities 688 76 (2) — 762 States, municipals, and political subdivisions 3,760 414 (1) — 4,173 Corporate securities 48,935 4,808 (135) (1) 53,607 Redeemable preferred stocks 297 13 — — 310 65,480 5,522 (227) (2) 70,773 Short-term investments 542 — — — 542 $ 66,022 $ 5,522 $ (227) $ (2) $ 71,315 As of December 31, 2020 Amortized Gross Gross Allowance Fair (Dollars In Millions) Fixed maturities: Residential mortgage-backed securities $ 6,510 $ 159 $ (1) $ — $ 6,668 Commercial mortgage-backed securities 2,429 128 (19) (4) 2,534 Other asset-backed securities 1,546 40 (7) (1) 1,578 U.S. government-related securities 1,492 26 (3) — 1,515 Other government-related securities 622 96 (1) — 717 States, municipals, and political subdivisions 3,902 519 (1) — 4,420 Corporate securities 46,150 6,074 (99) (18) 52,107 Redeemable preferred stocks 183 11 — — 194 62,834 7,053 (131) (23) 69,733 Short-term investments 386 — — — 386 $ 63,220 $ 7,053 $ (131) $ (23) $ 70,119 The Company holds certain investments pursuant to certain modified coinsurance (“Modco”) arrangements. The fixed maturities, equity securities, and short-term investments held as part of these arrangements are classified as trading securities. The fair value of the investments held pursuant to these Modco arrangements are as follows: As of September 30, 2021 December 31, 2020 (Dollars In Millions) Fixed maturities: Residential mortgage-backed securities $ 158 $ 209 Commercial mortgage-backed securities 211 214 Other asset-backed securities 181 163 U.S. government-related securities 33 91 Other government-related securities 64 30 States, municipals, and political subdivisions 288 282 Corporate securities 1,900 1,860 Redeemable preferred stocks 8 13 2,843 2,862 Equity securities 13 20 Short-term investments 87 76 $ 2,943 $ 2,958 The amortized cost and fair value of available-for-sale fixed maturities as of September 30, 2021, by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment. Available-for-Sale Amortized Fair (Dollars In Millions) Due in one year or less $ 1,566 $ 1,581 Due after one year through five years 11,358 11,900 Due after five years through ten years 14,469 15,365 Due after ten years 38,087 41,927 $ 65,480 $ 70,773 The following chart is a rollforward of the allowance for expected credit losses on fixed maturities classified as available-for-sale: For The For The Corporate CMBS ABS Total Corporate CMBS ABS Total (Dollars In Millions) Beginning Balance $ 1 $ 1 $ — $ 2 $ 18 $ 4 $ 1 $ 23 Additions for securities for which an allowance was not previously recorded — — — — — — — — Adjustments on previously recorded allowances due to change in expected cash flows — — — — (1) (3) — (4) Reductions on previously recorded allowances due to disposal of security in the current period — — — — — — (1) (1) Write-offs of previously recorded allowances due to intent or requirement to sell — — — — (16) — — (16) Ending Balance $ 1 $ 1 $ — $ 2 $ 1 $ 1 $ — $ 2 For The For The Corporate CMBS ABS Total Corporate CMBS ABS Total (Dollars In Millions) Beginning Balance $ 81 $ — $ 1 $ 82 $ — $ — $ — $ — Additions for securities for which an allowance was not previously recorded — — — — 62 — 1 63 Adjustments on previously recorded allowances due to change in expected cash flows 1 — — 1 20 — — 20 Reductions on previously recorded allowances due to disposal of security in the current period — — — — — — — — Write-offs of previously recorded allowances due to intent or requirement to sell (64) — — (64) (64) — — (64) Ending Balance $ 18 $ — $ 1 $ 19 $ 18 $ — $ 1 $ 19 The following table includes the gross unrealized losses and fair value of the Company’s AFS fixed maturities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2021: Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Millions) Residential mortgage-backed securities $ 3,460 $ (58) $ 11 $ — $ 3,471 $ (58) Commercial mortgage-backed securities 50 — 90 (6) 140 (6) Other asset-backed securities 130 — 54 (1) 184 (1) U.S. government-related securities 392 (21) 67 (3) 459 (24) Other government-related securities 76 (2) — — 76 (2) States, municipals, and political subdivisions 35 (1) 4 — 39 (1) Corporate securities 3,978 (96) 496 (39) 4,474 (135) Redeemable preferred stocks 20 — — — 20 — $ 8,141 $ (178) $ 722 $ (49) $ 8,863 $ (227) The corporate securities category had gross unrealized losses greater than twelve months of $39 million as of September 30, 2021, excluding losses of $1 million that were considered credit related. These losses are deemed temporary due to positive factors supporting the recoverability of the respective investments. Positive factors considered include credit ratings, the financial health of the issuer, the continued access of the issuer to capital markets, interest rate movement, and other pertinent information. As of September 30, 2021, the Company had a total of 558 positions that were in an unrealized loss position, including 5 positions for which an allowance for credit losses was established. For unrealized losses for which an allowance for credit losses was not established, the Company does not consider these unrealized loss positions to be credit-related. This is based on the aggregate factors discussed previously and because the Company has the ability and intent to hold these investments until the fair values recover. The Company does not intend to sell or expect to be required to sell the securities before recovering the Company’s amortized cost of the securities. The following table includes the gross unrealized losses and fair value of the Company’s AFS fixed maturities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2020: Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Millions) Residential mortgage-backed securities $ 386 $ (1) $ 9 $ — $ 395 $ (1) Commercial mortgage-backed securities 263 (15) 30 (4) 293 (19) Other asset-backed securities 146 (2) 326 (5) 472 (7) U.S. government-related securities 311 (3) 1 — 312 (3) Other government-related securities 19 — 7 (1) 26 (1) States, municipals, and political subdivisions 34 (1) 5 — 39 (1) Corporate securities 1,063 (33) 728 (66) 1,791 (99) Redeemable preferred stocks — — — — — — $ 2,222 $ (55) $ 1,106 $ (76) $ 3,328 $ (131) As of September 30, 2021, the Company had securities in its available-for-sale portfolio which were rated below investment grade of $2.6 billion and had an amortized cost of $2.4 billion. In addition, included in the Company’s trading portfolio, the Company held $139 million of securities which were rated below investment grade. The Company held $548 million of below investment grade securities that were not publicly traded. The change in unrealized gains (losses), net of the allowance for expected credit losses and income taxes, on fixed matur ities, classified as available-for-sale is summarized as follows: For The For The 2021 2020 2021 2020 (Dollars In Millions) Fixed maturities $ (326) $ 787 $ (1,285) $ 2,158 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company determined the fair value of its financial instruments based on the fair value hierarchy established in FASB guidance referenced in the Fair Value Measurements and Disclosures Topic which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company has adopted the provisions from the FASB guidance that is referenced in the Fair Value Measurements and Disclosures Topic for non-financial assets and liabilities (such as property and equipment, goodwill, and other intangible assets) that are required to be measured at fair value on a periodic basis. The effect on the Company’s periodic fair value measurements for non-financial assets and liabilities was not material. The Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three level hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized as follows: • Level 1: Unadjusted quoted prices for identical assets or liabilities in an active market. • Level 2: Quoted prices in markets that are not active or significant inputs that are observable either directly or indirectly. Level 2 inputs include the following: a) Quoted prices for similar assets or liabilities in active markets; b) Quoted prices for identical or similar assets or liabilities in non-active markets; c) Inputs other than quoted market prices that are observable; and d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means. • Level 3: Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own estimates about the assumptions a market participant would use in pricing the asset or liability. The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of September 30, 2021: Measurement Level 1 Level 2 Level 3 Total (Dollars In Millions) Assets: Fixed maturity securities - AFS Residential mortgage-backed securities 4 $ — $ 7,346 $ — $ 7,346 Commercial mortgage-backed securities 4 — 2,256 31 2,287 Other asset-backed securities 4 — 1,018 458 1,476 U.S. government-related securities 4 410 402 — 812 State, municipals, and political subdivisions 4 — 4,173 — 4,173 Other government-related securities 4 — 762 — 762 Corporate securities 4 — 51,972 1,635 53,607 Redeemable preferred stocks 4 310 — — 310 Total fixed maturity securities - AFS 720 67,929 2,124 70,773 Fixed maturity securities - trading Residential mortgage-backed securities 3 — 158 — 158 Commercial mortgage-backed securities 3 — 211 — 211 Other asset-backed securities 3 — 87 94 181 U.S. government-related securities 3 27 6 — 33 State, municipals, and political subdivisions 3 — 288 — 288 Other government-related securities 3 — 48 16 64 Corporate securities 3 — 1,885 15 1,900 Redeemable preferred stocks 3 8 — — 8 Total fixed maturity securities - trading 35 2,683 125 2,843 Total fixed maturity securities 755 70,612 2,249 73,616 Equity securities 3 614 — 158 772 Other long-term investments (1) 3 & 4 65 917 299 1,281 Short-term investments 3 463 166 — 629 Total investments 1,897 71,695 2,706 76,298 Cash 3 409 — — 409 Assets related to separate accounts Variable annuity 3 13,112 — — 13,112 Variable universal life 3 1,756 — — 1,756 Total assets measured at fair value on a recurring basis $ 17,174 $ 71,695 $ 2,706 $ 91,575 Liabilities: Annuity account balances (2) 3 $ — $ — $ 64 $ 64 Other liabilities (1) 3 & 4 25 603 1,948 2,576 Total liabilities measured at fair value on a recurring basis $ 25 $ 603 $ 2,012 $ 2,640 Measurement category 3 represents fair value through net income and 4 represents fair value through other comprehensive income (loss). (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2020: Measurement Level 1 Level 2 Level 3 Total (Dollars In Millions) Assets: Fixed maturity securities - AFS Residential mortgage-backed securities 4 $ — $ 6,668 $ — $ 6,668 Commercial mortgage-backed securities 4 — 2,502 32 2,534 Other asset-backed securities 4 — 1,143 435 1,578 U.S. government-related securities 4 1,015 500 — 1,515 State, municipals, and political subdivisions 4 — 4,420 — 4,420 Other government-related securities 4 — 717 — 717 Corporate securities 4 — 50,675 1,432 52,107 Redeemable preferred stocks 4 125 69 — 194 Total fixed maturity securities - AFS 1,140 66,694 1,899 69,733 Fixed maturity securities - trading Residential mortgage-backed securities 3 — 209 — 209 Commercial mortgage-backed securities 3 — 214 — 214 Other asset-backed securities 3 — 91 72 163 U.S. government-related securities 3 79 12 — 91 State, municipals, and political subdivisions 3 — 282 — 282 Other government-related securities 3 — 30 — 30 Corporate securities 3 — 1,843 17 1,860 Redeemable preferred stocks 3 13 — — 13 Total fixed maturity securities - trading 92 2,681 89 2,862 Total fixed maturity securities 1,232 69,375 1,988 72,595 Equity securities 3 566 — 101 667 Other long-term investments (1) 3 & 4 52 1,285 299 1,636 Short-term investments 3 403 59 — 462 Total investments 2,253 70,719 2,388 75,360 Cash 3 656 — — 656 Assets related to separate accounts Variable annuity 3 12,378 — — 12,378 Variable universal life 3 1,287 — — 1,287 Total assets measured at fair value on a recurring basis $ 16,574 $ 70,719 $ 2,388 $ 89,681 Liabilities: Annuity account balances (2) 3 $ — $ — $ 67 $ 67 Other liabilities (1) 3 & 4 14 867 2,238 3,119 Total liabilities measured at fair value on a recurring basis $ 14 $ 867 $ 2,305 $ 3,186 Measurement category 3 represents fair value through net income and 4 represents fair value through other comprehensive income (loss). (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. Determination of Fair Values The valuation methodologies used to determine the fair values of assets and liabilities reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. The Company determines the fair values of certain financial assets and financial liabilities based on quoted market prices, where available. The Company also determines certain fair values based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for counterparty credit quality, the Company’s credit standing, liquidity, and where appropriate, risk margins on unobservable parameters. The following is a discussion of the methodologies used to determine fair values for the financial instruments as listed in the above table. For a full description of the Company’s fair value calculations and accounting policies, refer to Note 5 in the Company’s Form 10-K for the year ended December 31, 2020. Valuation of Level 3 Financial Instruments The following tables present the valuation method for material AFS fixed maturity securities and embedded derivative financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments as of September 30, 2021 and December 31, 2020: September 30, 2021 Fair Value Valuation Unobservable Range (Dollars In Millions) Assets: Commercial mortgage-backed securities $ 31 Discounted cash flow Spread over treasury 2.12% - 2.29% (2.23%) Other asset-backed securities 458 Liquidation Liquidation value $97.00 - $99.75 ($98.77) Discounted cash flow Liquidity premium 0.84% - 2.31% (1.76%) Paydown Rate 10.03% - 13.15% (11.95%) Corporate securities 1,635 Discounted cash flow Spread over treasury 0.00% - 4.00% (1.46%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 535 Actuarial cash flow model Mortality 88% to 100% of Ruark 2015 ALB Table Lapse PL-RBA Predictive Model Utilization PL-RBA Predictive Model Nonperformance risk 0.18% - 0.81% Embedded derivative - FIA 570 Actuarial cash flow model Expenses $214 per policy Withdrawal rate 0.4% - 2.4% prior to age 72, 100% of the RMD for ages 72+ or WB withdrawal rate. Assume underutilized RMD for non-WB policies ages 72-88. Mortality 88% to 100% of Ruark 2015 ALB table Lapse 0.2% - 50.0%, depending on duration/surrender charge period Dynamically adjusted for WB moneyness and projected market rates vs credited rates Nonperformance risk 0.18% - 0.81% Embedded derivative - IUL 251 Actuarial cash flow model Mortality 43% - 110% of base table (90% of 2015 VBT Primary Tables adjusted for 5.5 years of 2020 SOA HMI) 94% - 248% of duration 8 point in scale 2015 VBT Primary Tables, depending on type of business Lapse 0.375% - 7.5%, depending on issue age and duration, smoking class, and level of funding Nonperformance risk 0.18% - 0.81% (1) Excludes modified coinsurance arrangements. (2) Fair value is presented as a net liability. December 31, 2020 Fair Value Valuation Unobservable Range (Dollars In Millions) Assets: Commercial mortgage-backed securities $ 32 Discounted cash flow Spread over treasury 2.78% - 2.92% (2.87%) Other asset-backed securities 435 Liquidation Liquidation value $95 - $97 ($96.19) Discounted cash flow Liquidity premium 0.54% - 2.3% (1.63%) Paydown Rate 8.79% - 12.49% (11.39%) Corporate securities 1,432 Discounted cash flow Spread over treasury 0.00% - 4.75% (1.89%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 822 Actuarial cash flow model Mortality 88% to 100% of Ruark 2015 ALB Table Lapse PL-RBA Predictive Model Utilization PL-RBA Predictive Model Nonperformance risk 0.19% - 0.81% Embedded derivative - FIA 573 Actuarial cash flow model Expenses $207 per policy Withdrawal rate 0.4% - 2.4% prior to age 70 RMD for ages 70+ or WB withdrawal rate Assume underutilized RMD for non-WB policies age 72-88 Mortality 88% to 100% or Ruark 2015 ALB table Lapse 0.2% - 50.0%, depending on duration/surrender charge period Nonperformance risk 0.19% - 0.81% Embedded derivative - IUL 201 Actuarial cash flow model Mortality 36% - 161% of 2015 VBT Primary Tables 94% - 248% of duration 8 point in scale 2015 VBT Primary Tables, depending on type of business Lapse 0.375% - 10%, depending on duration/distribution channel and smoking class Nonperformance risk 0.19% - 0.81% (1) Excludes modified coinsurance arrangements. (2) Fair value is presented as a net liability. The charts above exclude Level 3 financial instruments that are valued using broker quotes and for which book value approximates fair value. Unobservable inputs were weighted by the relative fair value of instruments, except for other asset-backed securities which were weighted by the relative par amounts. The Company has considered all reasonably available quantitative inputs as of September 30, 2021 and December 31, 2020, but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $206 million and $116 million of financial instruments being classified as Level 3 as of September 30, 2021 and December 31, 2020, of which $148 million and $88 million were other asset-backed securities, $12 million and $17 million were corporate securities and $46 million and $11 million were equity securities, respectively. In certain cases the Company has determined that book value materially approximates fair value. As of September 30, 2021 and December 31, 2020, the Company held $112 million and $90 million of financial instruments, respectively, where book value approximates fair value which was predominantly FHLB stock. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended September 30, 2021, for which the Company has used significant unobservable inputs (Level 3): Total Total Total Gains (losses) included in Operations related to Instruments still held at Beginning Included Included Included Included Purchases Sales Issuances Settlements Transfers Other Ending (Dollars In Millions) Assets: Fixed maturity securities AFS Commercial mortgage-backed securities $ 32 $ — $ — $ — $ (1) $ — $ — $ — $ — $ — $ — $ 31 $ — Other asset-backed securities 451 — — — (2) 6 — — — 3 — 458 — Corporate securities 1,553 — 8 — (7) 79 (35) — — 37 — 1,635 — Total fixed maturity securities - available-for-sale 2,036 — 8 — (10) 85 (35) — — 40 — 2,124 — Fixed maturity securities - trading Other asset-backed securities 97 — — — — 3 (6) — — — — 94 — Other government-related securities 16 — — — (1) — — — — — 1 16 — Corporate securities 11 — — — — 4 — — — — — 15 — Total fixed maturity securities - trading 124 — — — (1) 7 (6) — — — 1 125 — Total fixed maturity securities 2,160 — 8 — (11) 92 (41) — — 40 1 2,249 — Equity securities 112 — — — — 54 (8) — — — — 158 — Other long-term investments (1) 307 98 — (106) — — — — — — — 299 (8) Total investments 2,579 98 8 (106) (11) 146 (49) — — 40 1 2,706 (8) Total assets measured at fair value on a recurring basis $ 2,579 $ 98 $ 8 $ (106) $ (11) $ 146 $ (49) $ — $ — $ 40 $ 1 $ 2,706 $ (8) Liabilities: Annuity account balances (2) $ 65 $ — $ — $ (1) $ — $ — $ — $ 2 $ — $ — $ 64 $ — Other liabilities (1) 2,016 197 — (129) — — — — — — — 1,948 68 Total liabilities measured at fair value on a recurring basis $ 2,081 $ 197 $ — $ (130) $ — $ — $ — $ — $ 2 $ — $ — $ 2,012 $ 68 (1) Represents certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. For the three months ended September 30, 2021, th ere were $59 million of securities transferred into Level 3 from Level 2. These transfers resulted from securities that were priced by independent pricing services or brokers in previous periods but were priced internally using significant unobservable inputs where market observable inputs were not available as of September 30, 2021. For the three months ended September 30, 2021, there were $19 million of securities transferred into Level 2 from Level 3. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended September 30, 2020, for which the Company has used significant unobservable inputs (Level 3): Total Total Total Gains (losses) included in Operations related to Instruments still held at Beginning Included Included Included Included Purchases Sales Issuances Settlements Transfers Other Ending (Dollars In Millions) Assets: Fixed maturity securities AFS Commercial mortgage-backed securities $ 10 $ — $ 1 $ — $ — $ — $ — $ — $ — $ — $ — $ 11 $ — Other asset-backed securities 431 — 4 — (1) — (1) — — — 433 — Corporate securities 1,366 — 28 — (3) 62 (125) — — 31 (1) 1,358 — Total fixed maturity securities - available-for-sale 1,807 — 33 — (4) 62 (126) — — 31 (1) 1,802 — Fixed maturity securities - trading Other asset-backed securities 60 3 — — — 1 (2) — — — — 62 3 Corporate securities 13 — — — — 5 — — — — — 18 — Total fixed maturity securities - trading 73 3 — — — 6 (2) — — — — 80 3 Total fixed maturity securities 1,880 3 33 — (4) 68 (128) — — 31 (1) 1,882 3 Equity securities 78 2 — — — 7 — — — — — 87 1 Other long-term investments (1) 337 127 — (73) — — — — — — — 391 54 Total investments 2,295 132 33 (73) (4) 75 (128) — — 31 (1) 2,360 58 Total assets measured at fair value on a recurring basis $ 2,295 $ 132 $ 33 $ (73) $ (4) $ 75 $ (128) $ — $ — $ 31 $ (1) $ 2,360 $ 58 Liabilities: Annuity account balances (2) $ 68 $ — $ — $ (1) $ — $ — $ — $ — $ 1 $ — $ — $ 68 $ — Other liabilities (1) 2,423 301 — (249) — — — — — — — 2,371 (52) Total liabilities measured at fair value on a recurring basis $ 2,491 $ 301 $ — $ (250) $ — $ — $ — $ — $ 1 $ — $ — $ 2,439 $ (52) (1) Represents certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. For the three months ended September 30, 2020, th ere were $31 million of securities transferred into Level 3 from Level 2. These transfers resulted from securities that were priced by independent pricing services or brokers in previous periods but were priced internally using significant unobservable inputs where market observable inputs were not available as of September 30, 2020. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the nine months ended September 30, 2021, for which the Company has used significant unobservable inputs (Level 3): Total Total Total Gains (losses) included in Operations related to Instruments still held at Beginning Included Included Included Included Purchases Sales Issuances Settlements Transfers Other Ending (Dollars In Millions) Assets: Fixed maturity securities AFS Commercial mortgage-backed securities $ 32 $ — $ — $ — $ (1) $ — $ — $ — $ — $ — $ — $ 31 — Other asset-backed securities 435 — 5 — (1) 6 (2) — — 14 1 458 — Corporate securities 1,432 — 7 — (21) 240 (168) — — 146 (1) 1,635 — Total fixed maturity securities-AFS 1,899 — 12 — (23) 246 (170) — — 160 — 2,124 — Fixed maturity securities - trading Other asset-backed securities 71 — 2 — 1 14 (10) — — 16 — 94 — Other government-related securities — — — — — — — — — 16 — 16 — Corporate securities 18 — — — (1) 4 (1) — — (5) — 15 — Total fixed maturity securities - trading 89 — 2 — — 18 (11) — — 27 — 125 — Total fixed maturity securities 1,988 — 14 — (23) 264 (181) — — 187 — 2,249 — Equity securities 101 — — — — 94 (32) — — (5) — 158 — Other long-term investments (1) 298 169 — (168) — — — — — — — 299 1 Total investments 2,387 169 14 (168) (23) 358 (213) — — 182 — 2,706 1 Total assets measured at fair value on a recurring basis $ 2,387 $ 169 $ 14 $ (168) $ (23) $ 358 $ (213) $ — $ — $ 182 $ — $ 2,706 $ 1 Liabilities: Annuity account balances (2) $ 67 $ — $ — $ (2) $ — $ — $ — $ — $ 5 $ — $ — $ 64 $ — Other liabilities (1) 2,239 784 — (493) — — — — — — — 1,948 291 Total liabilities measured at fair value on a recurring basis $ 2,306 $ 784 $ — $ (495) $ — $ — $ — $ — $ 5 $ — $ — $ 2,012 $ 291 (1) Represents certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. For the nine months ended September 30, 2021, there were $199 million of securities transferred into Level 3. These transfers resulted from securities that were priced by independent pricing services or brokers in previous periods but were priced internally using significant unobservable inputs where market observable inputs were not available as of September 30, 2021. For the nine months ended September 30, 2021, there were $17 million of securities transferred into Level 2 from Level 3. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the nine months ended September 30, 2020, for which the Company has used significant unobservable inputs (Level 3): Total Total Total Gains (losses) included in Operations related to Instruments still held at Beginning Included Included Included Included Purchases Sales Issuances Settlements Transfers Other Ending (Dollars In Millions) Assets: Fixed maturity securities AFS Commercial mortgage-backed securities $ 10 $ — $ 2 $ — $ (1) $ — $ — $ — $ — $ — $ — $ 11 — Other asset-backed securities 421 — 4 — (13) — (1) — — 22 — 433 — Corporate securities 1,374 — 113 — (82) 365 (498) — — 88 (2) 1,358 — Total fixed maturity securities - AFS 1,805 — 119 — (96) 365 (499) — — 110 (2) 1,802 — Fixed maturity securities - trading Other asset-backed securities 65 4 — (8) — 4 (2) — — (1) — 62 3 Corporate securities 11 1 — — — 8 (2) — — — — 18 — Total fixed maturity securities - trading 76 5 — (8) — 12 (4) — — (1) — 80 3 Total fixed maturity securities 1,881 5 119 (8) (96) 377 (503) — — 109 (2) 1,882 3 Equity securities 74 1 — (1) — 8 — — — 5 — 87 1 Other long-term investments (1) 292 228 — (166) — 41 — — (4) — — 391 58 Total investments 2,247 234 119 (175) (96) 426 (503) — (4) 114 (2) 2,360 62 Total assets measured at fair value on a recurring basis $ 2,247 $ 234 $ 119 $ (175) $ (96) $ 426 $ (503) $ — $ (4) $ 114 $ (2) $ 2,360 $ 62 Liabilities: Annuity account balances (2) $ 70 $ — $ — $ (2) $ — $ — $ — $ — $ 4 $ — $ — $ 68 $ — Other liabilities (1) 1,332 649 — (1,688) — — — — — — — 2,371 (1,039) Total liabilities measured at fair value on a recurring basis $ 1,402 $ 649 $ — $ (1,690) $ — $ — $ — $ — $ 4 $ — $ — $ 2,439 $ (1,039) (1) Represents certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. For the nine months ended September 30, 2020, there were $115 million of securities transferred into Level 3. These transfers resulted from securities that were priced by independent pricing services or brokers in previous periods but were priced internally using significant unobservable inputs where market observable inputs were not available as of September 30, 2020. For the nine months ended September 30, 2020, there were $1 million securities transferred into Level 2 from Level 3. Total realized and unrealized gains (losses) on Level 3 assets and liabilities are reported in either realized gains (losses) within the consolidated condensed statements of income or other comprehensive income (loss) within shareowner’s equity based on the appropriate accounting treatment for the item. Purchases, sales, issuances, and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily relates to purchases and sales of fixed maturity securities and issuances and settlements of fixed indexed annuities. The amount of total gains (losses) for assets and liabilities still held as of the reporting date primarily represents changes in fair value of trading securities and certain derivatives that exist as of the reporting date and the change in fair value of fixed indexed annuities. Estimated Fair Value of Financial Instruments The carrying amounts and estimated fair values of the Company’s financial instruments as of the periods shown below are as follows: As of September 30, 2021 December 31, 2020 Fair Value Carrying Fair Values Carrying Fair Values (Dollars In Millions) Assets: Commercial mortgage loans (1) 3 $ 10,506 $ 11,153 $ 10,006 $ 10,788 Policy loans 3 1,543 1,543 1,593 1,593 Other long-term investments (2) 2 1,412 1,487 1,186 1,283 Liabilities: Stable value product account balances 3 $ 8,237 $ 8,373 $ 6,056 $ 6,231 Future policy benefits and claims (3) 3 1,482 1,528 1,580 1,603 Other policyholders’ funds (4) 3 99 106 102 108 Debt: (5) Subordinated funding obligations 3 $ 110 $ 116 $ 110 $ 121 Except as noted below, fair values were estimated using quoted market prices. (1) The carrying amount is net of allowance for credit losses. (2) Other long-term investments represents a Modco receivable, which is related to invested assets such as fixed income and structured securities, which are legally owned by the ceding company. The fair value is determined in a manner consistent with other similar invested assets held by the Company. (3) Single premium immediate annuity and structured annuities without life contingencies. (4) Supplementary contracts without life contingencies. (5) Excludes immaterial capital lease obligations. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Types of Derivative Instruments and Derivative Strategies The Company utilizes a risk management strategy that incorporates the use of derivative financial instruments to reduce exposure to certain risks, including but not limited to, interest rate risk, currency exchange risk, volatility risk, and equity market risk. These strategies are developed through the Company’s analysis of data from financial simulation models and other internal and industry sources, and are then incorporated into the Company’s risk management program. Derivative instruments expose the Company to credit and market risk and could result in material changes from period to period. The Company attempts to minimize its credit risk in connection with its overall asset/liability management programs and risk management strategies. In addition, all derivative programs are monitored by our risk management department. For a full description of the Company’s derivatives accounting policies, refer to Note 6 in the Company’s Form 10-K for the year ended December 31, 2020. Derivative Instruments Designated and Qualifying as Hedging Instruments Cash-Flow Hedges • To hedge a fixed rate note denominated in a foreign currency, the Company entered into a fixed-to-fixed foreign currency swap in order to hedge the foreign currency exchange risk associated with the note. The cash flows received on the swap are identical to the cash flows paid on the note. • To hedge a floating rate note, the Company entered into an interest rate swap to exchange the floating rate on the note for a fixed rate in order to hedge the interest rate risk associated with the note. The cash flows received on the swap are identical to the cash flow variability paid on the note. Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments The Company uses various other derivative instruments for risk management purposes that do not qualify for hedge accounting treatment. Changes in the fair value of these derivatives are recognized in realized gains (losses) during the period of change. The following table sets forth realized gains (losses) - derivatives for the periods shown: Realized gains (losses) - derivative financial instruments For The For The 2021 2020 2021 2020 (Dollars In Millions) Derivatives related to VA contracts: Interest rate futures $ — $ 2 $ 8 $ (3) Equity futures 2 (1) (10) 132 Currency futures 4 (9) 9 1 Equity options 1 (42) (81) 67 Interest rate swaps (24) (58) (167) 364 Total return swaps 6 (31) (119) 30 Embedded derivative - GLWB (15) 190 287 (681) Total derivatives related to VA contracts (26) 51 (73) (90) Derivatives related to FIA contracts: Embedded derivative 61 (9) 25 (38) Funds withheld derivative — (3) (5) (10) Equity futures — 1 3 (7) Equity options (3) 25 45 15 Other derivatives — — (2) — Total derivatives related to FIA contracts 58 14 66 (40) Derivatives related to IUL contracts: — Embedded derivative (3) 16 (15) 1 Equity futures — — — (2) Equity options 1 6 9 1 Total derivatives related to IUL contracts (2) 22 (6) — Embedded derivative - Modco reinsurance treaties 19 (25) 66 (56) Derivatives with PLC (1) — 20 — 22 Other derivatives 2 6 (3) 12 Total realized gains (losses) - derivatives $ 51 $ 88 $ 50 $ (152) (1) The Company and certain of its subsidiaries had an interest support agreement, YRT premium support agreements, and portfolio maintenance agreements with PLC through October 1, 2020. These agreements were terminated and a new portfolio maintenance agreement was entered into with PLC on that date. Based on expected cash flows of the underlying hedged items, the Company expects to reclassify $1 million out of accumulated other comprehensive income (loss) into realized gains (losses) during the next twelve months. The table below presents information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below: As of September 30, 2021 December 31, 2020 Notional Fair Notional Fair (Dollars In Millions) Other long-term investments Derivatives not designated as hedging instruments: Interest rate swaps $ 1,478 $ 75 $ 1,478 $ 185 Total return swaps 1,120 27 158 2 Derivatives with PLC (1) 4,161 — 4,076 — Embedded derivative - Modco reinsurance treaties 1,271 77 1,249 101 Embedded derivative - GLWB 2,871 161 2,067 138 Embedded derivative - FIA 383 61 335 60 Interest rate futures 893 8 690 4 Equity futures 82 3 203 4 Currency futures 216 5 — — Equity options 8,949 864 7,208 1,142 $ 21,424 $ 1,281 $ 17,464 $ 1,636 Other liabilities Cash flow hedges: Foreign currency swaps $ 117 $ 10 $ 117 $ 10 Derivatives not designated as hedging instruments: Interest rate swaps 1,354 — 1,354 — Total return swaps 229 6 1,003 15 Embedded derivative - Modco reinsurance treaties 2,996 294 2,911 389 Funds withheld derivative 833 11 661 10 Embedded derivative - GLWB 7,006 696 7,749 960 Embedded derivative - FIA 4,299 631 3,889 633 Embedded derivative - IUL 429 251 357 201 Interest rate futures 242 8 415 3 Equity futures 214 5 190 5 Currency futures — — 264 4 Equity options 6,628 588 5,499 834 Other 406 76 304 55 $ 24,753 $ 2,576 $ 24,713 $ 3,119 (1) The Company and certain of its subsidiaries had an interest support agreement, YRT premium support agreements, and portfolio maintenance agreements with PLC through October 1, 2020. These agreements were terminated and a new portfolio maintenance agreement was entered into with PLC on that date. |
OFFSETTING OF ASSETS AND LIABIL
OFFSETTING OF ASSETS AND LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
Offsetting [Abstract] | |
OFFSETTING OF ASSETS AND LIABILITIES | OFFSETTING OF ASSETS AND LIABILITIES Certain of the Company’s derivative instruments are subject to enforceable master netting arrangements that provide for the net settlement of all derivative contracts between the Company and a counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event either minimum thresholds, or in certain cases ratings levels, have been reached. Additionally, certain of the Company’s repurchase agreements provide for net settlement on termination of the agreement. Refer to Note 10, Debt and Other Obligations for details of the Company’s repurchase agreement programs. Collateral received includes both cash and non-cash collateral. Cash collateral received by the Company is recorded on the consolidated condensed balance sheet as “cash”, with a corresponding amount recorded in “other liabilities” to represent the Company’s obligation to return the collateral. Non-cash collateral received by the Company is not recognized on the consolidated condensed balance sheet unless the Company exercises its right to sell or re-pledge the underlying asset. There was no fair value of non-cash collateral received as of September 30, 2021 and December 31, 2020. The tables below present the derivative instruments by assets and liabilities for the Company as of September 30, 2021: Gross Gross Net Amounts Gross Amounts Not Offset Financial Collateral Net Amount (Dollars In Millions) Offsetting of Assets Derivatives: Free-Standing derivatives $ 982 $ — $ 982 $ 604 $ 211 $ 167 Total derivatives, subject to a master netting arrangement or similar arrangement 982 — 982 604 211 167 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 77 — 77 — — 77 Embedded derivative - GLWB 161 — 161 — — 161 Embedded derivative - FIA 61 — 61 — — 61 Total derivatives, not subject to a master netting arrangement or similar arrangement 299 — 299 — — 299 Total derivatives 1,281 — 1,281 604 211 466 Total Assets $ 1,281 $ — $ 1,281 $ 604 $ 211 $ 466 Gross Gross Net Amounts Gross Amounts Not Offset Financial Collateral Net Amount (Dollars In Millions) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 617 $ — $ 617 $ 604 $ 13 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 617 — 617 604 13 — Derivatives, not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 294 — 294 — — 294 Funds withheld derivative 11 — 11 — — 11 Embedded derivative - GLWB 696 — 696 — — 696 Embedded derivative - FIA 631 — 631 — — 631 Embedded derivative - IUL 251 — 251 — — 251 Other 76 — 76 — — 76 Total derivatives, not subject to a master netting arrangement or similar arrangement 1,959 — 1,959 — — 1,959 Total derivatives 2,576 — 2,576 604 13 1,959 Repurchase agreements (1) 1,104 — 1,104 — — 1,104 Total Liabilities $ 3,680 $ — $ 3,680 $ 604 $ 13 $ 3,063 (1) Borrowings under repurchase agreements are for a term less than 90 days. The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2020. Gross Gross Net Amounts Gross Amounts Not Offset Financial Collateral Net Amount (Dollars In Millions) Offsetting of Assets Derivatives: Free-Standing derivatives $ 1,337 $ — $ 1,337 $ 865 $ 290 $ 182 Total derivatives, subject to a master netting arrangement or similar arrangement 1,337 — 1,337 865 290 182 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 101 — 101 — — 101 Embedded derivative - GLWB 138 — 138 — — 138 Embedded derivative - FIA 60 — 60 — — 60 Total derivatives, not subject to a master netting arrangement or similar arrangement 299 — 299 — — 299 Total derivatives 1,636 — 1,636 865 290 481 Total Assets $ 1,636 $ — $ 1,636 $ 865 $ 290 $ 481 Gross Gross Net Amounts Gross Amounts Not Offset Financial Collateral Net Amount (Dollars In Millions) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 871 $ — $ 871 $ 865 $ 4 $ 2 Total derivatives, subject to a master netting arrangement or similar arrangement 871 — 871 865 4 2 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 389 — 389 — — 389 Funds withheld derivative 10 — 10 — — 10 Embedded derivative - GLWB 960 — 960 — — 960 Embedded derivative - FIA 633 — 633 — — 633 Embedded derivative - IUL 201 — 201 — — 201 Other 55 — 55 — — 55 Total derivatives, not subject to a master netting arrangement or similar arrangement 2,248 — 2,248 — — 2,248 Total derivatives 3,119 — 3,119 865 4 2,250 Repurchase agreements (1) 437 — 437 — — 437 Total Liabilities $ 3,556 $ — $ 3,556 $ 865 $ 4 $ 2,687 (1) Borrowings under repurchase agreements are for a term less than 90 days. |
COMMERCIAL MORTGAGE LOANS
COMMERCIAL MORTGAGE LOANS | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
COMMERCIAL MORTGAGE LOANS | COMMERCIAL MORTGAGE LOANS The Company invests a portion of its investment portfolio in commercial mortgage loans. As of September 30, 2021, the Company’s commercial mortgage loan holdings were $10.6 billion, or $10.5 billion net of allowance for credit losses. The Company specializes in making commercial mortgage loans on credit-oriented commercial properties. The Company’s underwriting procedures relative to its commercial mortgage loan portfolio are based, in the Company’s view, on a conservative and disciplined approach. The Company concentrates on a small number of commercial real estate asset types associated with the necessities of life (grocery anchored and credit tenant retail, industrial, multi-family, senior living, and credit tenant and medical office). The Company believes that these asset types tend to weather economic downturns better than other commercial asset classes in which it has chosen not to participate. The Company believes this disciplined approach has helped to maintain a relatively low delinquency and foreclosure rate throughout its history. The majority of the Company’s commercial mortgage loans portfolio was underwritten by the Company. From time to time, the Company may acquire loans in conjunction with an acquisition. The Company’s commercial mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, and net of the allowance for credit losses. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. Interest income, amortization of premiums and discounts and prepayment fees are reported in net investment income. Certain of the commercial mortgage loans have call options that occur within the next 9 years. However, if interest rates were to significantly increase, the Company may be unable to exercise the call options on its existing commercial mortgage loans commensurate with the significantly increased market rates. As of September 30, 2021, assuming the loans are called at their next call dates, $54 million of principal would become due for the remainder of 2021, $450 million in 2022 through 2026 and $12 million in 2027 through 2029. The Company offers a type of commercial mortgage loan under which the Company will permit a loan-to-value ratio of up to 85% in exchange for a participation interest in the cash flows from the underlying real estate. As of September 30, 2021 and December 31, 2020, $620 million and $806 million, respectively, of the Company’s total commercial mortgage loans principal balance have this participation feature. Cash flows received as a result of this participation feature are recorded as interest income. During the three and nine months ended September 30, 2021 and 2020, the Company recognized $32 million, $46 million, $1 million, and $17 million, respectively, of participation commercial mortgage loan income. As of September 30, 2021, the Company did not have any commercial mortgage loans that were nonperforming, restructured or foreclosed. As of December 31, 2020, $3 million of invested assets consisted of commercial mortgage loans that were nonperforming, restructured or foreclosed and converted to real estate properties. For all commercial mortgage loans, the impact of troubled debt restructurings is reflected in our investment balance and in the allowance for commercial mortgage loan credit losses. During the nine months ended September 30, 2021, the Company recognized one troubled debt restructuring transaction as a result of granting a concession to a borrower which included loan terms unavailable from other lenders. This concession was the result of an agreement between the creditor and the debtor. The Company did not identify any loans whose principal was permanently impaired during the nine months ended September 30, 2021. The Company provides certain relief under the Coronavirus Aid Relief, and Economic Security Act (the “CARES Act”) under its COVID-19 Commercial Mortgage Loan Program (the “Loan Modification Program”). During the nine months ended September 30, 2021, the Company modified 23 loans under the Loan Modification Program, representing $475 million in unpaid principal balance. As of September 30, 2021, since the inception of the CARES Act, there were 277 total loans modified under the Loan Modification Program, representing $2.1 billion in unpaid principal balance. At September 30, 2021, $1.7 billion of these loans have resumed regular principal and interest payments in accordance with the terms of the modification agreements and we expect the remaining $0.4 billion loans to resume scheduled payments in accordance with the agreed upon terms. The modifications under this program include agreements to defer principal payments only and/or to defer principal and interest payments for a specified period of time. None of these modifications were considered troubled debt restructurings. The amortized cost basis of the Company's commercial mortgage loan receivables by origination year, net of the allowance, for credit losses is as follows: Term Loans Amortized Cost Basis by Origination Year 2021 2020 2019 2018 2017 Prior Total (Dollars In Millions) As of September 30, 2021 Commercial mortgage loans: Performing $ 1,362 $ 1,448 $ 2,066 $ 1,483 $ 1,309 $ 2,941 $ 10,609 Non-performing — — — — — — — Amortized cost 1,362 1,448 2,066 1,483 1,309 2,941 10,609 Allowance for credit losses (8) (13) (22) (18) (16) (26) (103) Total commercial mortgage loans $ 1,354 $ 1,435 $ 2,044 $ 1,465 $ 1,293 $ 2,915 $ 10,506 Term Loans Amortized Cost Basis by Origination Year 2020 2019 2018 2017 2016 Prior Total (Dollars In Millions) As of December 31, 2020 Commercial mortgage loans: Performing $ 1,463 $ 2,442 $ 1,577 $ 1,344 $ 943 $ 2,458 $ 10,227 Non-performing — — — — — 1 1 Amortized cost 1,463 2,442 1,577 1,344 943 2,459 10,228 Allowance for credit losses (21) (46) (55) (37) (25) (38) (222) Total commercial mortgage loans $ 1,442 $ 2,396 $ 1,522 $ 1,307 $ 918 $ 2,421 $ 10,006 The following tables provide a comparative view of the key credit quality indicators of the Loan-to-Value and Debt Service Coverage Ratio (“DSCR”): As of September 30, 2021 As of December 31, 2020 Amortized % of Total DSCR (2) Amortized % of Total DSCR (2) (Dollars In Millions) (Dollars In Millions) Loan-to-Value (1) Greater than 75% $ 308 3 % 1.32 $ 399 4 % 1.29 50% - 75% 6,946 65 % 1.60 6,557 64 % 1.61 Less than 50% 3,355 32 % 2.03 3,272 32 % 2.01 Total commercial mortgage loans $ 10,609 100 % $ 10,228 100 % (1) The loan-to-value ratio compares the current unpaid principal of the loan to the estimated fair value of the underlying property collateralizing the loan. Our weighted average loan-to-value ratio was 54% and 54% at September 30, 2021 and December 31, 2020, respectively. (2) The debt service coverage ratio compares a property’s net operating income to its debt service payments, including principal and interest. Our weighted average debt service coverage ratio for September 30, 2021 and December 31, 2020 was 1.73x and 1.72x, respectively. The following provides a summary of the rollforward of the allowance for credit losses for funded commercial mortgage loans and unfunded commercial mortgage loan commitments for the periods indicated. For The For The 2021 2020 2021 2020 (Dollars In Millions) Allowance for Funded Commercial Mortgage Loan Credit Losses Beginning balance $ 136 $ 173 $ 222 $ 5 Cumulative effect adjustment — — — 80 Charge offs — — — — Recoveries — — (7) (2) Provision (33) 2 (112) 92 Ending balance $ 103 $ 175 $ 103 $ 175 Allowance for Unfunded Commercial Mortgage Loan Commitments Credit Losses Beginning balance $ 12 $ 20 $ 22 $ — Cumulative effect adjustment — — — 11 Charge offs — — — — Recoveries — — — — Provision (3) — (13) 9 Ending balance $ 9 $ 20 $ 9 $ 20 As of September 30, 2021, the Company did not have any loans that were delinquent. As of December 31, 2020, the Company had a total of one loan of $1 million that was 60-89 days delinquent. The Company’s commercial mortgage loan portfolio consists of commercial mortgage loans that are collateralized by real estate. Due to the collateralized nature of the loans, any assessment of impairment and ultimate loss given a default on the loans is based upon a consideration of the estimated fair value of the real estate. The Company limits accrued interest income on loans to ninety days of interest. For loans in nonaccrual status, interest income is recognized on a cash basis. For the nine months ended September 30, 2021, no accrued interest was excluded from the amortized cost basis pursuant to the Company's nonaccrual policy. |
MONY CLOSED BLOCK OF BUSINESS
MONY CLOSED BLOCK OF BUSINESS | 9 Months Ended |
Sep. 30, 2021 | |
Closed Block Disclosure [Abstract] | |
MONY CLOSED BLOCK OF BUSINESS | MONY CLOSED BLOCK OF BUSINESS In 1998, MONY Life Insurance Company (“MONY”) converted from a mutual insurance company to a stock corporation (“demutualization”). In connection with its demutualization, an accounting mechanism known as a closed block (the “Closed Block”) was established for certain individuals’ participating policies in force as of the date of demutualization. Assets, liabilities, and earnings of the Closed Block are specifically identified to support its participating policyholders. The Company acquired the Closed Block in conjunction with the acquisition of MONY in 2013. Assets allocated to the Closed Block inure solely to the benefit of the Closed Block’s policyholders and will not revert to the benefit of MONY or the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of MONY’s general account, any of MONY’s separate accounts or any affiliate of MONY without the approval of the Superintendent of The New York State Department of Financial Services (the “Superintendent”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the general account. Summarized financial information for the Closed Block as of September 30, 2021 and December 31, 2020 is as follows: As of September 30, 2021 December 31, 2020 (Dollars In Millions) Closed block liabilities Future policy benefits, policyholders’ account balances and other policyholder liabilities $ 5,313 $ 5,406 Policyholder dividend obligation 406 580 Other liabilities 14 7 Total closed block liabilities 5,733 5,993 Closed block assets Fixed maturities, available-for-sale, at fair value 4,720 4,903 Commercial mortgage loans 68 68 Policy loans 571 596 Cash and other invested assets 12 46 Other assets 92 91 Total closed block assets 5,463 5,704 Excess of reported closed block liabilities over closed block assets 270 289 Portion of above representing accumulated other comprehensive income: Net unrealized gains (losses) - net of policyholder dividend obligation: 2021 - $327 and 2020 - $493; and net of income tax: 2021 - $(69) and 2020 - $(104) — — Future earnings to be recognized from closed block assets and closed block liabilities $ 270 $ 289 Reconciliation of the policyholder dividend obligation is as follows: For The 2021 2020 (Dollars In Millions) Policyholder dividend obligation, beginning balance $ 580 $ 279 Applicable to net revenue (losses) (8) (21) Change in net unrealized gains (losses) - allocated to the policyholder dividend obligation (166) 216 Policyholder dividend obligation, ending balance $ 406 $ 474 Closed Block revenues and expenses were as follows: For The For The 2021 2020 2021 2020 (Dollars In Millions) Revenues Premiums and other income $ 35 $ 36 $ 102 $ 109 Net investment income 47 51 143 153 Net realized gains (losses) 3 (1) 27 (1) Total revenues 85 86 272 261 Benefits and other deductions Benefits and settlement expenses 82 81 248 242 Other operating expenses — — 1 1 Total benefits and other deductions 82 81 249 243 Net revenues before income taxes 3 5 23 18 Income tax expense 1 1 5 3 Net revenues $ 2 $ 4 $ 18 $ 15 |
REINSURANCE
REINSURANCE | 9 Months Ended |
Sep. 30, 2021 | |
Reinsurance Disclosures [Abstract] | |
REINSURANCE | REINSURANCE Allowance for Credit Losses – Reinsurance Receivables The Company establishes an allowance for current expected credit losses related to amounts receivable from reinsurers (the “Reinsurance ACL”). Changes in the Reinsurance ACL are recognized as a component of benefits and settlement expenses. The Reinsurance ACL is remeasured on a quarterly basis using an internally developed probability of default (“PD”) and loss given default (“LGD”) model. Key inputs to the calculation are a conditional probability of insurer liquidation by issuer credit rating and exposure at default derived from a runoff projection of ceded reserves by reinsurer to forecast future loss amounts. Management’s position is that the rate of return implicit in the financial asset (i.e. the ceded reserves) is associated with the discount rate used to value the underlying insurance reserves; that is, the rate of return on the asset portfolio(s) supporting the reserves. For reinsurance receivable exposures that do not share similar risk characteristics with other receivables, including those associated with counterparties that have experienced significant credit deterioration, the Company measures the allowance for credit losses individually, based on facts and circumstances associated with the specific reinsurer or transaction. As of September 30, 2021 and December 31, 2020, the Reinsurance ACL was $91 million and $94 million respectively. There were no write-offs or recoveries during the nine months ended September 30, 2021 and 2020. |
DEBT AND OTHER OBLIGATIONS
DEBT AND OTHER OBLIGATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT AND OTHER OBLIGATIONS | DEBT AND OTHER OBLIGATIONS Under a revolving line of credit arrangement (the “Credit Facility”), PLC and the Company have the ability to borrow on an unsecured basis up to a combined aggregate principal amount of $1 billion. Under certain circumstances the Credit Facility allows for a request that the commitment be increased up to a maximum principal amount of $1.5 billion. Balances outstanding under the Credit Facility accrue interest at a rate equal to, at the option of the borrowers, (i) LIBOR plus a spread based on the ratings of PLC’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s Prime rate, (y) 0.50% above the Funds Rate, or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of PLC’s Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of PLC’s Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The annual facility fee rate is 0.125% of the aggregate principal amount. The Credit Facility provides that PLC is liable for the full amount of any obligations for borrowings or letters of credit, including those of the Company, under the Credit Facility. The maturity date of the Credit Facility is May 3, 2023. The Company is not aware of any non-compliance with the financial debt covenants of the Credit Facility as of September 30, 2021. The Company had no outstanding balances drawn on the Credit Facility as of September 30, 2021 or December 31, 2020. PLC had an outstanding balance of $305 million and $190 million as of September 30, 2021 and December 31, 2020, respectively. Secured Financing Transactions Repurchase Program Borrowings While the Company anticipates that its cash flows and the cash flows of its operating subsidiaries will be sufficient to meet its investment commitments and operating cash needs in a normal credit market environment, the Company recognizes that investment commitments scheduled to be funded may, from time to time, exceed the funds then available. Therefore, the Company has established repurchase agreement programs for certain of its insurance subsidiaries to provide liquidity when needed. The Company expects that the rate received on its investments will equal or exceed its borrowing rate. Under this program, the Company may, from time to time, sell an investment security at a specific price and agree to repurchase that security at another specified price at a later date. These borrowings are typically for a term less than 90 days. The market value of securities to be repurchased is monitored and collateral levels are adjusted where appropriate to protect the counterparty against credit exposure. Cash received is invested in fixed maturi ty securities, and the agreements provide for net settlement in the event of default or on termination of the agreements. As of September 30, 2021, the fair value of securities pledged under the repurchase program was $1,124 million, and the repurchase obligation of $1,104 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 12 basis points). During the nine months ended September 30, 2021, the maximum balance outstanding at any one point in time related to these programs was $1,289 million. The average daily balance was $537 million (at an average borrowing rate of 12 basis points) during the nine months ended September 30, 2021. As of December 31, 2020, the fair value of securities pledged under the repurchase program was $452 million, and the repurchase obligation of $437 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 15 basis points). During 2020, the maximum balance outstanding at any one point in time related to these programs was $825 million. The average daily balance was $143 million (at an average borrowing rate of 33 basis points) during the year ended December 31, 2020. Securities Lending The Company participates in securities lending, primarily as an investment yield enhancement, whereby securities that are held as investments are loaned out to third parties for short periods of time. The Company requires collateral at least equal to 102% of the fair value of the loaned securities to be separately maintained. The loaned securities’ fair value is monitored on a daily basis and collateral is adjusted accordingly. The Company maintains ownership of the securities at all times and is entitled to receive from the borrower any payments for interest received on such securities during the loan term. Securities lending transactions are accounted for as secured borrowings. As of September 30, 2021 and December 31, 2020, securities with a fair value of $160 million and $57 million, respectively, were loaned under this program. As collateral for the loaned securities, the Company receives cash which is primarily reinvested in short-term repurchase agreements, which are also collateralized by U.S. Government or U.S. Government Agency securities, and government money market funds. These investments are recorded in short-term investments with a corresponding liability recorded in secured financing liabilities to account for its obligation to return the collateral. As of September 30, 2021 and December 31, 2020, the fair value of the collateral related to this program was $166 million and $59 million and the Company has an obligation to return $166 million and $59 million of collateral to the securities borrowers, respectively. The following table provides the fair value of collateral pledged for repurchase agreements, grouped by asset class as of September 30, 2021 and December 31, 2020 : Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of September 30, 2021 (Dollars In Millions) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 1,091 $ — $ — $ — $ 1,091 Corporate securities 33 — — — 33 Total repurchase agreements and repurchase-to-maturity transactions 1,124 — — — 1,124 Securities lending transactions Corporate securities 156 — — — 156 Equity securities 1 — — — 1 Redeemable preferred stocks 3 — — — 3 Total securities lending transactions 160 — — — 160 Total securities $ 1,284 $ — $ — $ — $ 1,284 Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of December 31, 2020 (Dollars In Millions) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 366 $ 86 $ — $ — $ 452 Total repurchase agreements and repurchase-to-maturity transactions 366 86 — — 452 Securities lending transactions Fixed maturity securities 49 — — — 49 Equity securities 7 — — — 7 Redeemable preferred stocks 1 — — — 1 Total securities lending transactions 57 — — — 57 Total securities $ 423 $ 86 $ — $ — $ 509 Golden Gate Captive Insurance Company |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company leases administrative and marketing office space as well as various office equipment. Most leases have terms ranging from two years to twenty-five years. Leases with an initial term of 12 months or less are not recorded on the consolidated condensed balance sheet. The Company accounts for lease components separately from non-lease components (e.g., common area maintenance). Certain of the Company’s lease agreements include options to renew at the Company’s discretion. Management has concluded that the Company is not reasonably certain to elect any of these renewal options. The Company will use the interest rates received on its funding agreement backed notes as the collateralized discount rate when calculating the present value of remaining lease payments when the rate implicit in the lease is unavailable. Under the insurance guaranty fund laws in most states, insurance companies doing business in those states can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. From time to time, companies may be asked to contribute amounts beyond prescribed limits. It is possible that the Company could be assessed with respect to product lines not offered by the Company. In addition, legislation may be introduced in various states with respect to guaranty fund assessment laws related to insurance products, including long term care insurance and other specialty products, that increases the cost of future assessments or alters future premium tax offsets received in connection with guaranty fund assessments. The Company cannot predict the amount, nature or timing of any future assessments or legislation, any of which could have a material and adverse impact on the Company’s financial condition or results of operations. A number of civil jury verdicts have been returned against insurers, broker-dealers, and other providers of financial services involving sales, refund or claims practices, alleged agent misconduct, failure to properly supervise representatives, relationships with agents or persons with whom the insurer does business, and other matters. Often these lawsuits have resulted in the award of substantial judgments that are disproportionate to the actual damages, including material amounts of punitive and non-economic compensatory damages. In some states, juries, judges, and arbitrators have substantial discretion in awarding punitive and non-economic compensatory damages which creates the potential for unpredictable material adverse judgments or awards in any given lawsuit or arbitration. Arbitration awards are subject to very limited appellate review. In addition, in some class action and other lawsuits, companies have made material settlement payments. The financial services and insurance industries in particular are also sometimes the target of law enforcement and regulatory investigations relating to the numerous laws and regulations that govern such companies. Some companies have been the subject of law enforcement or regulatory actions or other actions resulting from such investigations. The Company, in the ordinary course of business, is involved in such matters. The Company establishes liabilities for litigation and regulatory actions when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For matters where a loss is believed to be reasonably possible, but not probable, no liability is established. For such matters, the Company may provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. The Company reviews relevant information with respect to litigation and regulatory matters on a quarterly and annual basis and updates its established liabilities, disclosures, and estimates of reasonably possible losses or range of loss based on such reviews. Advance Trust & Life Escrow Services, LTA, as Securities Intermediary of Life Partners Position Holder Trust v. Protective Life Insurance Company, Case No. 2:18-CV-01290, is a putative class action that was filed on August 13, 2018 in the United States District Court for the Northern District of Alabama. Plaintiff alleges that the Company required policyholders to pay unlawful and excessive cost of insurance charges. Plaintiff seeks to represent all owners of universal life and variable universal life policies issued or administered by the Company or its predecessors that provide that cost of insurance rates are to be determined based on expectations of future mortality experience. The plaintiff seeks class certification, compensatory damages, pre-judgment and post-judgment interest, costs, and other unspecified relief. The Company is vigorously defending this matter and cannot predict the outcome of or reasonably estimate the possible loss or range of loss that might result from this litigation. The Company is currently defending three cases, including one putative class action ( Beverly Allen v. Protective Life Insurance Company , Civil Action No. 1:20-cv-00530-JLT) where the plaintiffs generally allege that the defendants failed to comply with certain California statutes which address contractual grace periods and lapse notice requirements for certain life insurance policies. Plaintiffs claim that these statutes apply to life insurance policies that existed before the statutes’ effective date. The plaintiffs seek damages and injunctive relief. No class has been certified in Beverly Allen v. Protective Life Insurance Company. In August 2021, the California Supreme Court determined in McHugh v. Protective Life Insurance Company , Case No. D072863, that the statutory requirements apply to life insurance policies issued before the statutes’ effective date. In continuing to defend these matters, the Company maintains various defenses to the merits of the plaintiffs’ claims and to class certification. However, the Company cannot predict the outcome of or reasonably estimate the possible loss or range of loss that might result from this litigation. Scottish Re (U.S.), Inc. ("SRUS") was placed in rehabilitation on March 6, 2019 by the State of Delaware. Under the related order, the Insurance Commissioner of the State of Delaware has been appointed the receiver of SRUS (the “Receiver”) and provided with authority to conduct and continue the business of SRUS in the interest of its cedents, creditors, and stockholder. The order was accompanied by an injunction requiring the continued payment of reinsurance premiums to SRUS and temporarily prohibiting cedents, including the Company, from offsetting premiums payable against receivables from SRUS. On June 20, 2019, the Delaware Court of Chancery (the “Court”) entered an order approving a Revised Offset Plan, which allows cedents, including the Company, to offset premiums under certain circumstances. A proposed Rehabilitation Plan (“Original Rehabilitation Plan”) was filed by the Receiver on June 30, 2020. The Original Rehabilitation Plan presents the following two options to each cedent: 1) remain in business with SRUS and be governed by the Rehabilitation Plan, or 2) recapture business ceded to SRUS. Due to SRUS’s financial status, neither option would pay 100% of the Company’s outstanding claims. The Original Rehabilitation Plan would impose certain financial terms and conditions on the cedents based on the election made, the type of business ceded, the manner in which the business is collateralized, and the amount of losses sustained by the cedent. On October 9, 2020, the Receiver filed a proposed order setting forth a schedule to present the Original Rehabilitation Plan for Court approval, which order contemplated possible modifications to the Rehabilitation Plan to be filed with the Court by March 16, 2021. The Court approved the order. On March 16, 2021, the Receiver filed a draft Amended Rehabilitation Plan (“Amended Plan”). The majority of the substance and form of the original Rehabilitation Plan, including its two option structure described above, remained in place. For much of 2020 and into early 2021, a group of interested parties collectively requested certain information and financial data from the Receiver that would allow them to more fully evaluate first the Original Rehabilitation Plan and then the Amended Plan. This group also had a number of conversations with counsel for the Receiver regarding concerns over the Plan. On July 26, 2021, the Receiver shared with interested parties an outline of a Modified Plan, along with a liquidation analysis. While there are significant changes proposed in the Modified Plan (as compared to the Original Rehabilitation Plan and the Amended Plan), much of the economic substance (including not paying claims in full) of the Original Rehabilitation Plan and the Amended Rehabilitation Plan are likely to be included in the Modified Plan. The Court has yet to rule further or to re-establish a schedule for pre-confirmation procedures or a hearing on confirmation. The Company continues to monitor SRUS and the actions of the Receiver through discussions with legal counsel and review of publicly available information. An allowance for credit losses related to SRUS is included in the overall reinsurance allowance for credit losses. As of September 30, 2021, management does not believe that the ultimate outcome of the rehabilitation process will have a material impact on our financial position or results of operations. Certain insurance companies for which the Company has coinsured blocks of life insurance and annuity policies, are under audit for compliance with the unclaimed property laws of a number of states. The audits are being conducted on behalf of the treasury departments or unclaimed property administrators in such states. The focus of the audits is on whether there have been unreported deaths, maturities, or policies that have exceeded limiting age with respect to which death benefits or other payments under life insurance or annuity policies should be treated as unclaimed property that should be escheated to the state. The Company is presently unable to estimate the reasonably possible loss or range of loss that may result from the audits due to a number of factors, including the early stages of the audits being conducted, and uncertainty as to whether the Company or other companies are responsible for the liabilities, if any, arising in connection with certain co-insured policies. The Company will continue to monitor the matter for any developments that would make the loss contingency associated with the audits reasonably estimable. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of and for the three and nine months ended September 30, 2021 and 2020. Changes in Accumulated Other Comprehensive Income (Loss) by Component Unrealized Gains and Losses on Investments (2) Accumulated Total (Dollars In Millions, Net of Tax) Balance, June 30, 2021 $ 2,818 $ (5) $ 2,813 Other comprehensive income (loss) before reclassifications (263) (2) (265) Other comprehensive income (loss) on investments in net expected credit losses (1) — (1) Amounts reclassified from accumulated other comprehensive income (loss) (1) (5) 1 (4) Balance, September 30, 2021 $ 2,549 $ (6) $ 2,543 Balance, December 31, 2020 $ 3,556 $ (8) $ 3,548 Other comprehensive income (loss) before reclassifications (967) 1 (966) Other comprehensive income (loss) on investments in net expected credit losses (1) (1) Amounts reclassified from accumulated other comprehensive income (loss) (1) (39) 1 (38) Balance, September 30, 2021 $ 2,549 $ (6) $ 2,543 Unrealized Gains and Losses on Investments (2) Accumulated Total (Dollars In Millions, Net of Tax) Balance, June 30, 2020 $ 2,233 $ (8) $ 2,225 Other comprehensive income (loss) before reclassifications 482 1 483 Other comprehensive income (loss) on investments in net expected credit losses 28 — 28 Amounts reclassified from accumulated other comprehensive income (loss) (1) 28 — 28 Balance, September 30, 2020 $ 2,771 $ (7) $ 2,764 Balance, December 31, 2019 $ 1,421 $ (8) $ 1,413 Other comprehensive income (loss) before reclassifications 1,264 (1) 1,263 Other comprehensive income (loss) on investments in net expected credit losses 26 — 26 Amounts reclassified from accumulated other comprehensive income (loss) (1) 60 2 62 Balance, September 30, 2020 $ 2,771 $ (7) $ 2,764 (1) See Reclassifications Out of Accumulated Other Comprehensive Income (Loss) table below for details. (2) Net unrealized gains reported in AOCI were offset by $(1.7) billion and $(2.0) billion as of September 30, 2021 and December 31, 2020, respectively, and $(1.6) billion and $(777) million as of September 30, 2020 and December 31, 2019, respectively, due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income. The following tables summarize the reclassifications amounts out of AOCI for the three and nine months ended September 30, 2021 and 2020. Reclassifications Out of Accumulated Other Comprehensive Income (Loss) For The For The Gains (losses) in net income: Affected Line Item in the 2021 2020 2021 2020 (Dollars In Millions) Derivative instruments Benefits and settlement expenses, net of reinsurance ceded (1) $ 1 $ — $ 1 $ (3) Tax (expense) benefit — — — 1 $ 1 $ — $ 1 $ (2) Unrealized gains and losses on available-for-sale securities Realized gains (losses) - investments $ 5 $ 3 $ 44 $ 45 Change in net expected credit losses - fixed maturities — (38) 5 (121) Tax (expense) benefit (1) 7 (10) 16 $ 4 $ (28) $ 39 $ (60) (1) See Note 5, Derivative Financial Instruments for additional information |
OPERATING SEGMENTS
OPERATING SEGMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | OPERATING SEGMENTS The Company has several operating segments, each having a strategic focus. An operating segment is distinguished by products, channels of distribution, and/or other strategic distinctions. The Company periodically evaluates its operating segments and makes adjustments to its segment reporting as needed. A brief description of each segment follows. • The Retail Life and Annuity segment primarily markets fixed universal life (“UL”), indexed universal life (“IUL”), variable universal life (“VUL”), level premium term insurance (“traditional”), bank-owned life insurance (“BOLI”), corporate-owned life insurance (“COLI”), fixed annuity, and variable annuity (“VA”) products on a national basis primarily through networks of independent insurance agents and brokers, broker-dealers, financial institutions, independent marketing organizations, and affinity groups. • The Acquisitions segment focuses on acquiring, converting, and servicing policies and contracts acquired from other companies. The segment’s primary focus is on life insurance policies and annuity products that were sold to individuals. Additionally, this segment’s acquisition activity is predicated upon many factors, including available capital, operating capacity, potential return on capital, and market dynamics. Policies acquired through the Acquisitions segment are typically blocks of business where no new policies are being marketed, however, some recent acquisitions have included ongoing new business activities. Ongoing new product sales written by the Company from these acquisitions are included in the Retail Life and Annuity segment. As a result, earnings and account values are expected to decline as the result of lapses, deaths, and other terminations of coverage unless new acquisitions are made. • The Stable Value Products segment sells fixed and floating rate funding agreements directly to the trustees of municipal bond proceeds, money market funds, bank trust departments, and other institutional investors. This segment also issues funding agreements to the FHLB, and markets guaranteed investment contracts (“GICs”) to 401(k) and other qualified retirement savings plans. The Company also has an unregistered funding agreement-backed notes program which provides for offers of notes to both domestic and international institutional investors. • The Asset Protection segment markets extended service contracts, GAP products, and other specialized ancillary products to protect consumers’ investments in automobiles and recreational vehicles. GAP products are designed to cover the difference between the scheduled loan pay-off amount and an asset’s actual cash value in the case of a total loss. Each type of specialized ancillary product protects against damage or other loss to a particular aspect of the underlying asset. • The Corporate and Other segment primarily consists of net investment income on assets supporting our equity capital, unallocated corporate overhead and expenses not attributable to the segments above. This segment includes earnings from several non-strategic or runoff lines of business, various financing and investment-related transactions, and the operations of several small subsidiaries. The Company’s management and Board of Directors analyzes and assesses the operating performance of each segment using pre-tax adjusted operating income (loss) and after-tax adjusted operating income (loss) . Consistent with GAAP accounting guidance for segment reporting, pre-tax adjusted operating income (loss) is the Company’s measure of segment performance. Pre-tax adjusted operating income (loss) is calculated by adjusting income (loss) before income tax , by excluding the following items: • realized gains and losses on investments and derivatives, • changes in the GLWB embedded derivatives exclusive of the portion attributable to the economic cost of the GLWB, • actual GLWB incurred claims, • immediate impacts from changes in current market conditions on estimates of future profitability on variable annuity and variable universal life products, including impacts on deferred acquisition cost (“DAC”), value of business acquired (“VOBA”), reserves and other items, and • the amortization of DAC, VOBA, and certain policy liabilities that is impacted by the exclusion of these items. After-tax adjusted operating income (loss) is derived from pre-tax adjusted operating income (loss) with the inclusion of income tax expense or benefits associated with pre-tax adjusted operating income. Income tax expense or benefits is allocated to the items excluded from pre-tax adjusted operating income (loss) at the statutory federal income tax rate for the associated period. Income tax expense or benefits allocated to after-tax adjusted operating income (loss) can vary period to period based on changes in the Company’s effective income tax rate. Pre-tax adjusted operating income (loss) and after-tax adjusted operating income (loss) presented below are non-GAAP financial measures. The items excluded from adjusted operating income (loss) are important to understanding the overall results of operations. During Q1 2021, the Company began excluding from pre-tax and after-tax adjusted operating income (loss) the impacts on DAC, VOBA, reserves and other items due to changes in estimated profitability of variable annuity and variable universal life products as a result of changes in current market conditions. Management believes this change enhances the understanding of the underlying performance trends of these products. Pre-tax adjusted operating income (loss) and after-tax adjusted operating income (loss) are not substitutes for income before income taxes or net income (loss), respectively. These measures may not be comparable to similarly titled measures reported by other companies. The Company believes that pre-tax and after-tax adjusted operating income (loss) enhances management’s and the Board of Directors’ understanding of the ongoing operations, the underlying profitability of each segment, and helps facilitate the allocation of resources. In determining the components of the pre-tax adjusted operating income (loss) for each segment, premiums and policy fees, other income, benefits and settlement expenses, and amortization of DAC and VOBA are attributed directly to each operating segment. Net investment income is allocated based on directly related assets required for transacting the business of that segment. Realized gains (losses) and other operating expenses are allocated to the segments in a manner that most appropriately reflects the operations of that segment. Investments and other assets are allocated based on statutory policy liabilities net of associated statutory policy assets, while DAC/VOBA and goodwill are shown in the segments to which they are attributable. There were no significant intersegment transactions during the three and nine months ended September 30, 2021 and 2020. The following tables present a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income: For The For The 2021 2020 2021 2020 (Dollars In Millions) Revenues Retail Life and Annuity $ 740 $ 757 $ 2,125 $ 1,808 Acquisitions 749 802 2,282 2,399 Stable Value Products 106 48 275 137 Asset Protection 66 68 205 209 Corporate and Other (9) 49 (13) 80 Total revenues $ 1,652 $ 1,724 $ 4,874 $ 4,633 Pre-tax Adjusted Operating Income (Loss) s Retail Life and Annuity $ (85) $ 23 $ (63) $ 47 Acquisitions 42 65 255 238 Stable Value Products 63 20 128 61 Asset Protection 9 8 31 33 Corporate and Other (26) (35) (120) (108) Pre-tax adjusted operating income (loss) 3 81 231 271 Non-operating income (loss) 56 79 156 (96) Income before income tax 59 160 387 175 Income tax expense (10) (29) (74) (31) Net income $ 49 $ 131 $ 313 $ 144 Pre-tax adjusted operating income (loss) $ 3 $ 81 $ 231 $ 271 Adjusted operating income tax expense 1 (13) (41) (52) After-tax adjusted operating income (loss) 4 68 190 219 Non-operating income (loss) 56 79 156 (96) Income tax expense on adjustments (11) (16) (33) 21 Net income $ 49 $ 131 $ 313 $ 144 Non-operating income (loss) Derivative gains (losses) $ 51 $ 88 $ 50 $ (152) Investment gains (losses) 16 23 111 (72) VA/VUL market impacts (1) (6) — 13 — Less: related amortization (2) 31 55 93 (59) Less: VA GLWB economic cost (26) (23) (75) (69) Total non-operating income (loss) $ 56 $ 79 $ 156 $ (96) (1) Represents the immediate impacts on DAC, VOBA, reserves, and other non-cash items in current period results due to changes in current market conditions on estimates of profitability, which are excluded from pre-tax and after-tax adjusted operating income (loss) beginning in Q1 of 2021. (2) Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses). For The For The 2021 2020 2021 2020 (Dollars In Millions) Net investment income Retail Life and Annuity $ 277 $ 252 $ 819 $ 754 Acquisitions 393 406 1,192 1,235 Stable Value Products 97 54 228 169 Asset Protection 5 5 16 19 Corporate and Other (19) 23 (40) 59 Total net investment income $ 753 $ 740 $ 2,215 $ 2,236 Amortization of DAC and VOBA Retail Life and Annuity $ 61 $ 77 $ 168 $ 70 Acquisitions 11 14 14 24 Stable Value Products 2 1 4 3 Asset Protection 17 18 47 48 Corporate and Other — — — — Total amortization of DAC and VOBA $ 91 $ 110 $ 233 $ 145 Operating Segment Assets As of September 30, 2021 (Dollars In Millions) Retail Life & Annuity Acquisitions Stable Value Investments and other assets $ 43,415 $ 54,949 $ 8,101 DAC and VOBA 2,690 851 16 Other intangibles 342 30 6 Goodwill 559 24 114 Total assets $ 47,006 $ 55,854 $ 8,237 Asset Corporate Total Investments and other assets $ 928 $ 17,771 $ 125,164 DAC and VOBA 176 — 3,733 Other intangibles 92 34 504 Goodwill 129 — 826 Total assets $ 1,325 $ 17,805 $ 130,227 Operating Segment Assets As of December 31, 2020 (Dollars In Millions) Retail Life & Annuity Acquisitions Stable Value Investments and other assets $ 39,874 $ 55,628 $ 5,928 DAC and VOBA 2,480 762 8 Other intangibles 367 33 6 Goodwill 559 24 114 Total assets $ 43,280 $ 56,447 $ 6,056 Asset Corporate Total Investments and other assets $ 881 $ 19,813 $ 122,124 DAC and VOBA 170 — 3,420 Other intangibles 101 33 540 Goodwill 129 — 826 Total assets $ 1,281 $ 19,846 $ 126,910 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSThe Company has evaluated the effects of events subsequent to September 30, 2021, and through November 12, 2021, the date the Company filed its consolidated condensed financial statements with the United States Securities and Exchange Commission. All accounting and disclosure requirements related to subsequent events are included in the Company's consolidated condensed financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Protective Life Insurance Company (the “Company”), a stock life insurance company, was founded in 1907. The Company is a wholly owned subsidiary of Protective Life Corporation (“PLC”), an insurance holding company. PLC is a wholly owned subsidiary of Dai-ichi Life Holdings, Inc., a kabushiki kaisha (“Dai-ichi Life”). The Company markets individual life insurance, guaranteed investment contracts, guaranteed funding agreements, fixed and variable annuities, and extended service contracts throughout the United States. The Company also maintains a separate segment devoted to the acquisition of insurance policies from other companies. PLC is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. These consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim periods presented herein. In the opinion of management, the accompanying consolidated condensed financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair presentation of the results for the interim periods presented. Operating results for the three and nine months ended September 30, 2021, are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021. The year-end consolidated condensed financial data included herein was derived from audited financial statements but this report does not include all disclosures required by GAAP. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors. Shades Creek Captive Insurance Company (“Shades Creek”) was a direct wholly owned insurance subsidiary of PLC through December 31, 2020. On January 1, 2021, Shades Creek was merged with and into the Company, with the Company being the surviving entity. The Company accounted for the transaction pursuant to Accounting Standards Codification (“ASC”) 805-50 “Transactions between Entities under Common Control”. The transferred assets and liabilities of Shades Creek were recorded by the Company at their carrying value at the date of transfer. In accordance with ASC 805-50, all prior financial information has been recast to reflect this transaction as of the earliest period presented under common control, January 1, 2020. Beginning in the first quarter of 2020, the outbreak of COVID-19 created significant economic and social disruption and impacted various operational and financial aspects of the Company’s business. The pandemic may continue to impact the Company’s earnings based on, amongst other factors, the volume and severity of claims related to COVID-19 and the financial disruption caused by the pandemic, which could impact the Company’s investment portfolio. |
Entities Included | Entities Included The consolidated condensed financial statements in this report include the accounts of Protective Life Insurance Company and its wholly owned subsidiaries and affiliate companies, which are consolidated in consideration of the Company’s voting interest or its power to direct the activities of the affiliate company. Intercompany balances and transactions have been eliminated. |
Accounting Pronouncements Recently Adopted and Not Yet Adopted | Accounting Pronouncements Recently Adopted Accounting Standards Update (“ASU” or “Update”) No. 2019-12 – Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this Update remove certain exceptions to the general principles in Topic 740 related to intraperiod tax allocations, interim tax calculations, and outside basis differences. The amendments also clarify and amend guidance in certain other areas of Topic 740 in order to eliminate diversity in practice. The amendments in this Update are effective for public business entities in fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of this Update did not have a material impact on the Company’s operations and financial results. Accounting Pronouncements Not Yet Adopted ASU No. 2018-12 - Financial Services - Insurance (Topic 944): Targeted Improvements to Accounting for Long-Duration Contracts. The amendments in this Update are designed to make improvements to the existing recognition, measurement, presentation, and disclosure requirements for certain long-duration contracts issued by an insurance company. The new amendments require insurance entities to provide a more current measure of the liability for future policy benefits for traditional and limited-payment contracts by regularly refining the liability for actual past experience and updated future assumptions. This differs from current requirements where assumptions are locked-in at contract issuance for these contract types. In addition, the updated liability will be discounted using an upper-medium grade (low-credit-risk) fixed income instrument yield that reflects the characteristics of the liability which differs from currently used rates based on the invested assets supporting the liability. In addition, the amendments introduce new requirements to assess market-based insurance contract options and guarantees for Market Risk Benefits and measure them at fair value. This Update also requires insurance entities to amortize deferred acquisition costs on a constant-level basis over the expected life of the contract. Finally, this Update requires new disclosures including liability rollforwards and information about significant inputs, judgments, assumptions, and methods used in the measurement. In November 2020, FASB issued ASU No. 2020-11 - Financial Services - Insurance (Topic 944); Effective Date and Early Application |
INVESTMENT OPERATIONS (Tables)
INVESTMENT OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Realized Gain (Loss) on Investments | Net realized gains (losses) are summarized as follows: For The For The 2021 2020 2021 2020 (Dollars In Millions) Fixed maturities $ 5 $ 3 $ 44 $ 45 Equity securities — 16 3 (1) Modco trading portfolios (25) 45 (69) 108 Change in net expected credit losses - fixed maturities — (38) 5 (121) Commercial mortgage loans 37 (2) 129 (101) Other investments (1) (1) (1) (2) Realized gains (losses) - investments 16 23 111 (72) Realized gains (losses) - derivatives (1) 51 88 50 (152) Realized gains (losses) $ 67 $ 111 $ 161 $ (224) (1) See Note 5, Derivative Financial Instruments |
Schedule of Fair Value (Proceeds) and Gains (Losses) on Securities in an Unrealized Gain or Loss Position | The chart below summarizes the sales proceeds and gains (losses) realized on securities classified as available-for-sale (“AFS”). For The For The 2021 2020 2021 2020 (Dollars In Millions) Securities in an unrealized gain position: Sales proceeds $ 232 $ 515 $ 1,443 $ 1,454 Realized gains $ 5 $ 3 $ 45 $ 50 Securities in an unrealized loss position: Sales proceeds $ 12 $ 8 $ 35 $ 33 Realized losses $ — $ — $ (1) $ (5) |
Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale | The amortized cost, gross unrealized gains, gross unrealized losses, allowance for expected credit losses, and fair value of the Company’s investments classified as AFS are as follows: As of September 30, 2021 Amortized Gross Gross Allowance Fair (Dollars In Millions) Fixed maturities: Residential mortgage-backed securities $ 7,345 $ 59 $ (58) $ — $ 7,346 Commercial mortgage-backed securities 2,196 98 (6) (1) 2,287 Other asset-backed securities 1,438 39 (1) — 1,476 U.S. government-related securities 821 15 (24) — 812 Other government-related securities 688 76 (2) — 762 States, municipals, and political subdivisions 3,760 414 (1) — 4,173 Corporate securities 48,935 4,808 (135) (1) 53,607 Redeemable preferred stocks 297 13 — — 310 65,480 5,522 (227) (2) 70,773 Short-term investments 542 — — — 542 $ 66,022 $ 5,522 $ (227) $ (2) $ 71,315 As of December 31, 2020 Amortized Gross Gross Allowance Fair (Dollars In Millions) Fixed maturities: Residential mortgage-backed securities $ 6,510 $ 159 $ (1) $ — $ 6,668 Commercial mortgage-backed securities 2,429 128 (19) (4) 2,534 Other asset-backed securities 1,546 40 (7) (1) 1,578 U.S. government-related securities 1,492 26 (3) — 1,515 Other government-related securities 622 96 (1) — 717 States, municipals, and political subdivisions 3,902 519 (1) — 4,420 Corporate securities 46,150 6,074 (99) (18) 52,107 Redeemable preferred stocks 183 11 — — 194 62,834 7,053 (131) (23) 69,733 Short-term investments 386 — — — 386 $ 63,220 $ 7,053 $ (131) $ (23) $ 70,119 |
Schedule of Fair Value of Trading Securities | The fair value of the investments held pursuant to these Modco arrangements are as follows: As of September 30, 2021 December 31, 2020 (Dollars In Millions) Fixed maturities: Residential mortgage-backed securities $ 158 $ 209 Commercial mortgage-backed securities 211 214 Other asset-backed securities 181 163 U.S. government-related securities 33 91 Other government-related securities 64 30 States, municipals, and political subdivisions 288 282 Corporate securities 1,900 1,860 Redeemable preferred stocks 8 13 2,843 2,862 Equity securities 13 20 Short-term investments 87 76 $ 2,943 $ 2,958 |
Schedule of Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Fixed Maturities, by Expected Maturity | The amortized cost and fair value of available-for-sale fixed maturities as of September 30, 2021, by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment. Available-for-Sale Amortized Fair (Dollars In Millions) Due in one year or less $ 1,566 $ 1,581 Due after one year through five years 11,358 11,900 Due after five years through ten years 14,469 15,365 Due after ten years 38,087 41,927 $ 65,480 $ 70,773 |
Schedule of Available-for-sale Allowance for Credit Losses on Fixed Maturities | The following chart is a rollforward of the allowance for expected credit losses on fixed maturities classified as available-for-sale: For The For The Corporate CMBS ABS Total Corporate CMBS ABS Total (Dollars In Millions) Beginning Balance $ 1 $ 1 $ — $ 2 $ 18 $ 4 $ 1 $ 23 Additions for securities for which an allowance was not previously recorded — — — — — — — — Adjustments on previously recorded allowances due to change in expected cash flows — — — — (1) (3) — (4) Reductions on previously recorded allowances due to disposal of security in the current period — — — — — — (1) (1) Write-offs of previously recorded allowances due to intent or requirement to sell — — — — (16) — — (16) Ending Balance $ 1 $ 1 $ — $ 2 $ 1 $ 1 $ — $ 2 For The For The Corporate CMBS ABS Total Corporate CMBS ABS Total (Dollars In Millions) Beginning Balance $ 81 $ — $ 1 $ 82 $ — $ — $ — $ — Additions for securities for which an allowance was not previously recorded — — — — 62 — 1 63 Adjustments on previously recorded allowances due to change in expected cash flows 1 — — 1 20 — — 20 Reductions on previously recorded allowances due to disposal of security in the current period — — — — — — — — Write-offs of previously recorded allowances due to intent or requirement to sell (64) — — (64) (64) — — (64) Ending Balance $ 18 $ — $ 1 $ 19 $ 18 $ — $ 1 $ 19 |
Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired | The following table includes the gross unrealized losses and fair value of the Company’s AFS fixed maturities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2021: Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Millions) Residential mortgage-backed securities $ 3,460 $ (58) $ 11 $ — $ 3,471 $ (58) Commercial mortgage-backed securities 50 — 90 (6) 140 (6) Other asset-backed securities 130 — 54 (1) 184 (1) U.S. government-related securities 392 (21) 67 (3) 459 (24) Other government-related securities 76 (2) — — 76 (2) States, municipals, and political subdivisions 35 (1) 4 — 39 (1) Corporate securities 3,978 (96) 496 (39) 4,474 (135) Redeemable preferred stocks 20 — — — 20 — $ 8,141 $ (178) $ 722 $ (49) $ 8,863 $ (227) |
Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired | The following table includes the gross unrealized losses and fair value of the Company’s AFS fixed maturities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2020: Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Millions) Residential mortgage-backed securities $ 386 $ (1) $ 9 $ — $ 395 $ (1) Commercial mortgage-backed securities 263 (15) 30 (4) 293 (19) Other asset-backed securities 146 (2) 326 (5) 472 (7) U.S. government-related securities 311 (3) 1 — 312 (3) Other government-related securities 19 — 7 (1) 26 (1) States, municipals, and political subdivisions 34 (1) 5 — 39 (1) Corporate securities 1,063 (33) 728 (66) 1,791 (99) Redeemable preferred stocks — — — — — — $ 2,222 $ (55) $ 1,106 $ (76) $ 3,328 $ (131) |
Summary of Change in Unrealized Gains (Losses), Net of Income Tax, on Fixed Maturity and Equity Securities, Classified as Available-for-Sale | The change in unrealized gains (losses), net of the allowance for expected credit losses and income taxes, on fixed matur ities, classified as available-for-sale is summarized as follows: For The For The 2021 2020 2021 2020 (Dollars In Millions) Fixed maturities $ (326) $ 787 $ (1,285) $ 2,158 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of September 30, 2021: Measurement Level 1 Level 2 Level 3 Total (Dollars In Millions) Assets: Fixed maturity securities - AFS Residential mortgage-backed securities 4 $ — $ 7,346 $ — $ 7,346 Commercial mortgage-backed securities 4 — 2,256 31 2,287 Other asset-backed securities 4 — 1,018 458 1,476 U.S. government-related securities 4 410 402 — 812 State, municipals, and political subdivisions 4 — 4,173 — 4,173 Other government-related securities 4 — 762 — 762 Corporate securities 4 — 51,972 1,635 53,607 Redeemable preferred stocks 4 310 — — 310 Total fixed maturity securities - AFS 720 67,929 2,124 70,773 Fixed maturity securities - trading Residential mortgage-backed securities 3 — 158 — 158 Commercial mortgage-backed securities 3 — 211 — 211 Other asset-backed securities 3 — 87 94 181 U.S. government-related securities 3 27 6 — 33 State, municipals, and political subdivisions 3 — 288 — 288 Other government-related securities 3 — 48 16 64 Corporate securities 3 — 1,885 15 1,900 Redeemable preferred stocks 3 8 — — 8 Total fixed maturity securities - trading 35 2,683 125 2,843 Total fixed maturity securities 755 70,612 2,249 73,616 Equity securities 3 614 — 158 772 Other long-term investments (1) 3 & 4 65 917 299 1,281 Short-term investments 3 463 166 — 629 Total investments 1,897 71,695 2,706 76,298 Cash 3 409 — — 409 Assets related to separate accounts Variable annuity 3 13,112 — — 13,112 Variable universal life 3 1,756 — — 1,756 Total assets measured at fair value on a recurring basis $ 17,174 $ 71,695 $ 2,706 $ 91,575 Liabilities: Annuity account balances (2) 3 $ — $ — $ 64 $ 64 Other liabilities (1) 3 & 4 25 603 1,948 2,576 Total liabilities measured at fair value on a recurring basis $ 25 $ 603 $ 2,012 $ 2,640 Measurement category 3 represents fair value through net income and 4 represents fair value through other comprehensive income (loss). (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2020: Measurement Level 1 Level 2 Level 3 Total (Dollars In Millions) Assets: Fixed maturity securities - AFS Residential mortgage-backed securities 4 $ — $ 6,668 $ — $ 6,668 Commercial mortgage-backed securities 4 — 2,502 32 2,534 Other asset-backed securities 4 — 1,143 435 1,578 U.S. government-related securities 4 1,015 500 — 1,515 State, municipals, and political subdivisions 4 — 4,420 — 4,420 Other government-related securities 4 — 717 — 717 Corporate securities 4 — 50,675 1,432 52,107 Redeemable preferred stocks 4 125 69 — 194 Total fixed maturity securities - AFS 1,140 66,694 1,899 69,733 Fixed maturity securities - trading Residential mortgage-backed securities 3 — 209 — 209 Commercial mortgage-backed securities 3 — 214 — 214 Other asset-backed securities 3 — 91 72 163 U.S. government-related securities 3 79 12 — 91 State, municipals, and political subdivisions 3 — 282 — 282 Other government-related securities 3 — 30 — 30 Corporate securities 3 — 1,843 17 1,860 Redeemable preferred stocks 3 13 — — 13 Total fixed maturity securities - trading 92 2,681 89 2,862 Total fixed maturity securities 1,232 69,375 1,988 72,595 Equity securities 3 566 — 101 667 Other long-term investments (1) 3 & 4 52 1,285 299 1,636 Short-term investments 3 403 59 — 462 Total investments 2,253 70,719 2,388 75,360 Cash 3 656 — — 656 Assets related to separate accounts Variable annuity 3 12,378 — — 12,378 Variable universal life 3 1,287 — — 1,287 Total assets measured at fair value on a recurring basis $ 16,574 $ 70,719 $ 2,388 $ 89,681 Liabilities: Annuity account balances (2) 3 $ — $ — $ 67 $ 67 Other liabilities (1) 3 & 4 14 867 2,238 3,119 Total liabilities measured at fair value on a recurring basis $ 14 $ 867 $ 2,305 $ 3,186 Measurement category 3 represents fair value through net income and 4 represents fair value through other comprehensive income (loss). (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. |
Schedule of the Valuation Method for Material Financial Instruments Included in Level 3, as well as the Unobservable Inputs Used in the Valuation of the Financial Instruments | The following tables present the valuation method for material AFS fixed maturity securities and embedded derivative financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments as of September 30, 2021 and December 31, 2020: September 30, 2021 Fair Value Valuation Unobservable Range (Dollars In Millions) Assets: Commercial mortgage-backed securities $ 31 Discounted cash flow Spread over treasury 2.12% - 2.29% (2.23%) Other asset-backed securities 458 Liquidation Liquidation value $97.00 - $99.75 ($98.77) Discounted cash flow Liquidity premium 0.84% - 2.31% (1.76%) Paydown Rate 10.03% - 13.15% (11.95%) Corporate securities 1,635 Discounted cash flow Spread over treasury 0.00% - 4.00% (1.46%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 535 Actuarial cash flow model Mortality 88% to 100% of Ruark 2015 ALB Table Lapse PL-RBA Predictive Model Utilization PL-RBA Predictive Model Nonperformance risk 0.18% - 0.81% Embedded derivative - FIA 570 Actuarial cash flow model Expenses $214 per policy Withdrawal rate 0.4% - 2.4% prior to age 72, 100% of the RMD for ages 72+ or WB withdrawal rate. Assume underutilized RMD for non-WB policies ages 72-88. Mortality 88% to 100% of Ruark 2015 ALB table Lapse 0.2% - 50.0%, depending on duration/surrender charge period Dynamically adjusted for WB moneyness and projected market rates vs credited rates Nonperformance risk 0.18% - 0.81% Embedded derivative - IUL 251 Actuarial cash flow model Mortality 43% - 110% of base table (90% of 2015 VBT Primary Tables adjusted for 5.5 years of 2020 SOA HMI) 94% - 248% of duration 8 point in scale 2015 VBT Primary Tables, depending on type of business Lapse 0.375% - 7.5%, depending on issue age and duration, smoking class, and level of funding Nonperformance risk 0.18% - 0.81% (1) Excludes modified coinsurance arrangements. (2) Fair value is presented as a net liability. December 31, 2020 Fair Value Valuation Unobservable Range (Dollars In Millions) Assets: Commercial mortgage-backed securities $ 32 Discounted cash flow Spread over treasury 2.78% - 2.92% (2.87%) Other asset-backed securities 435 Liquidation Liquidation value $95 - $97 ($96.19) Discounted cash flow Liquidity premium 0.54% - 2.3% (1.63%) Paydown Rate 8.79% - 12.49% (11.39%) Corporate securities 1,432 Discounted cash flow Spread over treasury 0.00% - 4.75% (1.89%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 822 Actuarial cash flow model Mortality 88% to 100% of Ruark 2015 ALB Table Lapse PL-RBA Predictive Model Utilization PL-RBA Predictive Model Nonperformance risk 0.19% - 0.81% Embedded derivative - FIA 573 Actuarial cash flow model Expenses $207 per policy Withdrawal rate 0.4% - 2.4% prior to age 70 RMD for ages 70+ or WB withdrawal rate Assume underutilized RMD for non-WB policies age 72-88 Mortality 88% to 100% or Ruark 2015 ALB table Lapse 0.2% - 50.0%, depending on duration/surrender charge period Nonperformance risk 0.19% - 0.81% Embedded derivative - IUL 201 Actuarial cash flow model Mortality 36% - 161% of 2015 VBT Primary Tables 94% - 248% of duration 8 point in scale 2015 VBT Primary Tables, depending on type of business Lapse 0.375% - 10%, depending on duration/distribution channel and smoking class Nonperformance risk 0.19% - 0.81% (1) Excludes modified coinsurance arrangements. (2) Fair value is presented as a net liability. |
Schedule of Reconciliation of the Beginning and Ending Balances for Fair Value Measurements, for Which the Company Has Used Significant Unobservable Inputs (Level 3) | The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended September 30, 2021, for which the Company has used significant unobservable inputs (Level 3): Total Total Total Gains (losses) included in Operations related to Instruments still held at Beginning Included Included Included Included Purchases Sales Issuances Settlements Transfers Other Ending (Dollars In Millions) Assets: Fixed maturity securities AFS Commercial mortgage-backed securities $ 32 $ — $ — $ — $ (1) $ — $ — $ — $ — $ — $ — $ 31 $ — Other asset-backed securities 451 — — — (2) 6 — — — 3 — 458 — Corporate securities 1,553 — 8 — (7) 79 (35) — — 37 — 1,635 — Total fixed maturity securities - available-for-sale 2,036 — 8 — (10) 85 (35) — — 40 — 2,124 — Fixed maturity securities - trading Other asset-backed securities 97 — — — — 3 (6) — — — — 94 — Other government-related securities 16 — — — (1) — — — — — 1 16 — Corporate securities 11 — — — — 4 — — — — — 15 — Total fixed maturity securities - trading 124 — — — (1) 7 (6) — — — 1 125 — Total fixed maturity securities 2,160 — 8 — (11) 92 (41) — — 40 1 2,249 — Equity securities 112 — — — — 54 (8) — — — — 158 — Other long-term investments (1) 307 98 — (106) — — — — — — — 299 (8) Total investments 2,579 98 8 (106) (11) 146 (49) — — 40 1 2,706 (8) Total assets measured at fair value on a recurring basis $ 2,579 $ 98 $ 8 $ (106) $ (11) $ 146 $ (49) $ — $ — $ 40 $ 1 $ 2,706 $ (8) Liabilities: Annuity account balances (2) $ 65 $ — $ — $ (1) $ — $ — $ — $ 2 $ — $ — $ 64 $ — Other liabilities (1) 2,016 197 — (129) — — — — — — — 1,948 68 Total liabilities measured at fair value on a recurring basis $ 2,081 $ 197 $ — $ (130) $ — $ — $ — $ — $ 2 $ — $ — $ 2,012 $ 68 (1) Represents certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended September 30, 2020, for which the Company has used significant unobservable inputs (Level 3): Total Total Total Gains (losses) included in Operations related to Instruments still held at Beginning Included Included Included Included Purchases Sales Issuances Settlements Transfers Other Ending (Dollars In Millions) Assets: Fixed maturity securities AFS Commercial mortgage-backed securities $ 10 $ — $ 1 $ — $ — $ — $ — $ — $ — $ — $ — $ 11 $ — Other asset-backed securities 431 — 4 — (1) — (1) — — — 433 — Corporate securities 1,366 — 28 — (3) 62 (125) — — 31 (1) 1,358 — Total fixed maturity securities - available-for-sale 1,807 — 33 — (4) 62 (126) — — 31 (1) 1,802 — Fixed maturity securities - trading Other asset-backed securities 60 3 — — — 1 (2) — — — — 62 3 Corporate securities 13 — — — — 5 — — — — — 18 — Total fixed maturity securities - trading 73 3 — — — 6 (2) — — — — 80 3 Total fixed maturity securities 1,880 3 33 — (4) 68 (128) — — 31 (1) 1,882 3 Equity securities 78 2 — — — 7 — — — — — 87 1 Other long-term investments (1) 337 127 — (73) — — — — — — — 391 54 Total investments 2,295 132 33 (73) (4) 75 (128) — — 31 (1) 2,360 58 Total assets measured at fair value on a recurring basis $ 2,295 $ 132 $ 33 $ (73) $ (4) $ 75 $ (128) $ — $ — $ 31 $ (1) $ 2,360 $ 58 Liabilities: Annuity account balances (2) $ 68 $ — $ — $ (1) $ — $ — $ — $ — $ 1 $ — $ — $ 68 $ — Other liabilities (1) 2,423 301 — (249) — — — — — — — 2,371 (52) Total liabilities measured at fair value on a recurring basis $ 2,491 $ 301 $ — $ (250) $ — $ — $ — $ — $ 1 $ — $ — $ 2,439 $ (52) (1) Represents certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the nine months ended September 30, 2021, for which the Company has used significant unobservable inputs (Level 3): Total Total Total Gains (losses) included in Operations related to Instruments still held at Beginning Included Included Included Included Purchases Sales Issuances Settlements Transfers Other Ending (Dollars In Millions) Assets: Fixed maturity securities AFS Commercial mortgage-backed securities $ 32 $ — $ — $ — $ (1) $ — $ — $ — $ — $ — $ — $ 31 — Other asset-backed securities 435 — 5 — (1) 6 (2) — — 14 1 458 — Corporate securities 1,432 — 7 — (21) 240 (168) — — 146 (1) 1,635 — Total fixed maturity securities-AFS 1,899 — 12 — (23) 246 (170) — — 160 — 2,124 — Fixed maturity securities - trading Other asset-backed securities 71 — 2 — 1 14 (10) — — 16 — 94 — Other government-related securities — — — — — — — — — 16 — 16 — Corporate securities 18 — — — (1) 4 (1) — — (5) — 15 — Total fixed maturity securities - trading 89 — 2 — — 18 (11) — — 27 — 125 — Total fixed maturity securities 1,988 — 14 — (23) 264 (181) — — 187 — 2,249 — Equity securities 101 — — — — 94 (32) — — (5) — 158 — Other long-term investments (1) 298 169 — (168) — — — — — — — 299 1 Total investments 2,387 169 14 (168) (23) 358 (213) — — 182 — 2,706 1 Total assets measured at fair value on a recurring basis $ 2,387 $ 169 $ 14 $ (168) $ (23) $ 358 $ (213) $ — $ — $ 182 $ — $ 2,706 $ 1 Liabilities: Annuity account balances (2) $ 67 $ — $ — $ (2) $ — $ — $ — $ — $ 5 $ — $ — $ 64 $ — Other liabilities (1) 2,239 784 — (493) — — — — — — — 1,948 291 Total liabilities measured at fair value on a recurring basis $ 2,306 $ 784 $ — $ (495) $ — $ — $ — $ — $ 5 $ — $ — $ 2,012 $ 291 (1) Represents certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the nine months ended September 30, 2020, for which the Company has used significant unobservable inputs (Level 3): Total Total Total Gains (losses) included in Operations related to Instruments still held at Beginning Included Included Included Included Purchases Sales Issuances Settlements Transfers Other Ending (Dollars In Millions) Assets: Fixed maturity securities AFS Commercial mortgage-backed securities $ 10 $ — $ 2 $ — $ (1) $ — $ — $ — $ — $ — $ — $ 11 — Other asset-backed securities 421 — 4 — (13) — (1) — — 22 — 433 — Corporate securities 1,374 — 113 — (82) 365 (498) — — 88 (2) 1,358 — Total fixed maturity securities - AFS 1,805 — 119 — (96) 365 (499) — — 110 (2) 1,802 — Fixed maturity securities - trading Other asset-backed securities 65 4 — (8) — 4 (2) — — (1) — 62 3 Corporate securities 11 1 — — — 8 (2) — — — — 18 — Total fixed maturity securities - trading 76 5 — (8) — 12 (4) — — (1) — 80 3 Total fixed maturity securities 1,881 5 119 (8) (96) 377 (503) — — 109 (2) 1,882 3 Equity securities 74 1 — (1) — 8 — — — 5 — 87 1 Other long-term investments (1) 292 228 — (166) — 41 — — (4) — — 391 58 Total investments 2,247 234 119 (175) (96) 426 (503) — (4) 114 (2) 2,360 62 Total assets measured at fair value on a recurring basis $ 2,247 $ 234 $ 119 $ (175) $ (96) $ 426 $ (503) $ — $ (4) $ 114 $ (2) $ 2,360 $ 62 Liabilities: Annuity account balances (2) $ 70 $ — $ — $ (2) $ — $ — $ — $ — $ 4 $ — $ — $ 68 $ — Other liabilities (1) 1,332 649 — (1,688) — — — — — — — 2,371 (1,039) Total liabilities measured at fair value on a recurring basis $ 1,402 $ 649 $ — $ (1,690) $ — $ — $ — $ — $ 4 $ — $ — $ 2,439 $ (1,039) (1) Represents certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. |
Schedule of the Carrying Amounts and Estimated Fair Value of the Company's Financial Instruments | The carrying amounts and estimated fair values of the Company’s financial instruments as of the periods shown below are as follows: As of September 30, 2021 December 31, 2020 Fair Value Carrying Fair Values Carrying Fair Values (Dollars In Millions) Assets: Commercial mortgage loans (1) 3 $ 10,506 $ 11,153 $ 10,006 $ 10,788 Policy loans 3 1,543 1,543 1,593 1,593 Other long-term investments (2) 2 1,412 1,487 1,186 1,283 Liabilities: Stable value product account balances 3 $ 8,237 $ 8,373 $ 6,056 $ 6,231 Future policy benefits and claims (3) 3 1,482 1,528 1,580 1,603 Other policyholders’ funds (4) 3 99 106 102 108 Debt: (5) Subordinated funding obligations 3 $ 110 $ 116 $ 110 $ 121 Except as noted below, fair values were estimated using quoted market prices. (1) The carrying amount is net of allowance for credit losses. (2) Other long-term investments represents a Modco receivable, which is related to invested assets such as fixed income and structured securities, which are legally owned by the ceding company. The fair value is determined in a manner consistent with other similar invested assets held by the Company. (3) Single premium immediate annuity and structured annuities without life contingencies. (4) Supplementary contracts without life contingencies. (5) Excludes immaterial capital lease obligations. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Realized Investments Gains and Losses | The following table sets forth realized gains (losses) - derivatives for the periods shown: Realized gains (losses) - derivative financial instruments For The For The 2021 2020 2021 2020 (Dollars In Millions) Derivatives related to VA contracts: Interest rate futures $ — $ 2 $ 8 $ (3) Equity futures 2 (1) (10) 132 Currency futures 4 (9) 9 1 Equity options 1 (42) (81) 67 Interest rate swaps (24) (58) (167) 364 Total return swaps 6 (31) (119) 30 Embedded derivative - GLWB (15) 190 287 (681) Total derivatives related to VA contracts (26) 51 (73) (90) Derivatives related to FIA contracts: Embedded derivative 61 (9) 25 (38) Funds withheld derivative — (3) (5) (10) Equity futures — 1 3 (7) Equity options (3) 25 45 15 Other derivatives — — (2) — Total derivatives related to FIA contracts 58 14 66 (40) Derivatives related to IUL contracts: — Embedded derivative (3) 16 (15) 1 Equity futures — — — (2) Equity options 1 6 9 1 Total derivatives related to IUL contracts (2) 22 (6) — Embedded derivative - Modco reinsurance treaties 19 (25) 66 (56) Derivatives with PLC (1) — 20 — 22 Other derivatives 2 6 (3) 12 Total realized gains (losses) - derivatives $ 51 $ 88 $ 50 $ (152) (1) The Company and certain of its subsidiaries had an interest support agreement, YRT premium support agreements, and portfolio maintenance agreements with PLC through October 1, 2020. These agreements were terminated and a new portfolio maintenance agreement was entered into with PLC on that date. |
Schedule of Information About the Nature and Accounting Treatment of the Company's Primary Derivative Financial Instruments and the Location in and Effect on the Consolidated Financial Statements | The table below presents information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below: As of September 30, 2021 December 31, 2020 Notional Fair Notional Fair (Dollars In Millions) Other long-term investments Derivatives not designated as hedging instruments: Interest rate swaps $ 1,478 $ 75 $ 1,478 $ 185 Total return swaps 1,120 27 158 2 Derivatives with PLC (1) 4,161 — 4,076 — Embedded derivative - Modco reinsurance treaties 1,271 77 1,249 101 Embedded derivative - GLWB 2,871 161 2,067 138 Embedded derivative - FIA 383 61 335 60 Interest rate futures 893 8 690 4 Equity futures 82 3 203 4 Currency futures 216 5 — — Equity options 8,949 864 7,208 1,142 $ 21,424 $ 1,281 $ 17,464 $ 1,636 Other liabilities Cash flow hedges: Foreign currency swaps $ 117 $ 10 $ 117 $ 10 Derivatives not designated as hedging instruments: Interest rate swaps 1,354 — 1,354 — Total return swaps 229 6 1,003 15 Embedded derivative - Modco reinsurance treaties 2,996 294 2,911 389 Funds withheld derivative 833 11 661 10 Embedded derivative - GLWB 7,006 696 7,749 960 Embedded derivative - FIA 4,299 631 3,889 633 Embedded derivative - IUL 429 251 357 201 Interest rate futures 242 8 415 3 Equity futures 214 5 190 5 Currency futures — — 264 4 Equity options 6,628 588 5,499 834 Other 406 76 304 55 $ 24,753 $ 2,576 $ 24,713 $ 3,119 (1) The Company and certain of its subsidiaries had an interest support agreement, YRT premium support agreements, and portfolio maintenance agreements with PLC through October 1, 2020. These agreements were terminated and a new portfolio maintenance agreement was entered into with PLC on that date. |
OFFSETTING OF ASSETS AND LIAB_2
OFFSETTING OF ASSETS AND LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Offsetting [Abstract] | |
Schedule of Derivative Instruments by Assets and Liabilities | The tables below present the derivative instruments by assets and liabilities for the Company as of September 30, 2021: Gross Gross Net Amounts Gross Amounts Not Offset Financial Collateral Net Amount (Dollars In Millions) Offsetting of Assets Derivatives: Free-Standing derivatives $ 982 $ — $ 982 $ 604 $ 211 $ 167 Total derivatives, subject to a master netting arrangement or similar arrangement 982 — 982 604 211 167 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 77 — 77 — — 77 Embedded derivative - GLWB 161 — 161 — — 161 Embedded derivative - FIA 61 — 61 — — 61 Total derivatives, not subject to a master netting arrangement or similar arrangement 299 — 299 — — 299 Total derivatives 1,281 — 1,281 604 211 466 Total Assets $ 1,281 $ — $ 1,281 $ 604 $ 211 $ 466 Gross Gross Net Amounts Gross Amounts Not Offset Financial Collateral Net Amount (Dollars In Millions) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 617 $ — $ 617 $ 604 $ 13 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 617 — 617 604 13 — Derivatives, not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 294 — 294 — — 294 Funds withheld derivative 11 — 11 — — 11 Embedded derivative - GLWB 696 — 696 — — 696 Embedded derivative - FIA 631 — 631 — — 631 Embedded derivative - IUL 251 — 251 — — 251 Other 76 — 76 — — 76 Total derivatives, not subject to a master netting arrangement or similar arrangement 1,959 — 1,959 — — 1,959 Total derivatives 2,576 — 2,576 604 13 1,959 Repurchase agreements (1) 1,104 — 1,104 — — 1,104 Total Liabilities $ 3,680 $ — $ 3,680 $ 604 $ 13 $ 3,063 (1) Borrowings under repurchase agreements are for a term less than 90 days. The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2020. Gross Gross Net Amounts Gross Amounts Not Offset Financial Collateral Net Amount (Dollars In Millions) Offsetting of Assets Derivatives: Free-Standing derivatives $ 1,337 $ — $ 1,337 $ 865 $ 290 $ 182 Total derivatives, subject to a master netting arrangement or similar arrangement 1,337 — 1,337 865 290 182 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 101 — 101 — — 101 Embedded derivative - GLWB 138 — 138 — — 138 Embedded derivative - FIA 60 — 60 — — 60 Total derivatives, not subject to a master netting arrangement or similar arrangement 299 — 299 — — 299 Total derivatives 1,636 — 1,636 865 290 481 Total Assets $ 1,636 $ — $ 1,636 $ 865 $ 290 $ 481 Gross Gross Net Amounts Gross Amounts Not Offset Financial Collateral Net Amount (Dollars In Millions) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 871 $ — $ 871 $ 865 $ 4 $ 2 Total derivatives, subject to a master netting arrangement or similar arrangement 871 — 871 865 4 2 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 389 — 389 — — 389 Funds withheld derivative 10 — 10 — — 10 Embedded derivative - GLWB 960 — 960 — — 960 Embedded derivative - FIA 633 — 633 — — 633 Embedded derivative - IUL 201 — 201 — — 201 Other 55 — 55 — — 55 Total derivatives, not subject to a master netting arrangement or similar arrangement 2,248 — 2,248 — — 2,248 Total derivatives 3,119 — 3,119 865 4 2,250 Repurchase agreements (1) 437 — 437 — — 437 Total Liabilities $ 3,556 $ — $ 3,556 $ 865 $ 4 $ 2,687 (1) Borrowings under repurchase agreements are for a term less than 90 days. |
COMMERCIAL MORTGAGE LOANS (Tabl
COMMERCIAL MORTGAGE LOANS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Schedule of Commercial Mortgage Loans Receivable by Origination Year and Key Credit Quality Indicators | The amortized cost basis of the Company's commercial mortgage loan receivables by origination year, net of the allowance, for credit losses is as follows: Term Loans Amortized Cost Basis by Origination Year 2021 2020 2019 2018 2017 Prior Total (Dollars In Millions) As of September 30, 2021 Commercial mortgage loans: Performing $ 1,362 $ 1,448 $ 2,066 $ 1,483 $ 1,309 $ 2,941 $ 10,609 Non-performing — — — — — — — Amortized cost 1,362 1,448 2,066 1,483 1,309 2,941 10,609 Allowance for credit losses (8) (13) (22) (18) (16) (26) (103) Total commercial mortgage loans $ 1,354 $ 1,435 $ 2,044 $ 1,465 $ 1,293 $ 2,915 $ 10,506 Term Loans Amortized Cost Basis by Origination Year 2020 2019 2018 2017 2016 Prior Total (Dollars In Millions) As of December 31, 2020 Commercial mortgage loans: Performing $ 1,463 $ 2,442 $ 1,577 $ 1,344 $ 943 $ 2,458 $ 10,227 Non-performing — — — — — 1 1 Amortized cost 1,463 2,442 1,577 1,344 943 2,459 10,228 Allowance for credit losses (21) (46) (55) (37) (25) (38) (222) Total commercial mortgage loans $ 1,442 $ 2,396 $ 1,522 $ 1,307 $ 918 $ 2,421 $ 10,006 The following tables provide a comparative view of the key credit quality indicators of the Loan-to-Value and Debt Service Coverage Ratio (“DSCR”): As of September 30, 2021 As of December 31, 2020 Amortized % of Total DSCR (2) Amortized % of Total DSCR (2) (Dollars In Millions) (Dollars In Millions) Loan-to-Value (1) Greater than 75% $ 308 3 % 1.32 $ 399 4 % 1.29 50% - 75% 6,946 65 % 1.60 6,557 64 % 1.61 Less than 50% 3,355 32 % 2.03 3,272 32 % 2.01 Total commercial mortgage loans $ 10,609 100 % $ 10,228 100 % (1) The loan-to-value ratio compares the current unpaid principal of the loan to the estimated fair value of the underlying property collateralizing the loan. Our weighted average loan-to-value ratio was 54% and 54% at September 30, 2021 and December 31, 2020, respectively. (2) The debt service coverage ratio compares a property’s net operating income to its debt service payments, including principal and interest. Our weighted average debt service coverage ratio for September 30, 2021 and December 31, 2020 was 1.73x and 1.72x, respectively. |
Schedule of Allowance for Credit Losses on Funded and Unfunded Mortgages | The following provides a summary of the rollforward of the allowance for credit losses for funded commercial mortgage loans and unfunded commercial mortgage loan commitments for the periods indicated. For The For The 2021 2020 2021 2020 (Dollars In Millions) Allowance for Funded Commercial Mortgage Loan Credit Losses Beginning balance $ 136 $ 173 $ 222 $ 5 Cumulative effect adjustment — — — 80 Charge offs — — — — Recoveries — — (7) (2) Provision (33) 2 (112) 92 Ending balance $ 103 $ 175 $ 103 $ 175 Allowance for Unfunded Commercial Mortgage Loan Commitments Credit Losses Beginning balance $ 12 $ 20 $ 22 $ — Cumulative effect adjustment — — — 11 Charge offs — — — — Recoveries — — — — Provision (3) — (13) 9 Ending balance $ 9 $ 20 $ 9 $ 20 |
MONY CLOSED BLOCK OF BUSINESS (
MONY CLOSED BLOCK OF BUSINESS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Closed Block Disclosure [Abstract] | |
Summary of Financial Information of the Policyholder Dividend Obligation | Summarized financial information for the Closed Block as of September 30, 2021 and December 31, 2020 is as follows: As of September 30, 2021 December 31, 2020 (Dollars In Millions) Closed block liabilities Future policy benefits, policyholders’ account balances and other policyholder liabilities $ 5,313 $ 5,406 Policyholder dividend obligation 406 580 Other liabilities 14 7 Total closed block liabilities 5,733 5,993 Closed block assets Fixed maturities, available-for-sale, at fair value 4,720 4,903 Commercial mortgage loans 68 68 Policy loans 571 596 Cash and other invested assets 12 46 Other assets 92 91 Total closed block assets 5,463 5,704 Excess of reported closed block liabilities over closed block assets 270 289 Portion of above representing accumulated other comprehensive income: Net unrealized gains (losses) - net of policyholder dividend obligation: 2021 - $327 and 2020 - $493; and net of income tax: 2021 - $(69) and 2020 - $(104) — — Future earnings to be recognized from closed block assets and closed block liabilities $ 270 $ 289 |
Schedule of Reconciliation of the Policyholder Dividend Obligation | Reconciliation of the policyholder dividend obligation is as follows: For The 2021 2020 (Dollars In Millions) Policyholder dividend obligation, beginning balance $ 580 $ 279 Applicable to net revenue (losses) (8) (21) Change in net unrealized gains (losses) - allocated to the policyholder dividend obligation (166) 216 Policyholder dividend obligation, ending balance $ 406 $ 474 |
Schedule of Closed Block Revenues and Expenses | Closed Block revenues and expenses were as follows: For The For The 2021 2020 2021 2020 (Dollars In Millions) Revenues Premiums and other income $ 35 $ 36 $ 102 $ 109 Net investment income 47 51 143 153 Net realized gains (losses) 3 (1) 27 (1) Total revenues 85 86 272 261 Benefits and other deductions Benefits and settlement expenses 82 81 248 242 Other operating expenses — — 1 1 Total benefits and other deductions 82 81 249 243 Net revenues before income taxes 3 5 23 18 Income tax expense 1 1 5 3 Net revenues $ 2 $ 4 $ 18 $ 15 |
DEBT AND OTHER OBLIGATIONS (Tab
DEBT AND OTHER OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Collateral Pledged for Repurchase Agreements | The following table provides the fair value of collateral pledged for repurchase agreements, grouped by asset class as of September 30, 2021 and December 31, 2020 : Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of September 30, 2021 (Dollars In Millions) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 1,091 $ — $ — $ — $ 1,091 Corporate securities 33 — — — 33 Total repurchase agreements and repurchase-to-maturity transactions 1,124 — — — 1,124 Securities lending transactions Corporate securities 156 — — — 156 Equity securities 1 — — — 1 Redeemable preferred stocks 3 — — — 3 Total securities lending transactions 160 — — — 160 Total securities $ 1,284 $ — $ — $ — $ 1,284 Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of December 31, 2020 (Dollars In Millions) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 366 $ 86 $ — $ — $ 452 Total repurchase agreements and repurchase-to-maturity transactions 366 86 — — 452 Securities lending transactions Fixed maturity securities 49 — — — 49 Equity securities 7 — — — 7 Redeemable preferred stocks 1 — — — 1 Total securities lending transactions 57 — — — 57 Total securities $ 423 $ 86 $ — $ — $ 509 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Summary of Changes in the Accumulated Balances for Each Component of AOCI | The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of and for the three and nine months ended September 30, 2021 and 2020. Changes in Accumulated Other Comprehensive Income (Loss) by Component Unrealized Gains and Losses on Investments (2) Accumulated Total (Dollars In Millions, Net of Tax) Balance, June 30, 2021 $ 2,818 $ (5) $ 2,813 Other comprehensive income (loss) before reclassifications (263) (2) (265) Other comprehensive income (loss) on investments in net expected credit losses (1) — (1) Amounts reclassified from accumulated other comprehensive income (loss) (1) (5) 1 (4) Balance, September 30, 2021 $ 2,549 $ (6) $ 2,543 Balance, December 31, 2020 $ 3,556 $ (8) $ 3,548 Other comprehensive income (loss) before reclassifications (967) 1 (966) Other comprehensive income (loss) on investments in net expected credit losses (1) (1) Amounts reclassified from accumulated other comprehensive income (loss) (1) (39) 1 (38) Balance, September 30, 2021 $ 2,549 $ (6) $ 2,543 Unrealized Gains and Losses on Investments (2) Accumulated Total (Dollars In Millions, Net of Tax) Balance, June 30, 2020 $ 2,233 $ (8) $ 2,225 Other comprehensive income (loss) before reclassifications 482 1 483 Other comprehensive income (loss) on investments in net expected credit losses 28 — 28 Amounts reclassified from accumulated other comprehensive income (loss) (1) 28 — 28 Balance, September 30, 2020 $ 2,771 $ (7) $ 2,764 Balance, December 31, 2019 $ 1,421 $ (8) $ 1,413 Other comprehensive income (loss) before reclassifications 1,264 (1) 1,263 Other comprehensive income (loss) on investments in net expected credit losses 26 — 26 Amounts reclassified from accumulated other comprehensive income (loss) (1) 60 2 62 Balance, September 30, 2020 $ 2,771 $ (7) $ 2,764 (1) See Reclassifications Out of Accumulated Other Comprehensive Income (Loss) table below for details. (2) Net unrealized gains reported in AOCI were offset by $(1.7) billion and $(2.0) billion as of September 30, 2021 and December 31, 2020, respectively, and $(1.6) billion and $(777) million as of September 30, 2020 and December 31, 2019, respectively, due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income. |
Schedule of Reclassifications Amounts Out of AOCI | The following tables summarize the reclassifications amounts out of AOCI for the three and nine months ended September 30, 2021 and 2020. Reclassifications Out of Accumulated Other Comprehensive Income (Loss) For The For The Gains (losses) in net income: Affected Line Item in the 2021 2020 2021 2020 (Dollars In Millions) Derivative instruments Benefits and settlement expenses, net of reinsurance ceded (1) $ 1 $ — $ 1 $ (3) Tax (expense) benefit — — — 1 $ 1 $ — $ 1 $ (2) Unrealized gains and losses on available-for-sale securities Realized gains (losses) - investments $ 5 $ 3 $ 44 $ 45 Change in net expected credit losses - fixed maturities — (38) 5 (121) Tax (expense) benefit (1) 7 (10) 16 $ 4 $ (28) $ 39 $ (60) (1) See Note 5, Derivative Financial Instruments for additional information |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Financial Information for the Company's Segments | The following tables present a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income: For The For The 2021 2020 2021 2020 (Dollars In Millions) Revenues Retail Life and Annuity $ 740 $ 757 $ 2,125 $ 1,808 Acquisitions 749 802 2,282 2,399 Stable Value Products 106 48 275 137 Asset Protection 66 68 205 209 Corporate and Other (9) 49 (13) 80 Total revenues $ 1,652 $ 1,724 $ 4,874 $ 4,633 Pre-tax Adjusted Operating Income (Loss) s Retail Life and Annuity $ (85) $ 23 $ (63) $ 47 Acquisitions 42 65 255 238 Stable Value Products 63 20 128 61 Asset Protection 9 8 31 33 Corporate and Other (26) (35) (120) (108) Pre-tax adjusted operating income (loss) 3 81 231 271 Non-operating income (loss) 56 79 156 (96) Income before income tax 59 160 387 175 Income tax expense (10) (29) (74) (31) Net income $ 49 $ 131 $ 313 $ 144 Pre-tax adjusted operating income (loss) $ 3 $ 81 $ 231 $ 271 Adjusted operating income tax expense 1 (13) (41) (52) After-tax adjusted operating income (loss) 4 68 190 219 Non-operating income (loss) 56 79 156 (96) Income tax expense on adjustments (11) (16) (33) 21 Net income $ 49 $ 131 $ 313 $ 144 Non-operating income (loss) Derivative gains (losses) $ 51 $ 88 $ 50 $ (152) Investment gains (losses) 16 23 111 (72) VA/VUL market impacts (1) (6) — 13 — Less: related amortization (2) 31 55 93 (59) Less: VA GLWB economic cost (26) (23) (75) (69) Total non-operating income (loss) $ 56 $ 79 $ 156 $ (96) (1) Represents the immediate impacts on DAC, VOBA, reserves, and other non-cash items in current period results due to changes in current market conditions on estimates of profitability, which are excluded from pre-tax and after-tax adjusted operating income (loss) beginning in Q1 of 2021. (2) Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses). For The For The 2021 2020 2021 2020 (Dollars In Millions) Net investment income Retail Life and Annuity $ 277 $ 252 $ 819 $ 754 Acquisitions 393 406 1,192 1,235 Stable Value Products 97 54 228 169 Asset Protection 5 5 16 19 Corporate and Other (19) 23 (40) 59 Total net investment income $ 753 $ 740 $ 2,215 $ 2,236 Amortization of DAC and VOBA Retail Life and Annuity $ 61 $ 77 $ 168 $ 70 Acquisitions 11 14 14 24 Stable Value Products 2 1 4 3 Asset Protection 17 18 47 48 Corporate and Other — — — — Total amortization of DAC and VOBA $ 91 $ 110 $ 233 $ 145 Operating Segment Assets As of September 30, 2021 (Dollars In Millions) Retail Life & Annuity Acquisitions Stable Value Investments and other assets $ 43,415 $ 54,949 $ 8,101 DAC and VOBA 2,690 851 16 Other intangibles 342 30 6 Goodwill 559 24 114 Total assets $ 47,006 $ 55,854 $ 8,237 Asset Corporate Total Investments and other assets $ 928 $ 17,771 $ 125,164 DAC and VOBA 176 — 3,733 Other intangibles 92 34 504 Goodwill 129 — 826 Total assets $ 1,325 $ 17,805 $ 130,227 Operating Segment Assets As of December 31, 2020 (Dollars In Millions) Retail Life & Annuity Acquisitions Stable Value Investments and other assets $ 39,874 $ 55,628 $ 5,928 DAC and VOBA 2,480 762 8 Other intangibles 367 33 6 Goodwill 559 24 114 Total assets $ 43,280 $ 56,447 $ 6,056 Asset Corporate Total Investments and other assets $ 881 $ 19,813 $ 122,124 DAC and VOBA 170 — 3,420 Other intangibles 101 33 540 Goodwill 129 — 826 Total assets $ 1,281 $ 19,846 $ 126,910 |
INVESTMENT OPERATIONS - Summary
INVESTMENT OPERATIONS - Summary of Net Realized Investment Gains (Losses) for All Other Investments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Fixed maturities | $ 5 | $ 3 | $ 44 | $ 45 |
Equity securities | 0 | 16 | 3 | (1) |
Modco trading portfolios | (25) | 45 | (69) | 108 |
Change in net expected credit losses - fixed maturities | 0 | (38) | 5 | (121) |
Commercial mortgage loans | 37 | (2) | 129 | (101) |
Other investments | (1) | (1) | (1) | (2) |
Realized gains (losses) - investments | 16 | 23 | 111 | (72) |
Realized gains (losses) - derivatives | 51 | 88 | 50 | (152) |
Realized gains (losses) | $ 67 | $ 111 | $ 161 | $ (224) |
INVESTMENT OPERATIONS - Schedul
INVESTMENT OPERATIONS - Schedule of Fair Value (Proceeds) and Gains/Losses Realized on Securities Sold in an Unrealized Gain/Loss Position (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Securities in an unrealized gain position: | ||||
Sales proceeds | $ 232 | $ 515 | $ 1,443 | $ 1,454 |
Realized gains | 5 | 3 | 45 | 50 |
Securities in an unrealized loss position: | ||||
Sales proceeds | 12 | 8 | 35 | 33 |
Realized losses | $ 0 | $ 0 | $ (1) | $ (5) |
INVESTMENT OPERATIONS - Realize
INVESTMENT OPERATIONS - Realized and Unrealized Gain (Losses) on Equity Securities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Net gains (losses) from equity securities still held at period end | $ (4) | $ 17 | $ (1) | $ (1) |
Gains from equity securities sold | $ 4 | $ 4 |
INVESTMENT OPERATIONS - Sched_2
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Investments [Line Items] | ||||||
Amortized Cost | $ 66,022 | $ 63,220 | ||||
Gross Unrealized Gains | 5,522 | 7,053 | ||||
Gross Unrealized Losses | (227) | (131) | ||||
Allowance for Expected Credit Losses | (2) | (23) | ||||
Fair Value | 71,315 | 70,119 | ||||
Residential mortgage-backed securities | ||||||
Schedule of Investments [Line Items] | ||||||
Amortized Cost | 7,345 | 6,510 | ||||
Gross Unrealized Gains | 59 | 159 | ||||
Gross Unrealized Losses | (58) | (1) | ||||
Allowance for Expected Credit Losses | 0 | 0 | ||||
Fair Value | 7,346 | 6,668 | ||||
Commercial mortgage-backed securities | ||||||
Schedule of Investments [Line Items] | ||||||
Amortized Cost | 2,196 | 2,429 | ||||
Gross Unrealized Gains | 98 | 128 | ||||
Gross Unrealized Losses | (6) | (19) | ||||
Allowance for Expected Credit Losses | (1) | $ (1) | (4) | $ 0 | $ 0 | $ 0 |
Fair Value | 2,287 | 2,534 | ||||
Other asset-backed securities | ||||||
Schedule of Investments [Line Items] | ||||||
Amortized Cost | 1,438 | 1,546 | ||||
Gross Unrealized Gains | 39 | 40 | ||||
Gross Unrealized Losses | (1) | (7) | ||||
Allowance for Expected Credit Losses | 0 | (1) | ||||
Fair Value | 1,476 | 1,578 | ||||
U.S. government-related securities | ||||||
Schedule of Investments [Line Items] | ||||||
Amortized Cost | 821 | 1,492 | ||||
Gross Unrealized Gains | 15 | 26 | ||||
Gross Unrealized Losses | (24) | (3) | ||||
Allowance for Expected Credit Losses | 0 | 0 | ||||
Fair Value | 812 | 1,515 | ||||
Other government-related securities | ||||||
Schedule of Investments [Line Items] | ||||||
Amortized Cost | 688 | 622 | ||||
Gross Unrealized Gains | 76 | 96 | ||||
Gross Unrealized Losses | (2) | (1) | ||||
Allowance for Expected Credit Losses | 0 | 0 | ||||
Fair Value | 762 | 717 | ||||
States, municipals, and political subdivisions | ||||||
Schedule of Investments [Line Items] | ||||||
Amortized Cost | 3,760 | 3,902 | ||||
Gross Unrealized Gains | 414 | 519 | ||||
Gross Unrealized Losses | (1) | (1) | ||||
Allowance for Expected Credit Losses | 0 | 0 | ||||
Fair Value | 4,173 | 4,420 | ||||
Corporate securities | ||||||
Schedule of Investments [Line Items] | ||||||
Amortized Cost | 48,935 | 46,150 | ||||
Gross Unrealized Gains | 4,808 | 6,074 | ||||
Gross Unrealized Losses | (135) | (99) | ||||
Allowance for Expected Credit Losses | (1) | (1) | (18) | (18) | (81) | 0 |
Fair Value | 53,607 | 52,107 | ||||
Redeemable preferred stocks | ||||||
Schedule of Investments [Line Items] | ||||||
Amortized Cost | 297 | 183 | ||||
Gross Unrealized Gains | 13 | 11 | ||||
Gross Unrealized Losses | 0 | 0 | ||||
Allowance for Expected Credit Losses | 0 | 0 | ||||
Fair Value | 310 | 194 | ||||
Fixed maturities | ||||||
Schedule of Investments [Line Items] | ||||||
Amortized Cost | 65,480 | 62,834 | ||||
Gross Unrealized Gains | 5,522 | 7,053 | ||||
Gross Unrealized Losses | (227) | (131) | ||||
Allowance for Expected Credit Losses | (2) | $ (2) | (23) | $ (19) | $ (82) | $ 0 |
Fair Value | 70,773 | 69,733 | ||||
Short-term investments | ||||||
Schedule of Investments [Line Items] | ||||||
Amortized Cost | 542 | 386 | ||||
Gross Unrealized Gains | 0 | 0 | ||||
Gross Unrealized Losses | 0 | 0 | ||||
Allowance for Expected Credit Losses | 0 | 0 | ||||
Fair Value | $ 542 | $ 386 |
INVESTMENT OPERATIONS - Sched_3
INVESTMENT OPERATIONS - Schedule of Fair Value of Trading Securities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | $ 2,943 | $ 2,958 |
Residential mortgage-backed securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | 158 | 209 |
Commercial mortgage-backed securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | 211 | 214 |
Other asset-backed securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | 181 | 163 |
U.S. government-related securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | 33 | 91 |
Other government-related securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | 64 | 30 |
States, municipals, and political subdivisions | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | 288 | 282 |
Corporate securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | 1,900 | 1,860 |
Redeemable preferred stocks | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | 8 | 13 |
Fixed maturities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | 2,843 | 2,862 |
Equity securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | 13 | 20 |
Short-term investments | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities | $ 87 | $ 76 |
INVESTMENT OPERATIONS - Sched_4
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Fixed Maturities, by Expected Maturity (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Available-for-sale, Amortized Cost | ||
Amortized Cost | $ 66,022 | $ 63,220 |
Available-for-sale, Fair Value | ||
Total | 71,315 | 70,119 |
Fixed maturities | ||
Available-for-sale, Amortized Cost | ||
Due in one year or less | 1,566 | |
Due after one year through five years | 11,358 | |
Due after five years through ten years | 14,469 | |
Due after ten years | 38,087 | |
Amortized Cost | 65,480 | 62,834 |
Available-for-sale, Fair Value | ||
Due in one year or less | 1,581 | |
Due after one year through five years | 11,900 | |
Due after five years through ten years | 15,365 | |
Due after ten years | 41,927 | |
Total | $ 70,773 | $ 69,733 |
INVESTMENT OPERATIONS - Sched_5
INVESTMENT OPERATIONS - Schedule of Available-for-Sale Credit Losses on Fixed Maturities With Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ 23 | |||
Ending Balance | $ 2 | 2 | ||
Corporate securities | ||||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 1 | $ 81 | 18 | $ 0 |
Additions for securities for which an allowance was not previously recorded | 0 | 0 | 0 | 62 |
Adjustments on previously recorded allowances due to change in expected cash flows | 0 | 1 | (1) | 20 |
Reductions on previously recorded allowances due to disposal of security in the current period | 0 | 0 | 0 | 0 |
Write-offs of previously recorded allowances due to intent or requirement to sell | 0 | (64) | (16) | (64) |
Ending Balance | 1 | 18 | 1 | 18 |
CMBS | ||||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 1 | 0 | 4 | 0 |
Additions for securities for which an allowance was not previously recorded | 0 | 0 | 0 | 0 |
Adjustments on previously recorded allowances due to change in expected cash flows | 0 | 0 | (3) | 0 |
Reductions on previously recorded allowances due to disposal of security in the current period | 0 | 0 | 0 | 0 |
Write-offs of previously recorded allowances due to intent or requirement to sell | 0 | 0 | 0 | 0 |
Ending Balance | 1 | 0 | 1 | 0 |
ABS | ||||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 0 | 1 | 1 | 0 |
Additions for securities for which an allowance was not previously recorded | 0 | 0 | 0 | 1 |
Adjustments on previously recorded allowances due to change in expected cash flows | 0 | 0 | 0 | 0 |
Reductions on previously recorded allowances due to disposal of security in the current period | 0 | 0 | (1) | 0 |
Write-offs of previously recorded allowances due to intent or requirement to sell | 0 | 0 | 0 | 0 |
Ending Balance | 0 | 1 | 0 | 1 |
Fixed maturities | ||||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 2 | 82 | 23 | 0 |
Additions for securities for which an allowance was not previously recorded | 0 | 0 | 0 | 63 |
Adjustments on previously recorded allowances due to change in expected cash flows | 0 | 1 | (4) | 20 |
Reductions on previously recorded allowances due to disposal of security in the current period | 0 | 0 | (1) | 0 |
Write-offs of previously recorded allowances due to intent or requirement to sell | 0 | (64) | (16) | (64) |
Ending Balance | $ 2 | $ 19 | $ 2 | $ 19 |
INVESTMENT OPERATIONS - Sched_6
INVESTMENT OPERATIONS - Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value | ||
Less Than 12 Months | $ 8,141 | $ 2,222 |
12 Months or More | 722 | 1,106 |
Total | 8,863 | 3,328 |
Unrealized Loss | ||
Less Than 12 Months | (178) | (55) |
12 Months or More | (49) | (76) |
Total | (227) | (131) |
Residential mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 3,460 | 386 |
12 Months or More | 11 | 9 |
Total | 3,471 | 395 |
Unrealized Loss | ||
Less Than 12 Months | (58) | (1) |
12 Months or More | 0 | 0 |
Total | (58) | (1) |
Commercial mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 50 | 263 |
12 Months or More | 90 | 30 |
Total | 140 | 293 |
Unrealized Loss | ||
Less Than 12 Months | 0 | (15) |
12 Months or More | (6) | (4) |
Total | (6) | (19) |
Other asset-backed securities | ||
Fair Value | ||
Less Than 12 Months | 130 | 146 |
12 Months or More | 54 | 326 |
Total | 184 | 472 |
Unrealized Loss | ||
Less Than 12 Months | 0 | (2) |
12 Months or More | (1) | (5) |
Total | (1) | (7) |
U.S. government-related securities | ||
Fair Value | ||
Less Than 12 Months | 392 | 311 |
12 Months or More | 67 | 1 |
Total | 459 | 312 |
Unrealized Loss | ||
Less Than 12 Months | (21) | (3) |
12 Months or More | (3) | 0 |
Total | (24) | (3) |
Other government-related securities | ||
Fair Value | ||
Less Than 12 Months | 76 | 19 |
12 Months or More | 0 | 7 |
Total | 76 | 26 |
Unrealized Loss | ||
Less Than 12 Months | (2) | 0 |
12 Months or More | 0 | (1) |
Total | (2) | (1) |
States, municipals, and political subdivisions | ||
Fair Value | ||
Less Than 12 Months | 35 | 34 |
12 Months or More | 4 | 5 |
Total | 39 | 39 |
Unrealized Loss | ||
Less Than 12 Months | (1) | (1) |
12 Months or More | 0 | 0 |
Total | (1) | (1) |
Corporate securities | ||
Fair Value | ||
Less Than 12 Months | 3,978 | 1,063 |
12 Months or More | 496 | 728 |
Total | 4,474 | 1,791 |
Unrealized Loss | ||
Less Than 12 Months | (96) | (33) |
12 Months or More | (39) | (66) |
Total | (135) | (99) |
Redeemable preferred stocks | ||
Fair Value | ||
Less Than 12 Months | 20 | 0 |
12 Months or More | 0 | 0 |
Total | 20 | 0 |
Unrealized Loss | ||
Less Than 12 Months | 0 | 0 |
12 Months or More | 0 | 0 |
Total | $ 0 | $ 0 |
INVESTMENT OPERATIONS - Additio
INVESTMENT OPERATIONS - Additional Information (Details) $ in Millions | Sep. 30, 2021USD ($)position | Dec. 31, 2020USD ($) |
Schedule of Investments [Line Items] | ||
Unrealized loss, greater than 12 months | $ 49 | $ 76 |
Total positions that were in an unrealized loss position | position | 558 | |
Total positions that were in an unrealized loss position having allowance for credit loss established | position | 5 | |
Fixed maturity securities - AFS | $ 71,315 | 70,119 |
Available-for-sale, amortized cost | 66,022 | 63,220 |
Fixed maturity securities | 2,943 | 2,958 |
Below investment grade | ||
Schedule of Investments [Line Items] | ||
Fixed maturity securities - AFS | 2,600 | |
Available-for-sale, amortized cost | 2,400 | |
Fixed maturity securities | 139 | |
Securities not publicly traded | 548 | |
Commercial mortgage-backed securities | ||
Schedule of Investments [Line Items] | ||
Unrealized loss, greater than 12 months | 6 | 4 |
Fixed maturity securities - AFS | 2,287 | 2,534 |
Available-for-sale, amortized cost | 2,196 | 2,429 |
Fixed maturity securities | 211 | 214 |
Other asset-backed securities | ||
Schedule of Investments [Line Items] | ||
Unrealized loss, greater than 12 months | 1 | 5 |
Fixed maturity securities - AFS | 1,476 | 1,578 |
Available-for-sale, amortized cost | 1,438 | 1,546 |
Fixed maturity securities | 181 | 163 |
Corporate securities | ||
Schedule of Investments [Line Items] | ||
Unrealized loss, greater than 12 months | 39 | 66 |
Fixed maturity securities - AFS | 53,607 | 52,107 |
Available-for-sale, amortized cost | 48,935 | 46,150 |
Fixed maturity securities | 1,900 | $ 1,860 |
Corporate securities | Below investment grade | ||
Schedule of Investments [Line Items] | ||
Unrealized losses, greater than twelve months, credit related | $ 1 |
INVESTMENT OPERATIONS - Summa_2
INVESTMENT OPERATIONS - Summary of Change in Unrealized Gains (Losses), Net of Income Tax, on Fixed Maturity and Equity Securities, Classified as Available-for-Sale (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Fixed maturities | ||||
Investment Holdings [Line Items] | ||||
Change in unrealized gains (losses), net of allowance and income taxes | $ (326) | $ 787 | $ (1,285) | $ 2,158 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Fixed maturity securities - AFS | $ 71,315 | $ 70,119 |
Fixed maturity securities - trading | 2,943 | 2,958 |
Total fixed maturity securities | 73,616 | 72,595 |
Equity securities | 772 | 667 |
Other long-term investments | 1,281 | 1,636 |
Short-term investments | 629 | 462 |
Assets related to separate accounts | ||
Variable annuity | 13,112 | 12,378 |
Variable universal life | 1,756 | 1,287 |
Fixed maturities | ||
Assets: | ||
Fixed maturity securities - AFS | 70,773 | 69,733 |
Fixed maturity securities - trading | 2,843 | 2,862 |
Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 7,346 | 6,668 |
Fixed maturity securities - trading | 158 | 209 |
Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 2,287 | 2,534 |
Fixed maturity securities - trading | 211 | 214 |
Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 1,476 | 1,578 |
Fixed maturity securities - trading | 181 | 163 |
States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - AFS | 4,173 | 4,420 |
Fixed maturity securities - trading | 288 | 282 |
Other government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 762 | 717 |
Fixed maturity securities - trading | 64 | 30 |
Corporate securities | ||
Assets: | ||
Fixed maturity securities - AFS | 53,607 | 52,107 |
Fixed maturity securities - trading | 1,900 | 1,860 |
Level 3 | Commercial mortgage-backed securities | ||
Assets: | ||
Total investments | 31 | 32 |
Level 3 | Other asset-backed securities | ||
Assets: | ||
Total investments | 458 | 435 |
Level 3 | Corporate securities | ||
Assets: | ||
Total investments | 1,635 | 1,432 |
Measured at fair value on a recurring basis | ||
Assets: | ||
Total fixed maturity securities | 73,616 | 72,595 |
Equity securities | 772 | 667 |
Other long-term investments | 1,281 | 1,636 |
Short-term investments | 629 | 462 |
Total investments | 76,298 | 75,360 |
Cash | 409 | 656 |
Assets related to separate accounts | ||
Variable annuity | 13,112 | 12,378 |
Variable universal life | 1,756 | 1,287 |
Total assets measured at fair value on a recurring basis | 91,575 | 89,681 |
Liabilities: | ||
Annuity account balances | 64 | 67 |
Other liabilities | 2,576 | 3,119 |
Total liabilities measured at fair value on a recurring basis | 2,640 | 3,186 |
Measured at fair value on a recurring basis | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - AFS | 70,773 | 69,733 |
Fixed maturity securities - trading | 2,843 | 2,862 |
Measured at fair value on a recurring basis | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 7,346 | 6,668 |
Fixed maturity securities - trading | 158 | 209 |
Measured at fair value on a recurring basis | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 2,287 | 2,534 |
Fixed maturity securities - trading | 211 | 214 |
Measured at fair value on a recurring basis | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 1,476 | 1,578 |
Fixed maturity securities - trading | 181 | 163 |
Measured at fair value on a recurring basis | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 812 | 1,515 |
Fixed maturity securities - trading | 33 | 91 |
Measured at fair value on a recurring basis | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - AFS | 4,173 | 4,420 |
Fixed maturity securities - trading | 288 | 282 |
Measured at fair value on a recurring basis | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 762 | 717 |
Fixed maturity securities - trading | 64 | 30 |
Measured at fair value on a recurring basis | Corporate securities | ||
Assets: | ||
Fixed maturity securities - AFS | 53,607 | 52,107 |
Fixed maturity securities - trading | 1,900 | 1,860 |
Measured at fair value on a recurring basis | Redeemable preferred stocks | ||
Assets: | ||
Fixed maturity securities - AFS | 310 | 194 |
Fixed maturity securities - trading | 8 | 13 |
Measured at fair value on a recurring basis | Level 1 | ||
Assets: | ||
Total fixed maturity securities | 755 | 1,232 |
Equity securities | 614 | 566 |
Other long-term investments | 65 | 52 |
Short-term investments | 463 | 403 |
Total investments | 1,897 | 2,253 |
Cash | 409 | 656 |
Assets related to separate accounts | ||
Variable annuity | 13,112 | 12,378 |
Variable universal life | 1,756 | 1,287 |
Total assets measured at fair value on a recurring basis | 17,174 | 16,574 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Other liabilities | 25 | 14 |
Total liabilities measured at fair value on a recurring basis | 25 | 14 |
Measured at fair value on a recurring basis | Level 1 | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - AFS | 720 | 1,140 |
Fixed maturity securities - trading | 35 | 92 |
Measured at fair value on a recurring basis | Level 1 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 410 | 1,015 |
Fixed maturity securities - trading | 27 | 79 |
Measured at fair value on a recurring basis | Level 1 | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Corporate securities | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Redeemable preferred stocks | ||
Assets: | ||
Fixed maturity securities - AFS | 310 | 125 |
Fixed maturity securities - trading | 8 | 13 |
Measured at fair value on a recurring basis | Level 2 | ||
Assets: | ||
Total fixed maturity securities | 70,612 | 69,375 |
Equity securities | 0 | 0 |
Other long-term investments | 917 | 1,285 |
Short-term investments | 166 | 59 |
Total investments | 71,695 | 70,719 |
Cash | 0 | 0 |
Assets related to separate accounts | ||
Variable annuity | 0 | 0 |
Variable universal life | 0 | 0 |
Total assets measured at fair value on a recurring basis | 71,695 | 70,719 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Other liabilities | 603 | 867 |
Total liabilities measured at fair value on a recurring basis | 603 | 867 |
Measured at fair value on a recurring basis | Level 2 | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - AFS | 67,929 | 66,694 |
Fixed maturity securities - trading | 2,683 | 2,681 |
Measured at fair value on a recurring basis | Level 2 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 7,346 | 6,668 |
Fixed maturity securities - trading | 158 | 209 |
Measured at fair value on a recurring basis | Level 2 | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 2,256 | 2,502 |
Fixed maturity securities - trading | 211 | 214 |
Measured at fair value on a recurring basis | Level 2 | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 1,018 | 1,143 |
Fixed maturity securities - trading | 87 | 91 |
Measured at fair value on a recurring basis | Level 2 | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 402 | 500 |
Fixed maturity securities - trading | 6 | 12 |
Measured at fair value on a recurring basis | Level 2 | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - AFS | 4,173 | 4,420 |
Fixed maturity securities - trading | 288 | 282 |
Measured at fair value on a recurring basis | Level 2 | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 762 | 717 |
Fixed maturity securities - trading | 48 | 30 |
Measured at fair value on a recurring basis | Level 2 | Corporate securities | ||
Assets: | ||
Fixed maturity securities - AFS | 51,972 | 50,675 |
Fixed maturity securities - trading | 1,885 | 1,843 |
Measured at fair value on a recurring basis | Level 2 | Redeemable preferred stocks | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 69 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | ||
Assets: | ||
Total fixed maturity securities | 2,249 | 1,988 |
Equity securities | 158 | 101 |
Other long-term investments | 299 | 299 |
Short-term investments | 0 | 0 |
Total investments | 2,706 | 2,388 |
Cash | 0 | 0 |
Assets related to separate accounts | ||
Variable annuity | 0 | 0 |
Variable universal life | 0 | 0 |
Total assets measured at fair value on a recurring basis | 2,706 | 2,388 |
Liabilities: | ||
Annuity account balances | 64 | 67 |
Other liabilities | 1,948 | 2,238 |
Total liabilities measured at fair value on a recurring basis | 2,012 | 2,305 |
Measured at fair value on a recurring basis | Level 3 | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - AFS | 2,124 | 1,899 |
Fixed maturity securities - trading | 125 | 89 |
Measured at fair value on a recurring basis | Level 3 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 31 | 32 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 458 | 435 |
Fixed maturity securities - trading | 94 | 72 |
Measured at fair value on a recurring basis | Level 3 | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | 16 | 0 |
Measured at fair value on a recurring basis | Level 3 | Corporate securities | ||
Assets: | ||
Fixed maturity securities - AFS | 1,635 | 1,432 |
Fixed maturity securities - trading | 15 | 17 |
Measured at fair value on a recurring basis | Level 3 | Redeemable preferred stocks | ||
Assets: | ||
Fixed maturity securities - AFS | 0 | 0 |
Fixed maturity securities - trading | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Valuation of Level 3 Financial Instruments (Details) | Sep. 30, 2021USD ($)usd_per_policy | Dec. 31, 2020USD ($)usd_per_policy |
Liabilities | ||
Fair Value | $ 2,576,000,000 | $ 3,119,000,000 |
Level 3 | Commercial mortgage-backed securities | ||
Assets: | ||
Fair value | 31,000,000 | 32,000,000 |
Level 3 | Other asset-backed securities | ||
Assets: | ||
Fair value | 458,000,000 | 435,000,000 |
Level 3 | Corporate securities | ||
Assets: | ||
Fair value | 1,635,000,000 | 1,432,000,000 |
Level 3 | Embedded derivative - GLWB | ||
Assets: | ||
Fair value | 535,000,000 | |
Liabilities | ||
Fair Value | 822,000,000 | |
Level 3 | Embedded derivative - FIA | ||
Liabilities | ||
Fair Value | 570,000,000 | 573,000,000 |
Level 3 | Embedded derivative - IUL | ||
Liabilities | ||
Fair Value | $ 251,000,000 | $ 201,000,000 |
Level 3 | Discounted cash flow | Commercial mortgage-backed securities | Minimum | ||
Liabilities | ||
Debt securities, measurement input | 0.0212 | 0.0278 |
Level 3 | Discounted cash flow | Commercial mortgage-backed securities | Maximum | ||
Liabilities | ||
Debt securities, measurement input | 0.0229 | 0.0292 |
Level 3 | Discounted cash flow | Commercial mortgage-backed securities | Weighted Average | ||
Liabilities | ||
Debt securities, measurement input | 0.0223 | 0.0287 |
Level 3 | Discounted cash flow | Corporate securities | Minimum | ||
Liabilities | ||
Debt securities, measurement input | 0 | 0 |
Level 3 | Discounted cash flow | Corporate securities | Maximum | ||
Liabilities | ||
Debt securities, measurement input | 0.0400 | 0.0475 |
Level 3 | Discounted cash flow | Corporate securities | Weighted Average | ||
Liabilities | ||
Debt securities, measurement input | 0.0146 | 0.0189 |
Level 3 | Actuarial cash flow model | Embedded derivative - FIA | ||
Liabilities | ||
Embedded derivative, measurement input | usd_per_policy | 214 | 207 |
Liquidation value | Level 3 | Liquidation | Other asset-backed securities | Minimum | ||
Liabilities | ||
Debt securities, measurement input, value | $ 97 | $ 95 |
Liquidation value | Level 3 | Liquidation | Other asset-backed securities | Maximum | ||
Liabilities | ||
Debt securities, measurement input, value | 99.75 | 97 |
Liquidation value | Level 3 | Liquidation | Other asset-backed securities | Weighted Average | ||
Liabilities | ||
Debt securities, measurement input, value | $ 98.77 | $ 96.19 |
Liquidity premium | Level 3 | Discounted cash flow | Minimum | ||
Liabilities | ||
Debt securities, measurement input | 0.0054 | |
Liquidity premium | Level 3 | Discounted cash flow | Maximum | ||
Liabilities | ||
Debt securities, measurement input | 0.023 | |
Liquidity premium | Level 3 | Discounted cash flow | Weighted Average | ||
Liabilities | ||
Debt securities, measurement input | 0.0163 | |
Liquidity premium | Level 3 | Discounted cash flow | Other asset-backed securities | Minimum | ||
Liabilities | ||
Debt securities, measurement input | 0.0084 | |
Liquidity premium | Level 3 | Discounted cash flow | Other asset-backed securities | Maximum | ||
Liabilities | ||
Debt securities, measurement input | 0.0231 | |
Liquidity premium | Level 3 | Discounted cash flow | Other asset-backed securities | Weighted Average | ||
Liabilities | ||
Debt securities, measurement input | 0.0176 | |
Paydown rate | Level 3 | Discounted cash flow | Other asset-backed securities | Minimum | ||
Liabilities | ||
Debt securities, measurement input | 0.1003 | 0.0879 |
Paydown rate | Level 3 | Discounted cash flow | Other asset-backed securities | Maximum | ||
Liabilities | ||
Debt securities, measurement input | 0.1315 | 0.1249 |
Paydown rate | Level 3 | Discounted cash flow | Other asset-backed securities | Weighted Average | ||
Liabilities | ||
Debt securities, measurement input | 0.1195 | 0.1139 |
Mortality rate | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Minimum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.88 | 0.88 |
Mortality rate | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Maximum | ||
Liabilities | ||
Embedded derivative, measurement input | 1 | 1 |
Mortality rate | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Minimum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.88 | 0.88 |
Mortality rate | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Maximum | ||
Liabilities | ||
Embedded derivative, measurement input | 1 | 1 |
Mortality rate | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Minimum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.43 | 0.36 |
Mortality rate | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Maximum | ||
Liabilities | ||
Embedded derivative, measurement input | 1.10 | 1.61 |
Mortality rate | Level 3 | Actuarial cash flow model, valuation basic report primary tables based on duration scale | Embedded derivative - IUL | Minimum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.94 | 0.94 |
Mortality rate | Level 3 | Actuarial cash flow model, valuation basic report primary tables based on duration scale | Embedded derivative - IUL | Maximum | ||
Liabilities | ||
Embedded derivative, measurement input | 2.48 | 2.48 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Minimum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.0018 | 0.0019 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Maximum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.0081 | 0.0081 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Minimum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.0018 | 0.0019 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Maximum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.0081 | 0.0081 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Minimum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.0018 | 0.0019 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Maximum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.0081 | 0.0081 |
Withdrawal rate prior to age 70 | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | ||
Liabilities | ||
Embedded derivative, measurement input | 0.004 | 0.004 |
Withdrawal rate for ages over 70 | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | ||
Liabilities | ||
Embedded derivative, measurement input | 0.024 | 0.024 |
Lapse rate | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Minimum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.002 | 0.002 |
Lapse rate | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Maximum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.500 | 0.500 |
Lapse rate | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Minimum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.00375 | 0.00375 |
Lapse rate | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Maximum | ||
Liabilities | ||
Embedded derivative, measurement input | 0.075 | 0.10 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Determination of fair values | |||||
Financial instruments owned, other | $ 112 | $ 112 | $ 90 | ||
Securities transferred into Level 3 | 59 | $ 31 | 199 | $ 115 | |
Securities transferred into Level 2 from Level 3 | 19 | 17 | $ 1 | ||
Level 3 | |||||
Determination of fair values | |||||
Financial instruments valued in broker quotes | 206 | 206 | 116 | ||
Other asset-backed securities | Level 3 | |||||
Determination of fair values | |||||
Financial instruments valued in broker quotes | 148 | 148 | 88 | ||
Equity securities | Level 3 | |||||
Determination of fair values | |||||
Financial instruments valued in broker quotes | 46 | 46 | 11 | ||
Corporate securities | Level 3 | |||||
Determination of fair values | |||||
Financial instruments valued in broker quotes | $ 12 | $ 12 | $ 17 |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS - Reconciliation of Beginning and Ending Balances for Fair Value Measurements (Details) - Level 3 - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Assets: | ||||
Beginning Balance | $ 2,579 | $ 2,295 | $ 2,387 | $ 2,247 |
Included in Operations | 98 | 132 | 169 | 234 |
Included in Other Comprehensive Income (Loss) | 8 | 33 | 14 | 119 |
Included in Operations | (106) | (73) | (168) | (175) |
Included in Other Comprehensive Income (Loss) | (11) | (4) | (23) | (96) |
Purchases | 146 | 75 | 358 | 426 |
Sales | (49) | (128) | (213) | (503) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | (4) |
Transfers in/out of Level 3 | 40 | 31 | 182 | 114 |
Other | 1 | (1) | 0 | (2) |
Ending Balance | 2,706 | 2,360 | 2,706 | 2,360 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | (8) | 58 | 1 | 62 |
Liabilities: | ||||
Beginning Balance | 2,081 | 2,491 | 2,306 | 1,402 |
Included in Operations | 197 | 301 | 784 | 649 |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Included in Operations | (130) | (250) | (495) | (1,690) |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 2 | 1 | 5 | 4 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 2,012 | 2,439 | 2,012 | 2,439 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 68 | (52) | 291 | (1,039) |
Annuity account balances | ||||
Liabilities: | ||||
Beginning Balance | 65 | 68 | 67 | 70 |
Included in Operations | 0 | 0 | 0 | 0 |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Included in Operations | (1) | (1) | (2) | (2) |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | |
Settlements | 2 | 1 | 5 | 4 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 64 | 68 | 64 | 68 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Other liabilities | ||||
Liabilities: | ||||
Beginning Balance | 2,016 | 2,423 | 2,239 | 1,332 |
Included in Operations | 197 | 301 | 784 | 649 |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Included in Operations | (129) | (249) | (493) | (1,688) |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 1,948 | 2,371 | 1,948 | 2,371 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 68 | (52) | 291 | (1,039) |
Total investments | ||||
Assets: | ||||
Beginning Balance | 2,579 | 2,295 | 2,387 | 2,247 |
Included in Operations | 98 | 132 | 169 | 234 |
Included in Other Comprehensive Income (Loss) | 8 | 33 | 14 | 119 |
Included in Operations | (106) | (73) | (168) | (175) |
Included in Other Comprehensive Income (Loss) | (11) | (4) | (23) | (96) |
Purchases | 146 | 75 | 358 | 426 |
Sales | (49) | (128) | (213) | (503) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | (4) |
Transfers in/out of Level 3 | 40 | 31 | 182 | 114 |
Other | 1 | (1) | 0 | (2) |
Ending Balance | 2,706 | 2,360 | 2,706 | 2,360 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | (8) | 58 | 1 | 62 |
Fixed maturities | ||||
Assets: | ||||
Beginning Balance | 2,160 | 1,880 | 1,988 | 1,881 |
Included in Operations | 0 | 3 | 0 | 5 |
Included in Other Comprehensive Income (Loss) | 8 | 33 | 14 | 119 |
Included in Operations | 0 | 0 | 0 | (8) |
Included in Other Comprehensive Income (Loss) | (11) | (4) | (23) | (96) |
Purchases | 92 | 68 | 264 | 377 |
Sales | (41) | (128) | (181) | (503) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 40 | 31 | 187 | 109 |
Other | 1 | (1) | 0 | (2) |
Ending Balance | 2,249 | 1,882 | 2,249 | 1,882 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 3 | 0 | 3 |
Fixed maturities | Available-for-sale securities | ||||
Assets: | ||||
Beginning Balance | 2,036 | 1,807 | 1,899 | 1,805 |
Included in Operations | 0 | 0 | 0 | 0 |
Included in Other Comprehensive Income (Loss) | 8 | 33 | 12 | 119 |
Included in Operations | 0 | 0 | 0 | 0 |
Included in Other Comprehensive Income (Loss) | (10) | (4) | (23) | (96) |
Purchases | 85 | 62 | 246 | 365 |
Sales | (35) | (126) | (170) | (499) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 40 | 31 | 160 | 110 |
Other | 0 | (1) | 0 | (2) |
Ending Balance | 2,124 | 1,802 | 2,124 | 1,802 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Fixed maturities | Trading securities | ||||
Assets: | ||||
Beginning Balance | 124 | 73 | 89 | 76 |
Included in Operations | 0 | 3 | 0 | 5 |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 2 | 0 |
Included in Operations | 0 | 0 | 0 | (8) |
Included in Other Comprehensive Income (Loss) | (1) | 0 | 0 | 0 |
Purchases | 7 | 6 | 18 | 12 |
Sales | (6) | (2) | (11) | (4) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 27 | (1) |
Other | 1 | 0 | 0 | 0 |
Ending Balance | 125 | 80 | 125 | 80 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 3 | 0 | 3 |
Commercial mortgage-backed securities | Available-for-sale securities | ||||
Assets: | ||||
Beginning Balance | 32 | 10 | 32 | 10 |
Included in Operations | 0 | 0 | 0 | 0 |
Included in Other Comprehensive Income (Loss) | 0 | 1 | 0 | 2 |
Included in Operations | 0 | 0 | 0 | 0 |
Included in Other Comprehensive Income (Loss) | (1) | 0 | (1) | (1) |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 31 | 11 | 31 | 11 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Other asset-backed securities | Available-for-sale securities | ||||
Assets: | ||||
Beginning Balance | 451 | 431 | 435 | 421 |
Included in Operations | 0 | 0 | 0 | 0 |
Included in Other Comprehensive Income (Loss) | 0 | 4 | 5 | 4 |
Included in Operations | 0 | 0 | 0 | 0 |
Included in Other Comprehensive Income (Loss) | (2) | (1) | (1) | (13) |
Purchases | 6 | 0 | 6 | 0 |
Sales | 0 | (1) | (2) | (1) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 3 | 14 | 22 | |
Other | 0 | 0 | 1 | 0 |
Ending Balance | 458 | 433 | 458 | 433 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Other asset-backed securities | Trading securities | ||||
Assets: | ||||
Beginning Balance | 97 | 60 | 71 | 65 |
Included in Operations | 0 | 3 | 0 | 4 |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 2 | 0 |
Included in Operations | 0 | 0 | 0 | (8) |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 1 | 0 |
Purchases | 3 | 1 | 14 | 4 |
Sales | (6) | (2) | (10) | (2) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 16 | (1) |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 94 | 62 | 94 | 62 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 3 | 0 | 3 |
Other government-related securities | Trading securities | ||||
Assets: | ||||
Beginning Balance | 16 | 0 | ||
Included in Operations | 0 | 0 | ||
Included in Other Comprehensive Income (Loss) | 0 | 0 | ||
Included in Operations | 0 | 0 | ||
Included in Other Comprehensive Income (Loss) | (1) | 0 | ||
Purchases | 0 | 0 | ||
Sales | 0 | 0 | ||
Issuances | 0 | 0 | ||
Settlements | 0 | 0 | ||
Transfers in/out of Level 3 | 0 | 16 | ||
Other | 1 | 0 | ||
Ending Balance | 16 | 16 | ||
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 0 | ||
Corporate securities | Available-for-sale securities | ||||
Assets: | ||||
Beginning Balance | 1,553 | 1,366 | 1,432 | 1,374 |
Included in Operations | 0 | 0 | 0 | 0 |
Included in Other Comprehensive Income (Loss) | 8 | 28 | 7 | 113 |
Included in Operations | 0 | 0 | 0 | 0 |
Included in Other Comprehensive Income (Loss) | (7) | (3) | (21) | (82) |
Purchases | 79 | 62 | 240 | 365 |
Sales | (35) | (125) | (168) | (498) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 37 | 31 | 146 | 88 |
Other | 0 | (1) | (1) | (2) |
Ending Balance | 1,635 | 1,358 | 1,635 | 1,358 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Corporate securities | Trading securities | ||||
Assets: | ||||
Beginning Balance | 11 | 13 | 18 | 11 |
Included in Operations | 0 | 0 | 0 | 1 |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Included in Operations | 0 | 0 | 0 | 0 |
Included in Other Comprehensive Income (Loss) | 0 | 0 | (1) | 0 |
Purchases | 4 | 5 | 4 | 8 |
Sales | 0 | 0 | (1) | (2) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | (5) | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 15 | 18 | 15 | 18 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Equity securities | ||||
Assets: | ||||
Beginning Balance | 112 | 78 | 101 | 74 |
Included in Operations | 0 | 2 | 0 | 1 |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Included in Operations | 0 | 0 | 0 | (1) |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Purchases | 54 | 7 | 94 | 8 |
Sales | (8) | 0 | (32) | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | (5) | 5 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 158 | 87 | 158 | 87 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | 0 | 1 | 0 | 1 |
Other long-term investments | ||||
Assets: | ||||
Beginning Balance | 307 | 337 | 298 | 292 |
Included in Operations | 98 | 127 | 169 | 228 |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Included in Operations | (106) | (73) | (168) | (166) |
Included in Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 41 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | (4) |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 299 | 391 | 299 | 391 |
Total Gains (losses) included in Operations related to Instruments still held at the Reporting Date | $ (8) | $ 54 | $ 1 | $ 58 |
FAIR VALUE OF FINANCIAL INSTR_7
FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Commercial mortgage loans | $ 10,506 | $ 10,006 |
Policy loans | 1,543 | 1,593 |
Other long-term investments | 2,916 | 3,241 |
Liabilities: | ||
Stable value product account balances | 8,237 | 6,056 |
Future policy benefits and claims | 15,841 | 15,478 |
Other policyholders’ funds | 1,798 | 1,865 |
Level 3 | Carrying Amounts | ||
Assets: | ||
Commercial mortgage loans | 10,506 | 10,006 |
Policy loans | 1,543 | 1,593 |
Liabilities: | ||
Stable value product account balances | 8,237 | 6,056 |
Future policy benefits and claims | 1,482 | 1,580 |
Other policyholders’ funds | 99 | 102 |
Debt | ||
Subordinated funding obligations | 110 | 110 |
Level 3 | Fair Values | ||
Assets: | ||
Commercial mortgage loans | 11,153 | 10,788 |
Policy loans | 1,543 | 1,593 |
Liabilities: | ||
Stable value product account balances | 8,373 | 6,231 |
Future policy benefits and claims | 1,528 | 1,603 |
Other policyholders’ funds | 106 | 108 |
Debt | ||
Subordinated funding obligations | 116 | 121 |
Level 2 | Carrying Amounts | ||
Assets: | ||
Other long-term investments | 1,412 | 1,186 |
Level 2 | Fair Values | ||
Assets: | ||
Other long-term investments | $ 1,487 | $ 1,283 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Realized Investments Gains and Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | $ 51 | $ 88 | $ 50 | $ (152) |
Derivatives not designated as hedging instruments | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 51 | 88 | 50 | (152) |
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 19 | (25) | 66 | (56) |
Derivatives not designated as hedging instruments | Derivatives with PLC | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 0 | 20 | 0 | 22 |
Derivatives not designated as hedging instruments | Other derivatives | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 2 | 6 | (3) | 12 |
Derivatives not designated as hedging instruments | VA | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (26) | 51 | (73) | (90) |
Derivatives not designated as hedging instruments | VA | Interest rate futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 0 | 2 | 8 | (3) |
Derivatives not designated as hedging instruments | VA | Equity futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 2 | (1) | (10) | 132 |
Derivatives not designated as hedging instruments | VA | Currency futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 4 | (9) | 9 | 1 |
Derivatives not designated as hedging instruments | VA | Equity options | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 1 | (42) | (81) | 67 |
Derivatives not designated as hedging instruments | VA | Interest rate swaps | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (24) | (58) | (167) | 364 |
Derivatives not designated as hedging instruments | VA | Total return swaps | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 6 | (31) | (119) | 30 |
Derivatives not designated as hedging instruments | VA | Embedded derivative - GLWB | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (15) | 190 | 287 | (681) |
Derivatives not designated as hedging instruments | FIA | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 58 | 14 | 66 | (40) |
Derivatives not designated as hedging instruments | FIA | Equity futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 0 | 1 | 3 | (7) |
Derivatives not designated as hedging instruments | FIA | Equity options | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (3) | 25 | 45 | 15 |
Derivatives not designated as hedging instruments | FIA | Embedded derivative - FIA | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 61 | (9) | 25 | (38) |
Derivatives not designated as hedging instruments | FIA | Funds withheld derivative | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 0 | (3) | (5) | (10) |
Derivatives not designated as hedging instruments | FIA | Other derivatives | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 0 | 0 | (2) | 0 |
Derivatives not designated as hedging instruments | IUL | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (2) | 22 | (6) | 0 |
Derivatives not designated as hedging instruments | IUL | Equity futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 0 | 0 | 0 | (2) |
Derivatives not designated as hedging instruments | IUL | Equity options | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 1 | 6 | 9 | 1 |
Derivatives not designated as hedging instruments | IUL | Embedded derivative - IUL | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | $ (3) | $ 16 | $ (15) | $ 1 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Amount of gains (losses) reclassified from accumulated other comprehensive income (loss) in the next twelve months | $ 1 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Nature and Accounting Treatment of Derivative Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Other long-term investments, Fair Value | $ 1,281 | $ 1,636 |
Embedded derivative - Modco reinsurance treaties | ||
Derivative [Line Items] | ||
Other long-term investments, Fair Value | 77 | 101 |
Embedded derivative - GLWB | ||
Derivative [Line Items] | ||
Other long-term investments, Fair Value | 161 | 138 |
Embedded derivative - FIA | ||
Derivative [Line Items] | ||
Other long-term investments, Fair Value | 61 | 60 |
Derivatives not designated as hedging instruments | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 21,424 | 17,464 |
Other long-term investments, Fair Value | 1,281 | 1,636 |
Other liabilities. Notional Amount | 24,753 | 24,713 |
Other liabilities, Fair Value | 2,576 | 3,119 |
Derivatives not designated as hedging instruments | Interest rate swaps | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 1,478 | 1,478 |
Other long-term investments, Fair Value | 75 | 185 |
Other liabilities. Notional Amount | 1,354 | 1,354 |
Other liabilities, Fair Value | 0 | 0 |
Derivatives not designated as hedging instruments | Total return swaps | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 1,120 | 158 |
Other long-term investments, Fair Value | 27 | 2 |
Other liabilities. Notional Amount | 229 | 1,003 |
Other liabilities, Fair Value | 6 | 15 |
Derivatives not designated as hedging instruments | Derivatives with PLC | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 4,161 | 4,076 |
Other long-term investments, Fair Value | 0 | 0 |
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 1,271 | 1,249 |
Other long-term investments, Fair Value | 77 | 101 |
Other liabilities. Notional Amount | 2,996 | 2,911 |
Other liabilities, Fair Value | 294 | 389 |
Derivatives not designated as hedging instruments | Embedded derivative - GLWB | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 2,871 | 2,067 |
Other long-term investments, Fair Value | 161 | 138 |
Other liabilities. Notional Amount | 7,006 | 7,749 |
Other liabilities, Fair Value | 696 | 960 |
Derivatives not designated as hedging instruments | Embedded derivative - FIA | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 383 | 335 |
Other long-term investments, Fair Value | 61 | 60 |
Other liabilities. Notional Amount | 4,299 | 3,889 |
Other liabilities, Fair Value | 631 | 633 |
Derivatives not designated as hedging instruments | Interest rate futures | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 893 | 690 |
Other long-term investments, Fair Value | 8 | 4 |
Other liabilities. Notional Amount | 242 | 415 |
Other liabilities, Fair Value | 8 | 3 |
Derivatives not designated as hedging instruments | Equity futures | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 82 | 203 |
Other long-term investments, Fair Value | 3 | 4 |
Other liabilities. Notional Amount | 214 | 190 |
Other liabilities, Fair Value | 5 | 5 |
Derivatives not designated as hedging instruments | Currency futures | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 216 | 0 |
Other long-term investments, Fair Value | 5 | 0 |
Other liabilities. Notional Amount | 0 | 264 |
Other liabilities, Fair Value | 0 | 4 |
Derivatives not designated as hedging instruments | Equity options | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 8,949 | 7,208 |
Other long-term investments, Fair Value | 864 | 1,142 |
Other liabilities. Notional Amount | 6,628 | 5,499 |
Other liabilities, Fair Value | 588 | 834 |
Derivatives not designated as hedging instruments | Funds withheld derivative | ||
Derivative [Line Items] | ||
Other liabilities. Notional Amount | 833 | 661 |
Other liabilities, Fair Value | 11 | 10 |
Derivatives not designated as hedging instruments | Embedded derivative - IUL | ||
Derivative [Line Items] | ||
Other liabilities. Notional Amount | 429 | 357 |
Other liabilities, Fair Value | 251 | 201 |
Derivatives not designated as hedging instruments | Other | ||
Derivative [Line Items] | ||
Other liabilities. Notional Amount | 406 | 304 |
Other liabilities, Fair Value | 76 | 55 |
Derivatives designated as hedging instrument | Cash flow hedges | Foreign currency swaps | ||
Derivative [Line Items] | ||
Other liabilities. Notional Amount | 117 | 117 |
Other liabilities, Fair Value | $ 10 | $ 10 |
OFFSETTING OF ASSETS AND LIAB_3
OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Assets (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, not subject to a master netting arrangement | $ 1,281 | $ 1,636 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheets | 1,281 | 1,636 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 604 | 865 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Received | 211 | 290 |
Net Amount | 466 | 481 |
Free-Standing derivatives | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, subject to master netting arrangement | 982 | 1,337 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheets | 982 | 1,337 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, subject to master netting arrangement | 604 | 865 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Received | 211 | 290 |
Net Amount | 167 | 182 |
Total derivatives, subject to a master netting arrangement or similar arrangement | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, subject to master netting arrangement | 982 | 1,337 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheets | 982 | 1,337 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, subject to master netting arrangement | 604 | 865 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Received | 211 | 290 |
Net Amount | 167 | 182 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, not subject to a master netting arrangement | 77 | 101 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheets | 77 | 101 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Received | 0 | 0 |
Net Amount | 77 | 101 |
Embedded derivative - GLWB | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, not subject to a master netting arrangement | 161 | 138 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheets | 161 | 138 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Received | 0 | 0 |
Net Amount | 161 | 138 |
Embedded derivative - FIA | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, not subject to a master netting arrangement | 61 | 60 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheets | 61 | 60 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Received | 0 | 0 |
Net Amount | 61 | 60 |
Total derivatives, not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, not subject to a master netting arrangement | 299 | 299 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheets | 299 | 299 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Received | 0 | 0 |
Net Amount | $ 299 | $ 299 |
OFFSETTING OF ASSETS AND LIAB_4
OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement or similar arrangement | $ 2,576 | $ 3,119 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 2,576 | 3,119 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 604 | 865 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 13 | 4 |
Net Amount | 1,959 | 2,250 |
Repurchase agreements | ||
Gross Amounts of Recognized Liabilities | 1,104 | 437 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 1,104 | 437 |
Gross Amounts Not Offset in the Balance Sheets, Financial instruments | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 0 | 0 |
Net Amount | 1,104 | 437 |
Total Liabilities | ||
Gross Amounts of Recognized Liabilities | 3,680 | 3,556 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 3,680 | 3,556 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments | 604 | 865 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 13 | 4 |
Net Amount | 3,063 | 2,687 |
Free-Standing derivatives | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, subject to master netting arrangement or similar arrangement | 617 | 871 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 617 | 871 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, subject to master netting arrangement | 604 | 865 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 13 | 4 |
Net Amount | 0 | 2 |
Total derivatives, subject to a master netting arrangement or similar arrangement | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, subject to master netting arrangement or similar arrangement | 617 | 871 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 617 | 871 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, subject to master netting arrangement | 604 | 865 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 13 | 4 |
Net Amount | 0 | 2 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement or similar arrangement | 294 | 389 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 294 | 389 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 0 | 0 |
Net Amount | 294 | 389 |
Funds withheld derivative | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement or similar arrangement | 11 | 10 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 11 | 10 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 0 | 0 |
Net Amount | 11 | 10 |
Embedded derivative - GLWB | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement or similar arrangement | 696 | 960 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 696 | 960 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 0 | 0 |
Net Amount | 696 | 960 |
Embedded derivative - FIA | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement or similar arrangement | 631 | 633 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 631 | 633 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 0 | 0 |
Net Amount | 631 | 633 |
Embedded derivative - IUL | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement or similar arrangement | 251 | 201 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 251 | 201 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 0 | 0 |
Net Amount | 251 | 201 |
Other | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement or similar arrangement | 76 | 55 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 76 | 55 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 0 | 0 |
Net Amount | 76 | 55 |
Total derivatives, not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement or similar arrangement | 1,959 | 2,248 |
Gross Amounts Offset in the Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheets | 1,959 | 2,248 |
Gross Amounts Not Offset in the Balance Sheets, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheets, Collateral Posted | 0 | 0 |
Net Amount | $ 1,959 | $ 2,248 |
COMMERCIAL MORTGAGE LOANS - Add
COMMERCIAL MORTGAGE LOANS - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)loan | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)loan | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)loan | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Commercial mortgage loans on real estate, net | $ 10,506 | $ 10,506 | $ 10,006 | ||
Amount that would become due in remainder of current fiscal year, if loans are called at their next call dates | 54 | 54 | |||
Amount that would become due in 2022 through 2026, if loans are called at their next call dates | 450 | 450 | |||
Amount that would become due in 2027 through 2029, if loans are called at their next call dates | 12 | 12 | |||
Loans not subject to pooling and servicing agreement, non performing or restructured amount | 3 | ||||
Commercial Mortgage Loans | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Commercial mortgage loans, before allowance for credit losses | 10,609 | 10,609 | 10,228 | ||
Commercial mortgage loans on real estate, net | 10,506 | 10,506 | 10,006 | ||
Mortgage loans having participation feature | 620 | 620 | $ 806 | ||
Income recognized on participating mortgage loans | 32 | $ 1 | 46 | $ 17 | |
Commercial Mortgage Loans | 60-89 Days Delinquent | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Number of delinquent loans | loan | 1 | ||||
Value of loans in delinquency | $ 1 | ||||
Commercial Mortgage Loans | Nonaccrual Status | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Number of delinquent loans | loan | 1 | ||||
Value of loans in delinquency | $ 1 | ||||
Commercial Mortgage Loans | CARES Act, Loan Modification Program | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Commercial mortgage loans, before allowance for credit losses | $ 2,100 | $ 2,100 | |||
Number of loans modified and not considered troubled debt restructuring | loan | 23 | 23 | |||
Loans modified during period and not considered troubled debt restructuring | $ 475 | $ 475 | |||
Number of loans in modification and not considered troubled debt restructuring | loan | 277 | 277 | |||
Commercial Mortgage Loans | CARES Act, Not In Payment Deferral, Loan Modification Program | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Commercial mortgage loans, before allowance for credit losses | $ 1,700 | $ 1,700 | |||
Commercial Mortgage Loans | Coronavirus Aid, Relief, and Economic Security Act, Loan Modification Program, Loans Resuming Payment | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Commercial mortgage loans, before allowance for credit losses | $ 400 | $ 400 | |||
Maximum | Commercial Mortgage Loans | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Mortgage call option period | 9 years | ||||
Loan-to-value ratio with participating interest (as a percent) | 85.00% | 85.00% |
COMMERCIAL MORTGAGE LOANS - Sch
COMMERCIAL MORTGAGE LOANS - Schedule of Commercial Mortgage Loans (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Allowance for credit losses | ||||||
Allowance for credit losses | $ (103) | $ (136) | $ (222) | $ (175) | $ (173) | $ (5) |
Total commercial mortgage loans | ||||||
Total commercial mortgage loans | 10,506 | 10,006 | ||||
Commercial Mortgage Loans | ||||||
Amortized cost | ||||||
Current fiscal year | 1,362 | 1,463 | ||||
Year prior to current fiscal year | 1,448 | 2,442 | ||||
Two years prior to current fiscal year | 2,066 | 1,577 | ||||
Three years prior to current fiscal year | 1,483 | 1,344 | ||||
Four years prior to current fiscal year | 1,309 | 943 | ||||
Prior | 2,941 | 2,459 | ||||
Amortized cost | 10,609 | 10,228 | ||||
Allowance for credit losses | ||||||
Current fiscal year | (8) | (21) | ||||
Year prior to current fiscal year | (13) | (46) | ||||
Two years prior to current fiscal year | (22) | (55) | ||||
Three years prior to current fiscal year | (18) | (37) | ||||
Four years prior to current fiscal year | (16) | (25) | ||||
Prior | (26) | (38) | ||||
Allowance for credit losses | (103) | (222) | ||||
Total commercial mortgage loans | ||||||
Current fiscal year | 1,354 | 1,442 | ||||
Year prior to current fiscal year | 1,435 | 2,396 | ||||
Two years prior to current fiscal year | 2,044 | 1,522 | ||||
Three years prior to current fiscal year | 1,465 | 1,307 | ||||
Four years prior to current fiscal year | 1,293 | 918 | ||||
Prior | 2,915 | 2,421 | ||||
Total commercial mortgage loans | 10,506 | 10,006 | ||||
Commercial Mortgage Loans | Performing | ||||||
Amortized cost | ||||||
Current fiscal year | 1,362 | 1,463 | ||||
Year prior to current fiscal year | 1,448 | 2,442 | ||||
Two years prior to current fiscal year | 2,066 | 1,577 | ||||
Three years prior to current fiscal year | 1,483 | 1,344 | ||||
Four years prior to current fiscal year | 1,309 | 943 | ||||
Prior | 2,941 | 2,458 | ||||
Amortized cost | 10,609 | 10,227 | ||||
Commercial Mortgage Loans | Non-performing | ||||||
Amortized cost | ||||||
Current fiscal year | 0 | 0 | ||||
Year prior to current fiscal year | 0 | 0 | ||||
Two years prior to current fiscal year | 0 | 0 | ||||
Three years prior to current fiscal year | 0 | 0 | ||||
Four years prior to current fiscal year | 0 | 0 | ||||
Prior | 0 | 1 | ||||
Amortized cost | $ 0 | $ 1 |
COMMERCIAL MORTGAGE LOANS - S_2
COMMERCIAL MORTGAGE LOANS - Schedule of Key Quality Indicators (Details) - Commercial Mortgage Loans $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2021 | |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Amortized Cost | $ 10,609 | $ 10,228 | |
Financing Receivable, Before Allowance For Credit Loss | Credit Concentration Risk | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
% of Total | 100.00% | 100.00% | |
Weighted Average | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Debt service coverage ratio | 1.72 | 1.73 | |
Loan-to-value ratio with participating interest (as a percent) | 54.00% | 54.00% | |
Greater than 75% | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Amortized Cost | $ 308 | $ 399 | |
Greater than 75% | Financing Receivable, Before Allowance For Credit Loss | Credit Concentration Risk | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
% of Total | 3.00% | 4.00% | |
Greater than 75% | Weighted Average | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Debt service coverage ratio | 1.32 | 1.29 | |
50% - 75% | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Amortized Cost | $ 6,946 | $ 6,557 | |
50% - 75% | Financing Receivable, Before Allowance For Credit Loss | Credit Concentration Risk | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
% of Total | 65.00% | 64.00% | |
50% - 75% | Weighted Average | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Debt service coverage ratio | 1.60 | 1.61 | |
Less than 50% | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Amortized Cost | $ 3,355 | $ 3,272 | |
Less than 50% | Financing Receivable, Before Allowance For Credit Loss | Credit Concentration Risk | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
% of Total | 32.00% | 32.00% | |
Less than 50% | Weighted Average | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Debt service coverage ratio | 2.03 | 2.01 |
COMMERCIAL MORTGAGE LOANS - S_3
COMMERCIAL MORTGAGE LOANS - Schedule of Allowance for Credit Losses on Funded and Unfunded Mortgages (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Allowance for Funded Commercial Mortgage Loan Credit Losses | ||||
Beginning balance | $ 136 | $ 173 | $ 222 | $ 5 |
Charge offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | (7) | (2) |
Provision | (33) | 2 | (112) | 92 |
Ending balance | 103 | 175 | 103 | 175 |
Allowance for Unfunded Commercial Mortgage Loan Commitments Credit Losses | ||||
Beginning balance | 12 | 20 | 22 | 0 |
Charge offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision | (3) | 0 | (13) | 9 |
Ending balance | 9 | 20 | 9 | 20 |
Cumulative effect adjustments | ||||
Allowance for Funded Commercial Mortgage Loan Credit Losses | ||||
Beginning balance | 0 | 0 | 0 | 80 |
Allowance for Unfunded Commercial Mortgage Loan Commitments Credit Losses | ||||
Beginning balance | $ 0 | $ 0 | $ 0 | $ 11 |
MONY CLOSED BLOCK OF BUSINESS -
MONY CLOSED BLOCK OF BUSINESS - Summary of Financial Information of the Policyholder Dividend Obligation (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Closed block liabilities | ||||
Future policy benefits, policyholders’ account balances and other policyholder liabilities | $ 5,313 | $ 5,406 | ||
Policyholder dividend obligation | 406 | 580 | $ 474 | $ 279 |
Other liabilities | 14 | 7 | ||
Total closed block liabilities | 5,733 | 5,993 | ||
Closed block assets | ||||
Fixed maturities, available-for-sale, at fair value | 4,720 | 4,903 | ||
Commercial mortgage loans | 68 | 68 | ||
Policy loans | 571 | 596 | ||
Cash and other invested assets | 12 | 46 | ||
Other assets | 92 | 91 | ||
Total closed block assets | 5,463 | 5,704 | ||
Excess of reported closed block liabilities over closed block assets | 270 | 289 | ||
Portion of above representing accumulated other comprehensive income: | ||||
Net unrealized gains (losses) - net of policyholder dividend obligation: 2021 - $327 and 2020 - $493; and net of income tax: 2021 - $(69) and 2020 - $(104) | 0 | 0 | ||
Future earnings to be recognized from closed block assets and closed block liabilities | 270 | 289 | ||
Policyholder dividend obligations | 327 | 493 | ||
Income tax expense (benefit) | $ (69) | $ (104) |
MONY CLOSED BLOCK OF BUSINESS_2
MONY CLOSED BLOCK OF BUSINESS - Schedule of Reconciliation of the Policyholder Dividend Obligation (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Movement in Closed Block Dividend Obligation [Roll Forward] | ||
Policyholder dividend obligation, beginning balance | $ 580 | $ 279 |
Applicable to net revenue (losses) | (8) | (21) |
Change in net unrealized gains (losses) - allocated to the policyholder dividend obligation | (166) | 216 |
Policyholder dividend obligation, ending balance | $ 406 | $ 474 |
MONY CLOSED BLOCK OF BUSINESS_3
MONY CLOSED BLOCK OF BUSINESS - Schedule of Closed Block Revenues and Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues | ||||
Premiums and other income | $ 35 | $ 36 | $ 102 | $ 109 |
Net investment income | 47 | 51 | 143 | 153 |
Net realized gains (losses) | 3 | (1) | 27 | (1) |
Total revenues | 85 | 86 | 272 | 261 |
Benefits and other deductions | ||||
Benefits and settlement expenses | 82 | 81 | 248 | 242 |
Other operating expenses | 0 | 0 | 1 | 1 |
Total benefits and other deductions | 82 | 81 | 249 | 243 |
Net revenues before income taxes | 3 | 5 | 23 | 18 |
Income tax expense | 1 | 1 | 5 | 3 |
Net revenues | $ 2 | $ 4 | $ 18 | $ 15 |
REINSURANCE - Additional Inform
REINSURANCE - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Reinsurance Retention Policy [Line Items] | |||
Reinsurance receivables, allowance for credit loss | $ 91 | $ 94 | |
Reinsurance recoverable, write-offs | 0 | $ 0 | |
Reinsurance recoveries | 0 | $ 0 | |
Gross reinsurance receivables | $ 4,600 | ||
Reinsurer Concentration Risk | Reinsurance Receivable | Ceded Credit Risk, Secured | |||
Reinsurance Retention Policy [Line Items] | |||
Concentration risk percentage | 12.00% | ||
Reinsurer Concentration Risk | AM Best Rating | Reinsurance Receivable | Ceded Credit Risk, Secured | |||
Reinsurance Retention Policy [Line Items] | |||
Concentration risk percentage | 92.00% | ||
Reinsurer Concentration Risk | AM Best, A+ Rating | Reinsurance Receivable | Ceded Credit Risk, Secured | |||
Reinsurance Retention Policy [Line Items] | |||
Concentration risk percentage | 56.00% | ||
Reinsurer Concentration Risk | AM Best, A Rating | Reinsurance Receivable | Ceded Credit Risk, Secured | |||
Reinsurance Retention Policy [Line Items] | |||
Concentration risk percentage | 19.00% | ||
Reinsurer Concentration Risk | AM Best, A- Rating | Reinsurance Receivable | Ceded Credit Risk, Secured | |||
Reinsurance Retention Policy [Line Items] | |||
Concentration risk percentage | 25.00% |
DEBT AND OTHER OBLIGATIONS - Ad
DEBT AND OTHER OBLIGATIONS - Additional Information (Details) - USD ($) | Oct. 01, 2020 | May 03, 2018 | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||
Initial collateral required (as a percent) | 102.00% | |||
Securities lending transactions | $ 160,000,000 | $ 57,000,000 | ||
Fair value of collateral | 166,000,000 | 59,000,000 | ||
Obligation to return collateral | 166,000,000 | 59,000,000 | ||
Repurchase Program Borrowings | ||||
Debt Instrument [Line Items] | ||||
Fair value of securities pledged under the repurchase program | 1,124,000,000 | 452,000,000 | ||
Secured financing liabilities | $ 1,104,000,000 | $ 437,000,000 | ||
Average borrowing rate (as a percent) | 0.12% | 0.15% | ||
Maximum outstanding balance | $ 1,289,000,000 | $ 825,000,000 | ||
Average daily balance | $ 537,000,000 | $ 143,000,000 | ||
Average borrowing rate (as a percent) | 0.12% | 0.33% | ||
Repurchase Program Borrowings | Maximum | ||||
Debt Instrument [Line Items] | ||||
Term of financing agreement | 90 days | |||
Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit, maximum borrowing capacity | $ 1,000,000,000 | |||
Line of credit, maximum borrowing capacity to be granted upon entity's request | $ 1,500,000,000 | |||
Facility fee percentage | 0.125% | |||
Credit Facility | Protective Life Corporation | ||||
Debt Instrument [Line Items] | ||||
Line of credit, amount outstanding | $ 305,000,000 | $ 190,000,000 | ||
Credit Facility | Federal Funds rate | ||||
Debt Instrument [Line Items] | ||||
Interest rate added to the base rate (as a percent) | 0.50% | |||
Credit Facility | One Month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate added to the base rate (as a percent) | 1.00% | |||
Financing Agreement With Golden Gate Captive Insurance Company | ||||
Debt Instrument [Line Items] | ||||
Financing capacity under the agreement | $ 5,000,000,000 | |||
XOL asset backing difference in statutory and economic reserve liabilities | $ 4,343,000,000 | |||
Financing Agreement With Golden Gate Captive Insurance Company | Minimum | ||||
Debt Instrument [Line Items] | ||||
Reserve funding agreement, term | 20 years | |||
Financing Agreement With Golden Gate Captive Insurance Company | Maximum | ||||
Debt Instrument [Line Items] | ||||
Reserve funding agreement, term | 25 years |
DEBT AND OTHER OBLIGATIONS - Am
DEBT AND OTHER OBLIGATIONS - Amount of Collateral Pledged for Repurchase Agreements, Grouped by Asset Class (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | $ 1,124 | $ 452 |
Securities lending transactions | 160 | 57 |
Total securities | 1,284 | 509 |
U.S. Treasury and agency securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 1,091 | 452 |
Corporate securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 33 | |
Securities lending transactions | 156 | 49 |
Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 1 | |
Fixed maturities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 7 | |
Redeemable preferred stocks | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 3 | 1 |
Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 1,124 | 366 |
Securities lending transactions | 160 | 57 |
Total securities | 1,284 | 423 |
Overnight and Continuous | U.S. Treasury and agency securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 1,091 | 366 |
Overnight and Continuous | Corporate securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 33 | |
Securities lending transactions | 156 | 49 |
Overnight and Continuous | Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 1 | |
Overnight and Continuous | Fixed maturities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 7 | |
Overnight and Continuous | Redeemable preferred stocks | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 3 | 1 |
Up to 30 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 86 |
Securities lending transactions | 0 | 0 |
Total securities | 0 | 86 |
Up to 30 days | U.S. Treasury and agency securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 86 |
Up to 30 days | Corporate securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | |
Securities lending transactions | 0 | 0 |
Up to 30 days | Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Up to 30 days | Fixed maturities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Up to 30 days | Redeemable preferred stocks | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | 0 |
30-90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Securities lending transactions | 0 | 0 |
Total securities | 0 | 0 |
30-90 days | U.S. Treasury and agency securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
30-90 days | Corporate securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | |
Securities lending transactions | 0 | 0 |
30-90 days | Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
30-90 days | Fixed maturities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
30-90 days | Redeemable preferred stocks | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | 0 |
Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Securities lending transactions | 0 | 0 |
Total securities | 0 | 0 |
Greater Than 90 days | U.S. Treasury and agency securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Greater Than 90 days | Corporate securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | |
Securities lending transactions | 0 | 0 |
Greater Than 90 days | Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Greater Than 90 days | Fixed maturities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Greater Than 90 days | Redeemable preferred stocks | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Administrative and marketing office space | Sep. 30, 2021 |
Minimum | |
Loss Contingencies [Line Items] | |
Operating lease term | 2 years |
Maximum | |
Loss Contingencies [Line Items] | |
Operating lease term | 25 years |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in AOCI by Component (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | $ 13,154 | $ 12,061 | $ 13,625 | $ 11,274 | $ 11,274 | |
Other comprehensive income (loss) on investments in net expected credit losses | (1) | 28 | (1) | 26 | ||
Ending balance | 12,933 | 12,731 | 12,933 | 12,731 | 13,625 | $ 11,274 |
Total Accumulated Other Comprehensive Income (Loss) | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 2,813 | 2,225 | 3,548 | 1,413 | 1,413 | |
Other comprehensive income (loss) before reclassifications | (265) | 483 | (966) | 1,263 | ||
Other comprehensive income (loss) on investments in net expected credit losses | (1) | 28 | (1) | 26 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (4) | 28 | (38) | 62 | ||
Ending balance | 2,543 | 2,764 | 2,543 | 2,764 | 3,548 | 1,413 |
Unrealized Gains and Losses on Investments | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 2,818 | 2,233 | 3,556 | 1,421 | 1,421 | |
Other comprehensive income (loss) before reclassifications | (263) | 482 | (967) | 1,264 | ||
Other comprehensive income (loss) on investments in net expected credit losses | (1) | 28 | (1) | 26 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (5) | 28 | (39) | 60 | ||
Ending balance | 2,549 | 2,771 | 2,549 | 2,771 | 3,556 | 1,421 |
Offset of net unrealized gains in AOCI due to impact those net unrealized losses would have on certain of the Company's insurance assets and liabilities had the net unrealized losses been recognized in net income | (1,700) | (1,600) | (2,000) | (777) | ||
Accumulated Gain and Loss Derivatives | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | (5) | (8) | (8) | (8) | (8) | |
Other comprehensive income (loss) before reclassifications | (2) | 1 | 1 | (1) | ||
Other comprehensive income (loss) on investments in net expected credit losses | 0 | 0 | 0 | |||
Amounts reclassified from accumulated other comprehensive income (loss) | 1 | 0 | 1 | 2 | ||
Ending balance | $ (6) | $ (7) | $ (6) | $ (7) | $ (8) | $ (8) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||||
Benefits and settlement expenses, net of reinsurance ceded | $ (1,350) | $ (1,259) | $ (3,748) | $ (3,737) |
Tax (expense) benefit | (10) | (29) | (74) | (31) |
Change in net expected credit losses - fixed maturities | 0 | (38) | 5 | (121) |
Net income | 49 | 131 | 313 | 144 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Gains and losses on derivative instruments | ||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||||
Benefits and settlement expenses, net of reinsurance ceded | 1 | 0 | 1 | (3) |
Tax (expense) benefit | 0 | 0 | 0 | 1 |
Net income | 1 | 0 | 1 | (2) |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized gains and losses on available-for-sale securities | ||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||||
Tax (expense) benefit | (1) | 7 | (10) | 16 |
Realized gains (losses) - investments | 5 | 3 | 44 | 45 |
Change in net expected credit losses - fixed maturities | 0 | (38) | 5 | (121) |
Net income | $ 4 | $ (28) | $ 39 | $ (60) |
OPERATING SEGMENTS - Schedule o
OPERATING SEGMENTS - Schedule of Operating Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Summarized financial information for the company's segments | |||||
Revenues | $ 1,652 | $ 1,724 | $ 4,874 | $ 4,633 | |
Pre-tax adjusted operating income (loss) | 3 | 81 | 231 | 271 | |
Non-operating income (loss) | 56 | 79 | 156 | (96) | |
Income before income tax | 59 | 160 | 387 | 175 | |
Income tax expense | (10) | (29) | (74) | (31) | |
Net income | 49 | 131 | 313 | 144 | |
Adjusted operating income tax expense | 1 | (13) | (41) | (52) | |
After-tax adjusted operating income (loss) | 4 | 68 | 190 | 219 | |
Income tax expense on adjustments | (11) | (16) | (33) | 21 | |
Non-operating income (loss) | |||||
Derivative gains (losses) | 51 | 88 | 50 | (152) | |
Investment gains (losses) | 16 | 23 | 111 | (72) | |
VA/VUL market impacts | (6) | 0 | 13 | 0 | |
Less: related amortization | 31 | 55 | 93 | (59) | |
Less: VA GLWB economic cost | (26) | (23) | (75) | (69) | |
Net investment income | 753 | 740 | 2,215 | 2,236 | |
Amortization of deferred policy acquisition costs and value of business acquired | 91 | 110 | 233 | 145 | |
Operating Segment Assets | |||||
Investments and other assets | 125,164 | 125,164 | $ 122,124 | ||
DAC and VOBA | 3,733 | 3,733 | 3,420 | ||
Other intangibles | 504 | 504 | 540 | ||
Goodwill | 826 | 826 | 826 | ||
Total assets | 130,227 | 130,227 | 126,910 | ||
Corporate and Other | |||||
Summarized financial information for the company's segments | |||||
Revenues | (9) | 49 | (13) | 80 | |
Pre-tax adjusted operating income (loss) | (26) | (35) | (120) | (108) | |
Non-operating income (loss) | |||||
Net investment income | (19) | 23 | (40) | 59 | |
Amortization of deferred policy acquisition costs and value of business acquired | 0 | 0 | 0 | 0 | |
Operating Segment Assets | |||||
Investments and other assets | 17,771 | 17,771 | 19,813 | ||
DAC and VOBA | 0 | 0 | 0 | ||
Other intangibles | 34 | 34 | 33 | ||
Goodwill | 0 | 0 | 0 | ||
Total assets | 17,805 | 17,805 | 19,846 | ||
Retail Life and Annuity | Operating Segments | |||||
Summarized financial information for the company's segments | |||||
Revenues | 740 | 757 | 2,125 | 1,808 | |
Pre-tax adjusted operating income (loss) | (85) | 23 | (63) | 47 | |
Non-operating income (loss) | |||||
Net investment income | 277 | 252 | 819 | 754 | |
Amortization of deferred policy acquisition costs and value of business acquired | 61 | 77 | 168 | 70 | |
Operating Segment Assets | |||||
Investments and other assets | 43,415 | 43,415 | 39,874 | ||
DAC and VOBA | 2,690 | 2,690 | 2,480 | ||
Other intangibles | 342 | 342 | 367 | ||
Goodwill | 559 | 559 | 559 | ||
Total assets | 47,006 | 47,006 | 43,280 | ||
Acquisitions | Operating Segments | |||||
Summarized financial information for the company's segments | |||||
Revenues | 749 | 802 | 2,282 | 2,399 | |
Pre-tax adjusted operating income (loss) | 42 | 65 | 255 | 238 | |
Non-operating income (loss) | |||||
Net investment income | 393 | 406 | 1,192 | 1,235 | |
Amortization of deferred policy acquisition costs and value of business acquired | 11 | 14 | 14 | 24 | |
Operating Segment Assets | |||||
Investments and other assets | 54,949 | 54,949 | 55,628 | ||
DAC and VOBA | 851 | 851 | 762 | ||
Other intangibles | 30 | 30 | 33 | ||
Goodwill | 24 | 24 | 24 | ||
Total assets | 55,854 | 55,854 | 56,447 | ||
Stable Value Products | Operating Segments | |||||
Summarized financial information for the company's segments | |||||
Revenues | 106 | 48 | 275 | 137 | |
Pre-tax adjusted operating income (loss) | 63 | 20 | 128 | 61 | |
Non-operating income (loss) | |||||
Net investment income | 97 | 54 | 228 | 169 | |
Amortization of deferred policy acquisition costs and value of business acquired | 2 | 1 | 4 | 3 | |
Operating Segment Assets | |||||
Investments and other assets | 8,101 | 8,101 | 5,928 | ||
DAC and VOBA | 16 | 16 | 8 | ||
Other intangibles | 6 | 6 | 6 | ||
Goodwill | 114 | 114 | 114 | ||
Total assets | 8,237 | 8,237 | 6,056 | ||
Asset Protection | Operating Segments | |||||
Summarized financial information for the company's segments | |||||
Revenues | 66 | 68 | 205 | 209 | |
Pre-tax adjusted operating income (loss) | 9 | 8 | 31 | 33 | |
Non-operating income (loss) | |||||
Net investment income | 5 | 5 | 16 | 19 | |
Amortization of deferred policy acquisition costs and value of business acquired | 17 | $ 18 | 47 | $ 48 | |
Operating Segment Assets | |||||
Investments and other assets | 928 | 928 | 881 | ||
DAC and VOBA | 176 | 176 | 170 | ||
Other intangibles | 92 | 92 | 101 | ||
Goodwill | 129 | 129 | 129 | ||
Total assets | $ 1,325 | $ 1,325 | $ 1,281 |