Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 14, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 5,000,000 | ||
Documents Incorporated by Reference | None | ||
Entity Central Index Key | 0000310826 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 185 |
Auditor Name | KPMG LLP |
Auditor Location | Birmingham, Alabama |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | |||||||||||
Gross premiums and policy fees | $ 1,047 | $ 1,054 | $ 1,026 | $ 1,095 | $ 1,053 | $ 1,045 | $ 1,009 | $ 896 | $ 4,222 | $ 4,003 | $ 4,056 |
Reinsurance ceded | (366) | (311) | (326) | (317) | (344) | (287) | (360) | (36) | (1,320) | (1,027) | (1,508) |
Net premiums and policy fees | 681 | 743 | 700 | 778 | 709 | 758 | 649 | 860 | 2,902 | 2,976 | 2,548 |
Net investment income | 767 | 753 | 742 | 720 | 653 | 740 | 742 | 754 | 2,982 | 2,889 | 2,825 |
Net gains (losses) - investments and derivatives | 150 | (235) | (59) | ||||||||
Other income | 102 | 89 | 100 | 88 | 184 | 115 | 111 | 128 | 379 | 538 | 417 |
Total revenues | 1,539 | 1,652 | 1,509 | 1,713 | 1,535 | 1,724 | 1,468 | 1,441 | 6,413 | 6,168 | 5,731 |
Benefits and expenses | |||||||||||
Benefits and settlement expenses, net of reinsurance ceded: (2021 - $1,423; 2020 - $883; 2019 - $1,244) | 4,924 | 4,901 | 4,256 | ||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 309 | 208 | 176 | ||||||||
Other operating expenses, net of reinsurance ceded: (2021 - $223; 2020 - $229; 2019 - $230) | 680 | 782 | 775 | ||||||||
Goodwill impairment | 129 | 0 | 0 | ||||||||
Total benefits and expenses | 1,555 | 1,593 | 1,308 | 1,586 | 1,433 | 1,564 | 1,294 | 1,600 | 6,042 | 5,891 | 5,207 |
Income (loss) before income tax | (16) | 59 | 201 | 127 | 102 | 160 | 174 | (159) | 371 | 277 | 524 |
Income tax expense (benefit) | |||||||||||
Current | 132 | 118 | 387 | ||||||||
Deferred | (46) | (75) | (290) | ||||||||
Total income tax expense | 12 | 10 | 39 | 25 | 12 | 29 | 32 | (30) | 86 | 43 | 97 |
Net income (loss) | $ (28) | $ 49 | $ 162 | $ 102 | $ 90 | $ 131 | $ 142 | $ (129) | $ 285 | $ 234 | $ 427 |
CONSOLIDATED STATEMENTS OF IN_2
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Benefits and settlement expenses, reinsurance ceded | $ 1,423 | $ 883 | $ 1,244 |
Other operating expenses, reinsurance ceded | $ 223 | $ 229 | $ 230 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 285 | $ 234 | $ 427 |
Other comprehensive income (loss): | |||
Change in net unrealized gains (losses) on investments, net of income tax: (2021 - $(294); 2020 - $544; 2019 - $756) | (1,105) | 2,048 | 2,844 |
Reclassification adjustment for investment amounts included in net income, net of income tax: (2021 - $(11); 2020 - $17; 2019 - $(3)) | (41) | 63 | (11) |
Change in net unrealized gains (losses) for which a credit loss has been recognized in net income, net of income tax: (2021 - $—; 2020 - $6) | (1) | 24 | |
Other Comprehensive Income Unrealized Gain (Loss) on Other than Temporary Impaired Investments Arising During Period, Net of Tax | (4) | ||
Change in accumulated (loss) gain - derivatives, net of income tax: (2021 - $—; 2020 - $(1); 2019 - $(3)) | 0 | (2) | (10) |
Reclassification adjustment for derivative amounts included in net income, net of income tax: (2021 - $—; 2020 - $1; 2019 - $—) | 1 | 2 | 2 |
Total other comprehensive income (loss) | (1,146) | 2,135 | 2,821 |
Total comprehensive income (loss) | $ (861) | $ 2,369 | $ 3,248 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Change in net unrealized gains (losses) on investments, income tax | $ (294) | $ 544 | $ 756 |
Reclassification adjustment for investment amounts included in net income, income tax | (11) | 17 | (3) |
Change in net unrealized gains (losses) on securities with credit losses, tax | 0 | 6 | |
Change in net unrealized (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | (1) | ||
Change in accumulated (loss) gain - derivatives, income tax | 0 | (1) | (3) |
Reclassification adjustment for derivative amounts included in net income, income tax | $ 0 | $ 1 | $ 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Fixed maturities, at fair value (amortized cost: 2021 - $68,055; 2020 - $65,696; allowance for credit losses: 2021 - $1; 2020 - $23) | $ 73,048 | $ 72,595 |
Equity securities, at fair value (cost: 2021 - $804; 2020 - $635) | 828 | 667 |
Commercial mortgage loans, net of allowance for credit losses (2021 - $103; 2020 - $222) | 10,863 | 10,006 |
Policy loans | 1,527 | 1,593 |
Other long-term investments | 3,646 | 3,251 |
Short-term investments | 862 | 462 |
Total investments | 90,774 | 88,574 |
Cash | 390 | 656 |
Accrued investment income | 704 | 707 |
Accounts and premiums receivable | 121 | 127 |
Reinsurance receivables, net of allowance for credit losses (2021 - $92; 2020 - $94) | 4,543 | 4,596 |
Deferred policy acquisition costs and value of business acquired | 3,869 | 3,420 |
Goodwill | 697 | 826 |
Other intangibles, net of accumulated amortization (2021 - $368; 2020 - $312) | 491 | 540 |
Property and equipment, net of accumulated depreciation (2021 - $79; 2020 - $61) | 203 | 204 |
Other assets | 267 | 271 |
Assets related to separate accounts | ||
Variable annuity | 13,648 | 12,378 |
Variable universal life | 1,982 | 1,286 |
Reinsurance assumed | 13,883 | 13,325 |
Total assets | 131,572 | 126,910 |
Liabilities | ||
Future policy benefits and claims | 54,064 | 54,107 |
Unearned premiums | 845 | 782 |
Total policy liabilities and accruals | 54,909 | 54,889 |
Stable value product account balances | 8,526 | 6,056 |
Annuity account balances | 15,846 | 15,478 |
Other policyholders’ funds | 1,820 | 1,865 |
Other liabilities | 5,084 | 5,623 |
Deferred income taxes | 1,428 | 1,779 |
Subordinated debt | 110 | 110 |
Secured financing liabilities | 1,572 | 496 |
Liabilities related to separate accounts | ||
Variable annuity | 13,648 | 12,378 |
Variable universal life | 1,982 | 1,286 |
Reinsurance assumed | 13,883 | 13,325 |
Total liabilities | 118,808 | 113,285 |
Commitments and contingencies - Note 15 | ||
Shareowner’s equity | ||
Preferred Stock; $1 par value, shares authorized: 2; Liquidation preference: $2 | 0 | 0 |
Common Stock, $1 par value, shares authorized and issued: 2021 and 2020 - 5,000 | 5 | 5 |
Additional paid-in-capital | 8,525 | 8,525 |
Retained earnings | 1,832 | 1,547 |
Accumulated other comprehensive income (loss): | ||
Net unrealized gains (losses) on investments, net of income tax: (2021 - $641; 2020 - $946) | 2,412 | 3,558 |
Net unrealized losses on investments for which a credit loss has been recognized in earnings, net of income tax: (2021 - $(1); 2020 - $(1)) | (3) | (2) |
Accumulated loss - derivatives, net of income tax: (2021 - $(2); 2020 - $(2)) | (7) | (8) |
Total shareowner’s equity | 12,764 | 13,625 |
Total liabilities and shareowner’s equity | $ 131,572 | $ 126,910 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, amortized cost | $ 68,055 | $ 65,696 |
Fixed maturities, allowance for credit losses | 1 | 23 |
Equity securities, cost | 804 | 635 |
Commercial mortgage loans, allowance for credit losses | 103 | 222 |
Reinsurance allowance, allowance for credit loss | 92 | 94 |
Other intangibles, accumulated amortization | 368 | 312 |
Property and equipment, accumulated depreciation | $ 79 | $ 61 |
Preferred stock, par value (in dollars per share) | $ 1,000,000 | $ 1,000,000 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, Liquidation preference | $ 2 | $ 2 |
Common stock, par value (in dollars per share) | $ 1,000,000 | $ 1,000,000 |
Common stock, shares authorized (in shares) | 5,000,000,000 | 5,000,000,000 |
Common stock, shares issued (in shares) | 5,000,000,000 | 5,000,000,000 |
Net unrealized gains (losses) on investments, income tax | $ 641 | $ 946 |
Net unrealized losses on investments with credit losses, tax | (1) | (1) |
Accumulated loss - derivatives, income tax | $ (2) | $ (2) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREOWNER'S EQUITY - USD ($) $ in Thousands | 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, 2018 | $ 7,226,000 | $ (50,000) | $ 0 | $ 5,000 | $ 7,555,000 | $ 1,074,000 | $ (50,000) | $ (1,408,000) |
Increase (decrease) in shareowner's equity | ||||||||
Net income | 427,000 | 427,000 | ||||||
Other comprehensive income (loss) | 2,821,000 | 2,821,000 | ||||||
Comprehensive income | 3,248,000 | |||||||
Capital contributions from parent | 850,000 | 850,000 | ||||||
Ending balance at Dec. 31, 2019 | 11,274,000 | $ (138,000) | 0 | 5,000 | 8,405,000 | 1,451,000 | $ (138,000) | 1,413,000 |
Increase (decrease) in shareowner's equity | ||||||||
Net income | 234,000 | 234,000 | ||||||
Other comprehensive income (loss) | 2,135,000 | 2,135,000 | ||||||
Comprehensive income | 2,369,000 | |||||||
Capital contributions from parent | 120,000 | 120,000 | ||||||
Ending balance at Dec. 31, 2020 | 13,625,000 | 0 | 5,000 | 8,525,000 | 1,547,000 | 3,548,000 | ||
Increase (decrease) in shareowner's equity | ||||||||
Net income | 285,000 | 285,000 | ||||||
Other comprehensive income (loss) | (1,146,000) | (1,146,000) | ||||||
Comprehensive income | (861,000) | |||||||
Ending balance at Dec. 31, 2021 | $ 12,764,000 | $ 0 | $ 5,000 | $ 8,525,000 | $ 1,832,000 | $ 2,402,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||
Net income | $ 285 | $ 234 | $ 427 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Net losses (gains) - investments and derivatives | (150) | 235 | 59 |
Amortization of deferred acquisition costs and value of business acquired | 309 | 208 | 176 |
Capitalization of deferred acquisition costs | (550) | (459) | (408) |
Depreciation and amortization expense | 77 | 79 | 74 |
Deferred income tax | (46) | (75) | (290) |
Accrued income tax | (86) | 35 | 7 |
Interest credited to universal life and investment products | 1,520 | 1,593 | 1,343 |
Goodwill impairment | 129 | 0 | 0 |
Trading securities purchases, sales, and maturities, net | 10 | (139) | 97 |
Other, net | (33) | 0 | 0 |
Change in: | |||
Policy fees assessed on universal life and investment products | (1,834) | (1,798) | (1,729) |
Reinsurance receivables | 52 | 135 | 115 |
Accrued investment income and other receivables | (12) | 34 | (3) |
Policy liabilities and other policyholders’ funds of traditional life and health products | (487) | (1,076) | (544) |
Amortization of premiums and accretion of discounts on investments and commercial mortgage loans | 245 | 382 | 319 |
Other liabilities | 39 | 648 | 347 |
Other, net | (22) | 19 | 188 |
Net cash (used in) provided by operating activities | (554) | 55 | 178 |
Cash flows from investing activities | |||
Maturities and principal reductions of investments, available-for-sale | 5,859 | 5,281 | 1,983 |
Sale of investments, available-for-sale | 3,106 | 6,248 | 4,246 |
Cost of investments acquired, available-for-sale | (11,749) | (13,902) | (6,427) |
Commercial mortgage loans: | |||
New loan originations | (2,182) | (1,611) | (1,323) |
Repayments | 1,415 | 749 | 1,017 |
Change in investment real estate, net | 0 | 0 | (3) |
Change in policy loans, net | 66 | 82 | 65 |
Change in other long-term investments, net | (323) | 132 | (36) |
Purchase of other long-term investments | (500) | 0 | 0 |
Change in short-term investments, net | (393) | 870 | (611) |
Net unsettled security transactions | 86 | 141 | (185) |
Purchase of property, equipment, and intangibles | (29) | (29) | (33) |
Payment for business acquisitions, net of cash acquired | 0 | 0 | (816) |
Net cash used in investing activities | (4,644) | (2,039) | (2,123) |
Cash flows from financing activities | |||
Issuance (repayment) of non-recourse funding obligations | 0 | (330) | 0 |
Secured financing liabilities | 1,076 | 160 | |
Secured financing liabilities | (160) | ||
Capital contributions from PLC | 0 | 120 | 850 |
Deposits to universal life and investments contracts | 7,830 | 6,627 | 5,184 |
Withdrawals from universal life and investment contracts | (3,924) | (4,147) | (3,866) |
Other financing activities, net | (50) | (3) | (1) |
Net cash provided by financing activities | 4,932 | 2,427 | 2,007 |
Change in cash | (266) | 443 | 62 |
Cash at beginning of period | 656 | 213 | 151 |
Cash at end of period | $ 390 | $ 656 | $ 213 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 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 organized under the laws of Japan (“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 financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such accounting principles differ from statutory reporting practices used by insurance companies in reporting to state regulatory authorities (see also Note 21, Statutory Reporting Practices and Other Regulatory Matters ). 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. During 2020, the Company identified $63 million of certain reclassifications needed to appropriately present amounts related to reinsured vehicle service contracts. Also during 2020, the Company identified $195 million of certain cash flows presented in its investing and financing activities that were determined to be non-cash items. The Company determined that the reclassifications were not material to the financial statements for any period. These amounts have been corrected in the consolidated balance sheets, statements of income, and statements of cash flows for the year ended December 31, 2020 and 2019. 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, 2019. The following table presents the changes as a result of the merger of the entity under common control to previously reported amounts in the audited consolidated statements of operations for the years ended December 31, 2020 and 2019 included in the Company’s annual report on Form 10-K for the year ended December 31, 2020. For The Year Ended December 31, 2020 As Reported Common Control Total (Recast) (In Millions) Net income $ 342 $ (108) $ 234 Total comprehensive income $ 2,471 $ (102) $ 2,369 For The Year Ended December 31, 2019 Net income $ 553 $ (126) $ 427 Total comprehensive income $ 3,365 $ (117) $ 3,248 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. Certain impacts from COVID-19 continued into 2021, including increased claims in both the life insurance and annuity blocks. In addition, the Asset Protection segment had a reduction in sales in the second half of 2021 due to supply chain issues. 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include those used in determining deferred policy acquisition costs (“DAC”) and related amortization periods, goodwill recoverability, value of business acquired (“VOBA”), certain investments and certain derivatives fair values, the allowance for credit losses, other-than-temporary impairments, future policy benefits, pension and other postretirement benefits, provisions for income taxes, reserves for contingent liabilities, reinsurance risk transfer assessments, and reserves for losses in connection with unresolved legal matters. Further, certain estimates and assumptions include the direct and indirect impact of the COVID-19 pandemic on the Company’s business, financial condition and results of operations. The economic impact of the pandemic on the Company’s business depends on its severity and duration, which in turn depend on highly uncertain factors such as the nature and extent of containment efforts and the timing and efficacy of vaccines. The high level of uncertainty regarding this economic impact means that management’s estimates and assumptions, specifically those related to investments and certain derivatives fair values, the allowance for credit losses, and future policy benefits are subject to change – perhaps substantial change – as the situation develops and new information becomes available. Significant Accounting Policies Income Statement Net Investment Income Investment income is recognized when earned, net of applicable management or other fees. Investment income on fixed maturity securities includes coupon interest, amortization of any premium and accretion of any discount. Investment income on equity securities includes dividend income and preferred coupons interest. Investment income on commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”), and other asset-backed securities is initially based upon yield, cash flow and prepayment assumptions at the date of purchase. Subsequent revisions in those assumptions are recorded using the retrospective or prospective method. Under the retrospective method used primarily for mortgage-backed and asset-backed securities of high credit quality which cannot be contractually prepaid in such a manner that we would not recover a substantial portion of the initial investment, amortized cost of the security is adjusted to the amount that would have existed had the revised assumptions been in place at the date of purchase. The adjustments to amortized cost are recorded as a charge or credit to net investment income. Under the prospective method, which is used for all other mortgage-backed and asset-backed securities, future cash flows are estimated and interest income is recognized going forward using the new internal rate of return. Net gains (losses) - investments and derivatives Net gains (losses) - investments and derivatives includes realized gains and losses from the sale of investments, which are calculated on the basis of specific identification on the trade date. It also includes gains and losses associated with the fair value changes of equity securities and net credit losses. In addition, it includes the gains and losses on free-standing and embedded derivatives. Other Income Other income consists primarily of advisory and administration service fees assessed on investment contract holder account values, marketing and distribution fees, rider charges associated with guaranteed benefits, distribution company revenues and other fees. In addition, any gains related to final settlements related to its acquisitions are included in other income. Balance Sheet Valuation of Investment Securities The Company determines the appropriate classification of investment securities at the time of purchase and periodically re-evaluates such designations. Investment securities are classified as either trading, available-for-sale, or held-to-maturity securities. Investment securities classified as trading are recorded at fair value with changes in fair value recorded in net gains (losses) - investments and derivatives . Investment securities purchased for long term investment purposes are classified as available-for-sale and are recorded at fair value with changes in unrealized gains and losses, net of taxes, reported as a component of other comprehensive income (loss). Investment securities are classified as held-to-maturity when the Company has the intent and ability to hold the securities to maturity and are reported at amortized cost. Interest income on available-for-sale and held-to-maturity securities includes the amortization of premiums and accretion of discounts and are recorded in investment income. As of December 31, 2020, the Company no longer held any held-to-maturity securities. The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a “waterfall” approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information as outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations. Where multiple broker quotes are obtained, the Company reviews the quotes and selects the quote that provides the best estimate of the price a market participant would pay for these specific assets in an arm's length transaction. A pricing matrix is used to price securities for which the Company is unable to obtain or effectively rely on either a price from a third party service or an independent broker quotation. Included in the pricing of other asset-backed securities, collateralized mortgage obligations (“CMOs”), and mortgage-backed securities (“MBS”) are estimates of the rate of future prepayments of principal and underlying collateral support over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and rates of prepayments previously experienced at the interest rate levels projected for the underlying collateral. The basis for the cost of securities sold was determined at the Committee on Uniform Securities Identification Procedures (“CUSIP”) level on a first in first out basis. The committee supplies a unique nine-character identification, called a CUSIP number, for each class of security approved for trading in the U.S., to facilitate clearing and settlement. These numbers are used when any buy and sell orders are recorded. Allowance for Credit Losses – Fixed Maturity and Structured Investments Each quarter the Company reviews investments with unrealized losses to determine whether such impairments are the result of credit losses. The Company analyzes various factors to make such determination including, but are not limited to: 1) actions taken by rating agencies, 2) default by the issuer, 3) the significance of the decline, 4) an assessment of the Company’s intent to sell the security (including a more likely than not assessment of whether the Company will be required to sell the security) before recovering the security’s amortized cost, 5) an economic analysis of the issuer’s industry, and 6) the financial strength, liquidity, and recoverability of the issuer. Management performs a security by security review each quarter to evaluate whether a credit loss has occurred. For securities which the Company does not intend to sell and does not expect to be required to sell before recovering the security’s amortized cost basis, analysis of expected cash flows is used to measure the amount of the credit loss. To the extent the amortized cost basis of the security exceeds the present value of future cash flows expected to be collected, this difference represents a credit loss. Credit losses are recorded in net gains (losses) - investments and derivatives with a corresponding adjustment to the allowance for credit losses, except that the credit loss recognized cannot exceed the difference between the book value and fair value of the security as of the date of the analysis. In future periods, recoveries in the present value of expected cash flows are recorded as a reversal of the previously recognized allowance for credit losses with an offsetting adjustment to net gains (losses) - investments and derivatives . The Company considers contractual cash flows and all known market data related to cash flows when developing its estimates of expected cash flows. The Company uses the effective interest rate implicit in the security at the date of acquisition to discount expected cash flows. For floating rate securities, the Company’s policy is to lock in the interest rate at the first instance of an impairment. Estimates of expected cash flows are not probability-weighted but reflect the Company’s best estimate based on past events, current conditions, and reasonable and supportable forecasts of future events. Debt securities that the Company intends to sell or expects to be required to sell before recovery are written down to fair value with the change recognized in net gains (losses) - investments and derivatives . The Company presents accrued interest receivable separately from other components of the amortized cost basis of its fixed maturity and structured investments and has made an accounting policy election not to measure an allowance for credit losses for accrued interest receivable. The Company’s policy is to write off uncollectible accrued interest receivables through a reversal of interest income in the period in which a credit loss is identified. Prior to January 1, 2020, the Company calculated a valuation allowance based on the analysis of specific loans that were believed to have a higher risk of credit impairment consistent with the applicable guidance for loan impairments in ASC Subtopic 310. Due to the Company’s loss experience and nature of the loan portfolio, the Company believed that a collectively evaluated allowance would be inappropriate. Since the Company used the specific identification method for calculating the allowance, it was necessary to review the economic situation of each borrower to determine those that had higher risk of credit impairment. The Company has a team of professionals that monitors borrower conditions such as payment practices, borrower credit, operating performance, and property conditions, as well as ensuring the timely payment of property taxes and insurance. Through this monitoring process, the Company assessed the risk of each loan. When issues were identified, the severity of the issues was assessed and reviewed for possible credit impairment. If a loss was deemed probable, an expected loss calculation was performed and an allowance was established for that loan based on the expected loss. The expected loss was calculated as the excess carrying value of a loan over either the present value of expected future cash flows discounted at the loan’s original effective interest rate, or the current estimated fair value of the loan’s underlying collateral. A loan could be subsequently charged off at such point that the Company no longer expected to receive cash payments, the present value of future expected payments of the renegotiated loan was less than the current principal balance, or at such time that the Company was party to foreclosure or bankruptcy proceedings associated with the borrower and did not expect to recover the principal balance of the loan. Corporate-Owned Life Insurance The Company has purchased corporate-owned life insurance (“COLI”) on the lives of certain employees. COLI is carried at the cash surrender value of the policies, which is based upon the underlying fair value of the portfolio of assets. Changes in the cash surrender value are reported currently in earnings. COLI is included in other long-term investments on the Company’s balance sheet and the cash surrender value was $710 million and $179 million as of December 31, 2021 and 2020, respectively. Derivative Financial Instruments The Company records its derivative financial instruments at fair value in the consolidated balance sheet in other long-term investments and other liabilities. The Company designates derivatives as either a cash flow hedge which hedges the variability of cash flows specific to a recognized asset or liability or forecasted transaction; a fair value hedge, which hedges the fair value of a recognized asset or liability or unrecognized firm commitment; or a derivative that does not qualify for hedge accounting. The Company assesses the effectiveness of a hedge at its inception and subsequently on a quarterly basis. For cash flow hedges, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged item impacts earnings. For fair value hedges, their gain or loss as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in net gains (losses) - investments and derivatives . The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship in net gains (losses) - investments and derivatives . For additional information, refer to Note 6, Derivative Financial Instruments . Commercial Mortgage Loans 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 (“ACL”). 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 . Allowance for Credit Losses – Commercial Mortgage Loans and Unfunded Commitments Effective January 1, 2020, the ACL represents the Company’s best estimate of expected credit losses over the contractual term of the loans. The allowance for credit losses for unfunded loan commitments is recognized as a component of other liabilities on the consolidated condensed balance sheet. Changes in the allowance for credit losses for both funded and unfunded commercial mortgage loans are recognized in net gains (losses) - investments and derivatives . Prior to January 1, 2020, the Company calculated a valuation allowance based on the analysis of specific loans that were believed to have a higher risk of credit impairment consistent with the applicable guidance for loan impairments in ASC Subtopic 310. The Company uses a loan-level probability of default (“PD”) and loss given default (“LGD”) model to calculate the allowance for credit losses for substantially all of its commercial mortgage loans and unfunded loan commitments. Guidance in FASB ASC Topic 326-20 - Credit Losses requires collective assessment of financial assets with similar risk characteristics. Consistent with this guidance, the model used by the Company (the “CML Model”) incorporates historical default data for a large number of loans with similar characteristics to the Company’s commercial mortgage loans in the measurement of the allowance for credit losses. Relevant risk characteristics include debt service coverage ratio (“DSCR”), loan-to-value ratio (“LTV”), geographic location, and property type. This historical default data is applied through the CML Model to forecast loan-level risk parameters including PD and LGD which provide the basis for the determination of expected losses. The CML Model incorporates both current conditions and reasonable and supportable forecasts when estimating the PD and LGD values that are used as the basis for calculating expected losses. Current conditions are incorporated by considering market-specific information, such as vacancy rates and property prices, to reflect the current position in the market cycle. To incorporate reasonable and supportable forecasts, loan-level risk parameters produced by the CML Model are conditioned by multiple probability-weighted macroeconomic forecast scenarios. CML Model results are also subject to adjustments based on other qualitative considerations to reflect management’s best estimate of the impact of future events and circumstances on the ACL. PDs and LGDs are forecasted over a reasonable and supportable forecast period, which is reassessed on a quarterly basis. After the reasonable and supportable forecast period, the CML Model reverts to the Company’s own historical loss history at a portfolio segment level. The historical loss data used for reversion will be assessed annually in the third quarter, along with certain other model inputs and assumptions. All or a portion of a loan may be written off at such point that a) the Company no longer expects to receive cash payments, b) the present value of future expected payments of a renegotiated loan is less than the current principal balance, or c) at such time that the Company is party to foreclosure or bankruptcy proceedings associated with the borrower and does not expect to recover the principal balance of the loan. A write-off is recorded by eliminating the allowance against the commercial mortgage loan and recording the renegotiated loan or the collateral property related to the loan as investment real estate on the balance sheet, which is carried at the lower of the appraised fair value of the property or the unpaid principal balance of the loan, less estimated selling costs associated with the property. Certain loans which meet the definition of collateral dependent are identified as part of the Company’s ongoing loan surveillance process. Loans are considered to be collateral dependent if foreclosure is deemed probable, or if a borrower is in financial difficulty and repayment is expected to be provided substantially through the operation or sale of the underlying collateral. The ACL for loans identified as collateral dependent is measured based on the fair value of the underlying collateral, less costs to sell. The Company presents accrued interest receivable separately from other components of the amortized cost basis of its commercial mortgage loans and has made an accounting policy election not to measure an allowance for credit losses for accrued interest receivable. It is the Company’s policy to cease to carry accrued interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. In each scenario, accrued income is reversed through investment income. Refer to Note 8, Commercial Mortgage Loans , for additional information. Short-term Investments Short-term investments primarily consist of highly liquid securities and other investments with remaining maturities of one year or less, but greater than three months, at the time of purchase. These securities and investments are generally carried at fair value or amortized cost that approximates fair value. Cash Cash includes all demand deposits reduced by the amount of outstanding checks and drafts. As a result of the Company’s cash management system, checks issued from a particular bank but not yet presented for payment may create negative book cash balances with the bank at certain reporting dates. Such negative balances are included in other liabilities and were $178 million and $185 million as of December 31, 2021 and 2020, respectively. The Company has deposits with certain financial institutions which exceed federally insured limits. The Company has reviewed the creditworthiness of these financial institutions and believes there is minimal risk of a material loss. Policy Loans Policy loans are stated at unpaid principal balances. Interest income is recorded as earned using the contractual interest rate. Generally, accrued interest is capitalized on the policy’s anniversary date. Any unpaid principal and accrued interest is deducted from the cash surrender value or the death benefit prior to settlement of the insurance policy. Deferred Policy Acquisition Costs (“DAC”) The incremental direct costs associated with successfully acquired insurance policies are deferred to the extent such costs are deemed recoverable from future profits. Such costs include commissions, costs of policy issuance and underwriting and certain other costs that are directly related to the successful acquisition of traditional life and health insurance, credit insurance, universal life insurance, and investment products. DAC is subject to recoverability testing at the end of each accounting period. Traditional life and health insurance acquisition costs are amortized over the premium-payment period of the related policies in proportion to the ratio of annual premium income to the present value of the total anticipated premium income. Credit insurance acquisition costs are being amortized in proportion to earned premium. Acquisition costs for universal life and investment products are amortized over the lives of the policies in relation to the present value of estimated gross profits before amortization. Acquisition costs for stable value contracts are amortized over the term of the contracts using the effective yield method. The Company makes certain assumptions regarding the mortality, persistency, expenses, and interest rates (equal to the rate used to compute liabilities for future policy benefits, currently 1.00% to 7.86%) the Company expects to experience in future periods when determining the present value of estimated gross profits (“EGPs”). These assumptions are best estimates and are periodically updated whenever actual experience and/or expectations for the future change from that assumed. Additionally, DAC is also impacted by unrealized investment gains (losses) which would have been recognized if such gains and losses had been realized. The Company includes the impact of these credits or charges, net of tax, in accumulated other comprehensive income (“AOCI”). Value of Businesses Acquired (“VOBA”) In conjunction with the Merger and the acquisition of insurance policies or investment contracts, a portion of the purchase price is allocated to the right to receive future gross profits from cash flows and earnings of associated insurance policies and investment contracts. This intangible asset, called VOBA, is based on the actuarially estimated present value of future cash flows from associated insurance policies and investment contracts acquired. The estimated present value of future cash flows used in the calculation of the VOBA is based on certain assumptions, including mortality, persistency, expenses, and interest rates that the Company believes to be those of a market participant. The Company amortizes VOBA in proportion to gross premiums for traditional life products, or estimated gross margins (“EGMs”) for participating traditional life products within the MONY Life Insurance Company (“MONY”) block. For interest sensitive products, the Company uses various amortization bases including EGPs, revenues, account values, or insurance in-force. VOBA is subject to annual recoverability testing. Included within the deferred policy acquisition costs and value of business acquired line of the Company’s consolidated balance sheets are amounts related to certain contracts or blocks of business that have negative VOBA. These amounts are presented on a net basis with positive VOBA amounts within this line on the Company’s consolidated balance sheets. Negative VOBA is amortized over the life of the related policies based on the amount of insurance in-force (for life insurance) or account values (for annuities). Such amortization is recorded in the amortization of deferred policy acquisition costs and value of business acquired line of the Company’s consolidated statements of income on a net basis with any positive VOBA amortization. Other Intangible Assets Other intangible assets with definite lives are amortized over the estimated useful life of the asset and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Amortizable intangible assets primarily consist of distribution relationships, trade names, technology, and software. Intangible assets with indefinite lives, primarily insurance licenses, are not amortized, but are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Software is generally amortized over a three Other intangible assets recognized by the Company included the following: As of December 31, Estimated 2021 2020 Useful Life (Dollars In Millions) (In Years) Distribution relationships $ 314 $ 340 14-22 Trade names 58 65 13-17 Technology 56 71 7-14 Other 31 32 Total intangible assets subject to amortization 459 508 Insurance licenses 32 32 Indefinite Total other intangible assets $ 491 $ 540 Other identified intangible assets were valued using the excess earnings method, relief from royalty method or cost approach, as appropriate. Amortizable intangible assets will be amortized straight line over their assigned useful lives. The following is a schedule of future estimated aggregate amortization expense: Year Amount (Dollars In Millions) 2022 $ 54 2023 51 2024 48 2025 43 2026 43 Property and Equipment The Company depreciates its assets using the straight-line method over the estimated useful lives of the assets. The Company’s home office is depreciated over twenty-five years, furniture is depreciated over a ten year useful life, office equipment and machines are depreciated over a five year useful life, and computers are depreciated over a four year useful life. Land is not depreciated. Major repairs or improvements ar e capitalized and depreciated over the estimated useful lives of the assets. Other repairs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or retired are removed from the accounts, and resulting gains or losses are included in income. Leases are recorded on the balance sheet as right-of-use assets and liabilities within property and equipment and other liabilities , respectively. Property and equipment consisted of the following: As of December 31, 2021 2020 (Dollars In Millions) Home office building $ 160 $ 159 Data processing equipment 39 36 Capital leases 36 25 Other, principally furniture and equipment 22 20 Total property and equipment subject to depreciation 257 240 Accumulated depreciation (79) (61) Land 25 25 Total property and equipment $ 203 $ 204 Separate Accounts The separate account assets represent funds for which the Company does not bear the investment risk. These assets are carried at fair value and are equal to the separate account liabilities, which represent the policyholder’s equity in those assets. The investment income and investment gains and losses on the separate account assets accrue directly to the policyholder. These amounts are reported separately as assets and liabilities related to separate accounts in the accompanying consolidated financial statements. Amounts assessed against policy account balances for the costs of insurance, policy administration, and other services are included in premiums and policy fees in the accompanying consolidated statements of income. Fees are generally based on the daily net assets of the policyholder’s account value and recognized as revenue when assessed. Assets and liabilities related to separate accounts include balances related to separate accounts assumed through reinsurance. These balances relate to variable annuity and variable life policies that we have reinsured on a modified coinsurance basis. Stable Value Product Account Balances The Stable Value Products segment sells fixed and floating rate funding agreements directly to qualified institutional investors. The segment also issues funding agreements to the Federal Home Loan Bank (“FHLB”), and markets guaranteed investment contracts (“GICs”) to 401(k) and other qualified retirement savings plans. GICs are contracts which specify a return on deposits for a specified period and often provide flexibility for withdrawals at book value in keeping with the benefits provided by the plan. The Company records its stable value contract liabilities in the consolidated balance sheets in stable value product account balances at the deposit amount plus accrued interest, adjusted for any unamortized premium or discount. Interest on the contracts is accrued based upon contract terms. Any premium or discount is amortized using the effective yield method. The segment’s products complement the Company’s overall asset/liability management in that the terms may be tailored to the needs of the Company as the seller of the contracts. Stable value product account balances include GICs and funding agreements the Company has issued. As of December 31, 2021 and 2020, the Company had $6,573 million and $4,032 million, respectively, of stable value product account balances marketed through structured programs. Most GICs and funding agreements the Company has written have maturities of one As of December 31, 2021, future maturities of stable value products were as follows: Year of Maturity Amount (Dollars In Millions) 2022 $ 2,559 2023 - 2024 3,551 2025 - 2026 1,347 Thereafter 1,069 Insurance Liabilities and Reserves Establishing an adequate liability for the Company’s obligations to policyholders requires the use of certain assumptions. Estimating liabilities for future policy benefits on life and health insurance products requires the use of assumptions relative to future investment yields, mortality, morbidity, persistency, and other assumptions based on the Company’s historical experience, modified as necessary to reflect anticipated trends and to include provisions for possible adverse deviation. Determining liabilities for the Company’s property and casualty insurance products also requires the use of assumptions, including the projected levels of used vehicle prices, the frequency and severity of claims, and the effectiveness of internal processes designed to reduce the level of claims. The Company’s results depend significantly upon the extent to which its actual claims experience is consistent with the assumptions the Company used in determining its reserves and pricing its products. The Company’s reserve assumptions and estimates require significant judgment and, therefore, are inherently uncertain. The Company cannot determine with precision the ultimate amounts that it will pay for actual claims or the timing of those payments. Guaranteed Living Withdrawal Benefits The Company also establishes reserves for guaranteed living withdrawal benefits (“GLWB”) on its variable annuity (“VA”) products. The GLWB is valued in accordance with FASB guidance under the ASC Derivatives and Hedging Topic which utili |
SIGNIFICANT TRANSACTIONS
SIGNIFICANT TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
SIGNIFICANT TRANSACTIONS | SIGNIFICANT TRANSACTIONS Captive Merger On October 1, 2020, as part of a corporate initiative to consolidate and simplify PLC’s reserve financing structures and reduce related financial and operational costs, Golden Gate II Captive Insurance Company (“Golden Gate II”), Golden Gate III Vermont Captive Insurance Company (“Golden Gate III”), Golden Gate IV Vermont Captive Insurance Company (“Golden Gate IV”), and Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”), all of which are wholly owned captive insurance company subsidiaries of the Company (collectively the “Captives”) merged with and into (the “Captive Merger”) Golden Gate Captive Insurance Company (“Golden Gate”), a Vermont special purpose financial insurance company and a wholly owned subsidiary of the Company. In conjunction with the Captive Merger, Golden Gate and Steel City, LLC (“Steel City”), a wholly owned subsidiary of PLC, terminated the financing facility into which Golden Gate and Steel City had entered in 2016. This termination included redeeming the fixed maturity securities issued by Steel City to Golden Gate and the non-recourse funding obligation issued by Golden Gate to Steel City. This non cash transaction resulted in a reduction to the carrying value of fixed maturities, at amortized cost on the balance sheet as well as a reduction to the carrying value of non-recourse funding obligations on the balance sheet of $1,858 million. These redemptions did not have an impact on income before taxes. Refer to Note 4, Investment Operations and Note 14, Debt and Other Obligations , for additional detail around the impacted balances. In conjunction with the Captive Merger, Golden Gate II redeemed the full outstanding principal amount of floating rate non-recourse funding obligations due July 15, 2052. These non-recourse funding obligations were previously marked to fair value in conjunction with the Merger. The redemption required the acceleration of the accretion of the discount associated with the non-recourse funding obligation. The impact of this non-cash acceleration was a $54 million reduction to income before taxes for the year ended December 31, 2020. Additionally, this redemption required a $330 million cash payment, of which $21 million was held by external parties and $309 million was held by nonconsolidated affiliates, to third parties in order to settle the outstanding principal associated with the non-recourse funding obligation. Refer to Note 14, Debt and Other Obligations , for additional detail around the impacted balances. Also in conjunction with the Captive Merger, Golden Gate V and Red Mountain, LLC (“Red Mountain”), a wholly owned subsidiary of the Company, terminated the financing facility into which Golden Gate V and Red Mountain had entered into in 2012. This termination included redeeming the $822 million of fixed maturity securities issued by Red Mountain to Golden Gate V and the $806 million of non-recourse funding obligation issued by Golden Gate V to Red Mountain. As a result of these redemptions, the amortization of premiums recorded against the fixed maturities and non-recourse funding obligations which were previously marked to fair value in conjunction with the Merger was accelerated. The net impact of this non-cash acceleration of amortization was a $16 million reduction to income before taxes for the year ended December 31, 2020. This net impact was comprised of a reduction to net investment income of $72 million and a reduction to other operating expenses of $56 million. Refer to Note 4, Investment Operations and Note 14, Debt and Other Obligations , for additional detail around the impacted balances. Also in conjunction with the Captive Merger, the interest support and YRT premium support agreements that were entered into with PLC by certain of the Company’s affiliates were terminated. As discussed in Note 5, Fair Value of Financial Instruments , these agreements met the definition of a derivative financial instrument and were accounted for at fair value in the consolidated financial statements. PLC settled its obligation under these agreements during the fourth quarter of 2020 and made a payment of $135 million to Golden Gate. On October 1, 2020, immediately following the Captive Merger, Golden Gate entered into a transaction with a term of 20 years, that may be extended to up to 25 years, to finance up to a maximum term of $5 billion of “XXX” and “AXXX” reserves related to the term life insurance business and universal life insurance with secondary guarantee business that is reinsured to Golden Gate by the Company and West Coast Life Insurance Company (“WCL”), an indirect wholly owned subsidiary, pursuant to an Excess of Loss Reinsurance Agreement (the “XOL Agreement”) with Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and RGA Reinsurance Company (Barbados) Ltd. (collectively, the “Retrocessionaires”). Pursuant to the XOL Agreement, in exchange for periodic fees, the Retrocessionaires assume, on an excess of loss basis, the obligation to pay (the “XOL Payments”) each quarter the lessor of a) the greater of (i) statutory reserves in excess of economic reserves and (ii) the financed amount and b) if total claims for such quarter exceed the available assets (as set forth in the XOL Agreement) of Golden Gate, the amount of such excess. The transaction is “non-recourse” to PLC, WCL, and the Company, meaning that none of these companies are liable to reimburse the Retrocessionaires for any XOL payments required to be made. As of December 31, 2020, the XOL Asset backing the difference in statutory and economic reserve liabilities was $4.58 billion. Great-West Life & Annuity Insurance Company On January 23, 2019, the Company entered into a Master Transaction Agreement (the “GWL&A Master Transaction Agreement”) with Great-West Life & Annuity Insurance Company (“GWL&A”), Great-West Life & Annuity Insurance Company of New York (“GWL&A of NY”), The Canada Life Assurance Company (“CLAC”) and The Great-West Life Assurance Company (“GWL” and, together with GWL&A, GWL&A of NY and CLAC, the “Sellers”), pursuant to which the Company will acquire via reinsurance (the “Transaction”) substantially all of the Sellers’ individual life insurance and annuity business (the “GW Individual Life Business”). On June 3, 2019, the Company and PLAIC completed the Transaction (the “GWL&A Closing”). Pursuant to the GWL&A Master Transaction Agreement, the Company and PLAIC entered into reinsurance agreements (the “GWL&A Reinsurance Agreements”) and related ancillary documents at the GWL&A Closing. On the terms and subject to the conditions of the GWL&A Reinsurance Agreements, the Sellers ceded to the Company and PLAIC, effective as of the date of the GWL&A Closing, substantially all of the insurance policies related to the Individual Life Business on a 100% indemnity basis net of reinsurance recoveries. The aggregate ceding commission for the reinsurance of the Individual Life Business paid at the GWL&A Closing was $766 million. All policies issued in states other than New York were ceded to the Company under reinsurance agreements between the applicable Seller and the Company, and all policies issued in New York were ceded to PLAIC under a reinsurance agreement between GWL&A of NY and PLAIC. On October 30, 2020, the Company reached a final settlement on all of the remaining pending items from the closing balance sheet. As the one year purchase price measurement period had concluded, the Company recognized $94 million in other income during the quarter ended December 31, 2020 related to the final settlement. Of the $94 million, $24 million was a cash settlement and $70 million resulted from reserve adjustments. To support its obligations under the GWL&A Reinsurance Agreements, the Company established trust accounts for the benefit of GWL&A, CLAC and GWL, and PLAIC established a trust account for the benefit of GWL&A of NY. The Sellers retained a block of participating policies, which are administered by the Company. The GWL&A Master Transaction Agreement and other transaction documents contain certain customary representations and warranties made by each of the parties, and certain customary covenants regarding the Sellers and the Individual Life Business, and provide for indemnification, among other things, for breaches of those representations, warranties, and covenants. The terms of the GWL&A Reinsurance Agreements resulted in an acquisition of the Individual Life Business by PLC in accordance with ASC Topic 805, Business Combinations . The following table details the final allocation of assets acquired and liabilities assumed from the Individual Life Business reinsurance transaction as of the date of the GWL&A Closing. Fair Value (Dollars In Millions) ASSETS Fixed maturities $ 8,698 Commercial mortgage loans 1,386 Policy loans 44 Other long-term investments 1,522 Total investments 11,650 Cash 35 Accrued investment income 101 Reinsurance receivables — Accounts and premiums receivable 2 Value of business acquired 535 Other intangibles 21 Other assets 6 Assets related to separate accounts 9,583 Total assets 21,933 LIABILITIES Future policy benefits and claims $ 11,022 Annuity account balances 220 Other policyholders’ funds 220 Other liabilities 75 Liabilities related to separate accounts 9,583 Total liabilities 21,120 NET ASSETS ACQUIRED $ 813 Assets related to separate accounts and liabilities related to separate accounts represent amounts receivable and payable for variable annuity and variable universal life products reinsured on a modified co-insurance basis. The following unaudited pro forma condensed consolidated results of operations assumes that the aforementioned transactions of the Individual Life Business were completed as of January 1, 2018. The unaudited pro forma condensed results of operations are presented solely for informational purposes and are not necessarily indicative of the consolidated condensed results of operations that might have been achieved had the transaction been completed as of the date indicated: Unaudited For The Year Ended (Recast) 2019 2018 (Dollars In Millions) Revenue $ 6,165 $ 5,592 Net income $ 444 $ 253 |
INVESTMENT OPERATIONS
INVESTMENT OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT OPERATIONS | INVESTMENT OPERATIONS Major categories of net investment income are summarized as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Fixed maturities $ 2,513 $ 2,481 $ 2,471 Equity securities 27 24 31 Commercial mortgage loans 505 443 389 Investment real estate 1 1 1 Other investment income 156 139 119 3,202 3,088 3,011 Investment expenses 220 199 186 Net investment income $ 2,982 $ 2,889 $ 2,825 Net gains (losses) - investments and derivatives are summarized as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Realized gains (losses) - investments, net Fixed maturities $ 46 $ 46 $ 48 Equity securities 4 — (3) Other investments 20 45 9 Total realized gains (losses) - investments, net 70 91 54 Modco trading portfolio (103) 130 243 Equity securities (8) 13 50 Change in net expected credit losses - fixed maturities (1) 6 (125) — Net impairment losses recognized in operations (2) — — (34) Commercial mortgage loans 137 (149) (4) Gains (losses) - derivatives, net (3) 48 (195) (368) Net gains (losses) - investments and derivatives $ 150 $ (235) $ (59) (1) Represents net credit losses recognized under FASB ASC 326 (2) Represents other-than-temporary impairment losses recognized in prior periods under FASB ASC 320 (3) Refer to Note 6, Derivative Financial Instruments The chart below summarizes the sales proceeds and gains (losses) realized on securities classified as AFS. For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Securities in an unrealized gain position: Sales proceeds $ 1,537 $ 2,000 $ 2,514 Realized gains $ 47 $ 51 $ 62 Securities in an unrealized loss position: Sales proceeds $ 35 $ 34 $ 547 Realized losses $ (1) $ (5) $ (14) The net gains (losses) from equity securities still held at period end, was ($8) million, $13 million, $50 million for the year ended December 31, 2021, 2020, and 2019, respectively. The Company recognized gains (losses) of $4 million and ($3) million on equity securities sold during the period for the year ended December 31, 2021 and 2020, respectively and immaterial gains for the year ended December 31, 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: Amortized Gross Gross Allowance for Expected Credit Losses Fair Value (Dollars In Millions) As of December 31, 2021 Fixed maturities: (1) Residential mortgage-backed securities $ 6,876 $ 31 $ (102) $ — $ 6,805 Commercial mortgage-backed securities 2,239 75 (7) — 2,307 Other asset-backed securities 1,391 31 (2) — 1,420 U.S. government-related securities 821 12 (25) — 808 Other government-related securities 680 75 (2) — 753 States, municipals, and political subdivisions 3,747 410 (1) — 4,156 Corporate securities 49,211 4,645 (156) (1) 53,699 Redeemable preferred stocks 297 10 — — 307 65,262 5,289 (295) (1) 70,255 Short-term investments 780 — — — 780 $ 66,042 $ 5,289 $ (295) $ (1) $ 71,035 (1) Included in the total above, as of December 31, 2021, the Company had public utility securities that had an amortized cost and fair value of $6.5 billion and $7.0 billion, respectively and foreign government securities that had an amortized cost and fair value of $620 million and $687 million, respectively. As of December 31, 2020 (Recast) Fixed maturities: (2) 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 (2) Included in the total above, as of December 31, 2020, the Company had public utility securities that had an amortized cost and fair value of $6.3 billion and $7.0 billion, respectively and foreign government securities that had an amortized cost and fair value of $557 million and $644 million, respectively. 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 December 31, 2021 2020 (Dollars In Millions) Fixed maturities: (1) Residential mortgage-backed securities $ 133 $ 209 Commercial mortgage-backed securities 209 214 Other asset-backed securities 185 163 U.S. government-related securities 33 91 Other government-related securities 64 30 States, municipals, and political subdivisions 286 282 Corporate securities 1,875 1,860 Redeemable preferred stocks 8 13 2,793 2,862 Equity securities 13 20 Short-term investments 82 76 $ 2,888 $ 2,958 (1) Included in the total above, as of December 31, 2021, the Company had public utility and foreign government securities that had a fair value of $134 million and $44 million, respectively and as of December 31, 2020, the Company had public utility and foreign government securities that had a fair value of $144 million and $30 million, respectively. The amortized cost and fair value of available-for-sale fixed maturities as of December 31, 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 $ 1,707 $ 1,719 Due after one year through five years 11,046 11,453 Due after five years through ten years 15,434 16,135 Due after ten years 37,075 40,948 $ 65,262 $ 70,255 The following chart is a rollforward of the allowance for expected credit losses on fixed maturities classified as AFS: For The Year Ended December 31, 2021 For The Year Ended December 31, 2020 Corporate Securities CMBS ABS Total Corporate Securities CMBS ABS Total (Dollars In Millions) (Dollars In Millions) Beginning Balance $ 18 $ 4 $ 1 $ 23 $ — $ — $ — $ — Additions for securities for which an allowance was not previously recorded — — — — 62 4 1 67 Adjustments on previously recorded allowances due to change in expected cash flows (1) (4) — (5) 20 — 1 21 Reductions on previously recorded allowances due to disposal of security in the current period — — (1) (1) (1) — (1) (2) Write-offs of previously recorded allowances due to intent or requirement to sell (16) — — (16) (63) — — (63) Ending Balance $ 1 $ — $ — $ 1 $ 18 $ 4 $ 1 $ 23 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, 2021: Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Millions) Residential mortgage-backed securities $ 4,615 $ (102) $ 15 $ — $ 4,630 $ (102) Commercial mortgage-backed securities 129 (1) 88 (6) 217 (7) Other asset-backed securities 249 (1) 47 (1) 296 (2) U.S. government-related securities 306 (13) 158 (12) 464 (25) Other government-related securities 76 (2) — — 76 (2) States, municipalities, and political subdivisions 37 (1) 4 — 41 (1) Corporate securities 4,841 (119) 515 (37) 5,356 (156) Redeemable preferred stocks 20 — — — 20 — $ 10,273 $ (239) $ 827 $ (56) $ 11,100 $ (295) The corporate securities category had gross unrealized losses greater than twelve months of $37 million as of December 31, 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 December 31, 2021, the Company had a total of 742 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 (Recast) (Dollars In Millions) Residential mortgage-backed securities $ 386 $ (1) $ 9 $ — $ 395 $ (1) Commercial mortgage-backed securities 263 (16) 30 (4) 293 (20) 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, municipalities, and political subdivisions 34 (1) 5 — 39 (1) Corporate securities 1,063 (33) 728 (66) 1,791 (99) Redeemable preferred stocks — — — — — — $ 2,222 $ (56) $ 1,106 $ (76) $ 3,328 $ (132) As of December 31, 2021, the Company had securities in its available-for-sale portfolio which were rated below investment grade with a fair value of $2.5 billion and had an amortized cost of $2.3 billion. In addition, included in the Company’s trading portfolio, the Company held $129 million of securities which were rated below investment grade. The Company held $550 million of the below investment grade securities that were not publicly traded. The change in unrealized gains (losses), net of allowance for expected credit losses and income taxes, on fixed maturities classified as AFS is summarized as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Fixed maturities $ (1,523) $ 3,271 $ 4,219 The Company held $21 million and $28 million of non-income producing securities for the year ended December 31, 2021 and 2020, respectively. Included in the Company’s invested assets are $1.5 billion and $1.6 billion of policy loans as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the interest rates on standard policy loans range from 3.0% to 8.0%. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 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 December 31, 2021: Measurement Category Level 1 Level 2 Level 3 Total (Dollars In Millions) Assets: Fixed maturity securities - AFS Residential mortgage-backed securities 4 $ — $ 6,765 $ 40 $ 6,805 Commercial mortgage-backed securities 4 — 2,127 180 2,307 Other asset-backed securities 4 — 905 515 1,420 U.S. government-related securities 4 411 397 — 808 State, municipalities, and political subdivisions 4 — 4,156 — 4,156 Other government-related securities 4 — 753 — 753 Corporate securities 4 — 52,117 1,582 53,699 Redeemable preferred stocks 4 307 — — 307 Total fixed maturity securities - AFS 718 67,220 2,317 70,255 Fixed maturity securities - trading Residential mortgage-backed securities 3 — 133 — 133 Commercial mortgage-backed securities 3 — 209 — 209 Other asset-backed securities 3 — 92 93 185 U.S. government-related securities 3 27 6 — 33 State, municipalities, and political subdivisions 3 — 286 — 286 Other government-related securities 3 — 48 16 64 Corporate securities 3 — 1,867 8 1,875 Redeemable preferred stocks 3 8 — — 8 Total fixed maturity securities - trading 35 2,641 117 2,793 Total fixed maturity securities 753 69,861 2,434 73,048 Equity securities 3 633 40 155 828 Other long-term investments (1) 3&4 59 1,093 295 1,447 Short-term investments 3 683 179 — 862 Total investments 2,128 71,173 2,884 76,185 Cash 3 390 — — 390 Assets related to separate accounts Variable annuity 3 13,648 — — 13,648 Variable universal life 3 1,982 — — 1,982 Total assets measured at fair value on a recurring basis $ 18,148 $ 71,173 $ 2,884 $ 92,205 Liabilities: Annuity account balances (2) 3 $ — $ — $ 63 $ 63 Other liabilities (1) 3&4 20 820 1,939 2,779 Total liabilities measured at fair value on a recurring basis $ 20 $ 820 $ 2,002 $ 2,842 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 (Recast) (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 1,014 501 — 1,515 State, municipalities, 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 1,139 66,695 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 — 92 71 163 U.S. government-related securities 3 79 12 — 91 State, municipalities, and political subdivisions 3 — 282 — 282 Other government-related securities 3 — 30 — 30 Corporate securities 3 — 1,842 18 1,860 Redeemable preferred stocks 3 13 — — 13 Total fixed maturity securities - trading 92 2,681 89 2,862 Total fixed maturity securities 1,231 69,376 1,988 72,595 Equity securities 3 566 — 101 667 Other long-term investments (1) 3&4 52 1,285 298 1,635 Short-term investments 3 403 59 — 462 Total investments 2,252 70,720 2,387 75,359 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 $ 16,573 $ 70,720 $ 2,387 $ 89,680 Liabilities: Annuity account balances (2) 3 $ — $ — $ 67 $ 67 Other liabilities (1) 3&4 14 867 2,239 3,120 Total liabilities measured at fair value on a recurring basis $ 14 $ 867 $ 2,306 $ 3,187 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. The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a ‘‘waterfall’’ approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. Third party pricing services price 91.87% of the Company’s available-for-sale and trading fixed maturity securities. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations. When using non-binding independent broker quotations, when available the Company obtains two quotes per security. Where multiple broker quotes are obtained, the Company reviews the quotes and selects the quote that provides the best estimate of the price a market participant would pay for these specific assets in an arm’s length transaction. A pricing matrix is used to price securities for which the Company is unable to obtain or effectively rely on either a price from a third party pricing service or an independent broker quotation. The pricing matrix used by the Company begins with current spread levels to determine the market price for the security. The credit spreads, assigned by brokers, incorporate the issuer’s credit rating, liquidity discounts, weighted- average of contracted cash flows, risk premium, if warranted, due to the issuer’s industry, and the security’s time to maturity. The Company uses credit ratings provided by nationally recognized rating agencies. For securities that are priced via non-binding independent broker quotations, the Company assesses whether prices received from independent brokers represent a reasonable estimate of fair value. The Company’s assessment incorporates various metrics (yield curves, credit spreads, prepayment rates, etc.) along with other information available to the Company from both internal and external sources to determine the valuation of such holdings. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the analytics, the price received from the independent broker is adjusted accordingly. The Company did not adjust any quotes or prices received from brokers during the years ended December 31, 2021 and 2020. The Company has analyzed the third party pricing services’ valuation methodologies and related inputs and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs that is in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. Based on this evaluation and investment class analysis, each price was classified into Level 1, 2, or 3. Most prices provided by third party pricing services are classified into Level 2 because the significant inputs used in pricing the securities are market observable and the observable inputs are corroborated by the Company. Since the matrix pricing of certain debt securities includes significant non-observable inputs, they are classified as Level 3. Asset-Backed Securities This category mainly consists of RMBS, CMBS, and other asset-backed securities (collectively referred to as asset-backed securities or “ABS”). As of December 31, 2021, the Company held $10.2 billion of ABS classified as Level 2. These securities are priced from information provided by a third party pricing service and independent broker quotes. The third party pricing services and brokers mainly value securities using both a market and income approach to valuation. As part of this valuation process they consider the following characteristics of the item being measured to be relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, and 7) credit ratings of the securities. After reviewing these characteristics of the ABS, the third party pricing service and brokers use certain inputs to determine the value of the security. For ABS classified as Level 2, the valuation would consist of predominantly market observable inputs such as, but not limited to: 1) monthly principal and interest payments on the underlying assets, 2) average life of the security, 3) prepayment speeds, 4) credit spreads, 5) treasury and swap yield curves, and 6) discount margin. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation. As of December 31, 2021, the Company held $828 million of Level 3 ABS, which included $735 million of other asset-backed securities classified as available-for-sale and $93 million of other asset-backed securities classified as trading. These securities are predominantly ARS whose underlying collateral is at least 97% guaranteed by the FFELP. As a result of the ARS market collapse during 2008, the Company prices its ARS using an income approach valuation model. As part of the valuation process the Company reviews the following characteristics of the ARS in determining the relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, 7) credit ratings of the securities, 8) liquidity premium, and 9) paydown rate. In periods where market activity increases and there are transactions at a price that is not the result of a distressed or forced sale we consider those prices as part of our valuation. If the market activity during a period is solely the result of the issuer redeeming positions we consider those transactions in our valuation, but still consider them to be level three measurements due to the nature of the transaction. Corporate Securities, Redeemable Preferred Stocks, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government Related Securities As of December 31, 2021, the Company classified $59.6 billion of corporate securities, redeemable preferred stocks, U.S. government-related securities, states, municipals, and political subdivisions, and other government-related securities as Level 2. The fair value of the Level 2 securities is predominantly priced by broker quotes and a third party pricing service. The Company has reviewed the valuation techniques of the brokers and third party pricing service and has determined that such techniques used Level 2 market observable inputs. The following characteristics of the securities are considered to be the primary relevant inputs to the valuation: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) seniority, and 4) credit ratings. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation. The brokers and third party pricing service utilize valuation models that consist of a hybrid methodology that utilizes a cash flow analysis and market approach to valuation. The pricing models utilize the following inputs: 1) principal and interest payments, 2) treasury yield curve, 3) credit spreads from new issue and secondary trading markets, 4) dealer quotes with adjustments for issues with early redemption features, 5) liquidity premiums present on private placements, and 6) discount margins from dealers in the new issue market. As of December 31, 2021, the Company classified $1.6 billion of securities as Level 3 valuations. Level 3 securities primarily represent investments in illiquid bonds for which no price is readily available. To determine a price, the Company uses a discounted cash flow model with both observable and unobservable inputs. These inputs are entered into an industry standard pricing model to determine the final price of the security. These inputs include: 1) principal and interest payments, 2) coupon rate, 3) sector and issuer level spread over treasury, 4) underlying collateral, 5) credit ratings, 6) maturity, 7) embedded options, 8) recent new issuance, 9) comparative bond analysis, and 10) an illiquidity premium. Equities As of December 31, 2021, the Company held $155 million of equity securities classified as Level 3. Of this total, $148 million represents FHLB stock. The Company believes that the cost of the FHLB stock approximates fair value. Other Long-Term Investments and Other Liabilities Derivative Financial Instruments Other long-term investments and other liabilities include free-standing and embedded derivative financial instruments. Refer to Note 6, Derivative Financial Instruments for additional information related to derivatives. Derivative financial instruments are valued using exchange prices, independent broker quotations, or pricing valuation models, which utilize market data inputs. Excluding embedded derivatives, as of December 31, 2021, 83.9% of derivatives based upon notional values were priced using exchange prices or independent broker quotations. Inputs used to value derivatives include, but are not limited to, interest swap rates, credit spreads, interest rate and equity market volatility indices, equity index levels, and treasury rates. The Company performs monthly analysis on derivative valuations that includes both quantitative and qualitative analyses. Derivative instruments classified as Level 1 generally include futures and options, which are traded on active exchange markets. Derivative instruments classified as Level 2 primarily include swaps, options, and swaptions, which are traded over-the-counter. Level 2 also includes certain centrally cleared derivatives. These derivative valuations are determined using independent broker quotations, which are corroborated with observable market inputs. Derivative instruments classified as Level 3 were embedded derivatives and include at least one significant non-observable input. A derivative instrument containing Level 1 and Level 2 inputs will be classified as a Level 3 financial instrument in its entirety if it has at least one significant Level 3 input. The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instruments may not be classified within the same fair value hierarchy level as the associated assets and liabilities. Therefore, the changes in fair value on derivatives reported in Level 3 may not reflect the offsetting impact of the changes in fair value of the associated assets and liabilities. Embedded derivatives are carried at fair value in other long-term investments and other liabilities on the Company’s consolidated balance sheet. The changes in fair value of embedded derivatives are recorded as net gains (losses) - investments and derivatives . Refer to Note 6, Derivative Financial Instruments for more information related to each embedded derivatives gains and losses. The fair value of the GLWB embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using multiple risk neutral stochastic equity scenarios and policyholder behavior assumptions. The risk neutral scenarios are generated using the current swap curve and projected equity volatilities and correlations. The projected equity volatilities are based on a blend of historical volatility and near- term equity market implied volatilities. The equity correlations are based on historical price observations. For policyholder behavior assumptions, expected lapse and utilization assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the Ruark 2015 ALB table with attained age factors varying from 88% - 100% based on company experience. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR plus a credit spread (to represent the Company’s non-performance risk). For expected lapse and utilization, assumptions are used and updated for actual experience, as necessary, using an internal predictive model developed by the Company. As a result of using significant unobservable inputs, the GLWB embedded derivative is categorized as Level 3. Policyholder assumptions are reviewed on an annual basis. The balance of the FIA embedded derivative is impacted by policyholder cash flows associated with the FIA product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the FIA embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the 2015 Ruark ALB mortality table, with attained age factors varying from 88% - 100% based on company experience. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the FIA embedded derivative is categorized as Level 3. The balance of the indexed universal life (“IUL”) embedded derivative is impacted by policyholder cash flows associated with the IUL product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the IUL embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality factors varying from 43% - 110% that are applied to the base table, which is defined as 90% of 2015 VBT Primary Tables adjusted for 5.5 years of 2020 SOA HMI. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represen t the Company’s non-performance risk) thereafte r. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the IUL embedded derivative is categorized as Level 3. The Company has assumed and ceded certain blocks of policies under modified coinsurance agreements in which the investment results of the underlying portfolios inure directly to the reinsurers. Funds withheld arrangements related to such agreements contain embedded derivatives that are reported at fair value. Changes in their fair value are reported in net gains (losses) - investments and derivatives . The fair value of embedded derivatives related to funds withheld under modified coinsurance agreements are a function of the unrealized gains or losses on the underlying assets and are calculated in a manner consistent with the terms of the agreements. The investments supporting certain of these agreements are designated as “trading securities”; therefore changes in their fair value are also reported in net gains (losses) - investments and derivatives . The fair value of embedded derivatives is estimated based on market standard valuation methodology and is considered a Level 3 valuation. In conjunction with the Captive Merger, PLC terminated its interest support, yearly renewable term (“YRT”) premium support, and portfolio maintenance agreements with Golden Gate, Golden Gate II, Golden Gate V, and WCL. The interest support agreement provided that PLC would make payments to Golden Gate II if actual investment income on certain of Golden Gate II’s asset portfolios fell below a calculated investment income amount as defined in the interest support agreement, the YRT premium support agreements provided that PLC would make payments to Golden Gate and Golden Gate II in the event that YRT premium rates increased, and the portfolio maintenance agreements provided that PLC would make payments to Golden Gate, Golden Gate V, and WCL in the event of other-than-temporary impairments on investments that exceeded defined thresholds. As part of the Captive Merger, PLC entered into a new portfolio maintenance agreement with Golden Gate. This agreement meets the definition of a derivative and is accounted for at fair value and is considered Level 3 valuation. The fair value of this derivative is included in Other long-term investments. For information regarding gains on these derivatives please refer to Note 6, Derivative Financial Instruments . The portfolio maintenance agreement provides that PLC will make payments to Golden Gate in the event of credit losses on investments that exceed defined thresholds. The derivative is valued using an internal discounted cash flow model. The significant unobservable inputs are the projected probability and severity of credit losses used to project future cash flows on the investment portfolios. The Funds Withheld derivative results from reinsurance agreements with Protective Life Reinsurance Bermuda LTD, a wholly owned subsidiary of PLC (“PL Re”) where the economic performance of certain hedging instruments held by the Company are ceded to PL Re. The value of the Funds Withheld derivative is directly tied to the value of the hedging instruments held in the funds withheld accounts. The hedging instruments consist of derivative instruments, the fair values of which are classified as a Level 2 measurement; as such, the fair value of the Funds Withheld derivative has been classified as a Level 2 measurement. The fair value of the Funds Withheld derivative as of December 31, 2021, was a liability of $10 million. Annuity Account Balances The Company records a certain legacy block of FIA reserves at fair value. Based on the characteristics of these reserves, the Company believes that the fund value approximates fair value. The fair value measurement of these reserves is considered a Level 3 valuation due to the unobservable nature of the fund values. Separate Accounts Separate account variable annuity and variable life assets represent segregated funds that are invested for certain customers which are invested in open-ended mutual funds and are included in Level 1. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s consolidated balance sheets. Valuation of Level 3 Financial Instruments The following table presents the valuation method for material financial instruments included in Level 3 as of December 31, 2021, as well as the unobservable inputs used in the valuation of those financial instruments: Fair Value Valuation Unobservable Range (Dollars In Millions) Assets: Residential mortgage-backed securities $ 40 Trade Price Spread 1.03%-1.10%(1.07%) Commercial mortgage-backed securities 180 Discounted cash flow Spread over treasury 1.04% - 2.47% (1.30%) Other asset-backed securities 436 Liquidation Liquidation value $98.63 -$99.75 ($99.07) Discounted cash flow Liquidity premium 0.11% - 2.14% (1.54%) Paydown Rate 11.20% - 13.41% (12.30%) Liquidation value $60.00-113.88% (112.92%) Corporate securities 1,588 Discounted cash flow Spread over treasury 0.00% - 4.00% (1.50%) Liabilities: (1)(2) Embedded derivatives—GLWB $ 475 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% - 0.82% Embedded derivative—FIA 595 Actuarial cash flow model Expenses $214 per policy Withdrawal rate 0.4%-2.4% prior to age 70 RMD for ages 70+ or WB withdrawal rate Assume underutilized RMD for nonWB 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 0.19% - 0.82% Embedded derivative—IUL 269 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 duration/distribution channel and smoking class Nonperformance risk 0.19% - 0.82% (1) Excludes modified coinsurance arrangements. (2) Fair value is presented as a net liability. The chart above excludes Level 3 financial instruments that are valued using broker quotes and those 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 December 31, 2021, but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $197 million of financial instruments being classified as Level 3 as of December 31, 2021. Of the $197 million, $172 million are other asset-backed securities, $3 million are corporate securities, $16 million are other government securities, and $6 million are equity securities. In certain cases the Company has determined that book value materially approximates fair value. As of December 31, 2021, the Company held $148 million of financial instruments where book value approximates fair value which are predominantly FHLB stock. The following table presents the valuation method for material financial instruments included in Level 3, as of December 31, 2020, as well as the unobservable inputs used in the valuation of those financial instruments: Fair Value As of December 31, 2020 Valuation Unobservable Range (Recast) (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 $95.00 - $97.00 ($96.19) Discounted cash flow Liquidity premium 0.54% - 2.30% (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)(2) Embedded derivatives—GLWB $ 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% 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 0.19% - 0.81% Embedded derivative—IUL 201 Actuarial cash f |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 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 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. Derivatives Related to Interest Rate Risk Management Derivative instruments that are used as part of the Company’s interest rate risk management strategy include interest rate swaps, interest rate futures, interest rate caps, and interest rate swaptions. Derivatives Related to Foreign Currency Exchange Risk Management Derivative instruments that are used as part of the Company’s foreign currency exchange risk management strategy include foreign currency swaps, foreign currency futures, foreign equity futures, and foreign equity options. Derivatives Related to Risk Mitigation of Certain Annuity Contracts The Company may use the following types of derivative contracts to mitigate its exposure to certain guaranteed benefits related to VA contracts, fixed indexed annuities, and indexed universal life contracts: • Foreign Currency Futures • Variance Swaps • Interest Rate Futures • Equity Options • Equity Futures • Credit Derivatives • Interest Rate Swaps • Interest Rate Swaptions • Volatility Futures • Volatility Options • Total Return Swaps Other Derivatives PLC terminated its derivatives with Golden Gate, Golden Gate II, Golden Gate V, and WCL as part of the Captive Merger and entered into a new portfolio maintenance agreement with Golden Gate, also as part of the Captive Merger. The derivatives terminated included an interest support agreement, YRT premium support agreements, and portfolio maintenance agreements. The Company has funds withheld accounts that consist of various derivative instruments held by us that are used to hedge certain fixed indexed annuity products. The economic performance of derivatives in the funds withheld accounts are ceded PL Re. The funds withheld accounts are accounted for as a derivative financial instrument. We believe that our asset/liability management programs and procedures and certain product features provide protection against the effects of changes in interest rates under various scenarios. Additionally, we believe our asset/liability management programs and procedures provide sufficient liquidity to enable us to fulfill our obligation to pay benefits under our various insurance and deposit contracts. However, our asset/liability management programs and procedures incorporate assumptions about the relationship between short-term and long-term interest rates (i.e., the slope of the yield curve), relationships between risk-adjusted and risk-free interest rates, market liquidity, spread movements, implied volatility, policyholder behavior, and other factors, and the effectiveness of our asset/liability management programs and procedures may be negatively affected whenever actual results differ from those assumptions. Accounting for Derivative Instruments GAAP requires that all derivative instruments be recognized in the balance sheet at fair value. The Company records its derivative financial instruments in the consolidated balance sheet in other long-term investments and other liabilities. The change in the fair value of derivative financial instruments is reported either in the statement of income or in other comprehensive income (loss), depending upon whether it qualified for and also has been properly identified as being part of a hedging relationship, and also on the type of hedging relationship that exists. It is the Company's policy not to offset assets and liabilities associated with open derivative contracts. However, the Chicago Mercantile Exchange (“CME”) rules characterize variation margin transfers as settlement payments, as opposed to adjustments to collateral. As a result, derivative assets and liabilities associated with centrally cleared derivatives for which the CME serves as the central clearing party are presented as if these derivatives had been settled as of the reporting date. For a derivative financial instrument to be accounted for as an accounting hedge, it must be identified and documented as such on the date of designation. For cash flow hedges, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged item impacts earnings. For fair value hedge derivatives, their gain or loss as well as the offsetting loss or gain attributable to the hedged risk of the hedged item is recognized in current earnings. Effectiveness of the Company’s hedge relationships is assessed on a quarterly basis. The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship through operations in the period of change. Changes in the fair value of those derivatives are recognized in net gains (losses) - investments and derivatives . 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 net gains (losses) - investments and derivatives during the period of change. Derivatives Related to Variable Annuity Contracts • The Company uses equity futures, equity options, total return swaps, interest rate futures, interest rate swaps, interest rate swaptions, currency futures, currency options, volatility futures, volatility options, and variance swaps to mitigate the risk related to certain guaranteed minimum benefits, including GLWB, within its VA products. In general, the cost of such benefits varies with the level of equity and interest rate markets, foreign currency levels, and overall volatility. • The Company markets certain VA products with a GLWB rider. The GLWB component is considered an embedded derivative, not considered to be clearly and closely related to the host contract. Derivatives Related to Fixed Indexed Annuity Contracts • The Company uses equity futures and options to mitigate the risk within its fixed indexed annuity products. In general, the cost of such benefits varies with the level of equity and overall volatility. • The Company markets certain fixed indexed annuity products. The FIA component is considered an embedded derivative as it is, not considered to be clearly and closely related to the host contract. • The Company has a funds withheld account that consists of various derivative instruments held by the Company that are used to hedge the fixed indexed annuity products. The economic performance of derivatives in the funds withheld account is ceded to PL Re. The funds withheld account is accounted for as a derivative financial instrument. Derivatives Related to Indexed Universal Life Contracts • The Company uses equity futures and options to mitigate the risk within its indexed universal life products. In general, the cost of such benefits varies with the level of equity markets. • The Company markets certain IUL products. The IUL component is considered an embedded derivative, as it is not considered to be clearly and closely related to the host contract. Other Derivatives • The Company uses various swaps and other types of derivatives to manage risk related to other exposures. • The Company is involved in various modified coinsurance and funds withheld arrangements which contain embedded derivatives. Changes in their fair value are recorded in net gains (losses) - investments and derivatives . The investment portfolios that support the related modified coinsurance reserves and funds withheld arrangements had fair value changes which substantially offset the gains or losses on these embedded derivatives. • Certain of the Company and 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 as part of the Captive Merger and a new portfolio maintenance agreement was entered into between Golden Gate and PLC on that date. The following table sets forth net gains and losses for the periods shown: Gains (losses) - derivative financial instruments For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Derivatives related to VA contracts: Interest rate futures $ 15 $ — $ (20) Equity futures (12) 109 5 Currency futures 11 (10) 3 Equity options (108) (30) (150) Interest rate swaps (136) 274 230 Total return swaps (189) (49) (78) Embedded derivative - GLWB 347 (404) (198) Total derivatives related to VA contracts (72) (110) (208) Derivatives related to FIA contracts: Embedded derivative 3 (69) (86) Funds withheld derivative (7) (10) — Equity futures 5 (4) 2 Equity options 72 49 84 Other derivatives (3) (1) — Total derivatives related to FIA contracts 70 (35) — Derivatives related to IUL contracts: Embedded derivative (28) 4 (13) Equity futures — (2) — Equity options 16 9 15 Total derivatives related to IUL contracts (12) 11 2 Embedded derivative - Modco reinsurance treaties 64 (99) (187) Derivatives with PLC (1) — 23 27 Other derivatives (2) 15 (2) Total gains (losses) - derivatives, net $ 48 $ (195) $ (368) (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 as part of the Captive Merger 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 net gains (losses) - investments and derivatives 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 financial statements for the periods presented below: As of December 31, 2021 2020 Notional Fair Notional Fair (Recast) (Dollars In Millions) Other long-term investments Derivatives not designated as hedging instruments: Interest rate swaps $ 1,478 $ 72 $ 1,478 $ 185 Total return swaps 239 8 158 2 Derivatives with PLC (1) 4,085 — 4,076 — Embedded derivative - Modco reinsurance treaties 1,268 62 1,249 101 Embedded derivative - GLWB 3,066 169 2,067 138 Embedded derivative - FIA 398 64 335 60 Interest rate futures 561 5 690 4 Equity futures 312 6 203 4 Currency futures 27 — — — Equity options 8,852 1,061 7,208 1,142 $ 20,286 $ 1,447 $ 17,464 $ 1,636 Other liabilities Cash flow hedges: Foreign currency swaps $ 117 $ 13 $ 117 $ 10 Derivatives not designated as hedging instruments: Interest rate swaps 1,354 — 1,354 — Total return swaps 1,168 39 1,003 15 Embedded derivative - Modco reinsurance treaties 2,974 280 2,911 389 Funds withheld derivative 855 10 661 10 Embedded derivative - GLWB 6,833 644 7,749 960 Embedded derivative - FIA 4,372 659 3,889 633 Embedded derivative - IUL 459 269 357 201 Interest rate futures 729 4 415 3 Equity futures 42 1 190 5 Currency futures 158 2 264 4 Equity options 7,044 771 5,499 834 Other 448 87 304 55 $ 26,553 $ 2,779 $ 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 as part of the Captive Merger and a new portfolio maintenance agreement was entered into with PLC on that date. |
OFFSETTING OF ASSETS AND LIABIL
OFFSETTING OF ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 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 14, 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 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 balance sheet unless the Company exercises its right to sell or re-pledge the underlying asset. As of December 31, 2021 and 2020, there was no fair value of non-cash collateral received. The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2021: Gross Amounts of Recognized Assets Gross Net Amounts Gross Amounts Financial Collateral Net Amount (Dollars In Millions) Offsetting of Derivative Assets Derivatives: Free-Standing derivatives $ 1,152 $ — $ 1,152 $ 806 $ 178 $ 168 Total derivatives, subject to a master netting arrangement or similar arrangement 1,152 — 1,152 806 178 168 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 62 — 62 — — 62 Embedded derivative - GLWB 169 — 169 — — 169 Derivatives with PLC — — — — — — Embedded derivative - FIA 64 — 64 — — 64 Total derivatives, not subject to a master netting arrangement or similar arrangement 295 — 295 — — 295 Total derivatives 1,447 — 1,447 806 178 463 Total Assets $ 1,447 $ — $ 1,447 $ 806 $ 178 $ 463 Gross Gross Net Amounts Gross Amounts Financial Collateral Net Amount (Dollars In Millions) Offsetting of Derivative Liabilities Derivatives: Free-Standing derivatives $ 830 $ — $ 830 $ 806 $ 22 $ 2 Total derivatives, subject to a master netting arrangement or similar arrangement 830 — 830 806 22 2 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 280 — 280 — — 280 Funds withheld derivative 10 — 10 — — 10 Embedded derivative - GLWB 644 — 644 — — 644 Embedded derivative - FIA 659 — 659 — — 659 Embedded derivative - IUL 269 — 269 — — 269 Other 87 — 87 — — 87 Total derivatives, not subject to a master netting arrangement or similar arrangement 1,949 — 1,949 — — 1,949 Total derivatives 2,779 — 2,779 806 22 1,951 Repurchase agreements (1) 1,393 — 1,393 — — 1,393 Total Liabilities $ 4,172 $ — $ 4,172 $ 806 $ 22 $ 3,344 (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 Gross Amounts Financial Collateral Net Amount (Recast) (Dollars In Millions) Offsetting of Derivative 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 Other 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 Gross Amounts Financial Collateral Net Amount (Recast) (Dollars In Millions) Offsetting of Derivative 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 | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
COMMERCIAL MORTGAGE LOANS | COMMERCIAL MORTGAGE LOANSThe Company invests a portion of its investment portfolio in commercial mortgage loans. As of December 31, 2021, the Company’s commercial mortgage loan holdings were $11.0 billion, or $10.9 billion net of allowance for credit losses. As of December 31, 2020, the Company’s commercial mortgage loan holdings were $10.2 billion, $10 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 loan portfolio was underwritten by the Company. From time to time, the Company may acquire commercial mortgage loans in conjunction with an acquisition. The following table includes a breakdown of the Company’s commercial mortgage loan portfolio by property type as of December 31: Percentage of Commercial Mortgage Loans Type 2021 2020 Retail 30.3 % 34.9 % Office buildings 13.8 15.1 Apartments 17.2 12.7 Warehouses 16.5 16.0 Senior housing 17.0 16.2 Other 5.2 5.1 100.0 % 100.0 % The Company specializes in making commercial mortgage loans on credit-oriented commercial properties. No single tenant’s exposure represents more than 0.9% of the commercial mortgage loan portfolio. The following states represent the primary locations of the Company’s commercial mortgage loans as of December 31: Percentage of Commercial Mortgage Loans State 2021 State 2020 California 10.1 % California 11.3 % Texas 7.3 Texas 7.3 Florida 7.2 Alabama 6.7 Alabama 6.3 Florida 6.2 North Carolina 5.6 Georgia 5.3 Ohio 4.6 North Carolina 4.9 Michigan 4.6 Ohio 4.7 Georgia 4.2 Michigan 4.4 Utah 4.0 Utah 4.2 Tennessee 3.5 Tennessee 3.5 57.4 % 58.5 % During the year ended December 31, 2021, the Company funded $2.0 billion of new commercial mortgage loans, with an average commercial mortgage loan size of $11 million. The average size commercial mortgage loan in the portfolio as of December 31, 2021, was $6 million and the weighted-average interest rate was 4.1%. The largest single commercial mortgage loan at December 31, 2021 was $78 million. During the year ended December 31, 2020, the Company funded $1.4 billion of new commercial mortgage loans loans, with an average loan size of $8 million. The average size commercial mortgage loan in the portfolio as of December 31, 2020, was $6 million and the weighted-average interest rate was 4.3%. The largest single commercial mortgage loan at December 31, 2020 was $78 million. During the year ended December 31, 2019, the Company funded $1.2 billion of new commercial mortgage loans, with an average loan size of $8 million. The average size commercial mortgage loan in the portfolio as of December 31, 2019, was $5 million and the weighted-average interest rate was 4.5%. The largest single commercial mortgage loan at December 31, 2019 was $78 million. Certain of the commercial mortgage loans have call options that occur within the next eight 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. Assuming the commercial mortgage loans are called at their next call dates, $116 million would become due in 2022, $379 million in 2023 through 2027, and $6 million in 2028 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 participating interest in the cash flows from the underlying real estate. As of December 31, 2021 and 2020, $600 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 years ended December 31, 2021, 2020, and 2019, the Company recognized $54 million, $26 million, and $23 million of participation commercial mortgage loan income, respectively. As of December 31, 2021, the Company did not have any commercial mortgage loans that were nonperforming, restructured, or foreclosed and converted to real estate properties. 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. The Company does not expect these investments to adversely affect its liquidity or ability to maintain proper matching of assets and liabilities. 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 years ended December 31, 2021, 2020, and 2019, the Company recognized one, four, and four troubled debt restructurings transactions, respectively, as a result of granting concessions to borrowers which included loan terms unavailable from other lenders. These concessions were the result of agreements between the creditor and the debtor. The Company did not identify any commercial mortgage loans whose principal was permanently impaired during the year ended December 31, 2021 and identified one loan that was permanently impaired during the year ended December 31, 2020. The Company provides certain relief under the Coronavirus Aid Relief, and Economic Security Act (the “CARES Act”), and the Consolidated Appropriations Act (the “CAA”) under its COVID-19 Commercial Mortgage Loan Program (the “Loan Modification Program”). During the year ended December 31, 2021, the Company modified 23 commercial mortgage loans under the Loan Modification Program, representing $475 million in unpaid principal balance. As of December 31, 2021, since the inception of the CARES Act, there were 268 total commercial mortgage loans modified under the Loan Modification Program, representing $2.0 billion in unpaid principal balance. At December 31, 2021, $1.9 billion of these loans have resumed regular principal and interest payments in accordance with the terms of the modification agreements and the Company expects the remaining $69 million in unpaid principal on commercial mortgage 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. As of December 31, 2021 and 2020, 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 December 31, 2021 Commercial mortgage loans: Performing $ 2,063 $ 1,439 $ 2,034 $ 1,404 $ 1,224 $ 2,802 $ 10,966 Non-performing — — — — — — — Amortized cost $ 2,063 $ 1,439 $ 2,034 $ 1,404 $ 1,224 $ 2,802 $ 10,966 Allowance for credit losses (12) (10) (21) (18) (12) (30) (103) Total commercial mortgage loans $ 2,051 $ 1,429 $ 2,013 $ 1,386 $ 1,212 $ 2,772 $ 10,863 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 December 31, 2021 and 2020: As of December 31, 2021 As of December 31, 2020 Amortized Cost % of Total DSCR (2) Amortized Cost % of Total DSCR (2) (Dollars In Millions) Loan-to-value (1) Greater than 75% $ 285 3 % 1.32 $ 399 4 % 1.29 50% - 75% 7,241 66 % 1.59 6,557 64 % 1.61 Less than 50% 3,440 31 % 2.04 3,272 32 % 2.01 Total commercial mortgage loans $ 10,966 100 % $ 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% at both December 31, 2021 and December 31, 2020. (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 December 31, 2021 and December 31, 2020 was 1.72x 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 included. For The For The (Dollars In Millions) Allowance for Funded Commercial Mortgage Loan Credit Losses Beginning balance $ 222 $ 5 Cumulative effect adjustment — 80 Charge offs — — Recoveries (7) (3) Provision (112) 140 Ending balance $ 103 $ 222 Allowance for Unfunded Commercial Mortgage Loan Commitments Credit Losses Beginning balance $ 22 $ — Cumulative effect adjustment — 10 Charge offs — — Recoveries — — Provision (17) 12 Ending balance $ 5 $ 22 As of December 31, 2021, the Company had one commercial mortgage loan of $28 million that was 30-59 days delinquent. As of December 31, 2020, the Company had one commercial mortgage 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 commercial mortgage loans, any assessment of impairment and ultimate loss given a default on the commercial mortgage loans is based upon a consideration of the estimated fair value of the real estate. The Company limits accrued interest income on commercial mortgage loans to ninety days of interest. For loans in nonaccrual status, interest income is recognized on a cash basis. For the year ended December 31, 2021, the Company did not have any of accrued interest was excluded from the amortized cost basis pursuant to the Company’s nonaccrual policy. As of December 31, 2021, the Company did not have any commercial mortgage loans in nonaccrual status. As of December 31, 2020, the Company had one commercial mortgage loan in nonaccrual status with no related allowance recorded. The recorded investment, unpaid principal balance, and average recorded investment was $1 million. |
DEFERRED POLICY ACQUISITION COS
DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Policy Acquisition Costs and Present Value of Future Insurance Profits, Net [Abstract] | |
DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED | DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED Deferred Policy Acquisition Costs The balances and changes in DAC are as follows: As of December 31, 2021 2020 (Dollars In Millions) Balance, beginning of period $ 1,628 $ 1,480 Capitalization of commissions, sales, and issue expenses 550 459 Amortization (200) (163) Change due to unrealized gains and losses 105 (152) Implementation of ASU 2016-13 — 4 Balance, end of period $ 2,083 $ 1,628 Value of Business Acquired The balances and changes in VOBA are as follows: As of December 31, 2021 2020 (Dollars In Millions) Balance, beginning of period $ 1,792 $ 2,040 Amortization (109) (45) Change due to unrealized gains and losses 80 (192) Other 23 (11) Balance, end of period $ 1,786 $ 1,792 Based on the balance recorded as of December 31, 2021, the expected amortization of VOBA for the next five years is as follows: Expected Years Amortization (Dollars In Millions) 2022 $ 121 2023 123 2024 123 2025 116 2026 99 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL The changes in the carrying value of goodwill by segment are as follows: Retail Life and Annuity Acquisitions Stable Value Products Asset Protection Total Consolidated (Dollars In Millions) Balance as of December 31, 2019 $ 559 $ 24 $ 114 $ 129 $ 826 Balance as of December 31, 2020 559 24 114 129 826 Impairment (129) — — — (129) Balance as of December 31, 2021 $ 430 $ 24 $ 114 $ 129 $ 697 In connection with its annual goodwill impairment testing, the Company elected to perform a quantitative assessment of goodwill associated with the reporting units within the Retail Life and Annuity segment, in which the fair value of each reporting unit was compared to that reporting unit’s carrying amount, including goodwill. To estimate the fair value of the reporting units, the Company utilized the income (i.e. discounted cash flow) valuation approach. This quantitative assessment indicated that an impairment existed as of December 31, 2021 within the Retirement reporting unit primarily due to the impact of interest rates and a longer period of sustained equity volatility on the weighted-average cost of capital used to discount the reporting unit’s cash flows. Guidance in ASC 350-20, Intangibles-Goodwill and Other , requires that an impairment loss be recognized in the amount that the carrying amount of a reporting unit exceeds its fair value. As a result, the Company recorded a non-cash impairment charge of $129 million. |
CERTAIN NONTRADITIONAL LONG-DUR
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | 12 Months Ended |
Dec. 31, 2021 | |
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | |
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS The Company issues variable universal life and VA products through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contract holder. The Company also offers, for our VA products, certain GMDB riders. The most significant of these guarantees involve 1) return of the highest anniversary date account value, or 2) return of the greater of the highest anniversary date account value or the last anniversary date account value compounded at 5% interest or 3) return of premium. The GLWB rider provides the contract holder with protection against certain adverse market impacts on the amount they can withdraw and is classified as an embedded derivative and is carried at fair value on the Company’s balance sheet. The VA separate account balances subject to GLWB were $9.2 billion and $8.9 billion as of December 31, 2021 and 2020, respectively. For more information regarding the valuation of and income impact of GLWB, please refer to Note 2, Summary of Significant Accounting Policies , Note 5, Fair Value of Financial Instruments , and Note 6, Derivative Financial Instruments . The GMDB reserve is calculated by applying a benefit ratio, equal to the present value of total expected GMDB claims divided by the present value of total expected contract assessments, to cumulative contract assessments. This amount is then adjusted by the amount of cumulative GMDB claims paid and accrued interest. Assumptions used in the calculation of the GMDB reserve were as follows: mean investment performance of 6.73%, age-based mortality from the Ruark 2015 ALB table adjusted for company and industry experience, lapse rates determined by a dynamic formula, and an average discount rate of 4.85%. Changes in the GMDB reserve are included in benefits and settlement expenses in the accompanying consolidated statements of income. The VA separate account balances subject to GMDB were $14.6 billion and $14.8 billion as of December 31, 2021 and 2020, respectively. The total GMDB amount payable based on VA account balances as of December 31, 2021 and 2020, was $85 million and $126 million with a GMDB reserve of $38 million and $43 million, respectively. The average attained age of contract holders as of December 31, 2021 and 2020 for the Company was 73 and 72. These amounts exclude certain VA business which has been 100% reinsured to Commonwealth Annuity and Life Insurance Company (formerly known as Allmerica Financial Life Insurance and Annuity Company) (“CALIC”) under a Modco agreement. The guaranteed amount payable associated with the annuities reinsured to CALIC was $6 million and $6 million, as of December 31, 2021 and 2020, respectively. The average attained age of contract holders as of December 31, 2021 and 2020, was 69 and 69. Activity relating to GMDB reserves (excluding those 100% ceded under the Modco agreement) is as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Beginning balance $ 43 $ 46 $ 44 Great West beginning balance — — 7 Incurred guarantee benefits — 2 (1) Less: Paid guarantee benefits 5 5 4 Ending balance $ 38 $ 43 $ 46 Account balances of variable annuities with guarantees invested in VA separate accounts are as follows: As of December 31, 2021 2020 (Dollars In Millions) Equity funds $ 9,732 $ 10,425 Fixed income funds 5,236 4,631 Total $ 14,968 $ 15,056 Certain of the Company’s fixed annuities and universal life products have a sales inducement in the form of a retroactive interest credit (“RIC”). In addition, certain annuity contracts provide a sales inducement in the form of a bonus interest credit. The Company maintains a reserve for all interest credits earned to date. The Company defers the expense associated with the RIC and bonus interest credits each period and amortizes these costs in a manner similar to that used for DAC. Activity in the Company’s deferred sales inducement asset, recorded on the balance sheet in other assets was as follows: For The Year Ended December 31, 2021 2020 2019 (Dollars In Millions) Deferred asset, beginning of period $ 41 $ 43 $ 40 Amounts deferred 3 2 6 Amortization (7) (4) (3) Deferred asset, end of period $ 37 $ 41 $ 43 |
MONY CLOSED BLOCK OF BUSINESS
MONY CLOSED BLOCK OF BUSINESS | 12 Months Ended |
Dec. 31, 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. The excess of Closed Block liabilities over Closed Block assets (adjusted to exclude the impact of related amounts in AOCI) at the acquisition date of October 1, 2013, represented the estimated maximum future post-tax earnings from the Closed Block that would be recognized in income from continuing operations over the period the policies and contracts in the Closed Block remain in force. In connection with the acquisition of MONY, the Company developed an actuarial calculation of the expected timing of MONY’s Closed Block’s earnings as of October 1, 2013. Pursuant to the acquisition of the Company by Dai-ichi Life on February 1, 2015, this actuarial calculation of the expected timing of MONY’s Closed Block earnings was recalculated and reset on that date, along with the establishment of a policyholder dividend obligation as of such date. If the actual cumulative earnings from the Closed Block are greater than the expected cumulative earnings, only the expected earnings will be recognized in the Company’s net income. Actual cumulative earnings in excess of expected cumulative earnings at any point in time are recorded as a policyholder dividend obligation because they will ultimately be paid to Closed Block policyholders as an additional policyholder dividend unless offset by future performance that is less favorable than originally expected. If a policyholder dividend obligation has been previously established and the actual Closed Block earnings in a subsequent period are less than the expected earnings for that period, the policyholder dividend obligation would be reduced (but not below zero). If, over the period the policies and contracts in the Closed Block remain in force, the actual cumulative earnings of the Closed Block are less than the expected cumulative earnings, only actual earnings would be recognized in income from continuing operations. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside the Closed Block. Many expenses related to Closed Block operations, including amortization of VOBA, are charged to operations outside of the Closed Block; accordingly, net revenues of the Closed Block do not represent the actual profitability of the Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to the business outside of the Closed Block. Summarized financial information for the Closed Block is as follows: As of December 31, 2021 2020 (Dollars In Millions) Closed block liabilities Future policy benefits, policyholders’ account balances and other policyholder liabilities $ 5,277 $ 5,406 Policyholder dividend obligation 401 580 Other liabilities 10 7 Total closed block liabilities 5,688 5,993 Closed block assets Fixed maturities, available-for-sale, at fair value 4,633 4,903 Commercial mortgage loans on real estate 68 68 Policy loans 557 596 Cash and other invested assets 73 46 Other assets 83 91 Total closed block assets 5,414 5,704 Excess of reported closed block liabilities over closed block assets 274 289 Portion of above representing accumulated other comprehensive income: Net unrealized investments gains (losses) net of policyholder dividend obligation: $323 and $493; and net of income tax: $(68) and $(104) — — Future earnings to be recognized from closed block assets and closed block liabilities $ 274 $ 289 Reconciliation of the policyholder dividend obligation is as follows: For The Year Ended December 31, 2021 2020 (Dollars In Millions) Policyholder dividend obligation, beginning balance $ 580 $ 279 Applicable to net revenue (9) (25) Change in net unrealized investment gains allocated to policyholder dividend obligation (170) 326 Policyholder dividend obligation, ending balance $ 401 $ 580 Closed Block revenues and expenses were as follows: For The Year Ended December 31, 2021 2020 2019 (Dollars In Millions) Revenues Premiums and other income $ 144 $ 154 $ 162 Net investment income 189 202 207 Net gains (losses) - investments and derivatives 28 (2) (2) Total revenues 361 354 367 Benefits and other deductions Benefits and settlement expenses 342 332 337 Other operating expenses 1 2 1 Total benefits and other deductions 343 334 338 Net revenues before income taxes 18 20 29 Income tax expense 5 4 6 Net revenues $ 13 $ 16 $ 23 |
REINSURANCE
REINSURANCE | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
REINSURANCE | REINSURANCE The Company reinsures certain of its risks with (cedes), and assumes risks from, other insurers under yearly renewable term, coinsurance, and modified coinsurance agreements. Under yearly renewable term agreements, the Company reinsures only the mortality risk, while under coinsurance the Company reinsures a proportionate share of all risks arising under the reinsured policy. Under coinsurance, the reinsurer receives a proportionate share of the premiums less commissions and is liable for a corresponding share of all benefit payments. Modified coinsurance is accounted for in a manner similar to coinsurance except that the liability for future policy benefits is held by the ceding company, and settlements are made on a net basis between the companies. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to us under the terms of the reinsurance agreements. The Company monitors the concentration of credit risk the Company has with any reinsurer, as well as the financial condition of its reinsurers. As of December 31, 2021, the Company had reinsured approximately 22% of the face value of its life insurance in-force. The Company has reinsured approximately 10% of the face value of its life insurance in-force with the following three reinsurers: • Security Life of Denver Insurance Co. (currently administered by Hannover Re) • Swiss Re Life & Health America Inc. • The Lincoln National Life Insurance Co. (currently administered by Swiss Re Life & Health America Inc.) The Company has not experienced any credit losses for the years ended December 31, 2021, 2020, or 2019 related to these reinsurers. The Company has set limits on the amount of insurance retained on the life of any one person. The amount of insurance retained by the Company on any one life on traditional life insurance was $500,000 in years prior to mid-2005. In 2005, this retention amount was increased to $1,000,000 for certain policies, and during 2008, it was increased to $2,000,000 for certain policies. During 2016, the retention amount was increased to $5,000,000. Reinsurance premiums, commissions, expense reimbursements, benefits, and reserves related to reinsured long-duration contracts are accounted for over the life of the underlying reinsured contracts using assumptions consistent with those used to account for the underlying contracts. The cost of reinsurance related to short-duration contracts is accounted for over the reinsurance contract period. Amounts recoverable from reinsurers, for both short- and long-duration reinsurance arrangements, are estimated in a manner consistent with the claim liabilities and policy benefits associated with reinsured policies. The following table presents total net life insurance in-force: As of December 31, 2021 2020 (Dollars In Millions) Direct life insurance in-force $ 829,253 $ 785,197 Amounts assumed from other companies 191,110 206,050 Amounts ceded to other companies (222,865) (244,588) Net life insurance in-force $ 797,498 $ 746,659 Percentage of amount assumed to net 24 % 28 % The following table reflects the effect of reinsurance on life, accident/health, and property and liability insurance premiums written and earned: Gross Ceded to Assumed Net (Dollars In Millions) For The Year Ended December 31, 2021 Premiums and policy fees: -1 Life insurance $ 2,843 $ (1,113) $ 1,037 $ 2,767 (1) Accident/health insurance 32 (19) 28 41 Property and liability insurance 281 (188) 1 94 Total $ 3,156 $ (1,320) $ 1,066 $ 2,902 For The Year Ended December 31, 2020 (Recast) Premiums and policy fees: Life insurance $ 2,661 $ (826) $ 934 $ 2,769 (1) Accident/health insurance 37 (23) 90 104 Property and liability insurance 279 (178) 2 103 Total $ 2,977 $ (1,027) $ 1,026 $ 2,976 For The Year Ended December 31, 2019 (Recast) Premiums and policy fees: Life insurance $ 2,853 $ (1,312) $ 836 $ 2,377 (1) Accident/health insurance 42 (90) 41 (7) Property and liability insurance 281 (106) 3 178 Total $ 3,176 $ (1,508) $ 880 $ 2,548 (1) Includes annuity policy fees of $199 million, $163 million, and $164 million, for the years ended December 31, 2021, 2020, and 2019, respectively. As of December 31, 2021 and 2020, policy and claim reserves relating to insurance ceded of $4.6 billion and $4.7 billion, respectively, are included in reinsurance receivables. Should any of the reinsurers be unable to meet its obligation at the time of the claim, the Company would be obligated to pay such claims. As of December 31, 2021 and 2020, the Company had paid $157 million and $135 million, respectively, of ceded benefits which are recoverable from reinsurers. In addition, as of December 31, 2021 and 2020, the Company had receivables of $64 million and $64 million, respectively, related to insurance assumed. The Company’s third party reinsurance receivables amounted to $4.5 billion and $4.6 billion as of December 31, 2021 and 2020, respectively. These amounts include ceded reserve balances and ceded benefit payments. The ceded benefit payments are recoverable from reinsurers. The following table sets forth the receivables attributable to our more significant reinsurance partners: As of December 31, 2021 2020 Reinsurance Receivable A.M. Best Reinsurance A.M. Best (Dollars In Millions) Security Life of Denver Insurance Company $ 500.5 A- $ 548.5 NR Swiss Re Life & Health America, Inc. 480.1 A+ 489.6 A+ Lincoln National Life Insurance Co. 337.3 A+ 370.7 A+ Somerset Re 335.1 A- 259.9 A- Transamerica Life Insurance Co. 226.4 A 240.3 A RGA Reinsurance Company 204.6 A+ 210.5 A+ American United Life Insurance Company 187.6 A+ 199.1 A+ Centre Reinsurance (Bermuda) Ltd 149.3 A 167.3 NR Employers Reassurance Corporation 139.4 B+ 162.0 NR The Canada Life Assurance Company 123.2 A+ 134.0 A+ The Company’s reinsurance contracts typically do not have a fixed term. In general, the reinsurers’ ability to terminate coverage for existing cessions is limited to such circumstances as material breach of contract or non-payment of premiums by the ceding company. The reinsurance contracts generally contain provisions intended to provide the ceding company with the ability to cede future business on a basis consistent with historical terms. However, either party may terminate any of the contracts with respect to future business upon appropriate notice to the other party. Generally, the reinsurance contracts do not limit the overall amount of the loss that can be incurred by the reinsurer. The amount of liabilities ceded under contracts that provide for the payment of experience refunds is immaterial. |
DEBT AND OTHER OBLIGATIONS
DEBT AND OTHER OBLIGATIONS | 12 Months Ended |
Dec. 31, 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 December 31, 2021. PLC had an outstanding balance of $275 million and $190 million as of December 31, 2021 and 2020. During 2018, the Company issued $110 million of Subordinated Funding Obligations as a rate of 3.55% due 2038. Secured Financing Transactions Repurchase Program Borrowings While the Company anticipates that 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 fair 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 maturity securities, and the agreements provided for net settlement in the event of default or on termination of the agreements . As of December 31, 2021, the fair value of securities pledged under the repurchase program was $1,503 million and the repurchase obligation of $1,393 million was included in the Company’s consolidated balance sheets (at an average borrowing rate of 13 basis points). During the year ended December 31, 2021, the maximum balance outstanding at any one point in time related to these programs was $1,799 million. The average daily balance was $775 million (at an average borrowing rate of 13 basis points) during the year ended December 31, 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 balance sheets (at an average borrowing rate of 15 basis points). During the year ended December 31, 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 December 31, 2021 and 2020, securities with a fair value of $174 million and $57 million 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 December 31, 2021 and 2020, the fair value of the collateral related to this program was $179 million and $59 million, and the Company has an obligation to return $179 million and $59 million, respectively, of collateral to the securities borrowers. The following table provides the fair value of collateral pledged for repurchase agreements, grouped by asset class, as of December 31, 2021 and 2020: 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, 2021 (Dollars In Millions) Overnight and Greater Than Continuous Up to 30 days 30 - 90 days 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 1,070 $ — $ — $ — $ 1,070 Corporate securities 69 — — — $ 69 Commercial mortgage loans 364 — — — 364 Total repurchase agreements and repurchase-to-maturity transactions $ 1,503 $ — $ — $ — $ 1,503 Securities lending transactions Fixed maturity securities 171 — — — 171 Equity securities 1 — — — 1 Redeemable preferred stocks 2 — — — 2 Total securities lending transactions 174 — — — 174 Total securities $ 1,677 $ — $ — $ — $ 1,677 Remaining Contractual Maturity of the Agreements As of December 31, 2020 (Dollars In Millions) Overnight and Greater Than Continuous Up to 30 days 30 - 90 days 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 366 $ 86 $ — $ — $ 452 Commercial mortgage loans — — — — — Total repurchase agreements and repurchase-to-maturity transactions $ 366 $ 86 $ — $ — $ 452 Securities lending transactions Corporate 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 On October 1, 2020, Golden Gate Captive Insurance Company (“Golden Gate”), a Vermont special purpose financial insurance company and a wholly owned subsidiary of the Company, entered into a transaction with a term of 20 years, that may be extended to a maximum of 25 years, to finance up to $5 billion of “XXX” and “AXXX” reserves related to the term life insurance business and universal life insurance with secondary guarantee business that is reinsured to Golden Gate by the Company and West Coast Life Insurance Company (“WCL”), a wholly owned subsidiary of the Company, pursuant to an Excess of Loss Reinsurance Agreement (the “XOL Agreement”) with Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and RGA Reinsurance Company (Barbados) Ltd. (collectively, the “Retrocessionaires”). The transaction is “non-recourse” to the Company, WCL, and PLC, meaning that none of these companies are liable to reimburse the Retrocessionaires for any XOL payments required to be made. As of December 31, 2021, the XOL Asset backing the difference in statutory and economic reserve liabilities was $4.267 billion. Other Obligations The Company routinely receives from or pays to affiliates, under the control of PLC, reimbursements for expenses incurred on one another’s behalf. Receivables and payables among affiliates are generally settled monthly. Interest Expense Interest expense is summarized as follows: For The Year Ended December 31, 2021 2020 2019 (Dollars In Millions) Subordinated funding obligations $ 3.9 $ 3.9 $ 3.9 Non-recourse funding obligations, other obligations, and repurchase agreements 11 133.2 175.8 Total interest expense $ 14.9 $ 137.1 $ 179.7 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 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 The Company had rental expense of $1 million, $4 million, and $6 million for the years ended December 31, 2021, 2020, and 2019, respectively. The following is a schedule by year of future minimum rental payments required under these leases: Year Amount (Dollars In Millions) 2022 $ 7 2023 4 2024 4 2025 2 2026 1 Thereafter 8 As of December 31, 2021 and 2020, the Company had outstanding commercial mortgage loan commitments of $994 million at an average rate of 3.58% and $801 million at an average rate of 3.90%, respectively. Under the insurance guaranty fund laws in most states, insurance companies doing business therein 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 two 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 December 31, 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. |
SHAREOWNER'S EQUITY
SHAREOWNER'S EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
SHAREOWNER'S EQUITY | SHAREOWNER’S EQUITYPLC owns all of the 2,000 shares of non-voting preferred stock issued by the Company’s subsidiary, PLAIC. The stock pays, when and if declared, noncumulative participating dividends to the extent PLAIC’s statutory earnings for the immediately preceding fiscal year exceeded $1 million. In 2021, 2020, and 2019, PLAIC paid no dividends to PLC on its preferred stock. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2021 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes in the accumulated balances for each component of AOCI as of December 31, 2021, 2020, and 2019. 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, December 31, 2018 (Recast) $ (1,408) $ — $ (1,408) Other comprehensive income (loss) before reclassifications 2,844 (10) 2,834 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (4) — (4) Amounts reclassified from accumulated other comprehensive income (loss) (1) (11) 2 (9) Balance, December 31, 2019 (Recast) $ 1,421 $ (8) $ 1,413 Other comprehensive income (loss) before reclassifications 2,048 (2) 2,046 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in operations 24 — 24 Amounts reclassified from accumulated other comprehensive income (loss) (1) 63 2 65 Balance, December 31, 2020 (Recast) $ 3,556 $ (8) $ 3,548 Other comprehensive income (loss) before reclassifications (1,105) — (1,105) Other comprehensive income (loss) on investments for which a credit loss has been recognized in operations (1) — (1) Amounts reclassified from accumulated other comprehensive income (loss) (1) (41) 1 (40) Balance, December 31, 2021 $ 2,409 $ (7) $ 2,402 (1) See Reclassification table below for details. (2) As of December 31, 2019, 2020 and 2021, net unrealized losses reported in AOCI were offset by $(777) million, $(2.0) billion and $(1.9) billion, 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 years ended December 31, 2021, 2020, and 2019. Gains/(losses) in net income: Affected Line Item in the Consolidated For The Year Ended December 31, 2021 2020 2019 (Dollars In Millions) Derivative instruments Benefits and settlement expenses, net of reinsurance ceded (1) $ (1) $ (3) $ (2) Tax (expense) benefit — 1 — $ (1) $ (2) $ (2) Unrealized gains and losses on available-for-sale securities Net gains (losses): investments $ 46 $ 46 $ 48 Net impairment losses recognized in earnings 6 (125) (34) Tax (expense) or benefit (11) 17 (3) $ 41 $ (62) $ 11 (1) Refer to Note 6, Derivative Financial Instruments for additional information |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective income tax rate related to continuing operations varied from the maximum federal income tax rate as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) Statutory federal income tax rate applied to pre-tax income 21.0 % 21.0 % 21.0 % State income taxes 0.2 (0.4) 0.5 Investment income not subject to tax (5.1) (3.6) (2.1) Prior period adjustments 0.5 (0.7) 0.1 Goodwill impairment 7.3 — — Other (0.7) (0.9) (1.0) 23.2 % 15.4 % 18.5 % The annual provision for federal income tax in these financial statements differs from the annual amounts of income tax expense reported in the respective income tax returns. Certain significant revenues and expenses are appropriately reported in different years with respect to the financial statements and the tax returns. The components of the Company’s income tax are as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Current income tax expense (benefit): Federal $ 129 $ 123 $ 378 State 3 (5) 9 Total current $ 132 $ 118 $ 387 Deferred income tax expense (benefit): Federal $ (44) $ (79) $ (284) State (2) 4 (6) Total deferred $ (46) $ (75) $ (290) The components of the Company’s net deferred income tax liability are as follows: As of December 31, 2021 2020 (Recast) (Dollars In Millions) Deferred income tax assets: Loss and credit carryforwards $ 168 $ 146 Deferred compensation 51 54 Deferred policy acquisition costs 67 143 Valuation allowance (10) (9) 276 334 Deferred income tax liabilities: Premium receivables and policy liabilities 200 250 VOBA and other intangibles 552 582 Invested assets (other than unrealized gains (losses)) 264 283 Net unrealized gains on investments 640 945 Other 48 53 1,704 2,113 Net deferred income tax liability $ (1,428) $ (1,779) The deferred tax assets reported above include certain deferred tax assets related to nonqualified deferred compensation and other employee benefit liabilities that were assumed by AXA and they were not acquired by the Company in connection with the acquisition of MONY. The future tax deductions stemming from these liabilities will be claimed by the Company on MONY’s tax returns in its post-acquisition periods. These deferred tax assets have been estimated as of the December 31, 2021 reporting date based on all available information. However, it is possible that these estimates may be adjusted in future reporting periods based on actuarial changes to the projected future payments associated with these liabilities. Any such adjustments will be recognized by the Company as an adjustment to income tax expense during the period in which they are realized. The CARES Act, as described in Note 8, Commercial Mortgage Loans , includes tax provisions relevant to businesses. The income tax related impacts of the CARES Act are not material to the Company’s consolidated financial statements for the year ended December 31, 2021. In management’s judgment, the gross deferred income tax asset as of December 31, 2021 will more likely than not be fully realized. The Company has recognized a valuation allowance of $10 million and $9 million as of December 31, 2021 and 2020, respectively, related to certain intercompany non-life federal NOL’s and state-based future deductible temporary differences that it has determined are more likely than not to expire unutilized. This resulting unfavorable change of $1 million, before the federal benefit of state income taxes, increased income tax expense in 2021 by the same amount. At December 31, 2021, the Company has intercompany loss carryforwards of $758 million that are available to offset future taxable income of certain non-life subsidiaries under the terms of the tax sharing agreement with PLC. Approximately $23 million of these loss carryforwards will expire between 2036 and 2038 and the remaining loss carryforwards of $735 million have no expiration. At December 31, 2020, the Company had intercompany loss carryforwards of $658 million that was available to offset future taxable income of certain non-life subsidiaries under the terms of the tax sharing agreement with PLC. $28 million of these loss carryforwards will expire between 2036 and 2037 and the remaining loss carryforwards of $630 million have no expiration. Included in the deferred income tax assets above are approximately $10 million in state net operating loss carryforwards attributable to certain jurisdictions, which are available to offset future taxable income in the respective state jurisdictions, expiring between 2022 and 2041. As of December 31, 2021 and 2020, some of the Company’s fixed maturities were reported at an unrealized loss, although the net amount is an unrealized gain as of December 31, 2021. If the Company were to realize a tax-basis net capital loss for a year, then such loss could not be deducted against that year’s other taxable income. However, such a loss could be carried back and forward against any prior year or future year tax-basis net capital gains. Therefore, the Company has relied upon a prudent and feasible tax-planning strategy regarding its fixed maturities that were reported at an unrealized loss. The Company has the ability and the intent to either hold such fixed maturities to maturity, thereby avoiding a realized loss, or to generate an offsetting realized gain from unrealized gain fixed maturities if such unrealized loss fixed maturities are sold at a loss prior to maturity. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: As of December 31, 2021 2020 2019 (Dollars In Millions) Balance, beginning of period $ 2 $ 2 $ 7 Additions for tax positions of the current year — — — Additions for tax positions of prior years — — — Reductions of tax positions of prior years: Changes in judgment — — — Settlements during the period — — (5) Lapses of applicable statute of limitations (2) — — Balance, end of period $ — $ 2 $ 2 Included in the end of period balances above, there were no unrecognized tax benefits for which the ultimate deductibility is certain but for which there is uncertainty about the timing of such deductions. The total amount of unrecognized tax benefits, if recognized, that would affect the effective income tax rate is none, $2 million, and $2 million, for the years ended December 31, 2021, 2020, and 2019, respectively. Any accrued interest related to the unrecognized tax benefits and other accrued income taxes have been included in income tax expense. There were no amounts included in any period ending in 2021, 2020, or 2019, as PLC maintains responsibility for the interest on unrecognized tax benefits. The lapse of the 2017 statute of limitations is the reason for the reductions in the unrecognized tax benefits shown in the above chart. In general, the Company is no longer subject to income tax examinations by taxing authorities for tax years that began before 2018. Due to IRS adjustments to the Company’s 2014 through 2016 reported taxable income, the Company has amended certain of its 2014 through 2016 state income tax returns. Such amendments will cause such years to remain open, pending the states’ acceptances of the returns. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATIONThe following table sets forth supplemental cash flow information: For The Year Ended December 31, 2021 2020 2019 (Dollars In Millions) Cash paid / (received) during the year: Interest expense $ 15 $ 177 $ 182 Income taxes 236 80 383 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company provides furnished office space and computers to affiliates through an intercompany agreement. Revenues from this agreement were $9 million, $7 million, and $6 million, for the years ended December 31, 2021, 2020, and 2019, respectively. The Company purchases data processing, legal, investment, and management services from affiliates. The costs of such services were $330 million, $297 million, and $278 million, for the years ended December 31, 2021, 2020, and 2019, respectively. In addition, the Company has an intercompany payable with affiliates as of December 31, 2021 and 2020 of $49 million and $47 million, respectively. There was a $12 million and $13 million intercompany receivable balance as of December 31, 2021 and 2020, respectively. Certain corporations with which PLC’s directors were affiliated paid us premiums and policy fees or other amounts for various types of insurance and investment products, interest on bonds we own and commissions on securities underwritings in which our affiliates participated. Such amounts were immaterial for the years ended December 31, 2021 and 2020 and $6 million for the year ended December 31, 2019. The Company and/or PLC paid commissions, interest on debt and investment products, and fees to these same corporations totaling $2 million for the year ended December 31, 2019. The Company did not make any payments for the year ended December 31, 2021 and 2020. The Company has joint venture interests in real estate for which the Company holds the underlying real estate’s loan. During 2021, 2020, and 2019, the Company received $7 million, $5 million, and $23 million, respectively, in mortgage loan payments corresponding to the joint venture interests and $16 million in principal was collected on loans that paid off in December 2020. During the periods ending December 31, 2021, 2020, and 2019, PLC paid a management fee to Dai-ichi Life of $13 million, $12 million, and $11 million, respectively, for certain services provided to the company. PLC had guaranteed the Company’s obligations for borrowings or letters of credit under the revolving line of credit arrangement to which PLC is also a party. PLC had also issued guarantees, entered into support agreements and/or assumed a duty to indemnify its indirect wholly owned captive insurance companies in certain respects. In connection with the Captive Merger on October 1, 2020, certain captive related guarantees, support agreements and indemnification obligations were terminated, amended or replaced. The Company has agreements with certain of its subsidiaries under which it provides administrative services for a fee. These services include but are not limited to accounting, financial reporting, compliance, policy administration, reserve computations, and projections. In addition, the Company and its subsidiaries pay PLC for investment, legal and data processing services. The Company and/or certain of its affiliates have reinsurance agreements in place with companies owned by PLC. These agreements relate to certain portions of our service contract business which is included within the Asset Protection segment. These transactions are eliminated at the PLC consolidated level. |
STATUTORY REPORTING PRACTICES A
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2021 | |
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | |
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS are that statutory financial statements do not reflect 1) deferred acquisition costs and VOBA, 2) benefit liabilities that are calculated using Company estimates of expected mortality, interest, and withdrawals, 3) deferred income taxes that are not subject to statutory limits, 4) recognition of realized gains and losses on the sale of securities in the period they are sold, and 5) fixed maturities recorded at fair values, but instead at amortized cost. Statu tory net income for the Company was $426 million , $692 million, and $(625) million for the years ended December 31, 2021, 2020, and 2019, respectively. Statutory capital and surplus for the Company was $5.3 billion and $5.4 billion as of December 31, 2021 and 2020, respectively. The Company and its insurance subsidiaries are subject to various state statutory and regulatory restrictions on the insurance subsidiaries’ ability to pay dividends to the Company and the Company’s ability to pay dividends to Protective Life Corporation. In general, dividends up to specified levels are considered ordinary and may be paid without prior approval of the insurance commissioner of the state of domicile. Dividends in larger amounts are considered extraordinary and are subject to affirmative prior approval by such commissioner. The insurance subsidiaries may pay, without the approval of the Insurance Commissioners of the state of domicile, $136 million of distributions in 2022. Additionally, as of December 31, 2021, $1.8 billion of consolidated shareowner’s equity, excluding net unrealized gains on investments, represented restricted net assets of the Company and its insurance subsidiaries needed to maintain the minimum capital required by the insurance subsidiaries’ respective state insurance departments. State insurance regulators and the NAIC have adopted risk-based capital (“RBC”) requirements for life insurance companies to evaluate the adequacy of statutory capital and surplus in relation to investment and insurance risks. The requirements provide a means of measuring the minimum amount of statutory surplus appropriate for an insurance company to support its overall business operations based on its size and risk profile. A company’s risk-based statutory surplus is calculated by applying factors and performing calculations relating to various asset, premium, claim, expense, and reserve items. Regulators can then measure the adequacy of a company’s statutory surplus by comparing it to RBC. The Company manages its capital consumption by using the ratio of its total adjusted capital, as defined by the insurance regulators, to the Company’s action level RBC (known as the RBC ratio), also defined by insurance regulators. As of December 31, 2021 and 2020, the Company and its insurance subsidiaries all exceeded the minimum RBC requirements. Additionally, the Company has certain assets that are on deposit with state regulatory authorities and restricted from use. As of December 31, 2021, the Company and its insurance subsidiaries had on deposit with regulatory authorities, fixed maturity and short-term investments with a fair value of $43 million. The State of Tennessee has adopted certain prescribed accounting practices that differ from those found in NAIC Statutory Accounting Principles (“SAP”). Specifically, Tennessee Insurance Law requires that goodwill arising from the purchase of a subsidiary, controlled or affiliated entity is charged directly to surplus in the year it originates. In NAIC SAP, goodwill in amounts not to exceed 10% of an insurer’s capital and surplus may be capitalized and all amounts are amortized as a component of unrealized gains and losses on investments over periods not to exceed 10 years. Certain prescribed and permitted practices impact the statutory surplus of the Company. These practices include the non-admission of goodwill as an asset for statutory reporting. The favorable (unfavorable) effects on the Company and its statutory surplus, compared to NAIC statutory surplus, from the use of this prescribed practice was as follows: As of December 31, 2021 2020 (Dollars In Millions) Non-admission of goodwill $ (66) $ (105) Total (net) $ (66) $ (105) PLC also has certain permitted practices which are applied at the subsidiary level and do not have a direct impact on the statutory surplus of the Company. These practices include permission to follow the actuarial guidelines of the domiciliary state of the ceding insurer for certain captive reinsurers, accounting for the XOL Asset Value, and a reserve difference related to a captive insurance company. As of December 31, 2021 2020 (Dollars In Millions) Accounting for XOL Asset Value as an admitted asset $ 4,267 4,579 Reserving based on state specific actuarial practices 101 94 Reserving difference related to a captive insurance company — (218) Total (net) $ 4,368 $ 4,455 |
OPERATING SEGMENTS
OPERATING SEGMENTS | 12 Months Ended |
Dec. 31, 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 UL, IUL, VUL, level premium term insurance (“traditional”), fixed annuity, and VA products on a national basis primarily through networks of independent insurance agents and brokers, broker-dealers, financial institutions, independent distribution 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 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 Company previously marketed a credit life and disability product but exited that market at the beginning of 2021. • 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: • gains and losses on investments and derivatives, • losses from the impairment of intangible assets, • 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 DAC, 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 the period ended December 31, 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 and non-cash charges incurred as a result of the impairment of intangible assets. Management believes this change enhances the understanding of the underlying performance trends of the Company’s core operations. 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. Our belief is that pre-tax and after-tax adjusted operating income (loss) enhances management’s and the Board of Directors’ understanding of the ongoing operations, and 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. Net gains (losses) - investments and derivatives 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 years ended December 31, 2021, 2020, and 2019. 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 Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Revenues Retail Life and Annuity $ 2,823 $ 2,440 $ 2,161 Acquisitions 2,984 3,282 2,902 Stable Value Products 347 176 247 Asset Protection 270 275 290 Corporate and Other (11) (5) 131 Total revenues $ 6,413 $ 6,168 $ 5,731 Pre-tax Adjusted Operating Income (Loss) Retail Life and Annuity $ (37) $ 100 $ 153 Acquisitions 314 406 347 Stable Value Products 171 90 93 Asset Protection 40 41 37 Corporate and Other (155) (247) (162) Pre-tax adjusted operating income 333 390 468 Non-operating income (loss) 38 (113) 56 Income before income tax 371 277 524 Income tax expense (benefit) 86 43 97 Net income $ 285 $ 234 $ 427 Pre-tax adjusted operating income $ 333 $ 390 $ 468 Adjusted operating income tax (expense) benefit (51) (66) (86) After-tax adjusted operating income 282 324 382 Non-operating income (loss) 38 (113) 56 Income tax (expense) benefit on adjustments (35) 23 (11) Net income $ 285 $ 234 $ 427 Non-operating income (loss) Derivative gains (losses), net $ 48 $ (195) $ (368) Investment gains (losses), net 102 (40) 309 VA/VUL market impacts (1) 21 — — Goodwill impairment (129) — — Less: related amortization (2) 104 (30) (24) Less: VA GLWB economic cost (100) (92) (91) Total non-operating income (loss) $ 38 $ (113) $ 56 (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 net gains (losses). For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Net Investment Income Retail Life and Annuity $ 1,110 $ 1,015 $ 945 Acquisitions 1,590 1,648 1,533 Stable Value Products 303 230 244 Asset Protection 20 23 28 Corporate and Other (41) (27) 75 Total net investment income $ 2,982 $ 2,889 $ 2,825 Amortization of DAC and VOBA Retail Life and Annuity $ 222 $ 116 $ 100 Acquisitions 19 24 11 Stable Value Products 5 3 3 Asset Protection 63 65 62 Corporate and Other — — — Total amortization of DAC and VOBA $ 309 $ 208 $ 176 Operating Segments (Dollars In Millions) Retail Life and Annuity Acquisitions Stable Value Investments and other assets $ 44,549 $ 54,561 $ 8,392 DAC and VOBA 2,806 870 15 Other intangibles 334 29 5 Goodwill 430 24 114 Total assets $ 48,119 $ 55,484 $ 8,526 Asset Corporate Total Investments and other assets $ 950 $ 18,063 $ 126,515 DAC and VOBA 178 — 3,869 Other intangibles 90 33 491 Goodwill 129 — 697 Total assets $ 1,347 $ 18,096 $ 131,572 Operating Segment Assets (Recast) (Dollars In Millions) Retail Life and Annuity Acquisitions Stable Value Investments and other assets $ 40,194 $ 55,628 $ 5,928 DAC and VOBA 2,480 762 8 Other intangibles 367 33 6 Goodwill 559 24 114 Total assets $ 43,600 $ 56,447 $ 6,056 Asset Corporate Total Investments and other assets $ 881 $ 19,493 $ 122,124 DAC and VOBA 170 — 3,420 Other intangibles 101 33 540 Goodwill 129 — 826 Total assets $ 1,281 $ 19,526 $ 126,910 |
CONSOLIDATED QUARTERLY RESULTS
CONSOLIDATED QUARTERLY RESULTS - UNAUDITED | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
CONSOLIDATED QUARTERLY RESULTS — UNAUDITED | CONSOLIDATED QUARTERLY RESULTS — UNAUDITED The Company’s unaudited consolidated quarterly operating data for the years ended December 31, 2021 and 2020 is presented below. In the opinion of management, all adjustments (consisting only of normal recurring items) necessary for a fair statement of quarterly results have been reflected in the following data. It is also management’s opinion, however, that quarterly operating data for insurance enterprises are not necessarily indicative of results that may be expected in succeeding quarters or years. In order to obtain a more accurate indication of performance, there should be a review of operating results, changes in shareowner’s equity, and cash flows for a period of several quarters. First Quarter Second Third Fourth Quarter (1) (Dollars In Millions) For The Year Ended December 31, 2021 Gross premiums and policy fees $ 1,095 $ 1,026 $ 1,054 $ 1,047 Reinsurance ceded (317) (326) (311) (366) Net premiums and policy fees 778 700 743 681 Net investment income 720 742 753 767 Net gains (losses) - investments and derivatives 127 (33) 67 (11) Other income 88 100 89 102 Total revenues 1,713 1,509 1,652 1,539 Total benefits and expenses 1,586 1,308 1,593 1,555 Income (loss) before income tax 127 201 59 (16) Income tax expense 25 39 10 12 Net income (loss) $ 102 $ 162 $ 49 $ (28) First Second Third Fourth (Dollars In Millions) For The Year Ended December 31, 2020 (Recast) Gross premiums and policy fees $ 896 $ 1,009 $ 1,045 $ 1,053 Reinsurance ceded (36) (360) (287) (344) Net premiums and policy fees 860 649 758 709 Net investment income 754 742 740 653 Net gains (losses) - investments and derivatives (301) (34) 111 (11) Other income 128 111 115 184 Total revenues 1,441 1,468 1,724 1,535 Total benefits and expenses 1,600 1,294 1,564 1,433 Income (loss) before income tax (159) 174 160 102 Income tax (benefit) expense (30) 32 29 12 Net income (loss) $ (129) $ 142 $ 131 $ 90 (1) The Company recorded a non-cash impairment charge of $129 million Q4 2021. Refer to Note 10, Goodwill for additional information. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSThe Company has evaluated the effects of events subsequent to December 31, 2021, and through the date we filed our consolidated financial statements with the United States Securities and Exchange Commission. All accounting and disclosure requirements related to subsequent events are included in our consolidated financial statements. |
SCHEDULE III - SUPPLEMENTARY IN
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION | SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION PROTECTIVE LIFE INSURANCE COMPANY AND SUBSIDIARIES Segment Deferred Future Policy Unearned Premiums Stable Value Net Net Investment Income (1) Benefits Amortization Other Operating Expenses (1) Premiums Written (2) (Dollars In Millions) For The Year Ended December 31, 2021 Retail Life and Annuity $ 2,806 $ 19,506 $ — $ 11,674 $ 1,474 $ 1,110 $ 2,316 $ 222 $ 224 $ — Acquisitions 870 34,478 1 5,914 1,320 1,590 2,411 19 234 28 Stable Value Products 15 — — 8,526 — 303 124 5 3 — Asset Protection 178 34 843 — 98 20 59 63 108 97 Corporate and Other — 46 1 78 10 (41) 14 — 111 10 Total $ 3,869 $ 54,064 $ 845 $ 26,192 $ 2,902 $ 2,982 $ 4,924 $ 309 $ 680 $ 135 For The Year Ended December 31, 2020 (Recast) Retail Life and Annuity $ 2,480 $ 18,483 $ — $ 10,914 $ 1,541 $ 1,015 $ 2,168 $ 116 $ 199 $ — Acquisitions 762 35,537 2 6,361 1,317 1,648 2,510 24 267 90 Stable Value Products 8 — — 6,056 — 230 133 3 4 — Asset Protection 170 40 779 — 107 23 75 65 94 105 Corporate and Other — 47 1 68 11 (27) 15 — 218 11 Total $ 3,420 $ 54,107 $ 782 $ 23,399 $ 2,976 $ 2,889 $ 4,901 $ 208 $ 782 $ 206 For The Year Ended December 31, 2019 (Recast) Retail Life and Annuity $ 2,417 $ 17,674 $ — $ 9,402 $ 1,244 $ 945 $ 1,765 $ 100 $ 209 $ — Acquisitions 924 36,176 2 6,387 1,173 1,533 2,237 11 232 42 Stable Value Products 5 — — 5,444 — 244 144 3 4 — Asset Protection 174 44 792 — 120 28 93 62 98 180 Corporate and Other — 51 1 78 11 75 17 — 232 12 Total $ 3,520 $ 53,945 $ 795 $ 21,311 $ 2,548 $ 2,825 $ 4,256 $ 176 $ 775 $ 234 (1) Allocations of Net Investment Income and Other Operating Expenses are based on a number of assumptions and estimates and results would change if different methods were applied. (2) Excludes Life Insurance. See the accompanying Report of Independent Registered Public Accounting Firm |
SCHEDULE IV - REINSURANCE
SCHEDULE IV - REINSURANCE | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
SCHEDULE IV - REINSURANCE | SCHEDULE IV - REINSURANCE PROTECTIVE LIFE INSURANCE COMPANY AND SUBSIDIARIES Gross Amount Ceded to Assumed Net Percentage of (Dollars In Millions) For The Year Ended December 31, 2021: Life insurance in-force $ 829,253 $ (222,865) $ 191,110 $ 797,498 24.0 % Premiums and policy fees: Life insurance $ 2,843 $ (1,113) $ 1,037 $ 2,767 (1) 37.5 % Accident/health insurance 32 (19) 28 41 68.3 Property and liability insurance 281 (188) 1 94 1.1 Total $ 3,156 $ (1,320) $ 1,066 $ 2,902 For The Year Ended December 31, 2020 (Recast): Life insurance in-force $ 785,197 $ (244,588) $ 206,050 $ 746,659 27.6 % Premiums and policy fees: Life insurance $ 2,661 $ (826) $ 934 $ 2,769 (1) 33.7 % Accident/health insurance 37 (23) 90 104 86.5 Property and liability insurance 279 (178) 2 103 1.9 Total $ 2,977 $ (1,027) $ 1,026 $ 2,976 For The Year Ended December 31, 2019 (Recast): Life insurance in-force $ 766,197 $ (271,601) $ 212,574 $ 707,170 30.1 % Premiums and policy fees: Life insurance $ 2,853 $ (1,312) $ 836 $ 2,377 (1) 35.2 % Accident/health insurance 42 (90) 41 (7) (585.7) Property and liability insurance 281 (106) 3 178 1.7 Total $ 3,176 $ (1,508) $ 880 $ 2,548 (1) Includes annuity policy fees of $199 million, $163 million, and $164 million, and for the years ended December 31, 2021, 2020, and 2019, respectively. See the accompanying Report of Independent Registered Public Accounting Firm |
SCHEDULE V - VALUATION AND QUAL
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE V — VALUATION AND QUALIFYING ACCOUNTS PROTECTIVE LIFE INSURANCE COMPANY AND SUBSIDIARIES Additions Description Balance Charged to Charges Deductions Balance (Dollars In Millions) As of December 31, 2021 Allowance for funded commercial mortgage loan credit losses $ 222 $ — $ — $ (119) $ 103 As of December 31, 2020 Allowance for funded commercial mortgage loan credit losses $ 5 $ 140 $ 80 $ (3) $ 222 See the accompanying Report of Independent Registered Public Accounting Firm |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 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 organized under the laws of Japan (“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 financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such accounting principles differ from statutory reporting practices used by insurance companies in reporting to state regulatory authorities (see also Note 21, Statutory Reporting Practices and Other Regulatory Matters ). 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. |
Entities Included | Entities IncludedThe consolidated financial statements include the accounts of Protective Life Insurance Company and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include those used in determining deferred policy acquisition costs (“DAC”) and related amortization periods, goodwill recoverability, value of business acquired (“VOBA”), certain investments and certain derivatives fair values, the allowance for credit losses, other-than-temporary impairments, future policy benefits, pension and other postretirement benefits, provisions for income taxes, reserves for contingent liabilities, reinsurance risk transfer assessments, and reserves for losses in connection with unresolved legal matters. Further, certain estimates and assumptions include the direct and indirect impact of the COVID-19 pandemic on the Company’s business, financial condition and results of operations. The economic impact of the pandemic on the Company’s business depends on its severity and duration, which in turn depend on highly uncertain factors such as the nature and extent of containment efforts and the timing and efficacy of vaccines. The high level of uncertainty regarding this economic impact means that management’s estimates and assumptions, specifically those related to investments and certain derivatives fair values, the allowance for credit losses, and future policy benefits are subject to change – perhaps substantial change – as the situation develops and new information becomes available. |
Net Investment Income and Valuation of Investment Securities | Net Investment Income Investment income is recognized when earned, net of applicable management or other fees. Investment income on fixed maturity securities includes coupon interest, amortization of any premium and accretion of any discount. Investment income on equity securities includes dividend income and preferred coupons interest. Investment income on commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”), and other asset-backed securities is initially based upon yield, cash flow and prepayment assumptions at the date of purchase. Subsequent revisions in those assumptions are recorded using the retrospective or prospective method. Under the retrospective method used primarily for mortgage-backed and asset-backed securities of high credit quality which cannot be contractually prepaid in such a manner that we would not recover a substantial portion of the initial investment, amortized cost of the security is adjusted to the amount that would have existed had the revised assumptions been in place at the date of purchase. The adjustments to amortized cost are recorded as a charge or credit to net investment income. Under the prospective method, which is used for all other mortgage-backed and asset-backed securities, future cash flows are estimated and interest income is recognized going forward using the new internal rate of return. Valuation of Investment Securities The Company determines the appropriate classification of investment securities at the time of purchase and periodically re-evaluates such designations. Investment securities are classified as either trading, available-for-sale, or held-to-maturity securities. Investment securities classified as trading are recorded at fair value with changes in fair value recorded in net gains (losses) - investments and derivatives . Investment securities purchased for long term investment purposes are classified as available-for-sale and are recorded at fair value with changes in unrealized gains and losses, net of taxes, reported as a component of other comprehensive income (loss). Investment securities are classified as held-to-maturity when the Company has the intent and ability to hold the securities to maturity and are reported at amortized cost. Interest income on available-for-sale and held-to-maturity securities includes the amortization of premiums and accretion of discounts and are recorded in investment income. As of December 31, 2020, the Company no longer held any held-to-maturity securities. The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a “waterfall” approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information as outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations. Where multiple broker quotes are obtained, the Company reviews the quotes and selects the quote that provides the best estimate of the price a market participant would pay for these specific assets in an arm's length transaction. A pricing matrix is used to price securities for which the Company is unable to obtain or |
Net gains (losses) - investments and derivatives | Net gains (losses) - investments and derivatives Net gains (losses) - investments and derivatives includes realized gains and losses from the sale of investments, which are calculated on the basis of specific identification on the trade date. It also includes gains and losses associated with the fair value changes of equity securities and net credit losses. In addition, it includes the gains and losses on free-standing and embedded derivatives. |
Other Income | Other Income Other income consists primarily of advisory and administration service fees assessed on investment contract holder account values, marketing and distribution fees, rider charges associated with guaranteed benefits, distribution company revenues and other fees. In addition, any gains related to final settlements related to its acquisitions are included in other income. |
Allowance for Credit Losses | Allowance for Credit Losses – Fixed Maturity and Structured Investments Each quarter the Company reviews investments with unrealized losses to determine whether such impairments are the result of credit losses. The Company analyzes various factors to make such determination including, but are not limited to: 1) actions taken by rating agencies, 2) default by the issuer, 3) the significance of the decline, 4) an assessment of the Company’s intent to sell the security (including a more likely than not assessment of whether the Company will be required to sell the security) before recovering the security’s amortized cost, 5) an economic analysis of the issuer’s industry, and 6) the financial strength, liquidity, and recoverability of the issuer. Management performs a security by security review each quarter to evaluate whether a credit loss has occurred. For securities which the Company does not intend to sell and does not expect to be required to sell before recovering the security’s amortized cost basis, analysis of expected cash flows is used to measure the amount of the credit loss. To the extent the amortized cost basis of the security exceeds the present value of future cash flows expected to be collected, this difference represents a credit loss. Credit losses are recorded in net gains (losses) - investments and derivatives with a corresponding adjustment to the allowance for credit losses, except that the credit loss recognized cannot exceed the difference between the book value and fair value of the security as of the date of the analysis. In future periods, recoveries in the present value of expected cash flows are recorded as a reversal of the previously recognized allowance for credit losses with an offsetting adjustment to net gains (losses) - investments and derivatives . The Company considers contractual cash flows and all known market data related to cash flows when developing its estimates of expected cash flows. The Company uses the effective interest rate implicit in the security at the date of acquisition to discount expected cash flows. For floating rate securities, the Company’s policy is to lock in the interest rate at the first instance of an impairment. Estimates of expected cash flows are not probability-weighted but reflect the Company’s best estimate based on past events, current conditions, and reasonable and supportable forecasts of future events. Debt securities that the Company intends to sell or expects to be required to sell before recovery are written down to fair value with the change recognized in net gains (losses) - investments and derivatives . The Company presents accrued interest receivable separately from other components of the amortized cost basis of its fixed maturity and structured investments and has made an accounting policy election not to measure an allowance for credit losses for accrued interest receivable. The Company’s policy is to write off uncollectible accrued interest receivables through a reversal of interest income in the period in which a credit loss is identified. Prior to January 1, 2020, the Company calculated a valuation allowance based on the analysis of specific loans that were believed to have a higher risk of credit impairment consistent with the applicable guidance for loan impairments in ASC Subtopic 310. Due to the Company’s loss experience and nature of the loan portfolio, the Company believed that a collectively evaluated allowance would be inappropriate. Since the Company used the specific identification method for calculating the allowance, it was necessary to review the economic situation of each borrower to determine those that had higher risk of credit impairment. The Company has a team of professionals that monitors borrower conditions such as payment practices, borrower credit, operating performance, and property conditions, as well as ensuring the timely payment of property taxes and insurance. Through this monitoring process, the Company assessed the risk of each loan. When issues were identified, the severity of the issues was assessed and reviewed for possible credit impairment. If a loss was deemed probable, an expected loss calculation was performed and an allowance was established for that loan based on the expected loss. The expected loss was calculated as the excess carrying value of a loan over either the present value of expected future cash flows discounted at the loan’s original effective interest rate, or the current estimated fair value of the loan’s underlying collateral. A loan could be subsequently charged off at such point that the Company no longer expected to receive cash payments, the present value of future expected payments of the renegotiated loan was less than the current principal balance, or at such time that the Company was party to foreclosure or bankruptcy proceedings associated with the borrower and did not expect to recover the principal balance of the loan. Allowance for Credit Losses – Commercial Mortgage Loans and Unfunded Commitments Effective January 1, 2020, the ACL represents the Company’s best estimate of expected credit losses over the contractual term of the loans. The allowance for credit losses for unfunded loan commitments is recognized as a component of other liabilities on the consolidated condensed balance sheet. Changes in the allowance for credit losses for both funded and unfunded commercial mortgage loans are recognized in net gains (losses) - investments and derivatives . Prior to January 1, 2020, the Company calculated a valuation allowance based on the analysis of specific loans that were believed to have a higher risk of credit impairment consistent with the applicable guidance for loan impairments in ASC Subtopic 310. The Company uses a loan-level probability of default (“PD”) and loss given default (“LGD”) model to calculate the allowance for credit losses for substantially all of its commercial mortgage loans and unfunded loan commitments. Guidance in FASB ASC Topic 326-20 - Credit Losses requires collective assessment of financial assets with similar risk characteristics. Consistent with this guidance, the model used by the Company (the “CML Model”) incorporates historical default data for a large number of loans with similar characteristics to the Company’s commercial mortgage loans in the measurement of the allowance for credit losses. Relevant risk characteristics include debt service coverage ratio (“DSCR”), loan-to-value ratio (“LTV”), geographic location, and property type. This historical default data is applied through the CML Model to forecast loan-level risk parameters including PD and LGD which provide the basis for the determination of expected losses. The CML Model incorporates both current conditions and reasonable and supportable forecasts when estimating the PD and LGD values that are used as the basis for calculating expected losses. Current conditions are incorporated by considering market-specific information, such as vacancy rates and property prices, to reflect the current position in the market cycle. To incorporate reasonable and supportable forecasts, loan-level risk parameters produced by the CML Model are conditioned by multiple probability-weighted macroeconomic forecast scenarios. CML Model results are also subject to adjustments based on other qualitative considerations to reflect management’s best estimate of the impact of future events and circumstances on the ACL. PDs and LGDs are forecasted over a reasonable and supportable forecast period, which is reassessed on a quarterly basis. After the reasonable and supportable forecast period, the CML Model reverts to the Company’s own historical loss history at a portfolio segment level. The historical loss data used for reversion will be assessed annually in the third quarter, along with certain other model inputs and assumptions. All or a portion of a loan may be written off at such point that a) the Company no longer expects to receive cash payments, b) the present value of future expected payments of a renegotiated loan is less than the current principal balance, or c) at such time that the Company is party to foreclosure or bankruptcy proceedings associated with the borrower and does not expect to recover the principal balance of the loan. A write-off is recorded by eliminating the allowance against the commercial mortgage loan and recording the renegotiated loan or the collateral property related to the loan as investment real estate on the balance sheet, which is carried at the lower of the appraised fair value of the property or the unpaid principal balance of the loan, less estimated selling costs associated with the property. Certain loans which meet the definition of collateral dependent are identified as part of the Company’s ongoing loan surveillance process. Loans are considered to be collateral dependent if foreclosure is deemed probable, or if a borrower is in financial difficulty and repayment is expected to be provided substantially through the operation or sale of the underlying collateral. The ACL for loans identified as collateral dependent is measured based on the fair value of the underlying collateral, less costs to sell. The Company presents accrued interest receivable separately from other components of the amortized cost basis of its commercial mortgage loans and has made an accounting policy election not to measure an allowance for credit losses for accrued interest receivable. It is the Company’s policy to cease to carry accrued interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. In each scenario, accrued income is reversed through investment income. Refer to Note 8, Commercial Mortgage Loans , for additional information. 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. |
Corporate-Owned Life Insurance | Corporate-Owned Life Insurance The Company has purchased corporate-owned life insurance (“COLI”) on the lives of certain employees. COLI is carried at the cash surrender value of the policies, which is based upon the underlying fair value of the portfolio of assets. Changes in the cash surrender value are reported currently in earnings. COLI is included in other long-term investments on the Company’s balance sheet and the cash surrender value was $710 million and $179 million as of December 31, 2021 and 2020, respectively. |
Derivative Financial Instruments | Derivative Financial Instruments The Company records its derivative financial instruments at fair value in the consolidated balance sheet in other long-term investments and other liabilities. The Company designates derivatives as either a cash flow hedge which hedges the variability of cash flows specific to a recognized asset or liability or forecasted transaction; a fair value hedge, which hedges the fair value of a recognized asset or liability or unrecognized firm commitment; or a derivative that does not qualify for hedge accounting. The Company assesses the effectiveness of a hedge at its inception and subsequently on a quarterly basis. For cash flow hedges, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged item impacts earnings. For fair value hedges, their gain or loss as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in net gains (losses) - investments and derivatives . The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship in net gains (losses) - investments and derivatives . For additional information, refer to Note 6, Derivative Financial Instruments . |
Commercial Mortgage Loans | Commercial Mortgage Loans 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 (“ACL”). 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 . |
Short-term Investments | Short-term Investments Short-term investments primarily consist of highly liquid securities and other investments with remaining maturities of one year or less, but greater than three months, at the time of purchase. These securities and investments are generally carried at fair value or amortized cost that approximates fair value. |
Cash | Cash Cash includes all demand deposits reduced by the amount of outstanding checks and drafts. As a result of the Company’s cash management system, checks issued from a particular bank but not yet presented for payment may create negative book cash balances with the bank at certain reporting dates. Such negative balances are included in other liabilities and were $178 million and $185 million as of December 31, 2021 and 2020, respectively. The Company has deposits with certain financial institutions which exceed federally insured limits. The Company has reviewed the creditworthiness of these financial institutions and believes there is minimal risk of a material loss. |
Policy Loans | Policy Loans Policy loans are stated at unpaid principal balances. Interest income is recorded as earned using the contractual interest rate. Generally, accrued interest is capitalized on the policy’s anniversary date. Any unpaid principal and accrued interest is deducted from the cash surrender value or the death benefit prior to settlement of the insurance policy. |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs (“DAC”) The incremental direct costs associated with successfully acquired insurance policies are deferred to the extent such costs are deemed recoverable from future profits. Such costs include commissions, costs of policy issuance and underwriting and certain other costs that are directly related to the successful acquisition of traditional life and health insurance, credit insurance, universal life insurance, and investment products. DAC is subject to recoverability testing at the end of each accounting period. Traditional life and health insurance acquisition costs are amortized over the premium-payment period of the related policies in proportion to the ratio of annual premium income to the present value of the total anticipated premium income. Credit insurance acquisition costs are being amortized in proportion to earned premium. Acquisition costs for universal life and investment products are amortized over the lives of the policies in relation to the present value of estimated gross profits before amortization. Acquisition costs for stable value contracts are amortized over the term of the contracts using the effective yield method. The Company makes certain assumptions regarding the mortality, persistency, expenses, and interest rates (equal to the rate used to compute liabilities for future policy benefits, currently 1.00% to 7.86%) the Company expects to experience in future periods when determining the present value of estimated gross profits (“EGPs”). These assumptions are best estimates and are periodically updated whenever actual experience and/or expectations for the future change from that assumed. Additionally, DAC is also impacted by unrealized investment gains (losses) which would have been recognized if such gains |
Value of Businesses Acquired | Value of Businesses Acquired (“VOBA”) In conjunction with the Merger and the acquisition of insurance policies or investment contracts, a portion of the purchase price is allocated to the right to receive future gross profits from cash flows and earnings of associated insurance policies and investment contracts. This intangible asset, called VOBA, is based on the actuarially estimated present value of future cash flows from associated insurance policies and investment contracts acquired. The estimated present value of future cash flows used in the calculation of the VOBA is based on certain assumptions, including mortality, persistency, expenses, and interest rates that the Company believes to be those of a market participant. The Company amortizes VOBA in proportion to gross premiums for traditional life products, or estimated gross margins (“EGMs”) for participating traditional life products within the MONY Life Insurance Company (“MONY”) block. For interest sensitive products, the Company uses various amortization bases including EGPs, revenues, account values, or insurance in-force. VOBA is subject to annual recoverability testing. Included within the deferred policy acquisition costs and value of business acquired line of the Company’s consolidated balance sheets are amounts related to certain contracts or blocks of business that have negative VOBA. These amounts are presented on a net basis with positive VOBA amounts within this line on the Company’s consolidated balance sheets. Negative VOBA is amortized over the life of the related policies based on the amount of insurance in-force (for life insurance) or account values (for annuities). Such amortization is recorded in the amortization of deferred policy acquisition costs and value of business acquired line of the Company’s consolidated statements of income on a net basis with any positive VOBA amortization. |
Other Intangible Assets | Other Intangible Assets Other intangible assets with definite lives are amortized over the estimated useful life of the asset and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Amortizable intangible assets primarily consist of distribution relationships, trade names, technology, and software. Intangible assets with indefinite lives, primarily insurance licenses, are not amortized, but are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Software is generally amortized over a three |
Property and Equipment | Property and Equipment The Company depreciates its assets using the straight-line method over the estimated useful lives of the assets. The Company’s home office is depreciated over twenty-five years, furniture is depreciated over a ten year useful life, office equipment and machines are depreciated over a five year useful life, and computers are depreciated over a four year useful life. Land is not depreciated. Major repairs or improvements ar e capitalized and depreciated over the estimated useful lives of the assets. Other repairs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or retired are removed from the accounts, and resulting gains or losses are included in income. Leases are recorded on the balance sheet as right-of-use assets and liabilities within property and equipment and other liabilities , respectively. |
Separate Accounts | Separate Accounts The separate account assets represent funds for which the Company does not bear the investment risk. These assets are carried at fair value and are equal to the separate account liabilities, which represent the policyholder’s equity in those assets. The investment income and investment gains and losses on the separate account assets accrue directly to the policyholder. These amounts are reported separately as assets and liabilities related to separate accounts in the accompanying consolidated financial statements. Amounts assessed against policy account balances for the costs of insurance, policy administration, and other services are included in premiums and policy fees in the accompanying consolidated statements of income. Fees are generally based on the daily net assets of the policyholder’s account value and recognized as revenue when assessed. Assets and liabilities related to separate accounts include balances related to separate accounts assumed through reinsurance. These balances relate to variable annuity and variable life policies that we have reinsured on a modified coinsurance basis. |
Stable Value Product Account Balances | Stable Value Product Account Balances The Stable Value Products segment sells fixed and floating rate funding agreements directly to qualified institutional investors. The segment also issues funding agreements to the Federal Home Loan Bank (“FHLB”), and markets guaranteed investment contracts (“GICs”) to 401(k) and other qualified retirement savings plans. GICs are contracts which specify a return on deposits for a specified period and often provide flexibility for withdrawals at book value in keeping with the benefits provided by the plan. The Company records its stable value contract liabilities in the consolidated balance sheets in stable value product account balances at the deposit amount plus accrued interest, adjusted for any unamortized premium or discount. Interest on the contracts is accrued based upon contract terms. Any premium or discount is amortized using the effective yield method. |
Insurance Liabilities and Reserves | nsurance Liabilities and ReservesEstablishing an adequate liability for the Company’s obligations to policyholders requires the use of certain assumptions. Estimating liabilities for future policy benefits on life and health insurance products requires the use of assumptions relative to future investment yields, mortality, morbidity, persistency, and other assumptions based on the Company’s historical experience, modified as necessary to reflect anticipated trends and to include provisions for possible adverse deviation. Determining liabilities for the Company’s property and casualty insurance products also requires the use of assumptions, including the projected levels of used vehicle prices, the frequency and severity of claims, and the effectiveness of internal processes designed to reduce the level of claims. The Company’s results depend significantly upon the extent to which its actual claims experience is consistent with the assumptions the Company used in determining its reserves and pricing its products. The Company’s reserve assumptions and estimates require significant judgment and, therefore, are inherently uncertain. The Company cannot determine with precision the ultimate amounts that it will pay for actual claims or the timing of those payments. |
Guaranteed Living Withdrawal Benefits | Guaranteed Living Withdrawal BenefitsThe Company also establishes reserves for guaranteed living withdrawal benefits (“GLWB”) on its variable annuity (“VA”) products. The GLWB is valued in accordance with FASB guidance under the ASC Derivatives and Hedging Topic which utilizes the valuation technique prescribed by the ASC Fair Value Measurements and Disclosures Topic, which requires the embedded derivative to be recorded at fair value using current interest rates and implied volatilities for the equity indices. The fair value of the GLWB is impacted by equity market conditions and can result in the GLWB embedded derivative being in an overall net asset or net liability position. In times of favorable equity market conditions the likelihood and severity of claims is reduced and expected fee income increases. Since claims are generally expected later than fees, these favorable equity market conditions can result in the present value of fees being greater than the present value of claims, which results in a net GLWB embedded derivative asset. In times of unfavorable equity market conditions the likelihood and severity of claims is increased and expected fee income decreases and can result in the present value of claims exceeding the present value of fees resulting in a net GLWB embedded derivative liability. The methods used to estimate the embedded derivative employ assumptions about mortality, lapses, policyholder behavior, equity market returns, interest rates, and market volatility. The Company assumes age-based mortality from the Ruark 2015 ALB table adjusted for company experience. Differences between the actual experience and the assumptions used result in variances in profit and could result in losses. |
Goodwill | Goodwill The balance recognized as goodwill is not amortized, but is reviewed for impairment on an annual basis, or more frequently as events or circumstances may warrant, including those circumstances which would more likely than not reduce the fair value of the Company’s reporting units below its carrying amount. Accounting for goodwill requires an estimate of the future profitability of the associated lines of business within the Company’s reporting units to assess the recoverability of the capitalized goodwill. The Company’s material goodwill balances are attributable to certain of its reportable segments. Each of the Company’s reportable segments are considered separate reporting units, with the exception of the Retail Life and Annuity segment. This reportable segment contains the Protection and Retirement divisions which are considered separate reporting units. The Company evaluates the carrying value of goodwill at the reporting units level at least annually and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Such circumstances could include, but are not limited to: 1) a significant adverse change in legal factors or in business climate, 2) unanticipated competition, or 3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, the Company first determines through qualitative analysis whether relevant events and circumstances indicate that it is more likely than not that a reporting unit’s goodwill balances is impaired as of the testing date. If the qualitative analysis does not indicate that an impairment of a reporting unit’s goodwill is more likely than not then no other specific quantitative impairment testing is required. If it is determined that it is more likely than not that impairment exists, the Company performs a quantitative assessment and compares its estimate of the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. The Company utilizes a fair value measurement (which includes a discounted cash flows analysis) to assess the carrying value of the reporting unit in consideration of the recoverability of the goodwill balance assigned to each reporting unit as of the measurement date. The cash flows used to determine the fair value of the Company’s reporting units are dependent on a number of significant assumptions. The Company’s estimates, which consider a market participant view of fair value, are subject to change given the inherent uncertainty in predicting future results and cash flows, which are impacted by such things as policyholder behavior, competitor pricing, capital limitations, new product introductions, and specific industry and market conditions. See Note 10, Goodwill for additional information on the Company’s annual impairment review. |
Income Taxes | Income Taxes The Company's income tax returns are included in PLC's consolidated U.S. income tax return. The Company uses the asset and liability method of accounting for income taxes. Generally, most items in pretax book income are also included in taxable income in the same year. However, some items are recognized for book purposes and for tax purposes in different years or are never recognized for either book or tax purposes. Those differences that will never be recognized for either book or tax purposes are permanent differences (e.g., investment income not subject to tax). As a result, the effective tax rate reflected in the financial statements may differ from the statutory rate reflected in the tax return. Those differences that are reported in different years for book and tax purposes are temporary and will reverse over time (e.g., the valuation of future policy benefits). These temporary differences are accounted for in the intervening periods as deferred tax assets and liabilities. Deferred tax assets generally represent revenue that is taxable before it is recognized in financial income and expenses that are deductible after they are recognized in financial income. Deferred tax liabilities generally represent revenues that are taxable after they are recognized in financial income or expenses or losses that are deductible before they are recognized in financial income. Components of AOCI are presented net of tax, and it is the Company’s policy to use the aggregate portfolio approach to clear the disproportionate tax effects that remain in AOCI as a result of tax rate changes and certain other events. Under the aggregate portfolio approach, disproportionate tax effects are cleared only when the portfolio of investments that gave rise to the deferred tax item is sold or otherwise disposed of in its entirety. The Company evaluates the recoverability of the Company’s deferred tax assets and establishes a valuation allowance, if necessary, to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized. Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance the Company may consider many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) in which tax jurisdictions they were generated and the timing of their reversal; (4) taxable income in prior carryback years as well as projected taxable earnings exclusive of reversing temporary differences and carryforwards; (5) the length of time that carryovers can be utilized in the various taxing jurisdictions; (6) any unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that the Company would employ to avoid a tax benefit from expiring unused. Although realization is not assured, management believes it is more likely than not that the deferred tax assets, net of valuation allowances, will be realized. GAAP prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on tax returns. The application of this guidance is a two-step process, the first step being recognition. The Company determines whether it is more likely than not, based on the technical merits, that the tax position will be sustained upon examination. If a tax position does not meet the more likely than not recognition threshold, the benefit of that position is not recognized in the financial statements. The second step for the tax positions that meet the more likely than not criteria is measurement. The Company measures the tax position as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate resolution with a taxing authority that has full knowledge of all relevant information. This measurement considers the amounts and probabilities of the outcomes that could be realized upon ultimate settlement using the facts, circumstances, and information available at the reporting date. The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing jurisdictions. Audit periods remain open for review until the statute of limitations expires. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards, the statute of limitations does not close until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. The Company classifies all interest and penalties related to tax uncertainties as income tax expense. Refer to Note 18, Income Taxes |
Policyholder Liabilities, Revenues and Benefits Expense | Policyholder Liabilities, Revenues, and Benefits Expense Future Policy Benefits and Claims Liabilities for life and annuity benefit reserves consist of liabilities for traditional life insurance, cash values associated with universal life insurance, immediate annuity benefit reserves, and other benefits associated with life and annuity benefits. The unpaid life claim liabilities consist of current pending claims as well as an estimate of incurred but not reported life insurance claims. Other policy benefit reserves consist of certain health insurance policies that are in runoff. The unpaid claim liabilities associated with other policy benefits includes current pending claims, the present value of estimated future claim payments for policies currently receiving benefits and an estimate of claims incurred but not yet reported. Traditional Life, Health, and Credit Insurance Products Traditional life insurance products consist principally of those products with fixed and guaranteed premiums and benefits, and they include whole life insurance policies, term and term-like life insurance policies, limited payment life insurance policies, and certain annuities with life contingencies. In accordance with ASC 805, the liabilities for future policy benefits on traditional life insurance products, when combined with the associated VOBA, were recorded at fair value on the date of the Merger. These values, subsequent to the Merger, are computed using assumptions that include interest rates, mortality, lapse rates, expense estimates, and other assumptions based on the Company’s experience, modified as necessary to reflect anticipated trends and to include provisions for possible adverse deviation. Liabilities for future policy benefits on traditional life insurance products have been computed using a net level method including assumptions as to investment yields, mortality, persistency, and other assumptions based on the Company’s experience, modified as necessary to reflect anticipated trends and to include provisions for possible adverse deviation . Reserve investment yield assumptions on December 31, 2021, range from approximatel y 2.50% to 5.50%. The liability for future policy benefits and claims on traditional life, health, and credit insurance products includes estimated unpaid claims that have been reported to us and claims incurred but not yet reported. Policy claims are charged to expense in the period in which the claims are incurred. Traditional life insurance premiums are recognized as revenue when due. Health and credit insurance premiums are recognized as revenue over the terms of the policies. Benefits and expenses are associated with earned premiums so that profits are recognized over the life of the contracts. This is accomplished by means of the provision for liabilities for future policy benefits and the amortization of DAC and VOBA. Gross premiums in excess of net premiums related to immediate annuities are deferred and recognized over the life of the policy. Universal Life and Investment Products Universal life and investment products include universal life insurance, guaranteed investment contracts, guaranteed funding agreements, deferred annuities, and annuities without life contingencies. Premiums and policy fees for universal life and investment products consist of fees that have been assessed against policy account balances for the costs of insurance, policy administration, and surrenders. Such fees are recognized when assessed and earned. Benefit reserves for universal life and investment products represent policy account balances before applicable surrender charges plus certain deferred policy initiation fees that are recognized in income over the term of the policies. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policy account balances and interest credited to policy account balances. Interest rates credited to universal life products ranged from 1.0% to 8.75% and investment products ranged from 0.05% to 9.81% in 2021. The Company establishes liabilities for fixed indexed annuity (“FIA”) products. These products are deferred fixed annuities with a guaranteed minimum interest rate plus a contingent return based on equity market performance. The FIA product is considered a hybrid financial instrument under FASB ASC Topic 815 - Derivatives and Hedging which allows the Company to make the election to value the liabilities of these FIA products at fair value. This election was made for the FIA products issued through 2009. These products are no longer being marketed. The future changes in the fair value of the liability for these FIA products are recorded in Benefit and settlement expenses with the liability being recorded in Annuity account balances . For more information regarding the determination of fair value of annuity account balances please refer to Note 5, Fair Value of Financial Instruments . Premiums and policy fees for these FIA products consist of fees that have been assessed against the policy account balances for surrenders. Such fees are recognized when assessed and earned. The Company currently markets a deferred fixed annuity with a guaranteed minimum interest rate plus a contingent return based on equity market performance and the products are considered hybrid financial instruments under the FASB’s ASC Topic 815 - Derivatives and Hedging . As a result, the Company accounts for the provision that provides for a contingent return based on equity market performance as an embedded derivative. The embedded derivative is bifurcated from the host contract and recorded at fair value in Other liabilities . Changes in the fair value of the embedded derivative are recorded in net gains (losses) - investments and derivatives . For more information regarding the determination of fair value of the FIA embedded derivative refer to Note 5, Fair Value of Financial Instruments . The host contract is accounted for as a universal life (“UL”) type insurance contract in accordance with ASC Topic 944 - Financial Services—Insurance and is recorded in Annuity account balances with any discount to the minimum account value being accreted using the effective yield method. The Company markets universal life products with a guaranteed minimum interest rate plus a contingent return based on equity market performance and the products are considered hybrid financial instruments under the FASB’s ASC Topic 815 - Derivatives and Hedging . The Company has not elected to value these indexed universal life (“IUL”) products at fair value prior to the Merger date. As a result, the Company accounts for the provision that provides for a contingent return based on equity market performance as an embedded derivative. The embedded derivative is bifurcated from the host contract and recorded at fair value in Other liabilities . Changes in the fair value of the embedded derivative are recorded in net gains (losses) - investments and derivatives . For more information regarding the determination of fair value of the IUL embedded derivative refer to Note 5, Fair Value of Financial Instruments . The host contract is accounted for as a debt instrument in accordance with ASC Topic 944 - Financial Services - Insurance and is recorded in Future policy benefits and claims with any discount to the minimum account value being accreted using the effective yield method. Benefits and settlement expenses include accrued interest and benefit claims incurred during the period. The Company’s accounting policies with respect to variable universal life (“VUL”) and VA are identical to those noted above for universal life and investment products except that policy account balances (excluding account balances that earn a fixed rate) are valued at fair value and reported as components of assets and liabilities related to separate accounts. The Company establishes liabilities for guaranteed minimum death benefits (“GMDB”) on its VA products. The methods used to estimate the liabilities employ assumptions about mortality and the performance of equity markets. The Company assumes age-based mortality from the Ruark 2015 ALB table adjusted for company experience. Future declines in the equity market would increase the Company’s GMDB liability. Differences between the actual experience and the assumptions used result in variances in profit and could result in losses. A portion of the Company’s GMDB is subject to a dollar-for-dollar reduction upon withdrawal of related annuity deposits on contracts issued prior to January 1, 2003. As of December 31, 2021 and 2020, the GMDB reserve was $38 million and $43 million. Annuity Account Balances and Other Policyholders’ Funds Annuity account balances consists of the fixed account value of deferred annuities and the host contract value of indexed annuities. Other policyholders’ funds consists of immediate benefit accounts and supplementary contracts without life contingencies. Property and Casualty Insurance Products Property and casualty insurance products include service contract business, surety bonds, and guaranteed asset protection (“GAP”). Premiums and fees associated with service contracts and GAP products are recognized based on expected claim patterns. For all other products, premiums are generally recognized over the terms of the contract on a pro-rata basis. Commissions and fee income associated with other products are recognized as earned when the related services are provided to the customer. Unearned premium reserves are maintained for the portion of the premiums that is related to the unexpired period of the policy. Such reserves are computed by pro rata methods or methods related to anticipated claims. Benefit reserves are recorded when insured events occur. Benefit reserves include case basis reserves for known but unpaid claims as of the balance sheet date as well as incurred but not reported (“IBNR”) reserves for claims where the insured event has occurred but has not been reported to the Company as of the balance sheet date. The case basis reserves and IBNR are calculated based on historical experience and on assumptions relating to claim severity and frequency, the level of used vehicle prices, and other factors. These assumptions are modified as necessary to reflect anticipated trends. |
Reinsurance | Reinsurance The Company uses reinsurance extensively in certain of its segments and accounts for reinsurance and the recognition of the impact of reinsurance costs in accordance with the ASC Financial Services - Insurance Topic. The following summarizes some of the key aspects of the Company’s accounting policies for reinsurance. Reinsurance Accounting Methodology —Ceded premiums of the Company’s traditional life insurance products are treated as an offset to direct premium and policy fee revenue and are recognized when due to the assuming company. Ceded claims are treated as an offset to direct benefits and settlement expenses and are recognized when the claim is incurred on a direct basis. Ceded policy reserve changes are also treated as an offset to benefits and settlement expenses and are recognized during the applicable financial reporting period. Expense allowances paid by the assuming companies which are allocable to the current period are treated as an offset to other operating expenses. Since reinsurance treaties typically provide for allowance percentages that decrease over the lifetime of a policy, allowances in excess of the “ultimate” or final level allowance are capitalized. Amortization of capitalized reinsurance expense allowances representing recovery of acquisition costs is treated as an offset to direct amortization of DAC or VOBA. Amortization of deferred expense allowances is calculated as a level percentage of expected premiums in all durations given expected future lapses and mortality and accretion due to interest. The Company utilizes reinsurance on certain short duration insurance contracts (primarily issued through the Asset Protection segment). As part of these reinsurance transactions the Company receives reinsurance allowances which reimburse the Company for acquisition costs such as commissions and premium taxes. A ceding fee is also collected to cover other administrative costs and profits for the Company. As a component of reinsurance costs, reinsurance allowances are accounted for in accordance with the relevant provisions of ASC Financial Services—Insurance Topic, which state that reinsurance costs should be amortized over the contract period of the reinsurance if the contract is short-duration. Accordingly, reinsurance allowances received related to short-duration contracts are capitalized and charged to expense in proportion to premiums earned. Ceded unamortized acquisition costs are netted with direct unamortized acquisition costs in the balance sheet. Ceded premiums and policy fees on the Company’s fixed universal life (“UL”), VUL, bank-owned life insurance (“BOLI”), and annuity products reduce premiums and policy fees recognized by the Company. Ceded claims are treated as an offset to direct benefits and settlement expenses and are recognized when the claim is incurred on a direct basis. Ceded policy reserve changes are also treated as an offset to benefits and settlement expenses and are recognized during the applicable valuation period. Since reinsurance treaties typically provide for allowance percentages that decrease over the lifetime of a policy, allowances in excess of the “ultimate” or final level allowance are capitalized. Amortization of capitalized reinsurance expense allowances are amortized based on future expected gross profits. Assumptions regarding mortality, lapses, and interest rates are continuously reviewed and may be periodically changed. These changes will result in “unlocking” that changes the balance in the ceded deferred acquisition cost and can affect the amortization of DAC and VOBA. Ceded unearned revenue liabilities are also amortized based on expected gross profits. Assumptions are based on the best current estimate of expected mortality, lapses and interest spread. The Company has also assumed certain policy risks written by other insurance companies through reinsurance agreements. Premiums and policy fees as well as Benefits and settlement expenses include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Assumed reinsurance is accounted for in accordance with ASC Financial Services—Insurance Topic. Reinsurance Allowances—Long-Duration Contracts —Reinsurance allowances are intended to reimburse the ceding company for some portion of the ceding company’s commissions, expenses, and taxes. The amount and timing of reinsurance allowances (both first year and renewal allowances) are contractually determined by the applicable reinsurance contract and do not necessarily bear a relationship to the amount and incidence of expenses actually paid by the ceding company in any given year. Ultimate reinsurance allowances are defined as the lowest allowance percentage paid by the reinsurer in any policy duration over the lifetime of a universal life policy (or through the end of the level term period for a traditional life policy). Ultimate reinsurance allowances are determined during the negotiation of each reinsurance agreement and will differ between agreements. The Company determines its “cost of reinsurance” to include amounts paid to the reinsurer (ceded premiums) net of amounts reimbursed by the reinsurer (in the form of allowances). As noted within ASC 944, Financial Services—Insurance Topic , “The difference, if any, between amounts paid for a reinsurance contract and the amount of the liabilities for policy benefits relating to the underlying reinsured contracts is part of the estimated cost to be amortized.” The Company’s policy is to amortize the cost of reinsurance over the life of the underlying reinsured contracts (for long-duration policies) in a manner consistent with the way in which benefits and expenses on the underlying contracts are recognized. For the Company’s long- duration contracts, it is the Company’s practice to defer reinsurance allowances as a component of the cost of reinsurance and recognize the portion related to the recovery of acquisition costs as a reduction of applicable unamortized acquisition costs in such a manner that net acquisition costs are capitalized and charged to expense in proportion to net revenue recognized. The remaining balance of reinsurance allowances are included as a component of the cost of reinsurance and those allowances which are allocable to the current period are recorded as an offset to operating expenses in the current period consistent with the recognition of benefits and expenses on the underlying reinsured contracts. This practice is consistent with the Company’s practice of capitalizing direct expenses (e.g. commissions), and results in the recognition of reinsurance allowances on a systematic basis over the life of the reinsured policies on a basis consistent with the way in which acquisition costs on the underlying reinsured contracts would be recognized. In some cases reinsurance allowances allocable to the current period may exceed non-deferred direct costs, which may cause net other operating expenses (related to specific contracts) to be negative. Amortization of Reinsurance Allowances —Reinsurance allowances do not affect the methodology used to amortize DAC and VOBA, or the period over which such DAC and VOBA are amortized. Reinsurance allowances offset the direct expenses capitalized, reducing the net amount that is capitalized. DAC and VOBA on traditional life policies are amortized based on the pattern of estimated gross premiums of the policies in force. Reinsurance allowances do not affect the gross premiums, so therefore they do not impact traditional life amortization patterns. DAC and VOBA on universal life products are amortized based on the pattern of estimated gross profits of the policies in force. Reinsurance allowances are considered in the determination of estimated gross profits, and therefore do impact amortization patterns. Reinsurance Assets and Liabilities —Claim liabilities and policy benefits are calculated consistently for all policies, regardless of whether or not the policy is reinsured. Once the claim liabilities and policy benefits for the underlying policies are estimated, the amounts recoverable from the reinsurers are estimated based on a number of factors including the terms of the reinsurance contracts, historical payment patterns of reinsurance partners, and the financial strength and credit worthiness of reinsurance partners and recorded as Reinsurance receivables on the balance sheet. Liabilities for unpaid reinsurance claims are produced from claims and reinsurance system records, which contain the relevant terms of the individual reinsurance contracts. The Company monitors claims due from reinsurers to ensure that balances are settled on a timely basis. Incurred but not reported claims are reviewed to ensure that appropriate amounts are ceded. The Company analyzes and monitors the credit worthiness of each of its reinsurance partners to minimize collection issues. For newly executed reinsurance contracts with reinsurance companies that do not meet predetermined standards, the Company requires collateral such as assets held in trusts or letters of credit. Reinsurance assets and liabilities related to agreements with funds withheld at interest where no net risk is retained by the Company are presented on a net basis. Reinsurance receivables were presented net of approximately $2.3 billion in reinsurance liabilities as of December 31, 2021 and 2020, respectively. Components of Reinsurance Cost —The following income statement lines are affected by reinsurance cost: Premiums and policy fees (“reinsurance ceded” on the Company’s financial statements) represent consideration paid to the assuming company for accepting the ceding company’s risks. Ceded premiums and policy fees increase reinsurance cost. Benefits and settlement expenses include incurred claim amounts ceded and changes in ceded policy reserves. Ceded benefits and settlement expenses decrease reinsurance cost. Amortization of deferred acquisition cost and value of business acquired reflects the amortization of capitalized reinsurance allowances representing recovery of acquisition costs. Ceded amortization decreases reinsurance cost. Other expenses include reinsurance allowances paid by assuming companies to the Company less amounts representing recovery of acquisition costs. Reinsurance allowances decrease reinsurance cost. The Company’s reinsurance programs do not materially impact the other income line of the Company’s income statement. In addition, net investment income generally has no direct impact on the Company’s reinsurance cost. However, it should be noted that by ceding business to the assuming companies, the Company forgoes investment income on the reserves ceded to the assuming companies. Conversely, the assuming companies will receive investment income on the reserves assumed which will increase the assuming companies’ profitability on business assumed from the Company. |
Accounting Pronouncements Recently Adopted And Not Yet Adopted | Accounting Pronouncements Recently Adopted ASU 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 became effective for public business entities in fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. 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 |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Recasts | The following table presents the changes as a result of the merger of the entity under common control to previously reported amounts in the audited consolidated statements of operations for the years ended December 31, 2020 and 2019 included in the Company’s annual report on Form 10-K for the year ended December 31, 2020. For The Year Ended December 31, 2020 As Reported Common Control Total (Recast) (In Millions) Net income $ 342 $ (108) $ 234 Total comprehensive income $ 2,471 $ (102) $ 2,369 For The Year Ended December 31, 2019 Net income $ 553 $ (126) $ 427 Total comprehensive income $ 3,365 $ (117) $ 3,248 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of finite lived intangible assets | Other intangible assets recognized by the Company included the following: As of December 31, Estimated 2021 2020 Useful Life (Dollars In Millions) (In Years) Distribution relationships $ 314 $ 340 14-22 Trade names 58 65 13-17 Technology 56 71 7-14 Other 31 32 Total intangible assets subject to amortization 459 508 Insurance licenses 32 32 Indefinite Total other intangible assets $ 491 $ 540 |
Schedule of indefinite-lived intangible assets | Other intangible assets recognized by the Company included the following: As of December 31, Estimated 2021 2020 Useful Life (Dollars In Millions) (In Years) Distribution relationships $ 314 $ 340 14-22 Trade names 58 65 13-17 Technology 56 71 7-14 Other 31 32 Total intangible assets subject to amortization 459 508 Insurance licenses 32 32 Indefinite Total other intangible assets $ 491 $ 540 |
Schedule of future estimated aggregate amortization expense | The following is a schedule of future estimated aggregate amortization expense: Year Amount (Dollars In Millions) 2022 $ 54 2023 51 2024 48 2025 43 2026 43 |
Schedule of property and equipment | Property and equipment consisted of the following: As of December 31, 2021 2020 (Dollars In Millions) Home office building $ 160 $ 159 Data processing equipment 39 36 Capital leases 36 25 Other, principally furniture and equipment 22 20 Total property and equipment subject to depreciation 257 240 Accumulated depreciation (79) (61) Land 25 25 Total property and equipment $ 203 $ 204 |
Schedule of future maturities of stable value products | As of December 31, 2021, future maturities of stable value products were as follows: Year of Maturity Amount (Dollars In Millions) 2022 $ 2,559 2023 - 2024 3,551 2025 - 2026 1,347 Thereafter 1,069 |
SIGNIFICANT TRANSACTIONS (Table
SIGNIFICANT TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Summary of fair values of the net assets acquired | The following table details the final allocation of assets acquired and liabilities assumed from the Individual Life Business reinsurance transaction as of the date of the GWL&A Closing. Fair Value (Dollars In Millions) ASSETS Fixed maturities $ 8,698 Commercial mortgage loans 1,386 Policy loans 44 Other long-term investments 1,522 Total investments 11,650 Cash 35 Accrued investment income 101 Reinsurance receivables — Accounts and premiums receivable 2 Value of business acquired 535 Other intangibles 21 Other assets 6 Assets related to separate accounts 9,583 Total assets 21,933 LIABILITIES Future policy benefits and claims $ 11,022 Annuity account balances 220 Other policyholders’ funds 220 Other liabilities 75 Liabilities related to separate accounts 9,583 Total liabilities 21,120 NET ASSETS ACQUIRED $ 813 |
Pro forma information | The following unaudited pro forma condensed consolidated results of operations assumes that the aforementioned transactions of the Individual Life Business were completed as of January 1, 2018. The unaudited pro forma condensed results of operations are presented solely for informational purposes and are not necessarily indicative of the consolidated condensed results of operations that might have been achieved had the transaction been completed as of the date indicated: Unaudited For The Year Ended (Recast) 2019 2018 (Dollars In Millions) Revenue $ 6,165 $ 5,592 Net income $ 444 $ 253 |
INVESTMENT OPERATIONS (Tables)
INVESTMENT OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of major categories of net investment income | Major categories of net investment income are summarized as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Fixed maturities $ 2,513 $ 2,481 $ 2,471 Equity securities 27 24 31 Commercial mortgage loans 505 443 389 Investment real estate 1 1 1 Other investment income 156 139 119 3,202 3,088 3,011 Investment expenses 220 199 186 Net investment income $ 2,982 $ 2,889 $ 2,825 |
Summary of net realized investment and derivative gains (losses) | Net gains (losses) - investments and derivatives are summarized as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Realized gains (losses) - investments, net Fixed maturities $ 46 $ 46 $ 48 Equity securities 4 — (3) Other investments 20 45 9 Total realized gains (losses) - investments, net 70 91 54 Modco trading portfolio (103) 130 243 Equity securities (8) 13 50 Change in net expected credit losses - fixed maturities (1) 6 (125) — Net impairment losses recognized in operations (2) — — (34) Commercial mortgage loans 137 (149) (4) Gains (losses) - derivatives, net (3) 48 (195) (368) Net gains (losses) - investments and derivatives $ 150 $ (235) $ (59) (1) Represents net credit losses recognized under FASB ASC 326 (2) Represents other-than-temporary impairment losses recognized in prior periods under FASB ASC 320 (3) Refer to Note 6, 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 AFS. For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Securities in an unrealized gain position: Sales proceeds $ 1,537 $ 2,000 $ 2,514 Realized gains $ 47 $ 51 $ 62 Securities in an unrealized loss position: Sales proceeds $ 35 $ 34 $ 547 Realized losses $ (1) $ (5) $ (14) 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, 2021: Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Millions) Residential mortgage-backed securities $ 4,615 $ (102) $ 15 $ — $ 4,630 $ (102) Commercial mortgage-backed securities 129 (1) 88 (6) 217 (7) Other asset-backed securities 249 (1) 47 (1) 296 (2) U.S. government-related securities 306 (13) 158 (12) 464 (25) Other government-related securities 76 (2) — — 76 (2) States, municipalities, and political subdivisions 37 (1) 4 — 41 (1) Corporate securities 4,841 (119) 515 (37) 5,356 (156) Redeemable preferred stocks 20 — — — 20 — $ 10,273 $ (239) $ 827 $ (56) $ 11,100 $ (295) 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 (Recast) (Dollars In Millions) Residential mortgage-backed securities $ 386 $ (1) $ 9 $ — $ 395 $ (1) Commercial mortgage-backed securities 263 (16) 30 (4) 293 (20) 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, municipalities, and political subdivisions 34 (1) 5 — 39 (1) Corporate securities 1,063 (33) 728 (66) 1,791 (99) Redeemable preferred stocks — — — — — — $ 2,222 $ (56) $ 1,106 $ (76) $ 3,328 $ (132) |
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: Amortized Gross Gross Allowance for Expected Credit Losses Fair Value (Dollars In Millions) As of December 31, 2021 Fixed maturities: (1) Residential mortgage-backed securities $ 6,876 $ 31 $ (102) $ — $ 6,805 Commercial mortgage-backed securities 2,239 75 (7) — 2,307 Other asset-backed securities 1,391 31 (2) — 1,420 U.S. government-related securities 821 12 (25) — 808 Other government-related securities 680 75 (2) — 753 States, municipals, and political subdivisions 3,747 410 (1) — 4,156 Corporate securities 49,211 4,645 (156) (1) 53,699 Redeemable preferred stocks 297 10 — — 307 65,262 5,289 (295) (1) 70,255 Short-term investments 780 — — — 780 $ 66,042 $ 5,289 $ (295) $ (1) $ 71,035 (1) Included in the total above, as of December 31, 2021, the Company had public utility securities that had an amortized cost and fair value of $6.5 billion and $7.0 billion, respectively and foreign government securities that had an amortized cost and fair value of $620 million and $687 million, respectively. As of December 31, 2020 (Recast) Fixed maturities: (2) 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 (2) Included in the total above, as of December 31, 2020, the Company had public utility securities that had an amortized cost and fair value of $6.3 billion and $7.0 billion, respectively and foreign government securities that had an amortized cost and fair value of $557 million and $644 million, respectively. |
Schedule of fair value of trading securities | The fair value of the investments held pursuant to these Modco arrangements are as follows: As of December 31, 2021 2020 (Dollars In Millions) Fixed maturities: (1) Residential mortgage-backed securities $ 133 $ 209 Commercial mortgage-backed securities 209 214 Other asset-backed securities 185 163 U.S. government-related securities 33 91 Other government-related securities 64 30 States, municipals, and political subdivisions 286 282 Corporate securities 1,875 1,860 Redeemable preferred stocks 8 13 2,793 2,862 Equity securities 13 20 Short-term investments 82 76 $ 2,888 $ 2,958 (1) Included in the total above, as of December 31, 2021, the Company had public utility and foreign government securities that had a fair value of $134 million and $44 million, respectively and as of December 31, 2020, the Company had public utility and foreign government securities that had a fair value of $144 million and $30 million, respectively. |
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 December 31, 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 $ 1,707 $ 1,719 Due after one year through five years 11,046 11,453 Due after five years through ten years 15,434 16,135 Due after ten years 37,075 40,948 $ 65,262 $ 70,255 |
Schedule of 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 AFS: For The Year Ended December 31, 2021 For The Year Ended December 31, 2020 Corporate Securities CMBS ABS Total Corporate Securities CMBS ABS Total (Dollars In Millions) (Dollars In Millions) Beginning Balance $ 18 $ 4 $ 1 $ 23 $ — $ — $ — $ — Additions for securities for which an allowance was not previously recorded — — — — 62 4 1 67 Adjustments on previously recorded allowances due to change in expected cash flows (1) (4) — (5) 20 — 1 21 Reductions on previously recorded allowances due to disposal of security in the current period — — (1) (1) (1) — (1) (2) Write-offs of previously recorded allowances due to intent or requirement to sell (16) — — (16) (63) — — (63) Ending Balance $ 1 $ — $ — $ 1 $ 18 $ 4 $ 1 $ 23 |
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 allowance for expected credit losses and income taxes, on fixed maturities classified as AFS is summarized as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Fixed maturities $ (1,523) $ 3,271 $ 4,219 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2021: Measurement Category Level 1 Level 2 Level 3 Total (Dollars In Millions) Assets: Fixed maturity securities - AFS Residential mortgage-backed securities 4 $ — $ 6,765 $ 40 $ 6,805 Commercial mortgage-backed securities 4 — 2,127 180 2,307 Other asset-backed securities 4 — 905 515 1,420 U.S. government-related securities 4 411 397 — 808 State, municipalities, and political subdivisions 4 — 4,156 — 4,156 Other government-related securities 4 — 753 — 753 Corporate securities 4 — 52,117 1,582 53,699 Redeemable preferred stocks 4 307 — — 307 Total fixed maturity securities - AFS 718 67,220 2,317 70,255 Fixed maturity securities - trading Residential mortgage-backed securities 3 — 133 — 133 Commercial mortgage-backed securities 3 — 209 — 209 Other asset-backed securities 3 — 92 93 185 U.S. government-related securities 3 27 6 — 33 State, municipalities, and political subdivisions 3 — 286 — 286 Other government-related securities 3 — 48 16 64 Corporate securities 3 — 1,867 8 1,875 Redeemable preferred stocks 3 8 — — 8 Total fixed maturity securities - trading 35 2,641 117 2,793 Total fixed maturity securities 753 69,861 2,434 73,048 Equity securities 3 633 40 155 828 Other long-term investments (1) 3&4 59 1,093 295 1,447 Short-term investments 3 683 179 — 862 Total investments 2,128 71,173 2,884 76,185 Cash 3 390 — — 390 Assets related to separate accounts Variable annuity 3 13,648 — — 13,648 Variable universal life 3 1,982 — — 1,982 Total assets measured at fair value on a recurring basis $ 18,148 $ 71,173 $ 2,884 $ 92,205 Liabilities: Annuity account balances (2) 3 $ — $ — $ 63 $ 63 Other liabilities (1) 3&4 20 820 1,939 2,779 Total liabilities measured at fair value on a recurring basis $ 20 $ 820 $ 2,002 $ 2,842 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 (Recast) (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 1,014 501 — 1,515 State, municipalities, 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 1,139 66,695 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 — 92 71 163 U.S. government-related securities 3 79 12 — 91 State, municipalities, and political subdivisions 3 — 282 — 282 Other government-related securities 3 — 30 — 30 Corporate securities 3 — 1,842 18 1,860 Redeemable preferred stocks 3 13 — — 13 Total fixed maturity securities - trading 92 2,681 89 2,862 Total fixed maturity securities 1,231 69,376 1,988 72,595 Equity securities 3 566 — 101 667 Other long-term investments (1) 3&4 52 1,285 298 1,635 Short-term investments 3 403 59 — 462 Total investments 2,252 70,720 2,387 75,359 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 $ 16,573 $ 70,720 $ 2,387 $ 89,680 Liabilities: Annuity account balances (2) 3 $ — $ — $ 67 $ 67 Other liabilities (1) 3&4 14 867 2,239 3,120 Total liabilities measured at fair value on a recurring basis $ 14 $ 867 $ 2,306 $ 3,187 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 | The following table presents the valuation method for material financial instruments included in Level 3 as of December 31, 2021, as well as the unobservable inputs used in the valuation of those financial instruments: Fair Value Valuation Unobservable Range (Dollars In Millions) Assets: Residential mortgage-backed securities $ 40 Trade Price Spread 1.03%-1.10%(1.07%) Commercial mortgage-backed securities 180 Discounted cash flow Spread over treasury 1.04% - 2.47% (1.30%) Other asset-backed securities 436 Liquidation Liquidation value $98.63 -$99.75 ($99.07) Discounted cash flow Liquidity premium 0.11% - 2.14% (1.54%) Paydown Rate 11.20% - 13.41% (12.30%) Liquidation value $60.00-113.88% (112.92%) Corporate securities 1,588 Discounted cash flow Spread over treasury 0.00% - 4.00% (1.50%) Liabilities: (1)(2) Embedded derivatives—GLWB $ 475 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% - 0.82% Embedded derivative—FIA 595 Actuarial cash flow model Expenses $214 per policy Withdrawal rate 0.4%-2.4% prior to age 70 RMD for ages 70+ or WB withdrawal rate Assume underutilized RMD for nonWB 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 0.19% - 0.82% Embedded derivative—IUL 269 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 duration/distribution channel and smoking class Nonperformance risk 0.19% - 0.82% (1) Excludes modified coinsurance arrangements. (2) Fair value is presented as a net liability. The following table presents the valuation method for material financial instruments included in Level 3, as of December 31, 2020, as well as the unobservable inputs used in the valuation of those financial instruments: Fair Value As of December 31, 2020 Valuation Unobservable Range (Recast) (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 $95.00 - $97.00 ($96.19) Discounted cash flow Liquidity premium 0.54% - 2.30% (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)(2) Embedded derivatives—GLWB $ 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% 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 0.19% - 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 year ended December 31, 2021, for which the Company has used significant unobservable inputs (Level 3): Total Realized and Unrealized Gains Total Total Gains (losses) included in Net Income related to Instruments still held at Beginning Included in Net Income Included In Other Included in Included in Other Purchases Sales Issuances Settlements Transfers Other Ending (Dollars In Millions) Assets: Fixed maturity securities AFS Residential mortgage-backed securities $ — $ — $ — $ — $ — $ 40 $ — $ — $ — $ — $ — $ 40 $ — Commercial mortgage-backed securities 32 — — — (2) — — — — 150 — 180 $ — Other asset-backed securities 435 — 3 — (1) 67 (4) — — 14 1 515 — Corporate securities 1,432 — 11 — (34) 274 (212) — — 112 (1) 1,582 — Total fixed maturity securities - AFS 1,899 — 14 — (37) 381 (216) — — 276 — 2,317 — Fixed maturity securities - trading Other asset-backed securities 71 — 3 — — 22 (19) — — 16 — 93 — Other government-related securities — — — — — — — — — 16 — 16 — Corporate securities 18 — — — (1) 2 (6) — — (5) — 8 — Total fixed maturity securities - trading 89 — 3 — (1) 24 (25) — — 27 — 117 — Total fixed maturity securities 1,988 — 17 — (38) 405 (241) — — 303 — 2,434 — Equity securities 101 — — — — 91 (32) — — (5) — 155 — Other long-term investments (1) 298 185 — (188) — — — — — — — 295 (3) Total investments 2,387 185 17 (188) (38) 496 (273) — — 298 — 2,884 (3) Total assets measured at fair value on a recurring basis $ 2,387 $ 185 $ 17 $ (188) $ (38) $ 496 $ (273) $ — $ — $ 298 $ — $ 2,884 $ (3) Liabilities: Annuity account balances (2) $ 67 $ — $ — $ (4) $ — $ — $ — $ — $ 8 $ — $ — $ 63 $ — Other liabilities (1) 2,239 877 — (577) — — — — — — — 1,939 300 Total liabilities measured at fair value on a recurring basis $ 2,306 $ 877 $ — $ (581) $ — $ — $ — $ — $ 8 $ — $ — $ 2,002 $ 300 (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 year ended December 31, 2020, for which the Company has used significant unobservable inputs (Level 3): Total Total Total Beginning Included in Included in Included in Included in Purchases Sales Issuances Settlements Transfers Other Ending (Recast) (Dollars In Millions) Assets: Fixed maturity securities AFS Commercial mortgage-backed securities $ 10 $ — $ 1 $ — $ (1) $ — $ — $ — $ — $ 22 $ — $ 32 $ — Other asset-backed securities 421 — 8 — (13) — (2) — — 22 (1) 435 — Corporate securities 1,374 — 135 — (83) 436 (562) — — 135 (3) 1,432 — Total fixed maturity securities— AFS 1,805 — 144 — (97) 436 (564) — — 179 (4) 1,899 — Fixed maturity securities—trading Other asset-backed securities 65 6 — (9) — 12 (2) — — (1) — 71 2 Corporate securities 11 1 — — — 8 (2) — — — — 18 — Total fixed maturity securities—trading 76 7 — (9) — 20 (4) — — (1) — 89 2 Total fixed maturity securities 1,881 7 144 (9) (97) 456 (568) — — 178 (4) 1,988 2 Equity securities 73 1 — — — 27 (5) — — 5 — 101 — Other long-term investments (1) 292 404 — (300) — 41 (135) — (4) — — 298 81 Total investments 2,246 412 144 (309) (97) 524 (708) — (4) 183 (4) 2,387 83 Total assets measured at fair value on a recurring basis $ 2,246 $ 412 $ 144 $ (309) $ (97) $ 524 $ (708) $ — $ (4) $ 183 $ (4) $ 2,387 $ 83 Liabilities: Annuity account balances (2) $ 70 $ — $ — $ (3) $ — $ — $ — $ — $ 6 $ — $ — $ 67 $ — Other liabilities (1) 1,332 926 — (1,833) — — — — — — — 2,239 (906) Total liabilities measured at fair value on a recurring basis $ 1,402 $ 926 $ — $ (1,836) $ — $ — $ — $ — $ 6 $ — $ — $ 2,306 $ (906) (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 that are not reported at fair value as of the periods shown below are as follows: As of December 31, 2021 2020 Fair Value Carrying Fair Carrying Fair (Dollars In Millions) Assets: Commercial mortgage loans (1) 3 $ 10,863 $ 11,386 $ 10,006 $ 10,788 Policy loans 3 1,527 1,527 1,593 1,593 Other long-term investments (2) 3 1,930 1,990 1,186 1,283 Liabilities: Stable value product account balances 3 $ 8,526 $ 8,598 $ 6,056 $ 6,231 Future policy benefits and claims (3) 3 1,457 1,504 1,580 1,603 Other policyholders’ funds (4) 3 102 108 102 108 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. In addition, it includes the cash surrender value of the Company’s COLI policy. (3) Single premium immediate annuity without life contingencies. (4) Supplementary contracts without life contingencies. (5) Excludes immaterial capital lease obligations. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of realized investment gains (losses) - derivative financial instruments | The following table sets forth net gains and losses for the periods shown: Gains (losses) - derivative financial instruments For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Derivatives related to VA contracts: Interest rate futures $ 15 $ — $ (20) Equity futures (12) 109 5 Currency futures 11 (10) 3 Equity options (108) (30) (150) Interest rate swaps (136) 274 230 Total return swaps (189) (49) (78) Embedded derivative - GLWB 347 (404) (198) Total derivatives related to VA contracts (72) (110) (208) Derivatives related to FIA contracts: Embedded derivative 3 (69) (86) Funds withheld derivative (7) (10) — Equity futures 5 (4) 2 Equity options 72 49 84 Other derivatives (3) (1) — Total derivatives related to FIA contracts 70 (35) — Derivatives related to IUL contracts: Embedded derivative (28) 4 (13) Equity futures — (2) — Equity options 16 9 15 Total derivatives related to IUL contracts (12) 11 2 Embedded derivative - Modco reinsurance treaties 64 (99) (187) Derivatives with PLC (1) — 23 27 Other derivatives (2) 15 (2) Total gains (losses) - derivatives, net $ 48 $ (195) $ (368) (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 as part of the Captive Merger and a new portfolio maintenance agreement was entered into with PLC on that date. |
Notional amounts and fair values of derivative financial instruments | 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 financial statements for the periods presented below: As of December 31, 2021 2020 Notional Fair Notional Fair (Recast) (Dollars In Millions) Other long-term investments Derivatives not designated as hedging instruments: Interest rate swaps $ 1,478 $ 72 $ 1,478 $ 185 Total return swaps 239 8 158 2 Derivatives with PLC (1) 4,085 — 4,076 — Embedded derivative - Modco reinsurance treaties 1,268 62 1,249 101 Embedded derivative - GLWB 3,066 169 2,067 138 Embedded derivative - FIA 398 64 335 60 Interest rate futures 561 5 690 4 Equity futures 312 6 203 4 Currency futures 27 — — — Equity options 8,852 1,061 7,208 1,142 $ 20,286 $ 1,447 $ 17,464 $ 1,636 Other liabilities Cash flow hedges: Foreign currency swaps $ 117 $ 13 $ 117 $ 10 Derivatives not designated as hedging instruments: Interest rate swaps 1,354 — 1,354 — Total return swaps 1,168 39 1,003 15 Embedded derivative - Modco reinsurance treaties 2,974 280 2,911 389 Funds withheld derivative 855 10 661 10 Embedded derivative - GLWB 6,833 644 7,749 960 Embedded derivative - FIA 4,372 659 3,889 633 Embedded derivative - IUL 459 269 357 201 Interest rate futures 729 4 415 3 Equity futures 42 1 190 5 Currency futures 158 2 264 4 Equity options 7,044 771 5,499 834 Other 448 87 304 55 $ 26,553 $ 2,779 $ 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 as part of the Captive Merger 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) | 12 Months Ended |
Dec. 31, 2021 | |
Offsetting [Abstract] | |
Schedule of derivative assets | The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2021: Gross Amounts of Recognized Assets Gross Net Amounts Gross Amounts Financial Collateral Net Amount (Dollars In Millions) Offsetting of Derivative Assets Derivatives: Free-Standing derivatives $ 1,152 $ — $ 1,152 $ 806 $ 178 $ 168 Total derivatives, subject to a master netting arrangement or similar arrangement 1,152 — 1,152 806 178 168 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 62 — 62 — — 62 Embedded derivative - GLWB 169 — 169 — — 169 Derivatives with PLC — — — — — — Embedded derivative - FIA 64 — 64 — — 64 Total derivatives, not subject to a master netting arrangement or similar arrangement 295 — 295 — — 295 Total derivatives 1,447 — 1,447 806 178 463 Total Assets $ 1,447 $ — $ 1,447 $ 806 $ 178 $ 463 The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2020. Gross Gross Net Gross Amounts Financial Collateral Net Amount (Recast) (Dollars In Millions) Offsetting of Derivative 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 Other 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 |
Schedule of derivative liabilities | Gross Gross Net Amounts Gross Amounts Financial Collateral Net Amount (Dollars In Millions) Offsetting of Derivative Liabilities Derivatives: Free-Standing derivatives $ 830 $ — $ 830 $ 806 $ 22 $ 2 Total derivatives, subject to a master netting arrangement or similar arrangement 830 — 830 806 22 2 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 280 — 280 — — 280 Funds withheld derivative 10 — 10 — — 10 Embedded derivative - GLWB 644 — 644 — — 644 Embedded derivative - FIA 659 — 659 — — 659 Embedded derivative - IUL 269 — 269 — — 269 Other 87 — 87 — — 87 Total derivatives, not subject to a master netting arrangement or similar arrangement 1,949 — 1,949 — — 1,949 Total derivatives 2,779 — 2,779 806 22 1,951 Repurchase agreements (1) 1,393 — 1,393 — — 1,393 Total Liabilities $ 4,172 $ — $ 4,172 $ 806 $ 22 $ 3,344 (1) Borrowings under repurchase agreements are for a term less than 90 days. Gross Gross Net Gross Amounts Financial Collateral Net Amount (Recast) (Dollars In Millions) Offsetting of Derivative 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) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Schedule of the breakdown of the commercial mortgage loan portfolio by property type | The following table includes a breakdown of the Company’s commercial mortgage loan portfolio by property type as of December 31: Percentage of Commercial Mortgage Loans Type 2021 2020 Retail 30.3 % 34.9 % Office buildings 13.8 15.1 Apartments 17.2 12.7 Warehouses 16.5 16.0 Senior housing 17.0 16.2 Other 5.2 5.1 100.0 % 100.0 % |
Schedule of mortgage loans by location of properties | The following states represent the primary locations of the Company’s commercial mortgage loans as of December 31: Percentage of Commercial Mortgage Loans State 2021 State 2020 California 10.1 % California 11.3 % Texas 7.3 Texas 7.3 Florida 7.2 Alabama 6.7 Alabama 6.3 Florida 6.2 North Carolina 5.6 Georgia 5.3 Ohio 4.6 North Carolina 4.9 Michigan 4.6 Ohio 4.7 Georgia 4.2 Michigan 4.4 Utah 4.0 Utah 4.2 Tennessee 3.5 Tennessee 3.5 57.4 % 58.5 % |
Schedule of commercial mortgage loans receivable by origination year | As of December 31, 2021 and 2020, 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 December 31, 2021 Commercial mortgage loans: Performing $ 2,063 $ 1,439 $ 2,034 $ 1,404 $ 1,224 $ 2,802 $ 10,966 Non-performing — — — — — — — Amortized cost $ 2,063 $ 1,439 $ 2,034 $ 1,404 $ 1,224 $ 2,802 $ 10,966 Allowance for credit losses (12) (10) (21) (18) (12) (30) (103) Total commercial mortgage loans $ 2,051 $ 1,429 $ 2,013 $ 1,386 $ 1,212 $ 2,772 $ 10,863 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 December 31, 2021 and 2020: As of December 31, 2021 As of December 31, 2020 Amortized Cost % of Total DSCR (2) Amortized Cost % of Total DSCR (2) (Dollars In Millions) Loan-to-value (1) Greater than 75% $ 285 3 % 1.32 $ 399 4 % 1.29 50% - 75% 7,241 66 % 1.59 6,557 64 % 1.61 Less than 50% 3,440 31 % 2.04 3,272 32 % 2.01 Total commercial mortgage loans $ 10,966 100 % $ 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% at both December 31, 2021 and December 31, 2020. (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 December 31, 2021 and December 31, 2020 was 1.72x and 1.72x, respectively. |
Schedule of changes in the allowance for mortgage loan credit losses | 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 included. For The For The (Dollars In Millions) Allowance for Funded Commercial Mortgage Loan Credit Losses Beginning balance $ 222 $ 5 Cumulative effect adjustment — 80 Charge offs — — Recoveries (7) (3) Provision (112) 140 Ending balance $ 103 $ 222 Allowance for Unfunded Commercial Mortgage Loan Commitments Credit Losses Beginning balance $ 22 $ — Cumulative effect adjustment — 10 Charge offs — — Recoveries — — Provision (17) 12 Ending balance $ 5 $ 22 |
DEFERRED POLICY ACQUISITION C_2
DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Policy Acquisition Costs and Present Value of Future Insurance Profits, Net [Abstract] | |
Schedule of balances and changes in DAC | The balances and changes in DAC are as follows: As of December 31, 2021 2020 (Dollars In Millions) Balance, beginning of period $ 1,628 $ 1,480 Capitalization of commissions, sales, and issue expenses 550 459 Amortization (200) (163) Change due to unrealized gains and losses 105 (152) Implementation of ASU 2016-13 — 4 Balance, end of period $ 2,083 $ 1,628 |
Schedule of balances and changes in VOBA | The balances and changes in VOBA are as follows: As of December 31, 2021 2020 (Dollars In Millions) Balance, beginning of period $ 1,792 $ 2,040 Amortization (109) (45) Change due to unrealized gains and losses 80 (192) Other 23 (11) Balance, end of period $ 1,786 $ 1,792 |
Schedule of estimated amortization of VOBA for the next five years | Based on the balance recorded as of December 31, 2021, the expected amortization of VOBA for the next five years is as follows: Expected Years Amortization (Dollars In Millions) 2022 $ 121 2023 123 2024 123 2025 116 2026 99 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying value of goodwill by segment are as follows: Retail Life and Annuity Acquisitions Stable Value Products Asset Protection Total Consolidated (Dollars In Millions) Balance as of December 31, 2019 $ 559 $ 24 $ 114 $ 129 $ 826 Balance as of December 31, 2020 559 24 114 129 826 Impairment (129) — — — (129) Balance as of December 31, 2021 $ 430 $ 24 $ 114 $ 129 $ 697 |
CERTAIN NONTRADITIONAL LONG-D_2
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | |
Schedule of activity relating to GMDB reserves (excluding those 100% reinsured under the Modco agreement) | Activity relating to GMDB reserves (excluding those 100% ceded under the Modco agreement) is as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Beginning balance $ 43 $ 46 $ 44 Great West beginning balance — — 7 Incurred guarantee benefits — 2 (1) Less: Paid guarantee benefits 5 5 4 Ending balance $ 38 $ 43 $ 46 |
Schedule of account balances of variable annuities with guarantees invested in variable annuity separate accounts | Account balances of variable annuities with guarantees invested in VA separate accounts are as follows: As of December 31, 2021 2020 (Dollars In Millions) Equity funds $ 9,732 $ 10,425 Fixed income funds 5,236 4,631 Total $ 14,968 $ 15,056 |
Schedule of activity in the Company's deferred sales inducement asset | Activity in the Company’s deferred sales inducement asset, recorded on the balance sheet in other assets was as follows: For The Year Ended December 31, 2021 2020 2019 (Dollars In Millions) Deferred asset, beginning of period $ 41 $ 43 $ 40 Amounts deferred 3 2 6 Amortization (7) (4) (3) Deferred asset, end of period $ 37 $ 41 $ 43 |
MONY CLOSED BLOCK OF BUSINESS (
MONY CLOSED BLOCK OF BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Closed Block Disclosure [Abstract] | |
Summary of financial information for the Closed Block | Summarized financial information for the Closed Block is as follows: As of December 31, 2021 2020 (Dollars In Millions) Closed block liabilities Future policy benefits, policyholders’ account balances and other policyholder liabilities $ 5,277 $ 5,406 Policyholder dividend obligation 401 580 Other liabilities 10 7 Total closed block liabilities 5,688 5,993 Closed block assets Fixed maturities, available-for-sale, at fair value 4,633 4,903 Commercial mortgage loans on real estate 68 68 Policy loans 557 596 Cash and other invested assets 73 46 Other assets 83 91 Total closed block assets 5,414 5,704 Excess of reported closed block liabilities over closed block assets 274 289 Portion of above representing accumulated other comprehensive income: Net unrealized investments gains (losses) net of policyholder dividend obligation: $323 and $493; and net of income tax: $(68) and $(104) — — Future earnings to be recognized from closed block assets and closed block liabilities $ 274 $ 289 |
Schedule of reconciliation of the policyholder dividend obligation | Reconciliation of the policyholder dividend obligation is as follows: For The Year Ended December 31, 2021 2020 (Dollars In Millions) Policyholder dividend obligation, beginning balance $ 580 $ 279 Applicable to net revenue (9) (25) Change in net unrealized investment gains allocated to policyholder dividend obligation (170) 326 Policyholder dividend obligation, ending balance $ 401 $ 580 |
Schedule of Closed Block revenues and expenses | Closed Block revenues and expenses were as follows: For The Year Ended December 31, 2021 2020 2019 (Dollars In Millions) Revenues Premiums and other income $ 144 $ 154 $ 162 Net investment income 189 202 207 Net gains (losses) - investments and derivatives 28 (2) (2) Total revenues 361 354 367 Benefits and other deductions Benefits and settlement expenses 342 332 337 Other operating expenses 1 2 1 Total benefits and other deductions 343 334 338 Net revenues before income taxes 18 20 29 Income tax expense 5 4 6 Net revenues $ 13 $ 16 $ 23 |
REINSURANCE (Tables)
REINSURANCE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Schedule of net life insurance in-force | The following table presents total net life insurance in-force: As of December 31, 2021 2020 (Dollars In Millions) Direct life insurance in-force $ 829,253 $ 785,197 Amounts assumed from other companies 191,110 206,050 Amounts ceded to other companies (222,865) (244,588) Net life insurance in-force $ 797,498 $ 746,659 Percentage of amount assumed to net 24 % 28 % |
Schedule of effect of reinsurance on life insurance premiums written and earned | The following table reflects the effect of reinsurance on life, accident/health, and property and liability insurance premiums written and earned: Gross Ceded to Assumed Net (Dollars In Millions) For The Year Ended December 31, 2021 Premiums and policy fees: -1 Life insurance $ 2,843 $ (1,113) $ 1,037 $ 2,767 (1) Accident/health insurance 32 (19) 28 41 Property and liability insurance 281 (188) 1 94 Total $ 3,156 $ (1,320) $ 1,066 $ 2,902 For The Year Ended December 31, 2020 (Recast) Premiums and policy fees: Life insurance $ 2,661 $ (826) $ 934 $ 2,769 (1) Accident/health insurance 37 (23) 90 104 Property and liability insurance 279 (178) 2 103 Total $ 2,977 $ (1,027) $ 1,026 $ 2,976 For The Year Ended December 31, 2019 (Recast) Premiums and policy fees: Life insurance $ 2,853 $ (1,312) $ 836 $ 2,377 (1) Accident/health insurance 42 (90) 41 (7) Property and liability insurance 281 (106) 3 178 Total $ 3,176 $ (1,508) $ 880 $ 2,548 (1) Includes annuity policy fees of $199 million, $163 million, and $164 million, for the years ended December 31, 2021, 2020, and 2019, respectively. |
Schedule of receivables attributable to more significant reinsurance partners | The following table sets forth the receivables attributable to our more significant reinsurance partners: As of December 31, 2021 2020 Reinsurance Receivable A.M. Best Reinsurance A.M. Best (Dollars In Millions) Security Life of Denver Insurance Company $ 500.5 A- $ 548.5 NR Swiss Re Life & Health America, Inc. 480.1 A+ 489.6 A+ Lincoln National Life Insurance Co. 337.3 A+ 370.7 A+ Somerset Re 335.1 A- 259.9 A- Transamerica Life Insurance Co. 226.4 A 240.3 A RGA Reinsurance Company 204.6 A+ 210.5 A+ American United Life Insurance Company 187.6 A+ 199.1 A+ Centre Reinsurance (Bermuda) Ltd 149.3 A 167.3 NR Employers Reassurance Corporation 139.4 B+ 162.0 NR The Canada Life Assurance Company 123.2 A+ 134.0 A+ |
DEBT AND OTHER OBLIGATIONS (Tab
DEBT AND OTHER OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2021 and 2020: 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, 2021 (Dollars In Millions) Overnight and Greater Than Continuous Up to 30 days 30 - 90 days 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 1,070 $ — $ — $ — $ 1,070 Corporate securities 69 — — — $ 69 Commercial mortgage loans 364 — — — 364 Total repurchase agreements and repurchase-to-maturity transactions $ 1,503 $ — $ — $ — $ 1,503 Securities lending transactions Fixed maturity securities 171 — — — 171 Equity securities 1 — — — 1 Redeemable preferred stocks 2 — — — 2 Total securities lending transactions 174 — — — 174 Total securities $ 1,677 $ — $ — $ — $ 1,677 Remaining Contractual Maturity of the Agreements As of December 31, 2020 (Dollars In Millions) Overnight and Greater Than Continuous Up to 30 days 30 - 90 days 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 366 $ 86 $ — $ — $ 452 Commercial mortgage loans — — — — — Total repurchase agreements and repurchase-to-maturity transactions $ 366 $ 86 $ — $ — $ 452 Securities lending transactions Corporate securities 49 — — — 49 Equity securities 7 — — — 7 Redeemable preferred stocks 1 — — — 1 Total securities lending transactions 57 — — — 57 Total securities $ 423 $ 86 $ — $ — $ 509 |
Interest income and interest expense | Interest expense is summarized as follows: For The Year Ended December 31, 2021 2020 2019 (Dollars In Millions) Subordinated funding obligations $ 3.9 $ 3.9 $ 3.9 Non-recourse funding obligations, other obligations, and repurchase agreements 11 133.2 175.8 Total interest expense $ 14.9 $ 137.1 $ 179.7 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | The following is a schedule by year of future minimum rental payments required under these leases: Year Amount (Dollars In Millions) 2022 $ 7 2023 4 2024 4 2025 2 2026 1 Thereafter 8 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Summary of changes in the accumulated balances for each component of accumulated other comprehensive income (loss) | The following table summarizes the changes in the accumulated balances for each component of AOCI as of December 31, 2021, 2020, and 2019. 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, December 31, 2018 (Recast) $ (1,408) $ — $ (1,408) Other comprehensive income (loss) before reclassifications 2,844 (10) 2,834 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (4) — (4) Amounts reclassified from accumulated other comprehensive income (loss) (1) (11) 2 (9) Balance, December 31, 2019 (Recast) $ 1,421 $ (8) $ 1,413 Other comprehensive income (loss) before reclassifications 2,048 (2) 2,046 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in operations 24 — 24 Amounts reclassified from accumulated other comprehensive income (loss) (1) 63 2 65 Balance, December 31, 2020 (Recast) $ 3,556 $ (8) $ 3,548 Other comprehensive income (loss) before reclassifications (1,105) — (1,105) Other comprehensive income (loss) on investments for which a credit loss has been recognized in operations (1) — (1) Amounts reclassified from accumulated other comprehensive income (loss) (1) (41) 1 (40) Balance, December 31, 2021 $ 2,409 $ (7) $ 2,402 (1) See Reclassification table below for details. (2) As of December 31, 2019, 2020 and 2021, net unrealized losses reported in AOCI were offset by $(777) million, $(2.0) billion and $(1.9) billion, 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 years ended December 31, 2021, 2020, and 2019. Gains/(losses) in net income: Affected Line Item in the Consolidated For The Year Ended December 31, 2021 2020 2019 (Dollars In Millions) Derivative instruments Benefits and settlement expenses, net of reinsurance ceded (1) $ (1) $ (3) $ (2) Tax (expense) benefit — 1 — $ (1) $ (2) $ (2) Unrealized gains and losses on available-for-sale securities Net gains (losses): investments $ 46 $ 46 $ 48 Net impairment losses recognized in earnings 6 (125) (34) Tax (expense) or benefit (11) 17 (3) $ 41 $ (62) $ 11 (1) Refer to Note 6, Derivative Financial Instruments for additional information |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of effective income tax rate related to continuing operations | The Company’s effective income tax rate related to continuing operations varied from the maximum federal income tax rate as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) Statutory federal income tax rate applied to pre-tax income 21.0 % 21.0 % 21.0 % State income taxes 0.2 (0.4) 0.5 Investment income not subject to tax (5.1) (3.6) (2.1) Prior period adjustments 0.5 (0.7) 0.1 Goodwill impairment 7.3 — — Other (0.7) (0.9) (1.0) 23.2 % 15.4 % 18.5 % |
Schedule of components of income tax | The components of the Company’s income tax are as follows: For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Current income tax expense (benefit): Federal $ 129 $ 123 $ 378 State 3 (5) 9 Total current $ 132 $ 118 $ 387 Deferred income tax expense (benefit): Federal $ (44) $ (79) $ (284) State (2) 4 (6) Total deferred $ (46) $ (75) $ (290) |
Schedule of components of the Company's net deferred income tax liability | The components of the Company’s net deferred income tax liability are as follows: As of December 31, 2021 2020 (Recast) (Dollars In Millions) Deferred income tax assets: Loss and credit carryforwards $ 168 $ 146 Deferred compensation 51 54 Deferred policy acquisition costs 67 143 Valuation allowance (10) (9) 276 334 Deferred income tax liabilities: Premium receivables and policy liabilities 200 250 VOBA and other intangibles 552 582 Invested assets (other than unrealized gains (losses)) 264 283 Net unrealized gains on investments 640 945 Other 48 53 1,704 2,113 Net deferred income tax liability $ (1,428) $ (1,779) |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: As of December 31, 2021 2020 2019 (Dollars In Millions) Balance, beginning of period $ 2 $ 2 $ 7 Additions for tax positions of the current year — — — Additions for tax positions of prior years — — — Reductions of tax positions of prior years: Changes in judgment — — — Settlements during the period — — (5) Lapses of applicable statute of limitations (2) — — Balance, end of period $ — $ 2 $ 2 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental cash flow information | The following table sets forth supplemental cash flow information: For The Year Ended December 31, 2021 2020 2019 (Dollars In Millions) Cash paid / (received) during the year: Interest expense $ 15 $ 177 $ 182 Income taxes 236 80 383 |
STATUTORY REPORTING PRACTICES_2
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | |
Schedule of favorable (unfavorable) effects of the Company's statutory surplus, compared to NAIC statutory surplus | The favorable (unfavorable) effects on the Company and its statutory surplus, compared to NAIC statutory surplus, from the use of this prescribed practice was as follows: As of December 31, 2021 2020 (Dollars In Millions) Non-admission of goodwill $ (66) $ (105) Total (net) $ (66) $ (105) |
Schedule of favorable (unfavorable) effects on the statutory surplus of the Company's insurance subsidiaries, compared to NAIC statutory surplus | The favorable (unfavorable) effects on the statutory surplus of the Company and its insurance subsidiaries, compared to NAIC statutory surplus, from the use of these permitted practices were as follows: As of December 31, 2021 2020 (Dollars In Millions) Accounting for XOL Asset Value as an admitted asset $ 4,267 4,579 Reserving based on state specific actuarial practices 101 94 Reserving difference related to a captive insurance company — (218) Total (net) $ 4,368 $ 4,455 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 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 Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Revenues Retail Life and Annuity $ 2,823 $ 2,440 $ 2,161 Acquisitions 2,984 3,282 2,902 Stable Value Products 347 176 247 Asset Protection 270 275 290 Corporate and Other (11) (5) 131 Total revenues $ 6,413 $ 6,168 $ 5,731 Pre-tax Adjusted Operating Income (Loss) Retail Life and Annuity $ (37) $ 100 $ 153 Acquisitions 314 406 347 Stable Value Products 171 90 93 Asset Protection 40 41 37 Corporate and Other (155) (247) (162) Pre-tax adjusted operating income 333 390 468 Non-operating income (loss) 38 (113) 56 Income before income tax 371 277 524 Income tax expense (benefit) 86 43 97 Net income $ 285 $ 234 $ 427 Pre-tax adjusted operating income $ 333 $ 390 $ 468 Adjusted operating income tax (expense) benefit (51) (66) (86) After-tax adjusted operating income 282 324 382 Non-operating income (loss) 38 (113) 56 Income tax (expense) benefit on adjustments (35) 23 (11) Net income $ 285 $ 234 $ 427 Non-operating income (loss) Derivative gains (losses), net $ 48 $ (195) $ (368) Investment gains (losses), net 102 (40) 309 VA/VUL market impacts (1) 21 — — Goodwill impairment (129) — — Less: related amortization (2) 104 (30) (24) Less: VA GLWB economic cost (100) (92) (91) Total non-operating income (loss) $ 38 $ (113) $ 56 (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 net gains (losses). For The Year Ended December 31, 2021 2020 2019 (Recast) (Recast) (Dollars In Millions) Net Investment Income Retail Life and Annuity $ 1,110 $ 1,015 $ 945 Acquisitions 1,590 1,648 1,533 Stable Value Products 303 230 244 Asset Protection 20 23 28 Corporate and Other (41) (27) 75 Total net investment income $ 2,982 $ 2,889 $ 2,825 Amortization of DAC and VOBA Retail Life and Annuity $ 222 $ 116 $ 100 Acquisitions 19 24 11 Stable Value Products 5 3 3 Asset Protection 63 65 62 Corporate and Other — — — Total amortization of DAC and VOBA $ 309 $ 208 $ 176 Operating Segments (Dollars In Millions) Retail Life and Annuity Acquisitions Stable Value Investments and other assets $ 44,549 $ 54,561 $ 8,392 DAC and VOBA 2,806 870 15 Other intangibles 334 29 5 Goodwill 430 24 114 Total assets $ 48,119 $ 55,484 $ 8,526 Asset Corporate Total Investments and other assets $ 950 $ 18,063 $ 126,515 DAC and VOBA 178 — 3,869 Other intangibles 90 33 491 Goodwill 129 — 697 Total assets $ 1,347 $ 18,096 $ 131,572 Operating Segment Assets (Recast) (Dollars In Millions) Retail Life and Annuity Acquisitions Stable Value Investments and other assets $ 40,194 $ 55,628 $ 5,928 DAC and VOBA 2,480 762 8 Other intangibles 367 33 6 Goodwill 559 24 114 Total assets $ 43,600 $ 56,447 $ 6,056 Asset Corporate Total Investments and other assets $ 881 $ 19,493 $ 122,124 DAC and VOBA 170 — 3,420 Other intangibles 101 33 540 Goodwill 129 — 826 Total assets $ 1,281 $ 19,526 $ 126,910 |
CONSOLIDATED QUARTERLY RESULT_2
CONSOLIDATED QUARTERLY RESULTS - UNAUDITED (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited consolidated quarterly operating data | First Quarter Second Third Fourth Quarter (1) (Dollars In Millions) For The Year Ended December 31, 2021 Gross premiums and policy fees $ 1,095 $ 1,026 $ 1,054 $ 1,047 Reinsurance ceded (317) (326) (311) (366) Net premiums and policy fees 778 700 743 681 Net investment income 720 742 753 767 Net gains (losses) - investments and derivatives 127 (33) 67 (11) Other income 88 100 89 102 Total revenues 1,713 1,509 1,652 1,539 Total benefits and expenses 1,586 1,308 1,593 1,555 Income (loss) before income tax 127 201 59 (16) Income tax expense 25 39 10 12 Net income (loss) $ 102 $ 162 $ 49 $ (28) First Second Third Fourth (Dollars In Millions) For The Year Ended December 31, 2020 (Recast) Gross premiums and policy fees $ 896 $ 1,009 $ 1,045 $ 1,053 Reinsurance ceded (36) (360) (287) (344) Net premiums and policy fees 860 649 758 709 Net investment income 754 742 740 653 Net gains (losses) - investments and derivatives (301) (34) 111 (11) Other income 128 111 115 184 Total revenues 1,441 1,468 1,724 1,535 Total benefits and expenses 1,600 1,294 1,564 1,433 Income (loss) before income tax (159) 174 160 102 Income tax (benefit) expense (30) 32 29 12 Net income (loss) $ (129) $ 142 $ 131 $ 90 (1) The Company recorded a non-cash impairment charge of $129 million Q4 2021. Refer to Note 10, Goodwill for additional information. |
BASIS OF PRESENTATION - Additio
BASIS OF PRESENTATION - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of reinsured vehicle service contracts | $ (4,596) | $ (4,543) |
Revision of Prior Period, Reclassification, Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of reinsured vehicle service contracts | 63 | |
Common Control Entity | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Increase in non-cash investing and financing activities | $ 195 |
BASIS OF PRESENTATION - Schedul
BASIS OF PRESENTATION - Schedule of Recasts (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Net income | $ (28) | $ 49 | $ 162 | $ 102 | $ 90 | $ 131 | $ 142 | $ (129) | $ 285 | $ 234 | $ 427 |
Total comprehensive income | $ (861) | 2,369 | 3,248 | ||||||||
As Reported | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Net income | 342 | 553 | |||||||||
Total comprehensive income | 2,471 | 3,365 | |||||||||
Common Control Entity | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Net income | (108) | (126) | |||||||||
Total comprehensive income | $ (102) | $ (117) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)primary_source | Dec. 31, 2021USD ($)input_method | Dec. 31, 2020USD ($) | |
Valuation of investment securities | |||
Number of primary sources of information used for determining fair value | primary_source | 1 | ||
Total number of primary sources of information available for determining fair value | 3 | 3 | |
Cash surrender value of corporate owned life insurance | $ 710 | $ 710 | $ 179 |
Cash | |||
Negative balances due to outstanding checks and drafts | $ 178 | $ 178 | $ 185 |
Minimum | |||
Deferred Policy Acquisition Costs | |||
Interest rate assumptions to compute liabilities for future policy benefits | 1.00% | 1.00% | |
Maximum | |||
Deferred Policy Acquisition Costs | |||
Interest rate assumptions to compute liabilities for future policy benefits | 7.86% | 7.86% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Other Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 459 | $ 508 |
Total other intangible assets | 491 | 540 |
Distribution relationships | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 314 | 340 |
Trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 58 | 65 |
Technology | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 56 | 71 |
Other | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 31 | 32 |
Insurance licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 32 | $ 32 |
Minimum | Software | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, estimated useful life | 3 years | |
Minimum | Distribution relationships | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, estimated useful life | 14 years | |
Minimum | Trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, estimated useful life | 13 years | |
Minimum | Technology | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, estimated useful life | 7 years | |
Maximum | Software | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, estimated useful life | 5 years | |
Maximum | Distribution relationships | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, estimated useful life | 22 years | |
Maximum | Trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, estimated useful life | 17 years | |
Maximum | Technology | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, estimated useful life | 14 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Future Estimated Aggregate Amortization Expense (Details) $ in Millions | Dec. 31, 2021USD ($) |
Accounting Policies [Abstract] | |
2022 | $ 54 |
2023 | 51 |
2024 | 48 |
2025 | 43 |
2026 | $ 43 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Equipment | ||
Capital leases | $ 36 | $ 25 |
Total property and equipment subject to depreciation | 257 | 240 |
Accumulated depreciation | (79) | (61) |
Land | 25 | 25 |
Total property and equipment | 203 | 204 |
Home office building | ||
Property and Equipment | ||
Property and equipment subject to depreciation, gross | $ 160 | 159 |
Useful life | 25 years | |
Furniture | ||
Property and Equipment | ||
Useful life | 10 years | |
Office equipment and machines | ||
Property and Equipment | ||
Useful life | 5 years | |
Computers | ||
Property and Equipment | ||
Useful life | 4 years | |
Data processing equipment | ||
Property and Equipment | ||
Property and equipment subject to depreciation, gross | $ 39 | 36 |
Other, principally furniture and equipment | ||
Property and Equipment | ||
Property and equipment subject to depreciation, gross | $ 22 | $ 20 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stable Value Product Account Balances (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summarized financial information for the company's segments | ||
Stable value product account balances marketed through structured programs | $ 6,573 | $ 4,032 |
Future maturities of stable value products | ||
2022 | 2,559 | |
2023 - 2024 | 3,551 | |
2025 - 2026 | 1,347 | |
Thereafter | $ 1,069 | |
Minimum | ||
Summarized financial information for the company's segments | ||
Maturities of GICs and funding agreements | 1 year | |
Maximum | ||
Summarized financial information for the company's segments | ||
Maturities of GICs and funding agreements | 12 years |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Guaranteed Living Withdrawal Benefits (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Variable annuity | Guaranteed living withdrawal benefits (GLWB) | ||
Guaranteed Minimum Withdrawal Benefits | ||
Guaranteed living withdrawal benefits liability held, net | $ 475 | $ 822 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Traditional Life, Health, and Credit Insurance Products & Reinsurance (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Liability for unpaid claims and claims adjustment expense | ||||
Impact of reinsurance | $ 38 | $ 43 | ||
Minimum | ||||
Liability for unpaid claims and claims adjustment expense | ||||
Interest rate assumptions to compute liabilities for future policy benefits | 1.00% | |||
Maximum | ||||
Liability for unpaid claims and claims adjustment expense | ||||
Interest rate assumptions to compute liabilities for future policy benefits | 7.86% | |||
Traditional Life Insurance | Minimum | ||||
Liability for unpaid claims and claims adjustment expense | ||||
Interest rate assumptions to compute liabilities for future policy benefits | 2.50% | |||
Traditional Life Insurance | Maximum | ||||
Liability for unpaid claims and claims adjustment expense | ||||
Interest rate assumptions to compute liabilities for future policy benefits | 5.50% | |||
Universal Life | Minimum | ||||
Liability for unpaid claims and claims adjustment expense | ||||
Interest rate credited to policy account balances | 1.00% | |||
Universal Life | Maximum | ||||
Liability for unpaid claims and claims adjustment expense | ||||
Interest rate credited to policy account balances | 8.75% | |||
Investments Product Line | Minimum | ||||
Liability for unpaid claims and claims adjustment expense | ||||
Interest rate credited to policy account balances | 0.05% | |||
Investments Product Line | Maximum | ||||
Liability for unpaid claims and claims adjustment expense | ||||
Interest rate credited to policy account balances | 9.81% | |||
Variable annuity | Guaranteed minimum death benefits (GMDB) | ||||
Liability for unpaid claims and claims adjustment expense | ||||
Impact of reinsurance | $ 38 | $ 43 | $ 46 | $ 44 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reinsurance Receivable and Accounting Pronouncements (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reinsurance liabilities | $ 2,300 | $ 2,300 |
Reinsurance allowance, allowance for credit loss | 92 | $ 94 |
Reinsurance recoverable, write-offs | 0 | |
Reinsurance recoveries | 0 | |
Gross reinsurance receivables | $ 4,500 | |
Concentrated credit risk | Ceded Credit Risk, Secured | Reinsurance Recoverable Including Reinsurance Premium Paid | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Concentration risk percentage | 11.00% | |
Concentrated credit risk | AM Best Rating | Ceded Credit Risk, Secured | Reinsurance Recoverable Including Reinsurance Premium Paid | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Concentration risk percentage | 84.00% | |
Concentrated credit risk | A Plus | Ceded Credit Risk, Secured | Reinsurance Recoverable Including Reinsurance Premium Paid | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Concentration risk percentage | 54.00% | |
Concentrated credit risk | A | Ceded Credit Risk, Secured | Reinsurance Recoverable Including Reinsurance Premium Paid | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Concentration risk percentage | 16.00% | |
Concentrated credit risk | AM Best, A- Rating | Ceded Credit Risk, Secured | Reinsurance Recoverable Including Reinsurance Premium Paid | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Concentration risk percentage | 30.00% |
SIGNIFICANT TRANSACTIONS - Addi
SIGNIFICANT TRANSACTIONS - Additional Information (Details) - USD ($) $ in Millions | Oct. 30, 2020 | Oct. 01, 2020 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 03, 2019 |
Business Combination Segment Allocation [Line Items] | ||||||||||||||
Reduction to net investment income | $ (767) | $ (753) | $ (742) | $ (720) | $ (653) | $ (740) | $ (742) | $ (754) | $ (2,982) | $ (2,889) | $ (2,825) | |||
Decrease in other ceded operating expenses | (680) | (782) | (775) | |||||||||||
Excess of loss reinsurance asset, amount backing economic reserve liability | 4,580 | 4,580 | ||||||||||||
Other income | $ 102 | $ 89 | $ 100 | $ 88 | $ 184 | $ 115 | $ 111 | $ 128 | $ 379 | $ 538 | $ 417 | |||
Golden Gate | ||||||||||||||
Business Combination Segment Allocation [Line Items] | ||||||||||||||
Merger agreement term | 20 years | |||||||||||||
Merger agreement extension term | 25 years | |||||||||||||
Maximum commitment amount | $ 5,000 | |||||||||||||
Individual Life Business | ||||||||||||||
Business Combination Segment Allocation [Line Items] | ||||||||||||||
Coinsurance basis percentage | 100.00% | |||||||||||||
Ceded commissions for reinsurance | $ 766 | |||||||||||||
Other income | $ 94 | |||||||||||||
Cash settlement | 24 | |||||||||||||
Reserve adjustments | $ 70 | |||||||||||||
Golden Gate, Captive Merger | ||||||||||||||
Business Combination Segment Allocation [Line Items] | ||||||||||||||
Reduction in fixed maturities at amortized cost | 1,858 | |||||||||||||
Increase (decrease) in non-recourse funding obligations | (1,858) | |||||||||||||
Reduction in income before taxes | 54 | |||||||||||||
Payments to settle outstanding principal with third parties | 330 | |||||||||||||
Payments to settle outstanding principal with third parties, amount held by external parties | 21 | |||||||||||||
Golden Gate, Captive Merger | Nonconsolidated Affiliates | ||||||||||||||
Business Combination Segment Allocation [Line Items] | ||||||||||||||
Payments to settle outstanding principal with third parties | 309 | |||||||||||||
Golden Gate, Captive Merger | PLC | ||||||||||||||
Business Combination Segment Allocation [Line Items] | ||||||||||||||
Payments to settle merger obligations | 135 | |||||||||||||
Golden Gate V and Red Mountain | ||||||||||||||
Business Combination Segment Allocation [Line Items] | ||||||||||||||
Increase (decrease) in non-recourse funding obligations | 806 | |||||||||||||
Reduction in income before taxes | (16) | |||||||||||||
Reduction to net investment income | 72 | |||||||||||||
Decrease in other ceded operating expenses | 56 | |||||||||||||
Fixed maturities, held-to-maturity | $ 822 |
SIGNIFICANT TRANSACTIONS - Purc
SIGNIFICANT TRANSACTIONS - Purchase Consideration and Pro Forma (Details) - Individual Life Business - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jun. 01, 2019 | |
ASSETS | |||
Fixed maturities | $ 8,698 | ||
Commercial mortgage loans | 1,386 | ||
Policy loans | 44 | ||
Other long-term investments | 1,522 | ||
Total investments | 11,650 | ||
Cash | 35 | ||
Accrued investment income | 101 | ||
Reinsurance receivables | 0 | ||
Accounts and premiums receivable | 2 | ||
Value of business acquired | 535 | ||
Other intangibles | 21 | ||
Other assets | 6 | ||
Assets related to separate accounts | 9,583 | ||
Total assets | 21,933 | ||
LIABILITIES | |||
Future policy benefits and claims | 11,022 | ||
Annuity account balances | 220 | ||
Other policyholders’ funds | 220 | ||
Other liabilities | 75 | ||
Liabilities related to separate accounts | 9,583 | ||
Total liabilities | 21,120 | ||
NET ASSETS ACQUIRED | $ 813 | ||
Business Acquisition, Pro Forma Information [Abstract] | |||
Revenue | $ 6,165 | $ 5,592 | |
Net Income | $ 444 | $ 253 |
INVESTMENT OPERATIONS - Summary
INVESTMENT OPERATIONS - Summary of Major Categories of Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt and Equity Securities, FV-NI [Line Items] | |||||||||||
Investment income before other investment expenses | $ 3,202 | $ 3,088 | $ 3,011 | ||||||||
Investment expenses | 220 | 199 | 186 | ||||||||
Net investment income | $ 767 | $ 753 | $ 742 | $ 720 | $ 653 | $ 740 | $ 742 | $ 754 | 2,982 | 2,889 | 2,825 |
Fixed maturities | |||||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||||
Investment income before other investment expenses | 2,513 | 2,481 | 2,471 | ||||||||
Equity securities | |||||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||||
Investment income before other investment expenses | 27 | 24 | 31 | ||||||||
Commercial mortgage loans | |||||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||||
Investment income before other investment expenses | 505 | 443 | 389 | ||||||||
Investment real estate | |||||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||||
Investment income before other investment expenses | 1 | 1 | 1 | ||||||||
Other investment income | |||||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||||
Investment income before other investment expenses | $ 156 | $ 139 | $ 119 |
INVESTMENT OPERATIONS - Summa_2
INVESTMENT OPERATIONS - Summary of Net Realized Investment and Derivative Gains (Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Realized gains (losses) - investments, net | |||
Fixed maturities | $ 46 | $ 46 | $ 48 |
Equity securities | 4 | 0 | (3) |
Other investments | 20 | 45 | 9 |
Total realized gains (losses) - investments, net | 70 | 91 | 54 |
Modco trading portfolio | (103) | 130 | 243 |
Equity securities | (8) | 13 | 50 |
Change in net expected credit losses - fixed maturities | 6 | (125) | 0 |
Net impairment losses recognized in operations | 0 | 0 | (34) |
Commercial mortgage loans | 137 | (149) | (4) |
Gains (losses) - derivatives, net | 48 | (195) | (368) |
Net gains (losses) - investments and derivatives | $ 150 | $ (235) | $ (59) |
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 | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Securities in an unrealized gain position: | |||
Sales proceeds | $ 1,537 | $ 2,000 | $ 2,514 |
Realized gains | 47 | 51 | 62 |
Securities in an unrealized loss position: | |||
Sales proceeds | 35 | 34 | 547 |
Realized losses | $ (1) | $ (5) | $ (14) |
INVESTMENT OPERATIONS - Additio
INVESTMENT OPERATIONS - Additional Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)position | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Available-for-sale securities | |||
Net gains (losses) from equity securities still held at period end | $ (8) | $ 13 | $ 50 |
Gains from equity securities sold | 4 | 0 | $ (3) |
Continuous unrealized loss position, 12 months or longer | $ 56 | 76 | |
Number of positions in unrealized loss position | position | 742 | ||
Number of positions in unrealized loss position with allowance established | position | 5 | ||
Fixed maturity securities - AFS | $ 71,035 | 70,119 | |
Available-for-sale securities, amortized cost | 66,042 | 63,220 | |
Securities in trading portfolio | 2,888 | 2,958 | |
Non-income producing investments | 21 | 28 | |
Policy loans | 1,527 | 1,593 | |
Total fixed maturity securities - AFS | |||
Available-for-sale securities | |||
Fixed maturity securities - AFS | 70,255 | 69,733 | |
Available-for-sale securities, amortized cost | 65,262 | 62,834 | |
Securities in trading portfolio | 2,793 | 2,862 | |
Commercial mortgage-backed securities | |||
Available-for-sale securities | |||
Continuous unrealized loss position, 12 months or longer | 6 | 4 | |
Fixed maturity securities - AFS | 2,307 | 2,534 | |
Available-for-sale securities, amortized cost | 2,239 | 2,429 | |
Securities in trading portfolio | 209 | 214 | |
Other asset-backed securities | |||
Available-for-sale securities | |||
Continuous unrealized loss position, 12 months or longer | 1 | 5 | |
Fixed maturity securities - AFS | 1,420 | 1,578 | |
Available-for-sale securities, amortized cost | 1,391 | 1,546 | |
Securities in trading portfolio | 185 | 163 | |
Corporate securities | |||
Available-for-sale securities | |||
Continuous unrealized loss position, 12 months or longer | 37 | 66 | |
Fixed maturity securities - AFS | 53,699 | 52,107 | |
Available-for-sale securities, amortized cost | 49,211 | 46,150 | |
Securities in trading portfolio | $ 1,875 | $ 1,860 | |
Minimum | |||
Available-for-sale securities | |||
Interest rate on standard policy loans (as a percent) | 3.00% | ||
Maximum | |||
Available-for-sale securities | |||
Interest rate on standard policy loans (as a percent) | 8.00% | ||
Below investment grade | |||
Available-for-sale securities | |||
Fixed maturity securities - AFS | $ 2,500 | ||
Available-for-sale securities, amortized cost | 2,300 | ||
Securities in trading portfolio | 129 | ||
Securities not publicly traded | 550 | ||
Below investment grade | Corporate securities | |||
Available-for-sale securities | |||
Unrealized losses, greater than twelve months, credit related | $ 1 |
INVESTMENT OPERATIONS - Amortiz
INVESTMENT OPERATIONS - Amortized Cost and Fair Value of Investments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | $ 66,042 | $ 63,220 | |
Gross Unrealized Gains | 5,289 | 7,053 | |
Gross Unrealized Losses | (295) | (131) | |
Allowance for Expected Credit Losses | (1) | (23) | |
Fair Value | 71,035 | 70,119 | |
Residential mortgage-backed securities | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 6,876 | 6,510 | |
Gross Unrealized Gains | 31 | 159 | |
Gross Unrealized Losses | (102) | (1) | |
Allowance for Expected Credit Losses | 0 | 0 | |
Fair Value | 6,805 | 6,668 | |
Commercial mortgage-backed securities | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 2,239 | 2,429 | |
Gross Unrealized Gains | 75 | 128 | |
Gross Unrealized Losses | (7) | (19) | |
Allowance for Expected Credit Losses | 0 | (4) | $ 0 |
Fair Value | 2,307 | 2,534 | |
Other asset-backed securities | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 1,391 | 1,546 | |
Gross Unrealized Gains | 31 | 40 | |
Gross Unrealized Losses | (2) | (7) | |
Allowance for Expected Credit Losses | 0 | (1) | 0 |
Fair Value | 1,420 | 1,578 | |
U.S. government-related securities | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 821 | 1,492 | |
Gross Unrealized Gains | 12 | 26 | |
Gross Unrealized Losses | (25) | (3) | |
Allowance for Expected Credit Losses | 0 | 0 | |
Fair Value | 808 | 1,515 | |
Other government-related securities | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 680 | 622 | |
Gross Unrealized Gains | 75 | 96 | |
Gross Unrealized Losses | (2) | (1) | |
Allowance for Expected Credit Losses | 0 | 0 | |
Fair Value | 753 | 717 | |
States, municipals, and political subdivisions | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 3,747 | 3,902 | |
Gross Unrealized Gains | 410 | 519 | |
Gross Unrealized Losses | (1) | (1) | |
Allowance for Expected Credit Losses | 0 | 0 | |
Fair Value | 4,156 | 4,420 | |
Corporate securities | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 49,211 | 46,150 | |
Gross Unrealized Gains | 4,645 | 6,074 | |
Gross Unrealized Losses | (156) | (99) | |
Allowance for Expected Credit Losses | (1) | (18) | 0 |
Fair Value | 53,699 | 52,107 | |
Preferred Stock | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 297 | 183 | |
Gross Unrealized Gains | 10 | 11 | |
Gross Unrealized Losses | 0 | 0 | |
Allowance for Expected Credit Losses | 0 | 0 | |
Fair Value | 307 | 194 | |
Total fixed maturity securities - AFS | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 65,262 | 62,834 | |
Gross Unrealized Gains | 5,289 | 7,053 | |
Gross Unrealized Losses | (295) | (131) | |
Allowance for Expected Credit Losses | (1) | (23) | $ 0 |
Fair Value | 70,255 | 69,733 | |
Short-term investments | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 780 | 386 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | 0 | 0 | |
Allowance for Expected Credit Losses | 0 | 0 | |
Fair Value | 780 | 386 | |
Public utility securities | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 6,500 | 6,300 | |
Fair Value | 7,000 | 7,000 | |
Foreign government securities | |||
Debt Securities, Trading and Available-for-sale [Abstract] | |||
Amortized Cost | 620 | 557 | |
Fair Value | $ 687 | $ 644 |
INVESTMENT OPERATIONS - Sched_2
INVESTMENT OPERATIONS - Schedule of Fair Value of Trading Securities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | $ 2,888 | $ 2,958 |
Residential mortgage-backed securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 133 | 209 |
Commercial mortgage-backed securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 209 | 214 |
Other asset-backed securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 185 | 163 |
U.S. government-related securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 33 | 91 |
Other government-related securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 64 | 30 |
States, municipals, and political subdivisions | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 286 | 282 |
Corporate securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 1,875 | 1,860 |
Preferred Stock | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 8 | 13 |
Total fixed maturity securities - AFS | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 2,793 | 2,862 |
Equity securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 13 | 20 |
Short-term investments | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 82 | 76 |
Public utility securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | 134 | 144 |
Foreign government securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed maturity securities - trading | $ 44 | $ 30 |
INVESTMENT OPERATIONS - Sched_3
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of Available-For-Sale by Maturity Date (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Available-for-sale Amortized Cost | ||
Amortized Cost | $ 66,042 | $ 63,220 |
Available-for-sale Fair Value | ||
Fair Value | 71,035 | 70,119 |
Total fixed maturity securities - AFS | ||
Available-for-sale Amortized Cost | ||
Due in one year or less | 1,707 | |
Due after one year through five years | 11,046 | |
Due after five years through ten years | 15,434 | |
Due after ten years | 37,075 | |
Amortized Cost | 65,262 | 62,834 |
Available-for-sale Fair Value | ||
Due in one year or less | 1,719 | |
Due after one year through five years | 11,453 | |
Due after five years through ten years | 16,135 | |
Due after ten years | 40,948 | |
Fair Value | $ 70,255 | $ 69,733 |
INVESTMENT OPERATIONS - Sched_4
INVESTMENT OPERATIONS - Schedule of Available-for-Sale Credit Losses on Fixed Maturities with Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | $ 23 | |
Ending Balance | 1 | $ 23 |
Corporate securities | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | 18 | 0 |
Additions for securities for which an allowance was not previously recorded | 0 | 62 |
Adjustments on previously recorded allowances due to change in expected cash flows | (1) | 20 |
Reductions on previously recorded allowances due to disposal of security in the current period | 0 | (1) |
Write-offs of previously recorded allowances due to intent or requirement to sell | (16) | (63) |
Ending Balance | 1 | 18 |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | 4 | 0 |
Additions for securities for which an allowance was not previously recorded | 0 | 4 |
Adjustments on previously recorded allowances due to change in expected cash flows | (4) | 0 |
Reductions on previously recorded allowances due to disposal of security in the current period | 0 | 0 |
Write-offs of previously recorded allowances due to intent or requirement to sell | 0 | 0 |
Ending Balance | 0 | 4 |
Other asset-backed securities | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | 1 | 0 |
Additions for securities for which an allowance was not previously recorded | 0 | 1 |
Adjustments on previously recorded allowances due to change in expected cash flows | 0 | 1 |
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 | 0 | 0 |
Ending Balance | 0 | 1 |
Total fixed maturity securities - AFS | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | 23 | 0 |
Additions for securities for which an allowance was not previously recorded | 0 | 67 |
Adjustments on previously recorded allowances due to change in expected cash flows | (5) | 21 |
Reductions on previously recorded allowances due to disposal of security in the current period | (1) | (2) |
Write-offs of previously recorded allowances due to intent or requirement to sell | (16) | (63) |
Ending Balance | $ 1 | $ 23 |
INVESTMENT OPERATIONS - Sched_5
INVESTMENT OPERATIONS - Schedule of Gross Unrealized Losses and Fair Value of Investments Not Deemed to be Other-Than-Temporary (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value | ||
Less Than 12 Months | $ 10,273 | $ 2,222 |
12 Months or More | 827 | 1,106 |
Total | 11,100 | 3,328 |
Unrealized Loss | ||
Less Than 12 Months | (239) | (56) |
12 Months or More | (56) | (76) |
Total | (295) | (132) |
Residential mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 4,615 | 386 |
12 Months or More | 15 | 9 |
Total | 4,630 | 395 |
Unrealized Loss | ||
Less Than 12 Months | (102) | (1) |
12 Months or More | 0 | 0 |
Total | (102) | (1) |
Commercial mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 129 | 263 |
12 Months or More | 88 | 30 |
Total | 217 | 293 |
Unrealized Loss | ||
Less Than 12 Months | (1) | (16) |
12 Months or More | (6) | (4) |
Total | (7) | (20) |
Other asset-backed securities | ||
Fair Value | ||
Less Than 12 Months | 249 | 146 |
12 Months or More | 47 | 326 |
Total | 296 | 472 |
Unrealized Loss | ||
Less Than 12 Months | (1) | (2) |
12 Months or More | (1) | (5) |
Total | (2) | (7) |
U.S. government-related securities | ||
Fair Value | ||
Less Than 12 Months | 306 | 311 |
12 Months or More | 158 | 1 |
Total | 464 | 312 |
Unrealized Loss | ||
Less Than 12 Months | (13) | (3) |
12 Months or More | (12) | 0 |
Total | (25) | (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 | 37 | 34 |
12 Months or More | 4 | 5 |
Total | 41 | 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 | 4,841 | 1,063 |
12 Months or More | 515 | 728 |
Total | 5,356 | 1,791 |
Unrealized Loss | ||
Less Than 12 Months | (119) | (33) |
12 Months or More | (37) | (66) |
Total | (156) | (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 - Change
INVESTMENT OPERATIONS - Change in Unrealized Gains (Losses) on Investments Classified as Available-for-Sale (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total fixed maturity securities - AFS | |||
Net Investment Income [Line Items] | |||
Change in unrealized gains (losses) net of income tax | $ (1,523) | $ 3,271 | $ 4,219 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Hierarchy for Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Fixed maturity securities - AFS | $ 71,035 | $ 70,119 |
Fixed maturity securities - trading | 2,888 | 2,958 |
Total fixed maturity securities | 73,048 | 72,595 |
Equity securities | 828 | 667 |
Other long-term investments | 1,447 | 1,636 |
Short-term investments | 862 | 462 |
Assets related to separate accounts | ||
Variable annuity | 13,648 | 12,378 |
Variable universal life | 1,982 | 1,286 |
Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 6,805 | 6,668 |
Fixed maturity securities - trading | 133 | 209 |
Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 2,307 | 2,534 |
Fixed maturity securities - trading | 209 | 214 |
Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 1,420 | 1,578 |
Fixed maturity securities - trading | 185 | 163 |
States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - AFS | 4,156 | 4,420 |
Fixed maturity securities - trading | 286 | 282 |
Other government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 753 | 717 |
Fixed maturity securities - trading | 64 | 30 |
Corporate securities | ||
Assets: | ||
Fixed maturity securities - AFS | 53,699 | 52,107 |
Fixed maturity securities - trading | 1,875 | 1,860 |
Total fixed maturity securities - AFS | ||
Assets: | ||
Fixed maturity securities - AFS | 70,255 | 69,733 |
Fixed maturity securities - trading | 2,793 | 2,862 |
Level 2 | Corporate securities | ||
Assets: | ||
Total investments | 59,600 | |
Level 3 | Residential mortgage-backed securities | ||
Assets: | ||
Total investments | 40 | |
Level 3 | Commercial mortgage-backed securities | ||
Assets: | ||
Total investments | 180 | 32 |
Level 3 | Other asset-backed securities | ||
Assets: | ||
Total investments | 436 | 435 |
Level 3 | Corporate securities | ||
Assets: | ||
Total investments | 1,588 | 1,432 |
Measured at fair value on a recurring basis | ||
Assets: | ||
Total fixed maturity securities | 73,048 | 72,595 |
Equity securities | 828 | 667 |
Other long-term investments | 1,447 | 1,635 |
Short-term investments | 862 | 462 |
Total investments | 76,185 | 75,359 |
Cash | 390 | 656 |
Assets related to separate accounts | ||
Variable annuity | 13,648 | 12,378 |
Variable universal life | 1,982 | 1,287 |
Total assets measured at fair value on a recurring basis | 92,205 | 89,680 |
Liabilities: | ||
Annuity account balances | 63 | 67 |
Other liabilities | 2,779 | 3,120 |
Total liabilities measured at fair value on a recurring basis | 2,842 | 3,187 |
Measured at fair value on a recurring basis | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 6,805 | 6,668 |
Fixed maturity securities - trading | 133 | 209 |
Measured at fair value on a recurring basis | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 2,307 | 2,534 |
Fixed maturity securities - trading | 209 | 214 |
Measured at fair value on a recurring basis | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 1,420 | 1,578 |
Fixed maturity securities - trading | 185 | 163 |
Measured at fair value on a recurring basis | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 808 | 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 | 4,156 | 4,420 |
Fixed maturity securities - trading | 286 | 282 |
Measured at fair value on a recurring basis | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 753 | 717 |
Fixed maturity securities - trading | 64 | 30 |
Measured at fair value on a recurring basis | Corporate securities | ||
Assets: | ||
Fixed maturity securities - AFS | 53,699 | 52,107 |
Fixed maturity securities - trading | 1,875 | 1,860 |
Measured at fair value on a recurring basis | Redeemable preferred stocks | ||
Assets: | ||
Fixed maturity securities - AFS | 307 | 194 |
Fixed maturity securities - trading | 8 | 13 |
Measured at fair value on a recurring basis | Total fixed maturity securities - AFS | ||
Assets: | ||
Fixed maturity securities - AFS | 70,255 | 69,733 |
Fixed maturity securities - trading | 2,793 | 2,862 |
Measured at fair value on a recurring basis | Level 1 | ||
Assets: | ||
Total fixed maturity securities | 753 | 1,231 |
Equity securities | 633 | 566 |
Other long-term investments | 59 | 52 |
Short-term investments | 683 | 403 |
Total investments | 2,128 | 2,252 |
Cash | 390 | 656 |
Assets related to separate accounts | ||
Variable annuity | 13,648 | 12,378 |
Variable universal life | 1,982 | 1,287 |
Total assets measured at fair value on a recurring basis | 18,148 | 16,573 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Other liabilities | 20 | 14 |
Total liabilities measured at fair value on a recurring basis | 20 | 14 |
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 | 411 | 1,014 |
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 | 307 | 125 |
Fixed maturity securities - trading | 8 | 13 |
Measured at fair value on a recurring basis | Level 1 | Total fixed maturity securities - AFS | ||
Assets: | ||
Fixed maturity securities - AFS | 718 | 1,139 |
Fixed maturity securities - trading | 35 | 92 |
Measured at fair value on a recurring basis | Level 2 | ||
Assets: | ||
Total fixed maturity securities | 69,861 | 69,376 |
Equity securities | 40 | 0 |
Other long-term investments | 1,093 | 1,285 |
Short-term investments | 179 | 59 |
Total investments | 71,173 | 70,720 |
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 | 71,173 | 70,720 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Other liabilities | 820 | 867 |
Total liabilities measured at fair value on a recurring basis | 820 | 867 |
Measured at fair value on a recurring basis | Level 2 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 6,765 | 6,668 |
Fixed maturity securities - trading | 133 | 209 |
Measured at fair value on a recurring basis | Level 2 | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 2,127 | 2,502 |
Fixed maturity securities - trading | 209 | 214 |
Measured at fair value on a recurring basis | Level 2 | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 905 | 1,143 |
Fixed maturity securities - trading | 92 | 92 |
Measured at fair value on a recurring basis | Level 2 | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 397 | 501 |
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 | 4,156 | 4,420 |
Fixed maturity securities - trading | 286 | 282 |
Measured at fair value on a recurring basis | Level 2 | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - AFS | 753 | 717 |
Fixed maturity securities - trading | 48 | 30 |
Measured at fair value on a recurring basis | Level 2 | Corporate securities | ||
Assets: | ||
Fixed maturity securities - AFS | 52,117 | 50,675 |
Fixed maturity securities - trading | 1,867 | 1,842 |
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 2 | Total fixed maturity securities - AFS | ||
Assets: | ||
Fixed maturity securities - AFS | 67,220 | 66,695 |
Fixed maturity securities - trading | 2,641 | 2,681 |
Measured at fair value on a recurring basis | Level 3 | ||
Assets: | ||
Total fixed maturity securities | 2,434 | 1,988 |
Equity securities | 155 | 101 |
Other long-term investments | 295 | 298 |
Short-term investments | 0 | 0 |
Total investments | 2,884 | 2,387 |
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 | 2,884 | 2,387 |
Liabilities: | ||
Annuity account balances | 63 | 67 |
Other liabilities | 1,939 | 2,239 |
Total liabilities measured at fair value on a recurring basis | 2,002 | 2,306 |
Measured at fair value on a recurring basis | Level 3 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - AFS | 40 | 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 | 180 | 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 | 515 | 435 |
Fixed maturity securities - trading | 93 | 71 |
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 | 1,582 | 1,432 |
Fixed maturity securities - trading | 8 | 18 |
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 |
Measured at fair value on a recurring basis | Level 3 | Total fixed maturity securities - AFS | ||
Assets: | ||
Fixed maturity securities - AFS | 2,317 | 1,899 |
Fixed maturity securities - trading | $ 117 | $ 89 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Determination of Fair Values Additional Information (Details) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2021USD ($)primary_source | Dec. 31, 2021USD ($)input_method | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($)quote | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Determination of fair values | ||||||
Number of primary sources of information used for determining fair value | primary_source | 1 | |||||
Total number of primary sources of information available for determining fair value | 3 | 3 | ||||
Minimum percentage of the Company's fixed maturity securities priced by third party pricing services | 91.87% | |||||
Number of independent non-binding broker quotes obtained per security | quote | 2 | |||||
Minimum percentage of underlying collateral guaranteed by third party | 97.00% | |||||
Percentage of derivatives excluding embedded derivatives that were priced using exchange prices or independent broker quotations | 83.90% | |||||
Other long-term investments | $ 1,447 | $ 1,447 | $ 1,447 | $ 1,447 | $ 1,636 | |
Level 3 | ||||||
Determination of fair values | ||||||
Annuity account balances | 2,002 | 2,002 | 2,002 | 2,002 | 2,306 | $ 1,402 |
Asset-Backed Securities | Level 2 | ||||||
Determination of fair values | ||||||
Fair value, assets | 10,200 | 10,200 | 10,200 | 10,200 | ||
Asset-Backed Securities | Level 3 | ||||||
Determination of fair values | ||||||
Fair value, assets | 828 | 828 | 828 | 828 | ||
Other asset-backed securities | Level 3 | ||||||
Determination of fair values | ||||||
Fair value, assets | 436 | 436 | 436 | 436 | 435 | |
Other asset-backed securities | Level 3 | Available-for-sale securities | ||||||
Determination of fair values | ||||||
Fair value, assets | 735 | 735 | 735 | 735 | ||
Other asset-backed securities | Level 3 | Trading securities | ||||||
Determination of fair values | ||||||
Fair value, assets | 93 | 93 | 93 | 93 | ||
Equity securities | Level 2 and Level 3 | ||||||
Determination of fair values | ||||||
Fair value, assets | 155 | 155 | 155 | 155 | ||
Federal home loan bank stock | 148 | 148 | $ 148 | 148 | ||
Embedded derivative - GLWB | Minimum | ||||||
Determination of fair values | ||||||
Mortality rate | 88.00% | |||||
Embedded derivative - GLWB | Maximum | ||||||
Determination of fair values | ||||||
Mortality rate | 100.00% | |||||
Funds withheld derivative | Level 2 | ||||||
Determination of fair values | ||||||
Fair value, derivative liability | 10 | 10 | $ 10 | 10 | ||
Corporate securities | Level 2 | ||||||
Determination of fair values | ||||||
Fair value, assets | 59,600 | 59,600 | 59,600 | 59,600 | ||
Corporate securities | Level 3 | ||||||
Determination of fair values | ||||||
Fair value, assets | 1,588 | 1,588 | 1,588 | 1,588 | 1,432 | |
Corporate Bonds And Securities | Level 3 | ||||||
Determination of fair values | ||||||
Fair value, assets | 1,600 | 1,600 | $ 1,600 | 1,600 | ||
Actuarial cash flow model | Embedded derivative—FIA | Level 3 | Minimum | ||||||
Determination of fair values | ||||||
Mortality rate | 88.00% | |||||
Actuarial cash flow model | Embedded derivative—FIA | Level 3 | Maximum | ||||||
Determination of fair values | ||||||
Mortality rate | 100.00% | |||||
Actuarial cash flow model | Embedded derivative - IUL | Level 3 | Minimum | ||||||
Determination of fair values | ||||||
Mortality rate | 43.00% | |||||
Actuarial cash flow model | Embedded derivative - IUL | Level 3 | Maximum | ||||||
Determination of fair values | ||||||
Mortality rate | 110.00% | |||||
Variable annuity | Level 3 | ||||||
Determination of fair values | ||||||
Annuity account balances | $ 63 | $ 63 | $ 63 | $ 63 | $ 67 | $ 70 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Valuation of Level 3 Financial Instruments (Details) | Dec. 31, 2021USD ($)usd_per_policy | Dec. 31, 2020USD ($)usd_per_policy |
Assets and liabilities measured at fair value on a recurring basis | ||
Derivative liability | $ 2,779,000,000 | $ 3,119,000,000 |
Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Financial instruments that are valued using broker quotes | 197,000,000 | 116,000,000 |
Financial instruments with book value approximating fair value | 148,000,000 | 90,000,000 |
Level 3 | Residential mortgage-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value, assets | 40,000,000 | |
Level 3 | Commercial mortgage-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value, assets | 180,000,000 | 32,000,000 |
Level 3 | Other asset-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value, assets | 436,000,000 | 435,000,000 |
Financial instruments that are valued using broker quotes | 172,000,000 | 88,000,000 |
Level 3 | Corporate securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value, assets | 1,588,000,000 | 1,432,000,000 |
Financial instruments that are valued using broker quotes | 3,000,000 | 17,000,000 |
Level 3 | Embedded derivative - GLWB | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Derivative liability | 475,000,000 | 822,000,000 |
Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Derivative liability | 595,000,000 | 573,000,000 |
Level 3 | Embedded derivative - IUL | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Derivative liability | 269,000,000 | 201,000,000 |
Level 3 | Other government-related securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Financial instruments that are valued using broker quotes | 16,000,000 | |
Level 3 | Equity securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Financial instruments that are valued using broker quotes | $ 6,000,000 | $ 11,000,000 |
Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | usd_per_policy | 214 | 207 |
Minimum | Discounted cash flow | Level 3 | Corporate securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0 | 0 |
Maximum | Discounted cash flow | Level 3 | Corporate securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0400 | 0.0475 |
Weighted Average | Discounted cash flow | Level 3 | Corporate securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0150 | 0.0189 |
Spread over treasury | Minimum | Discounted cash flow | Level 3 | Residential mortgage-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0103 | |
Spread over treasury | Minimum | Discounted cash flow | Level 3 | Commercial mortgage-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0104 | 0.0278 |
Spread over treasury | Maximum | Discounted cash flow | Level 3 | Residential mortgage-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0110 | |
Spread over treasury | Maximum | Discounted cash flow | Level 3 | Commercial mortgage-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0247 | 0.0292 |
Spread over treasury | Weighted Average | Discounted cash flow | Level 3 | Residential mortgage-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0107 | |
Spread over treasury | Weighted Average | Discounted cash flow | Level 3 | Commercial mortgage-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0130 | 0.0287 |
Liquidation value | Minimum | Discounted cash flow | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 60 | |
Liquidation value | Minimum | Liquidation | Level 3 | Other asset-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input, value | $ 98.63 | $ 95 |
Liquidation value | Maximum | Discounted cash flow | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 1.1388 | |
Liquidation value | Maximum | Liquidation | Level 3 | Other asset-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input, value | $ 99.75 | 97 |
Liquidation value | Weighted Average | Discounted cash flow | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 1.1292 | |
Liquidation value | Weighted Average | Liquidation | Level 3 | Other asset-backed securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input, value | $ 99.07 | $ 96.19 |
Liquidity premium | Minimum | Discounted cash flow | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0011 | 0.0054 |
Liquidity premium | Maximum | Discounted cash flow | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0214 | 0.0230 |
Liquidity premium | Weighted Average | Discounted cash flow | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.0154 | 0.0163 |
Paydown Rate | Minimum | Discounted cash flow | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.1120 | 0.0879 |
Paydown Rate | Maximum | Discounted cash flow | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.1341 | 0.1249 |
Paydown Rate | Weighted Average | Discounted cash flow | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Debt securities, measurement input | 0.1230 | 0.1139 |
Mortality | Minimum | Actuarial cash flow model | Level 3 | Embedded derivative - GLWB | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.88 | 0.88 |
Mortality | Minimum | Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.88 | 0.88 |
Mortality | Minimum | Actuarial cash flow model, vbt primary tables | Level 3 | Embedded derivative - IUL | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.43 | 0.36 |
Mortality | Minimum | Actuarial cash flow model, vbt primary tables, duration scale | Level 3 | Embedded derivative - IUL | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.94 | 0.94 |
Mortality | Maximum | Actuarial cash flow model | Level 3 | Embedded derivative - GLWB | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 1 | 1 |
Mortality | Maximum | Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 1 | 1 |
Mortality | Maximum | Actuarial cash flow model, vbt primary tables | Level 3 | Embedded derivative - IUL | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 1.10 | 1.61 |
Mortality | Maximum | Actuarial cash flow model, vbt primary tables, duration scale | Level 3 | Embedded derivative - IUL | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 2.48 | 2.48 |
Nonperformance risk | Minimum | Actuarial cash flow model | Level 3 | Embedded derivative - GLWB | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.0019 | 0.0019 |
Nonperformance risk | Minimum | Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.0019 | 0.0019 |
Nonperformance risk | Minimum | Actuarial cash flow model | Level 3 | Embedded derivative - IUL | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.0019 | 0.0019 |
Nonperformance risk | Maximum | Actuarial cash flow model | Level 3 | Embedded derivative - GLWB | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.0082 | 0.0081 |
Nonperformance risk | Maximum | Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.0082 | 0.0081 |
Nonperformance risk | Maximum | Actuarial cash flow model | Level 3 | Embedded derivative - IUL | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.0082 | 0.0081 |
Withdrawal rate prior to age 70 | Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.004 | |
Withdrawal rate prior to age 70 | Minimum | Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.004 | |
Withdrawal rate prior to age 70 | Maximum | Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.024 | |
Withdrawal rate | Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.024 | |
Lapse | Minimum | Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.002 | 0.002 |
Lapse | Minimum | Actuarial cash flow model | Level 3 | Embedded derivative - IUL | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.00375 | 0.00375 |
Lapse | Maximum | Actuarial cash flow model | Level 3 | Embedded derivative - FIA | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.500 | 0.500 |
Lapse | Maximum | Actuarial cash flow model | Level 3 | Embedded derivative - IUL | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Embedded derivative liability, measurement input | 0.075 | 0.10 |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS - Reconciliation of Fair Value Measurements for Level 3 (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Transfers | ||
Securities transferred into Level 3 | $ 336 | $ 184 |
Transferred out of Level 3 | 38 | 1 |
Level 3 | ||
Assets: | ||
Beginning Balance | 2,387 | 2,246 |
Total Realized and Unrealized Gains Included in Net Income | 185 | 412 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 17 | 144 |
Total Realized and Unrealized Losses Included in Net Income | (188) | (309) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (38) | (97) |
Purchases | 496 | 524 |
Sales | (273) | (708) |
Issuances | 0 | 0 |
Settlements | 0 | (4) |
Transfers in/out of Level 3 | 298 | 183 |
Other | 0 | (4) |
Ending Balance | 2,884 | 2,387 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | (3) | 83 |
Liabilities: | ||
Beginning Balance | 2,306 | 1,402 |
Total Realized and Unrealized Gains Included in Net Income | 877 | 926 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Net Income | (581) | (1,836) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 8 | 6 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 2,002 | 2,306 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 300 | (906) |
Level 3 | Variable annuity | ||
Liabilities: | ||
Beginning Balance | 67 | 70 |
Total Realized and Unrealized Gains Included in Net Income | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Net Income | (4) | (3) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 8 | 6 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 63 | 67 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Other liabilities | ||
Liabilities: | ||
Beginning Balance | 2,239 | 1,332 |
Total Realized and Unrealized Gains Included in Net Income | 877 | 926 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Net Income | (577) | (1,833) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 1,939 | 2,239 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 300 | (906) |
Level 3 | Total investments | ||
Assets: | ||
Beginning Balance | 2,387 | 2,246 |
Total Realized and Unrealized Gains Included in Net Income | 185 | 412 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 17 | 144 |
Total Realized and Unrealized Losses Included in Net Income | (188) | (309) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (38) | (97) |
Purchases | 496 | 524 |
Sales | (273) | (708) |
Transfers in/out of Level 3 | 298 | 183 |
Other | 0 | (4) |
Ending Balance | 2,884 | 2,387 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | (3) | 83 |
Level 3 | Total fixed maturity securities - AFS | ||
Assets: | ||
Beginning Balance | 1,988 | 1,881 |
Total Realized and Unrealized Gains Included in Net Income | 0 | 7 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 17 | 144 |
Total Realized and Unrealized Losses Included in Net Income | 0 | (9) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (38) | (97) |
Purchases | 405 | 456 |
Sales | (241) | (568) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 303 | 178 |
Other | 0 | (4) |
Ending Balance | 2,434 | 1,988 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | 2 |
Level 3 | Total fixed maturity securities - AFS | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 1,899 | 1,805 |
Total Realized and Unrealized Gains Included in Net Income | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 14 | 144 |
Total Realized and Unrealized Losses Included in Net Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (37) | (97) |
Purchases | 381 | 436 |
Sales | (216) | (564) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 276 | 179 |
Other | 0 | (4) |
Ending Balance | 2,317 | 1,899 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Total fixed maturity securities - AFS | Trading Securities | ||
Assets: | ||
Beginning Balance | 89 | 76 |
Total Realized and Unrealized Gains Included in Net Income | 0 | 7 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 3 | 0 |
Total Realized and Unrealized Losses Included in Net Income | 0 | (9) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (1) | 0 |
Purchases | 24 | 20 |
Sales | (25) | (4) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 27 | (1) |
Other | 0 | 0 |
Ending Balance | 117 | 89 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | 2 |
Level 3 | Residential mortgage-backed securities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 0 | |
Total Realized and Unrealized Gains Included in Net Income | 0 | |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | |
Total Realized and Unrealized Losses Included in Net Income | 0 | |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | |
Purchases | 40 | |
Sales | 0 | |
Issuances | 0 | |
Settlements | 0 | |
Transfers in/out of Level 3 | 0 | |
Other | 0 | |
Ending Balance | 40 | 0 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | |
Level 3 | Commercial mortgage-backed securities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 32 | 10 |
Total Realized and Unrealized Gains Included in Net Income | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 1 |
Total Realized and Unrealized Losses Included in Net Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (2) | (1) |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 150 | 22 |
Other | 0 | 0 |
Ending Balance | 180 | 32 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Other asset-backed securities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 435 | 421 |
Total Realized and Unrealized Gains Included in Net Income | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 3 | 8 |
Total Realized and Unrealized Losses Included in Net Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (1) | (13) |
Purchases | 67 | 0 |
Sales | (4) | (2) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 14 | 22 |
Other | 1 | (1) |
Ending Balance | 515 | 435 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Other asset-backed securities | Trading Securities | ||
Assets: | ||
Beginning Balance | 71 | 65 |
Total Realized and Unrealized Gains Included in Net Income | 0 | 6 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 3 | 0 |
Total Realized and Unrealized Losses Included in Net Income | 0 | (9) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 22 | 12 |
Sales | (19) | (2) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 16 | (1) |
Other | 0 | 0 |
Ending Balance | 93 | 71 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | 2 |
Level 3 | Other government-related securities | Trading Securities | ||
Assets: | ||
Beginning Balance | 0 | |
Total Realized and Unrealized Gains Included in Net Income | 0 | |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | |
Total Realized and Unrealized Losses Included in Net Income | 0 | |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | |
Purchases | 0 | |
Sales | 0 | |
Issuances | 0 | |
Settlements | 0 | |
Transfers in/out of Level 3 | 16 | |
Other | 0 | |
Ending Balance | 16 | 0 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | |
Level 3 | Corporate securities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 1,432 | 1,374 |
Total Realized and Unrealized Gains Included in Net Income | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 11 | 135 |
Total Realized and Unrealized Losses Included in Net Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (34) | (83) |
Purchases | 274 | 436 |
Sales | (212) | (562) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 112 | 135 |
Other | (1) | (3) |
Ending Balance | 1,582 | 1,432 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Corporate securities | Trading Securities | ||
Assets: | ||
Beginning Balance | 18 | 11 |
Total Realized and Unrealized Gains Included in Net Income | 0 | 1 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Net Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (1) | 0 |
Purchases | 2 | 8 |
Sales | (6) | (2) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | (5) | 0 |
Other | 0 | 0 |
Ending Balance | 8 | 18 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Equity securities | ||
Assets: | ||
Beginning Balance | 101 | 73 |
Total Realized and Unrealized Gains Included in Net Income | 0 | 1 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Net Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 91 | 27 |
Sales | (32) | (5) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | (5) | 5 |
Other | 0 | 0 |
Ending Balance | 155 | 101 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Other long-term investments | ||
Assets: | ||
Beginning Balance | 298 | 292 |
Total Realized and Unrealized Gains Included in Net Income | 185 | 404 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Net Income | (188) | (300) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 41 |
Sales | 0 | (135) |
Issuances | 0 | 0 |
Settlements | 0 | (4) |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 295 | 298 |
Total Gains (losses) included in Net Income related to Instruments still held at the Reporting Date | $ (3) | $ 81 |
FAIR VALUE OF FINANCIAL INSTR_7
FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Commercial mortgage loan holdings, net | $ 10,863 | $ 10,006 |
Policy loans | 1,527 | 1,593 |
Other long-term investments | 3,646 | 3,251 |
Liabilities: | ||
Stable value product account balances | 8,526 | 6,056 |
Future policy benefits and claims | 15,846 | 15,478 |
Other policyholders’ funds | 1,820 | 1,865 |
Carrying Amounts | Level 3 | ||
Assets: | ||
Commercial mortgage loan holdings, net | 10,863 | 10,006 |
Policy loans | 1,527 | 1,593 |
Other long-term investments | 1,930 | 1,186 |
Liabilities: | ||
Future policy benefits and claims | 1,457 | 1,580 |
Other policyholders’ funds | 102 | 102 |
Debt | ||
Subordinated funding obligations | 110 | 110 |
Fair Value | Level 3 | ||
Assets: | ||
Commercial mortgage loan holdings, net | 11,386 | 10,788 |
Policy loans | 1,527 | 1,593 |
Other long-term investments | 1,990 | 1,283 |
Liabilities: | ||
Stable value product account balances | 8,598 | 6,231 |
Future policy benefits and claims | 1,504 | 1,603 |
Other policyholders’ funds | 108 | 108 |
Debt | ||
Subordinated funding obligations | 116 | $ 121 |
Amounts receivable under certain modified coinsurance agreements included in other long-term investments | 1,200 | |
Cash surrender value of COLI policies included in other long-term investments | $ 710 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Realized Investment Gains (Losses) Derivative Financial Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | $ 48 | $ (195) | $ (368) |
Amount expected to be reclassified out of accumulated comprehensive income into earnings | 1 | ||
Derivatives not designated as hedging instruments | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 48 | (195) | (368) |
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 64 | (99) | (187) |
Derivatives not designated as hedging instruments | Derivatives with PLC | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 0 | 23 | 27 |
Derivatives not designated as hedging instruments | Other | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | (2) | 15 | (2) |
Variable annuity | Derivatives not designated as hedging instruments | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | (72) | (110) | (208) |
Variable annuity | Derivatives not designated as hedging instruments | Interest rate futures | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 15 | 0 | (20) |
Variable annuity | Derivatives not designated as hedging instruments | Equity futures | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | (12) | 109 | 5 |
Variable annuity | Derivatives not designated as hedging instruments | Currency futures | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 11 | (10) | 3 |
Variable annuity | Derivatives not designated as hedging instruments | Equity options | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | (108) | (30) | (150) |
Variable annuity | Derivatives not designated as hedging instruments | Interest rate swaps | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | (136) | 274 | 230 |
Variable annuity | Derivatives not designated as hedging instruments | Total return swaps | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | (189) | (49) | (78) |
Variable annuity | Derivatives not designated as hedging instruments | Embedded derivative - GLWB | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 347 | (404) | (198) |
FIA | Derivatives not designated as hedging instruments | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 70 | (35) | 0 |
FIA | Derivatives not designated as hedging instruments | Equity futures | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 5 | (4) | 2 |
FIA | Derivatives not designated as hedging instruments | Equity options | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 72 | 49 | 84 |
FIA | Derivatives not designated as hedging instruments | Funds withheld derivative | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | (7) | (10) | 0 |
FIA | Derivatives not designated as hedging instruments | Embedded derivative - FIA | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 3 | (69) | (86) |
FIA | Derivatives not designated as hedging instruments | Other | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | (3) | (1) | 0 |
Universal Life | Derivatives not designated as hedging instruments | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | (12) | 11 | 2 |
Universal Life | Derivatives not designated as hedging instruments | Equity futures | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 0 | (2) | 0 |
Universal Life | Derivatives not designated as hedging instruments | Equity options | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | 16 | 9 | 15 |
Universal Life | Derivatives not designated as hedging instruments | Embedded derivative - IUL | |||
Notional amount and fair value of the entity's derivative financial instruments | |||
Total gains (losses) - derivatives, net | $ (28) | $ 4 | $ (13) |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Nature and Accounting Treatment of Derivative Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | $ 20,286 | $ 17,464 |
Derivative asset, fair value | 1,447 | 1,636 |
Derivative liability, notional amount | 26,553 | 24,713 |
Derivative liability, fair value | 2,779 | 3,119 |
Interest rate swaps | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | 1,478 | 1,478 |
Derivative asset, fair value | 72 | 185 |
Derivative liability, notional amount | 1,354 | 1,354 |
Derivative liability, fair value | 0 | 0 |
Total return swaps | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | 239 | 158 |
Derivative asset, fair value | 8 | 2 |
Derivative liability, notional amount | 1,168 | 1,003 |
Derivative liability, fair value | 39 | 15 |
Derivatives with PLC | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, fair value | 0 | |
Derivatives with PLC | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | 4,085 | 4,076 |
Derivative asset, fair value | 0 | 0 |
Embedded derivative - Modco reinsurance treaties | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, fair value | 62 | 101 |
Derivative liability, fair value | 280 | 389 |
Embedded derivative - Modco reinsurance treaties | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | 1,268 | 1,249 |
Derivative asset, fair value | 62 | 101 |
Derivative liability, notional amount | 2,974 | 2,911 |
Derivative liability, fair value | 280 | 389 |
Funds withheld derivative | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, fair value | 10 | 10 |
Funds withheld derivative | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, notional amount | 855 | 661 |
Derivative liability, fair value | 10 | 10 |
Embedded derivative - GLWB | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, fair value | 169 | 138 |
Derivative liability, fair value | 644 | 960 |
Embedded derivative - GLWB | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | 3,066 | 2,067 |
Derivative asset, fair value | 169 | 138 |
Derivative liability, notional amount | 6,833 | 7,749 |
Derivative liability, fair value | 644 | 960 |
Embedded derivative - FIA | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, fair value | 659 | 633 |
Embedded derivative - FIA | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | 398 | 335 |
Derivative asset, fair value | 64 | 60 |
Derivative liability, notional amount | 4,372 | 3,889 |
Derivative liability, fair value | 659 | 633 |
Embedded derivative - IUL | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, fair value | 269 | 201 |
Embedded derivative - IUL | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, notional amount | 459 | 357 |
Derivative liability, fair value | 269 | 201 |
Interest rate futures | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | 561 | 690 |
Derivative asset, fair value | 5 | 4 |
Derivative liability, notional amount | 729 | 415 |
Derivative liability, fair value | 4 | 3 |
Equity futures | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | 312 | 203 |
Derivative asset, fair value | 6 | 4 |
Derivative liability, notional amount | 42 | 190 |
Derivative liability, fair value | 1 | 5 |
Currency futures | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | 27 | 0 |
Derivative asset, fair value | 0 | 0 |
Derivative liability, notional amount | 158 | 264 |
Derivative liability, fair value | 2 | 4 |
Equity options | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset, notional a mount | 8,852 | 7,208 |
Derivative asset, fair value | 1,061 | 1,142 |
Derivative liability, notional amount | 7,044 | 5,499 |
Derivative liability, fair value | 771 | 834 |
Other | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, notional amount | 448 | 304 |
Derivative liability, fair value | 87 | 55 |
Cash flow hedges | Foreign currency swaps | Cash flow hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, notional amount | 117 | 117 |
Derivative liability, fair value | $ 13 | $ 10 |
OFFSETTING OF ASSETS AND LIAB_3
OFFSETTING OF ASSETS AND LIABILITIES - Offsetting of Derivative Assets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Offsetting of Derivative Assets | ||
Other long-term investments | $ 1,447 | $ 1,636 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheet, Including not subject to master netting arrangement | 1,447 | 1,636 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, subject to master netting arrangement | 806 | 865 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Received | 178 | 290 |
Net Amount | 463 | 481 |
Free-Standing derivatives | ||
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets, subject to master netting arrangement | 1,152 | 1,337 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheet, Including not subject to master netting arrangement | 1,152 | 1,337 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, not subject to master netting arrangement | 806 | 865 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Received | 178 | 290 |
Net Amount | 168 | 182 |
Total derivatives, subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets, subject to master netting arrangement | 1,152 | 1,337 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheet, Including not subject to master netting arrangement | 1,152 | 1,337 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, not subject to master netting arrangement | 806 | 865 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Received | 178 | 290 |
Net Amount | 168 | 182 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Derivative Assets | ||
Other long-term investments | 62 | 101 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheet, Including not subject to master netting arrangement | 62 | 101 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Received | 0 | 0 |
Net Amount | 62 | 101 |
Embedded derivative - GLWB | ||
Offsetting of Derivative Assets | ||
Other long-term investments | 169 | 138 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheet, Including not subject to master netting arrangement | 169 | 138 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Received | 0 | 0 |
Net Amount | 169 | 138 |
Derivatives with PLC | ||
Offsetting of Derivative Assets | ||
Other long-term investments | 0 | |
Gross Amounts Offset in the Balance Sheet | 0 | |
Net Amounts of Assets Presented in the Balance Sheet, Including not subject to master netting arrangement | 0 | |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, subject to master netting arrangement | 0 | |
Gross Amounts Not Offset in the Balance Sheet, Collateral Received | 0 | |
Net Amount | 0 | |
Embedded derivative - FIA | ||
Offsetting of Derivative Assets | ||
Other long-term investments | 64 | 60 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheet, Including not subject to master netting arrangement | 64 | 60 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Received | 0 | 0 |
Net Amount | 64 | 60 |
Total derivatives, not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Assets | ||
Other long-term investments | 295 | 299 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheet, Including not subject to master netting arrangement | 295 | 299 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Received | 0 | 0 |
Net Amount | $ 295 | $ 299 |
OFFSETTING OF ASSETS AND LIAB_4
OFFSETTING OF ASSETS AND LIABILITIES - Offsetting of Derivative Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | $ 2,779 | $ 3,119 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Including not subject to master netting arrangement | 2,779 | 3,119 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, not subject to master netting arrangement | 806 | 865 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted, including not subject to master netting arrangement | 22 | 4 |
Net Amount | 1,951 | 2,250 |
Repurchase agreements | ||
Gross Amounts of Recognized Liabilities | 1,393 | 437 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheet | 1,393 | 437 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted | 0 | 0 |
Net Amount | 1,393 | 437 |
Total Liabilities | ||
Gross Amounts of Recognized Liabilities | 4,172 | 3,556 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheet | 4,172 | 3,556 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments | 806 | 865 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted | 22 | 4 |
Net Amount | 3,344 | 2,687 |
Free-Standing derivatives | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities, subject to a master netting arrangement | 830 | 871 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Including not subject to master netting arrangement | 830 | 871 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, subject to master netting arrangement | 806 | 865 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted, including not subject to master netting arrangement | 22 | 4 |
Net Amount | 2 | 2 |
Total derivatives, subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities, subject to a master netting arrangement | 830 | 871 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Including not subject to master netting arrangement | 830 | 871 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, subject to master netting arrangement | 806 | 865 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted, including not subject to master netting arrangement | 22 | 4 |
Net Amount | 2 | 2 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 280 | 389 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Including not subject to master netting arrangement | 280 | 389 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted, including not subject to master netting arrangement | 0 | 0 |
Net Amount | 280 | 389 |
Funds withheld derivative | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 10 | 10 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Including not subject to master netting arrangement | 10 | 10 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted, including not subject to master netting arrangement | 0 | 0 |
Net Amount | 10 | 10 |
Embedded derivative - GLWB | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 644 | 960 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Including not subject to master netting arrangement | 644 | 960 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted, including not subject to master netting arrangement | 0 | 0 |
Net Amount | 644 | 960 |
Embedded derivative - FIA | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 659 | 633 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Including not subject to master netting arrangement | 659 | 633 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted, including not subject to master netting arrangement | 0 | 0 |
Net Amount | 659 | 633 |
Embedded derivative - IUL | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 269 | 201 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Including not subject to master netting arrangement | 269 | 201 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted, including not subject to master netting arrangement | 0 | 0 |
Net Amount | 269 | 201 |
Embedded derivative - FIA | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 87 | 55 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Including not subject to master netting arrangement | 87 | 55 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted, including not subject to master netting arrangement | 0 | 0 |
Net Amount | 87 | 55 |
Total derivatives, not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 1,949 | 2,248 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Including not subject to master netting arrangement | 1,949 | 2,248 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments, not subject to master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Collateral Posted, including not subject to master netting arrangement | 0 | 0 |
Net Amount | $ 1,949 | $ 2,248 |
COMMERCIAL MORTGAGE LOANS - Loa
COMMERCIAL MORTGAGE LOANS - Loan Portfolio and Additional Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)loanquotereinsurertroubled_debt_restructuring | Dec. 31, 2020USD ($)troubled_debt_restructuringloan | Dec. 31, 2019USD ($)troubled_debt_restructuring | |
Mortgage loans | |||
Commercial mortgage loan holdings, net | $ 10,863 | $ 10,006 | |
Percentage of mortgage loans on real estate | 100.00% | 100.00% | |
Number of single tenants whose exposure represents more than 1.7% of mortgage loans | reinsurer | 0 | ||
Amount of new loans funded | $ 2,000 | $ 1,400 | $ 1,200 |
Average loan size of new loans funded | 11 | 8 | 8 |
Average loan size of portfolio | $ 6 | $ 6 | $ 5 |
Weighted-average interest rate on mortgage loans (as a percent) | 4.10% | 4.30% | 4.50% |
Largest single mortgage loan | $ 78 | $ 78 | $ 78 |
Amount that would become due in 2022, if loans are called at their next call dates | 116 | ||
Amount that would become due in 2023 through 2027, if loans are called at their next call dates | 379 | ||
Amount that would become due in 2028 through 2029, if loans are called at their next call dates | 6 | ||
Allowance for credit losses | 103 | 222 | 5 |
Commercial Mortgage Loans | |||
Mortgage loans | |||
Commercial mortgage loan holdings, before allowance | 10,966 | 10,228 | |
Commercial mortgage loan holdings, net | 10,863 | 10,006 | |
Allowance for credit losses | $ 103 | $ 222 | |
Commercial Mortgage Loans | Financial Asset, 60 to 89 Days Past Due | |||
Mortgage loans | |||
Number of loans past due | loan | 1 | ||
Value of loans in delinquency | $ 1 | ||
Commercial Mortgage Loans | Financial Asset, 30 to 59 Days Past Due | |||
Mortgage loans | |||
Number of loans past due | loan | 1 | ||
Value of loans in delinquency | $ 28 | ||
Commercial Mortgage Loans | Financial Asset, Equal to or Greater than 90 Days Past Due | |||
Mortgage loans | |||
Number of loans past due | loan | 1 | ||
Value of loans in delinquency | $ 1 | ||
Commercial Mortgage Loans | Coronavirus Aid, Relief, and Economic Security Act, Payment Deferrals, Loan Modification Program | |||
Mortgage loans | |||
Commercial mortgage loan holdings, before allowance | $ 2,000 | ||
Number of loans modified and not considered troubled debt restructuring | loan | 23 | ||
Loans modified during period and not considered troubled debt restructuring | $ 475 | ||
Number of loans in modification and not considered troubled debt restructuring | quote | 268 | ||
Commercial Mortgage Loans | Coronavirus Aid, Relief, and Economic Security Act, Not In Payment Deferral, Loan Modification Program | |||
Mortgage loans | |||
Commercial mortgage loan holdings, before allowance | $ 1,900 | ||
Commercial Mortgage Loans | Coronavirus Aid, Relief, and Economic Security Act, Loan Modification Program, Loans In Payment | |||
Mortgage loans | |||
Commercial mortgage loan holdings, before allowance | $ 69 | ||
CALIFORNIA | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 10.10% | 11.30% | |
TEXAS | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 7.30% | 7.30% | |
ALABAMA | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 7.20% | 6.70% | |
FLORIDA | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 6.30% | 6.20% | |
GEORGIA | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 5.60% | 5.30% | |
NORTH CAROLINA | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 4.60% | 4.90% | |
OHIO | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 4.60% | 3.50% | |
UTAH | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 4.00% | 4.70% | |
MICHIGAN | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 4.20% | 4.40% | |
ILLINOIS | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 4.20% | ||
TENNESSEE | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 3.50% | ||
All identified states | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 57.40% | 58.50% | |
Retail | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 30.30% | 34.90% | |
Office buildings | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 13.80% | 15.10% | |
Apartments | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 17.20% | 12.70% | |
Warehouses | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 16.50% | 16.00% | |
Senior housing | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 17.00% | 16.20% | |
Other | |||
Mortgage loans | |||
Percentage of mortgage loans on real estate | 5.20% | 5.10% | |
Maximum | |||
Mortgage loans | |||
Single tenant's exposure as a percentage of mortgage loans | 0.90% | ||
Commercial mortgage loans | |||
Mortgage loans | |||
Mortgage loans having participation feature | $ 600 | $ 806 | |
Income recognized on participating mortgage loans | $ 54 | 26 | $ 23 |
Loans not subject to pooling and servicing agreement, non performing or restructured amount | $ 3 | ||
Number of troubled debt restructurings | troubled_debt_restructuring | 1 | 4 | 4 |
Commercial mortgage loans | Maximum | |||
Mortgage loans | |||
Period for exercise of call options or interest rate reset options | 8 years | ||
Loan-to-value ratio with participating interest (as a percent) (up to) | 85.00% |
COMMERCIAL MORTGAGE LOANS - Sch
COMMERCIAL MORTGAGE LOANS - Schedule of Commercial Mortgage Loans Amortized Cost Basis by Origination Year (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for Credit Loss | |||
Allowance for credit losses | $ (103) | $ (222) | $ (5) |
Total Commercial Loans | |||
Total commercial mortgage loans | 10,863 | 10,006 | |
Commercial Mortgage Loans | |||
Amortized Cost | |||
Current fiscal year | 2,063 | 1,463 | |
Year prior to current fiscal year | 1,439 | 2,442 | |
Two years prior to current fiscal year | 2,034 | 1,577 | |
Three years prior to current fiscal year | 1,404 | 1,344 | |
Four years prior to current fiscal year | 1,224 | 943 | |
Prior | 2,802 | 2,459 | |
Amortized cost | 10,966 | 10,228 | |
Allowance for Credit Loss | |||
Current fiscal year | (12) | (21) | |
Year prior to current fiscal year | (10) | (46) | |
Two years prior to current fiscal year | (21) | (55) | |
Three years prior to current fiscal year | (18) | (37) | |
Four years prior to current fiscal year | (12) | (25) | |
Prior | (30) | (38) | |
Allowance for credit losses | (103) | (222) | |
Total Commercial Loans | |||
Current fiscal year | 2,051 | 1,442 | |
Year prior to current fiscal year | 1,429 | 2,396 | |
Two years prior to current fiscal year | 2,013 | 1,522 | |
Three years prior to current fiscal year | 1,386 | 1,307 | |
Four years prior to current fiscal year | 1,212 | 918 | |
Prior | 2,772 | 2,421 | |
Total commercial mortgage loans | 10,863 | 10,006 | |
Commercial Mortgage Loans | Performing | |||
Amortized Cost | |||
Current fiscal year | 2,063 | 1,463 | |
Year prior to current fiscal year | 1,439 | 2,442 | |
Two years prior to current fiscal year | 2,034 | 1,577 | |
Three years prior to current fiscal year | 1,404 | 1,344 | |
Four years prior to current fiscal year | 1,224 | 943 | |
Prior | 2,802 | 2,458 | |
Amortized cost | 10,966 | 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 | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Amortized Cost | $ 10,966 | $ 10,228 |
Financing Receivable, Before Allowance For Credit Loss | Credit Concentration Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Percentage of Total | 100.00% | 100.00% |
Weighted Average | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loan-to-value ratio with participating interest (as a percent) | 54.00% | 54.00% |
Debt service coverage ratio | 1.72 | 1.72 |
Greater than 75% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Amortized Cost | $ 285 | $ 399 |
Greater than 75% | Financing Receivable, Before Allowance For Credit Loss | Credit Concentration Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Percentage 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 | $ 7,241 | $ 6,557 |
50% - 75% | Financing Receivable, Before Allowance For Credit Loss | Credit Concentration Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Percentage of Total | 66.00% | 64.00% |
50% - 75% | Weighted Average | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Debt service coverage ratio | 1.59 | 1.61 |
Less than 50% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Amortized Cost | $ 3,440 | $ 3,272 |
Less than 50% | Financing Receivable, Before Allowance For Credit Loss | Credit Concentration Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Percentage of Total | 31.00% | 32.00% |
Less than 50% | Weighted Average | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Debt service coverage ratio | 2.04 | 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 | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for Funded Commercial Mortgage Loan Credit Losses | ||
Beginning balance | $ 222 | $ 5 |
Charge offs | 0 | 0 |
Recoveries | (7) | (3) |
Provision | (112) | 140 |
Ending balance | 103 | 222 |
Allowance for Unfunded Commercial Mortgage Loan Commitments Credit Losses | ||
Beginning balance | 22 | 0 |
Charge offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | (17) | 12 |
Ending balance | 5 | 22 |
Cumulative effect adjustments | ||
Allowance for Funded Commercial Mortgage Loan Credit Losses | ||
Beginning balance | 0 | 80 |
Ending balance | 0 | |
Allowance for Unfunded Commercial Mortgage Loan Commitments Credit Losses | ||
Beginning balance | $ 0 | 10 |
Ending balance | $ 0 |
DEFERRED POLICY ACQUISITION C_3
DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Balances and changes in DAC | ||
Balance, beginning of period | $ 1,628 | $ 1,480 |
Capitalization of commissions, sales, and issue expenses | 550 | 459 |
Amortization | (200) | (163) |
Change due to unrealized gains and losses | 105 | (152) |
Implementation of ASU 2016-13 | 0 | 4 |
Balance, end of period | 2,083 | 1,628 |
Balances and changes in VOBA | ||
Balance, beginning of period | 1,792 | 2,040 |
Amortization | (109) | (45) |
Change due to unrealized gains and losses | 80 | (192) |
Other | 23 | (11) |
Balance, end of period | 1,786 | $ 1,792 |
Expected amortization of VOBA for the next five years | ||
2022 | 121 | |
2023 | 123 | |
2024 | 123 | |
2025 | 116 | |
2026 | $ 99 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | |||
Beginning balance | $ 826 | $ 826 | |
Impairment | (129) | 0 | $ 0 |
Ending balance | 697 | 826 | 826 |
Retail Life and Annuity | Operating Segments | |||
Goodwill [Roll Forward] | |||
Beginning balance | 559 | 559 | |
Impairment | (129) | ||
Ending balance | 430 | 559 | 559 |
Acquisitions | Operating Segments | |||
Goodwill [Roll Forward] | |||
Beginning balance | 24 | 24 | |
Impairment | 0 | ||
Ending balance | 24 | 24 | 24 |
Stable Value Products | Operating Segments | |||
Goodwill [Roll Forward] | |||
Beginning balance | 114 | 114 | |
Impairment | 0 | ||
Ending balance | 114 | 114 | 114 |
Asset Protection | Operating Segments | |||
Goodwill [Roll Forward] | |||
Beginning balance | 129 | 129 | |
Impairment | 0 | ||
Ending balance | $ 129 | $ 129 | $ 129 |
CERTAIN NONTRADITIONAL LONG-D_3
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS - Activity During Period (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | |||
Separate account balances | $ 13,648 | $ 12,378 | |
Guaranteed amount payable with GMDB reserve | 38 | 43 | |
Activity relating to GMDB reserves (excluding those 100% reinsured under the Modco agreement) | |||
Beginning balance | 43 | ||
Ending balance | $ 38 | $ 43 | |
Annuity account | CALIC | |||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | |||
Average attained age of contract holders | 69 years | 69 years | |
Percentage of variable annuity business reinsured | 100.00% | ||
Annuity account | Acquisitions | CALIC | |||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | |||
Guaranteed amount payable | $ 6 | $ 6 | |
Guaranteed minimum death benefits (GMDB) | Annuity account | |||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | |||
Interest rate at which last anniversary date account value is compounded (as a percent) | 5.00% | ||
Separate account balances | $ 14,600 | 14,800 | |
Mean investment performance (as a percent) | 6.73% | ||
Average discount rate (as a percent) | 4.85% | ||
Guaranteed amount payable | $ 85 | 126 | |
Guaranteed amount payable with GMDB reserve | $ 38 | $ 43 | $ 46 |
Average attained age of contract holders | 73 years | 72 years | |
Activity relating to GMDB reserves (excluding those 100% reinsured under the Modco agreement) | |||
Beginning balance | $ 43 | $ 46 | 44 |
Great West beginning balance | 0 | 0 | 7 |
Incurred guarantee benefits | 0 | 2 | (1) |
Less: Paid guarantee benefits | 5 | 5 | 4 |
Ending balance | 38 | 43 | $ 46 |
Guaranteed living withdrawal benefits (GLWB) | Annuity account | |||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | |||
Separate account balances | $ 9,200 | $ 8,900 |
CERTAIN NONTRADITIONAL LONG-D_4
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS - Account Balances and Deferred Sales Inducement Asset (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Activity in the Company's deferred sales inducement asset | |||
Deferred asset, beginning of period | $ 41 | $ 43 | $ 40 |
Amounts deferred | 3 | 2 | 6 |
Amortization | (7) | (4) | (3) |
Deferred asset, end of period | 37 | 41 | $ 43 |
Annuity account | |||
Certain Nontraditional Long-duration Contracts | |||
Account balances of variable annuities with guarantees invested in variable annuity separate accounts | 14,968 | 15,056 | |
Annuity account | Equity funds | |||
Certain Nontraditional Long-duration Contracts | |||
Account balances of variable annuities with guarantees invested in variable annuity separate accounts | 9,732 | 10,425 | |
Annuity account | Fixed income funds | |||
Certain Nontraditional Long-duration Contracts | |||
Account balances of variable annuities with guarantees invested in variable annuity separate accounts | $ 5,236 | $ 4,631 |
MONY CLOSED BLOCK OF BUSINESS_2
MONY CLOSED BLOCK OF BUSINESS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Closed block liabilities | |||
Future policy benefits, policyholders’ account balances and other policyholder liabilities | $ 5,277 | $ 5,406 | |
Policyholder dividend obligation | 401 | 580 | $ 279 |
Other liabilities | 10 | 7 | |
Total closed block liabilities | 5,688 | 5,993 | |
Closed block assets | |||
Fixed maturities, available-for-sale, at fair value | 4,633 | 4,903 | |
Commercial mortgage loans on real estate | 68 | 68 | |
Policy loans | 557 | 596 | |
Cash and other invested assets | 73 | 46 | |
Other assets | 83 | 91 | |
Total closed block assets | 5,414 | 5,704 | |
Excess of reported closed block liabilities over closed block assets | 274 | 289 | |
Portion of above representing accumulated other comprehensive income: | |||
Net unrealized investments gains (losses) net of policyholder dividend obligation: $323 and $493; and net of income tax: $(68) and $(104) | 0 | 0 | |
Future earnings to be recognized from closed block assets and closed block liabilities | 274 | 289 | |
Policyholder dividend obligation | 323 | 493 | |
Policyholder dividend obligation, deferred income tax | (68) | (104) | |
Reconciliation of the policyholder dividend obligation | |||
Policyholder dividend obligation, beginning balance | 580 | 279 | |
Applicable to net revenue | (9) | (25) | |
Change in net unrealized investment gains allocated to policyholder dividend obligation | (170) | 326 | |
Policyholder dividend obligation, ending balance | 401 | 580 | 279 |
Revenues | |||
Premiums and other income | 144 | 154 | 162 |
Net investment income | 189 | 202 | 207 |
Net gains (losses) - investments and derivatives | 28 | (2) | (2) |
Total revenues | 361 | 354 | 367 |
Benefits and other deductions | |||
Benefits and settlement expenses | 342 | 332 | 337 |
Other operating expenses | 1 | 2 | 1 |
Total benefits and other deductions | 343 | 334 | 338 |
Net revenues before income taxes | 18 | 20 | 29 |
Income tax expense | 5 | 4 | 6 |
Net revenues | $ 13 | $ 16 | $ 23 |
REINSURANCE - Additional Inform
REINSURANCE - Additional Information (Details) | 6 Months Ended | 12 Months Ended | 30 Months Ended | ||
Jun. 30, 2005USD ($) | Dec. 31, 2021reinsurer | Dec. 31, 2016USD ($) | Dec. 31, 2008USD ($) | Dec. 31, 2007USD ($) | |
REINSURANCE | |||||
Percentage of the face value of life insurance in-force reinsured | 22.00% | ||||
Single insured life | |||||
REINSURANCE | |||||
Amount of insurance retained - certain newly issued traditional life products | $ | $ 500,000 | $ 5,000,000 | $ 2,000,000 | $ 1,000,000 | |
Concentrated credit risk | |||||
REINSURANCE | |||||
Percentage of the face value of life insurance in-force reinsured | 10.00% | ||||
Life insurance in-force reinsured, concentrated number of reinsurers | reinsurer | 3 |
REINSURANCE - Life Insurance In
REINSURANCE - Life Insurance In-Force and Effect of Reinsurance on Premiums Written and Earned (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net life insurance in-force | |||
Direct life insurance in-force | $ 829,253 | $ 785,197 | $ 766,197 |
Amounts assumed from other companies | 191,110 | 206,050 | 212,574 |
Amounts ceded to other companies | (222,865) | (244,588) | (271,601) |
Net Amount | $ 797,498 | $ 746,659 | $ 707,170 |
Percentage of amount assumed to net | 24.00% | 27.60% | 30.10% |
Effect of reinsurance on premiums written and earned | |||
Gross Amount | $ 3,156 | $ 2,977 | $ 3,176 |
Ceded to Other Companies | (1,320) | (1,027) | (1,508) |
Assumed from Other Companies | 1,066 | 1,026 | 880 |
Net Amount | 2,902 | 2,976 | 2,548 |
Reinsurance receivables | 4,600 | 4,700 | |
Ceded benefits which are recoverable from reinsurers | 157 | 135 | |
Receivables related to insurance assumed | 64 | 64 | |
Life insurance | |||
Effect of reinsurance on premiums written and earned | |||
Gross Amount | 2,843 | 2,661 | 2,853 |
Ceded to Other Companies | (1,113) | (826) | (1,312) |
Assumed from Other Companies | 1,037 | 934 | 836 |
Net Amount | 2,767 | 2,769 | 2,377 |
Annuity policy fees | 199 | 163 | 164 |
Accident/health insurance | |||
Effect of reinsurance on premiums written and earned | |||
Gross Amount | 32 | 37 | 42 |
Ceded to Other Companies | (19) | (23) | (90) |
Assumed from Other Companies | 28 | 90 | 41 |
Net Amount | 41 | 104 | (7) |
Property and liability insurance | |||
Effect of reinsurance on premiums written and earned | |||
Gross Amount | 281 | 279 | 281 |
Ceded to Other Companies | (188) | (178) | (106) |
Assumed from Other Companies | 1 | 2 | 3 |
Net Amount | $ 94 | $ 103 | $ 178 |
REINSURANCE - Receivables (Deta
REINSURANCE - Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Reinsurance | ||
Reinsurance Receivable | $ 4,543 | $ 4,596 |
Concentrated credit risk | Security Life of Denver Insurance Company | ||
Reinsurance | ||
Reinsurance Receivable | 548.5 | |
Concentrated credit risk | Security Life of Denver Insurance Company | A Minus | ||
Reinsurance | ||
Reinsurance Receivable | 500.5 | |
Concentrated credit risk | Swiss Re Life & Health America, Inc. | A Plus | ||
Reinsurance | ||
Reinsurance Receivable | 480.1 | 489.6 |
Concentrated credit risk | Lincoln National Life Insurance Co. | A Plus | ||
Reinsurance | ||
Reinsurance Receivable | 337.3 | 370.7 |
Concentrated credit risk | Somerset Re | A Minus | ||
Reinsurance | ||
Reinsurance Receivable | 335.1 | 259.9 |
Concentrated credit risk | Transamerica Life Insurance Co. | A | ||
Reinsurance | ||
Reinsurance Receivable | 226.4 | 240.3 |
Concentrated credit risk | RGA Reinsurance Company | A Plus | ||
Reinsurance | ||
Reinsurance Receivable | 204.6 | 210.5 |
Concentrated credit risk | American United Life Insurance Company | A Plus | ||
Reinsurance | ||
Reinsurance Receivable | 187.6 | 199.1 |
Concentrated credit risk | Centre Reinsurance (Bermuda) Ltd | ||
Reinsurance | ||
Reinsurance Receivable | 167.3 | |
Concentrated credit risk | Centre Reinsurance (Bermuda) Ltd | A | ||
Reinsurance | ||
Reinsurance Receivable | 149.3 | |
Concentrated credit risk | Employers Reassurance Corporation | ||
Reinsurance | ||
Reinsurance Receivable | 162 | |
Concentrated credit risk | Employers Reassurance Corporation | B Plus | ||
Reinsurance | ||
Reinsurance Receivable | 139.4 | |
Concentrated credit risk | The Canada Life Assurance Company | A Plus | ||
Reinsurance | ||
Reinsurance Receivable | $ 123.2 | $ 134 |
DEBT AND OTHER OBLIGATIONS - Ad
DEBT AND OTHER OBLIGATIONS - Additional Informatoin (Details) - USD ($) | Oct. 01, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Secured borrowings, percent of initial collateral required | 102.00% | |||
Securities lending transactions | $ 174,000,000 | $ 57,000,000 | ||
Securities loaned, fair value of collateral | 179,000,000 | 59,000,000 | ||
Repurchase Program Borrowings | ||||
Debt Instrument [Line Items] | ||||
Fair value of securities pledged under the repurchase program | 1,503,000,000 | 452,000,000 | ||
Secured financing liabilities | $ 1,393,000,000 | $ 437,000,000 | ||
Reverse repurchase liability average interest rate (percent) | 0.13% | 0.15% | ||
Reverse repurchase maximum balance outstanding | $ 1,799,000,000 | $ 825,000,000 | ||
Reverse repurchase average daily balance | $ 775,000,000 | $ 143,000,000 | ||
Reverse repurchase average daily balance at average interest rate (percent) | 0.13% | 0.33% | ||
Maximum | Repurchase Program Borrowings | ||||
Debt Instrument [Line Items] | ||||
Debt term | 90 days | |||
Amended Line Of Credit | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 1,000,000,000 | |||
Maximum borrowing capacity | $ 1,500,000,000 | |||
Facility fee rate | 0.125% | |||
Amended Line Of Credit | PLC | ||||
Debt Instrument [Line Items] | ||||
Outstanding balance | $ 275,000,000 | $ 190,000,000 | ||
Amended Line Of Credit | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Variable rate | 0.50% | |||
Amended Line Of Credit | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Variable rate | 1.00% | |||
Subordinated Debentures 3.55 Percent Due 2038 | Subordinated Debt | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal | $ 110,000,000 | |||
Interest rate | 3.55% | |||
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 | $ 4,267,000,000 | |||
Financing Agreement With Golden Gate Captive Insurance Company | Maximum | ||||
Debt Instrument [Line Items] | ||||
Reserve funding agreement, term | 25 years | |||
Financing Agreement With Golden Gate Captive Insurance Company | Minimum | ||||
Debt Instrument [Line Items] | ||||
Reserve funding agreement, term | 20 years |
DEBT AND OTHER OBLIGATIONS - Re
DEBT AND OTHER OBLIGATIONS - Repurchase Agreements (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | $ 1,503 | $ 452 |
Securities lending transactions | 174 | 57 |
Total securities | 1,677 | 509 |
U.S. Treasury and agency securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 1,070 | 452 |
Corporate securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 69 | |
Securities lending transactions | 49 | |
Commercial mortgage loans | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 364 | 0 |
Fixed maturity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 171 | |
Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 1 | 7 |
Redeemable preferred stocks | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 2 | 1 |
Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 1,503 | 366 |
Securities lending transactions | 174 | 57 |
Total securities | 1,677 | 423 |
Overnight and Continuous | U.S. Treasury and agency securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 1,070 | 366 |
Overnight and Continuous | Corporate securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 69 | |
Securities lending transactions | 49 | |
Overnight and Continuous | Commercial mortgage loans | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 364 | 0 |
Overnight and Continuous | Fixed maturity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 171 | |
Overnight and Continuous | Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 1 | 7 |
Overnight and Continuous | Redeemable preferred stocks | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 2 | 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 | |
Up to 30 days | Commercial mortgage loans | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Up to 30 days | Fixed maturity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Up to 30 days | Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | 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 | |
30 - 90 days | Commercial mortgage loans | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
30 - 90 days | Fixed maturity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
30 - 90 days | Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | 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 | |
Greater Than 90 days | Commercial mortgage loans | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Greater Than 90 days | Fixed maturity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Greater Than 90 days | Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | 0 |
Greater Than 90 days | Redeemable preferred stocks | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | $ 0 | $ 0 |
DEBT AND OTHER OBLIGATIONS - Sc
DEBT AND OTHER OBLIGATIONS - Schedule of Interest Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Subordinated funding obligations | $ 3.9 | $ 3.9 | $ 3.9 |
Non-recourse funding obligations, other obligations, and repurchase agreements | 11 | 133.2 | 175.8 |
Total interest expense | $ 14.9 | $ 137.1 | $ 179.7 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)case | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Operating leased assets | |||
Rent expense | $ | $ 1 | $ 4 | $ 6 |
Outstanding mortgage loan commitments | $ | $ 994 | $ 801 | |
Average rate (as a percent) | 3.58% | 3.90% | |
Beverly Allen v. Protective Life Insurance Company | Pending Litigation | |||
Operating leased assets | |||
Number of pending cases | case | 2 | ||
Number of pending class action cases | case | 1 | ||
Administrative and marketing office space | Minimum | |||
Operating leased assets | |||
Lease term | 2 years | ||
Administrative and marketing office space | Maximum | |||
Operating leased assets | |||
Lease term | 25 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Future Minimum Rental Payments (Details) - Administrative and marketing office space $ in Millions | Dec. 31, 2021USD ($) |
Future minimum retail payments required under operating leases | |
2022 | $ 7 |
2023 | 4 |
2024 | 4 |
2025 | 2 |
2026 | 1 |
Thereafter | $ 8 |
SHAREOWNER'S EQUITY (Details)
SHAREOWNER'S EQUITY (Details) - PLC - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SHAREOWNER'S EQUITY | |||
Number of shares of non-voting preferred stock owned in the subsidiary, PL&A (in shares) | 2,000 | ||
Amount of PL&A statutory earnings in immediately the preceding fiscal year, which must be exceeded for preferred stock to pay noncumulative participating dividends | $ 1,000,000 | ||
Dividends received by PLC on preferred stock holdings in PL & A | $ 0 | $ 0 | $ 0 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in AOCI by Component (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | |||
Beginning balance | $ 13,625,000 | $ 11,274,000 | $ 7,226,000 |
Ending balance | 12,764,000 | 13,625,000 | 11,274,000 |
Unrealized Gains and Losses on Investments | |||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | |||
Beginning balance | 3,556,000 | 1,421,000 | (1,408,000) |
Other comprehensive income (loss) before reclassifications | (1,105,000) | 2,048,000 | 2,844,000 |
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | (1,000) | 24,000 | (4,000) |
Amounts reclassified from accumulated other comprehensive income (loss) | (41,000) | 63,000 | (11,000) |
Ending balance | 2,409,000 | 3,556,000 | 1,421,000 |
Offset of net unrealized losses in AOCI due to impact of net unrealized (loss) on insurance assets and liabilities if recognized as income | (1,900,000) | (2,000,000) | (777,000) |
Accumulated Gain and Loss on Derivatives | |||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | |||
Beginning balance | (8,000) | (8,000) | 0 |
Other comprehensive income (loss) before reclassifications | 0 | (2,000) | (10,000) |
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | 1,000 | 2,000 | 2,000 |
Ending balance | (7,000) | (8,000) | (8,000) |
Total Accumulated Other Comprehensive Income (Loss) | |||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | |||
Beginning balance | 3,548,000 | 1,413,000 | (1,408,000) |
Other comprehensive income (loss) before reclassifications | (1,105,000) | 2,046,000 | 2,834,000 |
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | (1,000) | 24,000 | (4,000) |
Amounts reclassified from accumulated other comprehensive income (loss) | (40,000) | 65,000 | (9,000) |
Ending balance | $ 2,402,000 | $ 3,548,000 | $ 1,413,000 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications Out of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | |||||||||||
Benefits and settlement expenses, net of reinsurance ceded | $ (4,924) | $ (4,901) | $ (4,256) | ||||||||
Net gains (losses): investments | 150 | (235) | (59) | ||||||||
Tax (expense) benefit | $ (12) | $ (10) | $ (39) | $ (25) | $ (12) | $ (29) | $ (32) | $ 30 | (86) | (43) | (97) |
Net income (loss) | $ (28) | $ 49 | $ 162 | $ 102 | $ 90 | $ 131 | $ 142 | $ (129) | 285 | 234 | 427 |
Gains and losses on derivative instruments | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||||||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | |||||||||||
Benefits and settlement expenses, net of reinsurance ceded | (1) | (3) | (2) | ||||||||
Tax (expense) benefit | 0 | 1 | 0 | ||||||||
Net income (loss) | (1) | (2) | (2) | ||||||||
Unrealized gains and losses on available-for-sale securities | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||||||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | |||||||||||
Net gains (losses): investments | 46 | 46 | 48 | ||||||||
Net impairment losses recognized in earnings | 6 | (125) | (34) | ||||||||
Tax (expense) benefit | (11) | 17 | (3) | ||||||||
Net income (loss) | $ 41 | $ (62) | $ 11 |
INCOME TAXES - Effective Income
INCOME TAXES - Effective Income Tax Rate and Components of Income Tax and Deferred Liability (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Effective income tax rate related to continuing operations | |||
Statutory federal income tax rate applied to pre-tax income | 21.00% | 21.00% | 21.00% |
State income taxes | 0.20% | (0.40%) | 0.50% |
Investment income not subject to tax | (5.10%) | (3.60%) | (2.10%) |
Prior period adjustments | 0.50% | (0.70%) | 0.10% |
Goodwill impairment | 7.30% | 0.00% | 0.00% |
Other | (0.70%) | (0.90%) | (1.00%) |
Effective income tax rate | 23.20% | 15.40% | 18.50% |
Current income tax expense (benefit): | |||
Federal | $ 129 | $ 123 | $ 378 |
State | 3 | (5) | 9 |
Total current | 132 | 118 | 387 |
Deferred income tax expense (benefit): | |||
Federal | (44) | (79) | (284) |
State | (2) | 4 | (6) |
Total deferred | (46) | (75) | (290) |
Deferred income tax assets: | |||
Loss and credit carryforwards | 168 | 146 | |
Deferred compensation | 51 | 54 | |
Deferred policy acquisition costs | 67 | 143 | |
Valuation allowance | (10) | (9) | |
Deferred income tax assets | 276 | 334 | |
Deferred income tax liabilities: | |||
Premium receivables and policy liabilities | 200 | 250 | |
VOBA and other intangibles | 552 | 582 | |
Invested assets (other than unrealized gains (losses)) | 264 | 283 | |
Net unrealized gains on investments | 640 | 945 | |
Other | 48 | 53 | |
Deferred income tax liabilities | 1,704 | 2,113 | |
Net deferred income tax liability | (1,428) | (1,779) | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Balance, beginning of period | 2 | 2 | 7 |
Additions for tax positions of the current year | 0 | 0 | 0 |
Additions for tax positions of prior years | 0 | 0 | 0 |
Reductions of tax positions of prior years: | |||
Changes in judgment | 0 | 0 | 0 |
Settlements during the period | 0 | 0 | (5) |
Lapses of applicable statute of limitations | (2) | 0 | 0 |
Balance, end of period | $ 0 | $ 2 | $ 2 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | $ 10 | $ 9 | |
Loss carryforwards | 758 | 658 | |
Loss carryforward, subject to expiration | 23 | 28 | |
Loss carryforward, not subject to expiration | 735 | 630 | |
Amount of unrecognized tax benefits that would affect the effective income tax rate if recognized | 0 | 2 | $ 2 |
Accrued interest related to the unrecognized tax benefits included in income tax expense | 0 | $ 0 | $ 0 |
State jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | 1 | ||
Deferred tax asset, operating loss carryforwards | $ 10 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid / (received) during the year: | |||
Interest expense | $ 15 | $ 177 | $ 182 |
Income taxes | $ 236 | $ 80 | $ 383 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |||
Mortgage loan payments received | $ 1,415 | $ 749 | $ 1,017 |
Affiliates | |||
RELATED PARTY TRANSACTIONS | |||
Lease revenues | 9 | 7 | 6 |
Cost of services | 330 | 297 | 278 |
Intercompany payables | 49 | 47 | |
Intercompany receivables | 12 | 13 | |
Certain corporations with which the parent's directors were affiliated | |||
RELATED PARTY TRANSACTIONS | |||
Premiums and policy fees or other amounts for insurance and investment products, interest on bonds and commissions on securities underwriting | 0 | 0 | 6 |
Joint Venture | |||
RELATED PARTY TRANSACTIONS | |||
Mortgage loan payments received | 7 | 5 | 23 |
Proceeds from collection of principal payments on mortgage loans | 16 | ||
Payment of Management Fee | Affiliates | |||
RELATED PARTY TRANSACTIONS | |||
Management fee for certain services provided | 13 | 12 | 11 |
PLC | Certain corporations with which the parent's directors were affiliated | |||
RELATED PARTY TRANSACTIONS | |||
Commission, interest on debt and investment products and fees | $ 0 | $ 0 | $ 2 |
STATUTORY REPORTING PRACTICES_3
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2022 | |
Statutory Accounting Practices [Line Items] | ||||
Statutory net income | $ 426 | $ 692 | $ (625) | |
Statutory capital and surplus | 5,300 | $ 5,400 | ||
Consolidated shareowners' equity which represented net assets of the Company's insurance subsidiaries that is required to be maintained as minimum capital | 1,800 | |||
Market value of fixed maturity and short-term investments of the company's subsidiaries deposited with regulatory authorities | $ 43 | |||
Scenario, Forecast | ||||
Statutory Accounting Practices [Line Items] | ||||
Net assets of the Company's insurance subsidiaries that are restricted from transfer (in dollars) | $ 136 |
STATUTORY REPORTING PRACTICES_4
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS - Schedule of Effects on Statutory Surplus (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statutory Accounting Practices Disclosure of Favorable (Unfavorable) Effects of Statutory Surplus [Abstract] | ||
Non-admission of goodwill | $ (66) | $ (105) |
Total (net) | (66) | (105) |
Insurance subsidiaries | ||
Statutory Accounting Practices Disclosure of Favorable (Unfavorable) Effects of Statutory Surplus [Abstract] | ||
Total (net) | 4,368 | 4,455 |
Statutory Accounting Practices Disclosure of Favorable (Unfavorable) Effects on Statutory Surplus of Insurance Subsidiaries [Abstract] | ||
Accounting for XOL Asset Value as an admitted asset | 4,267 | 4,579 |
Reserving based on state specific actuarial practices | 101 | 94 |
Reserving difference related to a captive insurance company | $ 0 | $ (218) |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Summarized financial information for the company's segments | |||||||||||
Revenues | $ 1,539 | $ 1,652 | $ 1,509 | $ 1,713 | $ 1,535 | $ 1,724 | $ 1,468 | $ 1,441 | $ 6,413 | $ 6,168 | $ 5,731 |
Pre-tax Adjusted Operating Income (Loss) | 333 | 390 | 468 | ||||||||
Non-operating income (loss) | 38 | (113) | 56 | ||||||||
Income (loss) before income tax | (16) | 59 | 201 | 127 | 102 | 160 | 174 | (159) | 371 | 277 | 524 |
Income tax expense (benefit) | 12 | 10 | 39 | 25 | 12 | 29 | 32 | (30) | 86 | 43 | 97 |
Net income (loss) | (28) | 49 | 162 | 102 | 90 | 131 | 142 | (129) | 285 | 234 | 427 |
Adjusted operating income tax (expense) benefit | (51) | (66) | (86) | ||||||||
After-tax adjusted operating income | 282 | 324 | 382 | ||||||||
Income tax (expense) benefit on adjustments | (35) | 23 | (11) | ||||||||
Non-operating income (loss) | |||||||||||
Derivative gains (losses), net | 48 | (195) | (368) | ||||||||
Investment gains (losses), net | 102 | (40) | 309 | ||||||||
VA/VUL market impacts | 21 | 0 | 0 | ||||||||
Goodwill impairment | (129) | 0 | 0 | ||||||||
Less: related amortization | 104 | (30) | (24) | ||||||||
Less: VA GLWB economic cost | (100) | (92) | (91) | ||||||||
Net investment income | 767 | $ 753 | $ 742 | $ 720 | 653 | $ 740 | $ 742 | $ 754 | 2,982 | 2,889 | 2,825 |
Amortization of deferred policy acquisition costs and value of business acquired | 309 | 208 | 176 | ||||||||
Operating Segment Assets | |||||||||||
Investments and other assets | 126,515 | 122,124 | 126,515 | 122,124 | |||||||
DAC and VOBA | 3,869 | 3,420 | 3,869 | 3,420 | 3,520 | ||||||
Other intangibles | 491 | 540 | 491 | 540 | |||||||
Goodwill | 697 | 826 | 697 | 826 | 826 | ||||||
Total assets | 131,572 | 126,910 | 131,572 | 126,910 | |||||||
Retail Life and Annuity | |||||||||||
Non-operating income (loss) | |||||||||||
Net investment income | 1,110 | 1,015 | 945 | ||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 222 | 116 | 100 | ||||||||
Operating Segment Assets | |||||||||||
DAC and VOBA | 2,806 | 2,480 | 2,806 | 2,480 | 2,417 | ||||||
Acquisitions | |||||||||||
Non-operating income (loss) | |||||||||||
Net investment income | 1,590 | 1,648 | 1,533 | ||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 19 | 24 | 11 | ||||||||
Operating Segment Assets | |||||||||||
DAC and VOBA | 870 | 762 | 870 | 762 | 924 | ||||||
Stable Value Products | |||||||||||
Non-operating income (loss) | |||||||||||
Net investment income | 303 | 230 | 244 | ||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 5 | 3 | 3 | ||||||||
Operating Segment Assets | |||||||||||
DAC and VOBA | 15 | 8 | 15 | 8 | 5 | ||||||
Asset Protection | |||||||||||
Non-operating income (loss) | |||||||||||
Net investment income | 20 | 23 | 28 | ||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 63 | 65 | 62 | ||||||||
Operating Segment Assets | |||||||||||
DAC and VOBA | 178 | 170 | 178 | 170 | 174 | ||||||
Corporate and Other | |||||||||||
Non-operating income (loss) | |||||||||||
Net investment income | (41) | (27) | 75 | ||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 0 | 0 | 0 | ||||||||
Operating Segment Assets | |||||||||||
DAC and VOBA | 0 | 0 | 0 | 0 | 0 | ||||||
Operating Segments | |||||||||||
Summarized financial information for the company's segments | |||||||||||
Revenues | 6,413 | 6,168 | 5,731 | ||||||||
Pre-tax Adjusted Operating Income (Loss) | 333 | 390 | 468 | ||||||||
Operating Segments | Retail Life and Annuity | |||||||||||
Summarized financial information for the company's segments | |||||||||||
Revenues | 2,823 | 2,440 | 2,161 | ||||||||
Pre-tax Adjusted Operating Income (Loss) | (37) | 100 | 153 | ||||||||
Non-operating income (loss) | |||||||||||
Goodwill impairment | (129) | ||||||||||
Operating Segment Assets | |||||||||||
Investments and other assets | 44,549 | 40,194 | 44,549 | 40,194 | |||||||
DAC and VOBA | 2,806 | 2,480 | 2,806 | 2,480 | |||||||
Other intangibles | 334 | 367 | 334 | 367 | |||||||
Goodwill | 430 | 559 | 430 | 559 | 559 | ||||||
Total assets | 48,119 | 43,600 | 48,119 | 43,600 | |||||||
Operating Segments | Acquisitions | |||||||||||
Summarized financial information for the company's segments | |||||||||||
Revenues | 2,984 | 3,282 | 2,902 | ||||||||
Pre-tax Adjusted Operating Income (Loss) | 314 | 406 | 347 | ||||||||
Non-operating income (loss) | |||||||||||
Goodwill impairment | 0 | ||||||||||
Operating Segment Assets | |||||||||||
Investments and other assets | 54,561 | 55,628 | 54,561 | 55,628 | |||||||
DAC and VOBA | 870 | 762 | 870 | 762 | |||||||
Other intangibles | 29 | 33 | 29 | 33 | |||||||
Goodwill | 24 | 24 | 24 | 24 | 24 | ||||||
Total assets | 55,484 | 56,447 | 55,484 | 56,447 | |||||||
Operating Segments | Stable Value Products | |||||||||||
Summarized financial information for the company's segments | |||||||||||
Revenues | 347 | 176 | 247 | ||||||||
Pre-tax Adjusted Operating Income (Loss) | 171 | 90 | 93 | ||||||||
Non-operating income (loss) | |||||||||||
Goodwill impairment | 0 | ||||||||||
Operating Segment Assets | |||||||||||
Investments and other assets | 8,392 | 5,928 | 8,392 | 5,928 | |||||||
DAC and VOBA | 15 | 8 | 15 | 8 | |||||||
Other intangibles | 5 | 6 | 5 | 6 | |||||||
Goodwill | 114 | 114 | 114 | 114 | 114 | ||||||
Total assets | 8,526 | 6,056 | 8,526 | 6,056 | |||||||
Operating Segments | Asset Protection | |||||||||||
Summarized financial information for the company's segments | |||||||||||
Revenues | 270 | 275 | 290 | ||||||||
Pre-tax Adjusted Operating Income (Loss) | 40 | 41 | 37 | ||||||||
Non-operating income (loss) | |||||||||||
Goodwill impairment | 0 | ||||||||||
Operating Segment Assets | |||||||||||
Investments and other assets | 950 | 881 | 950 | 881 | |||||||
DAC and VOBA | 178 | 170 | 178 | 170 | |||||||
Other intangibles | 90 | 101 | 90 | 101 | |||||||
Goodwill | 129 | 129 | 129 | 129 | 129 | ||||||
Total assets | 1,347 | 1,281 | 1,347 | 1,281 | |||||||
Operating Segments | Corporate and Other | |||||||||||
Summarized financial information for the company's segments | |||||||||||
Revenues | (11) | (5) | 131 | ||||||||
Pre-tax Adjusted Operating Income (Loss) | (155) | (247) | $ (162) | ||||||||
Operating Segment Assets | |||||||||||
Investments and other assets | 18,063 | 19,493 | 18,063 | 19,493 | |||||||
DAC and VOBA | 0 | 0 | 0 | 0 | |||||||
Other intangibles | 33 | 33 | 33 | 33 | |||||||
Goodwill | 0 | 0 | 0 | 0 | |||||||
Total assets | $ 18,096 | $ 19,526 | $ 18,096 | $ 19,526 |
CONSOLIDATED QUARTERLY RESULT_3
CONSOLIDATED QUARTERLY RESULTS - UNAUDITED (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Gross premiums and policy fees | $ 1,047 | $ 1,054 | $ 1,026 | $ 1,095 | $ 1,053 | $ 1,045 | $ 1,009 | $ 896 | $ 4,222 | $ 4,003 | $ 4,056 |
Reinsurance ceded | (366) | (311) | (326) | (317) | (344) | (287) | (360) | (36) | (1,320) | (1,027) | (1,508) |
Net premiums and policy fees | 681 | 743 | 700 | 778 | 709 | 758 | 649 | 860 | 2,902 | 2,976 | 2,548 |
Net investment income | 767 | 753 | 742 | 720 | 653 | 740 | 742 | 754 | 2,982 | 2,889 | 2,825 |
Net gains (losses) - investments and derivatives | (11) | 67 | (33) | 127 | (11) | 111 | (34) | (301) | |||
Other income | 102 | 89 | 100 | 88 | 184 | 115 | 111 | 128 | 379 | 538 | 417 |
Total revenues | 1,539 | 1,652 | 1,509 | 1,713 | 1,535 | 1,724 | 1,468 | 1,441 | 6,413 | 6,168 | 5,731 |
Total benefits and expenses | 1,555 | 1,593 | 1,308 | 1,586 | 1,433 | 1,564 | 1,294 | 1,600 | 6,042 | 5,891 | 5,207 |
Income (loss) before income tax | (16) | 59 | 201 | 127 | 102 | 160 | 174 | (159) | 371 | 277 | 524 |
Income tax (benefit) expense | 12 | 10 | 39 | 25 | 12 | 29 | 32 | (30) | 86 | 43 | 97 |
Net income (loss) | $ (28) | $ 49 | $ 162 | $ 102 | $ 90 | $ 131 | $ 142 | $ (129) | 285 | 234 | 427 |
Non-cash impairment charge | $ 129 | $ 0 | $ 0 |
SCHEDULE III - SUPPLEMENTARY _2
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Supplementary insurance information | |||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | $ 3,869 | $ 3,420 | $ 3,869 | $ 3,420 | $ 3,520 | ||||||
Future Policy Benefits and Claims | 54,064 | 54,107 | 54,064 | 54,107 | 53,945 | ||||||
Unearned Premiums | 845 | 782 | 845 | 782 | 795 | ||||||
Stable Value Products, Annuity Contracts and Other Policyholders’ Funds | 26,192 | 23,399 | 26,192 | 23,399 | 21,311 | ||||||
Net Premiums and Policy Fees | 681 | $ 743 | $ 700 | $ 778 | 709 | $ 758 | $ 649 | $ 860 | 2,902 | 2,976 | 2,548 |
Net Investment Income | 2,982 | 2,889 | 2,825 | ||||||||
Benefits and Settlement Expenses | 4,924 | 4,901 | 4,256 | ||||||||
Amortization of deferred acquisition costs and value of business acquired | 309 | 208 | 176 | ||||||||
Other Operating Expenses | 680 | 782 | 775 | ||||||||
Premiums Written | 135 | 206 | 234 | ||||||||
Retail Life and Annuity | |||||||||||
Supplementary insurance information | |||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 2,806 | 2,480 | 2,806 | 2,480 | 2,417 | ||||||
Future Policy Benefits and Claims | 19,506 | 18,483 | 19,506 | 18,483 | 17,674 | ||||||
Unearned Premiums | 0 | 0 | 0 | 0 | 0 | ||||||
Stable Value Products, Annuity Contracts and Other Policyholders’ Funds | 11,674 | 10,914 | 11,674 | 10,914 | 9,402 | ||||||
Net Premiums and Policy Fees | 1,474 | 1,541 | 1,244 | ||||||||
Net Investment Income | 1,110 | 1,015 | 945 | ||||||||
Benefits and Settlement Expenses | 2,316 | 2,168 | 1,765 | ||||||||
Amortization of deferred acquisition costs and value of business acquired | 222 | 116 | 100 | ||||||||
Other Operating Expenses | 224 | 199 | 209 | ||||||||
Premiums Written | 0 | 0 | 0 | ||||||||
Acquisitions | |||||||||||
Supplementary insurance information | |||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 870 | 762 | 870 | 762 | 924 | ||||||
Future Policy Benefits and Claims | 34,478 | 35,537 | 34,478 | 35,537 | 36,176 | ||||||
Unearned Premiums | 1 | 2 | 1 | 2 | 2 | ||||||
Stable Value Products, Annuity Contracts and Other Policyholders’ Funds | 5,914 | 6,361 | 5,914 | 6,361 | 6,387 | ||||||
Net Premiums and Policy Fees | 1,320 | 1,317 | 1,173 | ||||||||
Net Investment Income | 1,590 | 1,648 | 1,533 | ||||||||
Benefits and Settlement Expenses | 2,411 | 2,510 | 2,237 | ||||||||
Amortization of deferred acquisition costs and value of business acquired | 19 | 24 | 11 | ||||||||
Other Operating Expenses | 234 | 267 | 232 | ||||||||
Premiums Written | 28 | 90 | 42 | ||||||||
Stable Value Products | |||||||||||
Supplementary insurance information | |||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 15 | 8 | 15 | 8 | 5 | ||||||
Future Policy Benefits and Claims | 0 | 0 | 0 | 0 | 0 | ||||||
Unearned Premiums | 0 | 0 | 0 | 0 | 0 | ||||||
Stable Value Products, Annuity Contracts and Other Policyholders’ Funds | 8,526 | 6,056 | 8,526 | 6,056 | 5,444 | ||||||
Net Premiums and Policy Fees | 0 | 0 | 0 | ||||||||
Net Investment Income | 303 | 230 | 244 | ||||||||
Benefits and Settlement Expenses | 124 | 133 | 144 | ||||||||
Amortization of deferred acquisition costs and value of business acquired | 5 | 3 | 3 | ||||||||
Other Operating Expenses | 3 | 4 | 4 | ||||||||
Premiums Written | 0 | 0 | 0 | ||||||||
Asset Protection | |||||||||||
Supplementary insurance information | |||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 178 | 170 | 178 | 170 | 174 | ||||||
Future Policy Benefits and Claims | 34 | 40 | 34 | 40 | 44 | ||||||
Unearned Premiums | 843 | 779 | 843 | 779 | 792 | ||||||
Stable Value Products, Annuity Contracts and Other Policyholders’ Funds | 0 | 0 | 0 | 0 | 0 | ||||||
Net Premiums and Policy Fees | 98 | 107 | 120 | ||||||||
Net Investment Income | 20 | 23 | 28 | ||||||||
Benefits and Settlement Expenses | 59 | 75 | 93 | ||||||||
Amortization of deferred acquisition costs and value of business acquired | 63 | 65 | 62 | ||||||||
Other Operating Expenses | 108 | 94 | 98 | ||||||||
Premiums Written | 97 | 105 | 180 | ||||||||
Corporate and Other | |||||||||||
Supplementary insurance information | |||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 0 | 0 | 0 | 0 | 0 | ||||||
Future Policy Benefits and Claims | 46 | 47 | 46 | 47 | 51 | ||||||
Unearned Premiums | 1 | 1 | 1 | 1 | 1 | ||||||
Stable Value Products, Annuity Contracts and Other Policyholders’ Funds | $ 78 | $ 68 | 78 | 68 | 78 | ||||||
Net Premiums and Policy Fees | 10 | 11 | 11 | ||||||||
Net Investment Income | (41) | (27) | 75 | ||||||||
Benefits and Settlement Expenses | 14 | 15 | 17 | ||||||||
Amortization of deferred acquisition costs and value of business acquired | 0 | 0 | 0 | ||||||||
Other Operating Expenses | 111 | 218 | 232 | ||||||||
Premiums Written | $ 10 | $ 11 | $ 12 |
SCHEDULE IV - REINSURANCE (Deta
SCHEDULE IV - REINSURANCE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Life insurance in-force | |||
Gross Amount | $ 829,253 | $ 785,197 | $ 766,197 |
Ceded to Other Companies | (222,865) | (244,588) | (271,601) |
Assumed from Other Companies | 191,110 | 206,050 | 212,574 |
Net Amount | $ 797,498 | $ 746,659 | $ 707,170 |
Percentage of Amount Assumed to Net | 24.00% | 27.60% | 30.10% |
Premiums and policy fees: | |||
Gross Amount | $ 3,156 | $ 2,977 | $ 3,176 |
Ceded to Other Companies | (1,320) | (1,027) | (1,508) |
Assumed from Other Companies | 1,066 | 1,026 | 880 |
Net Amount | 2,902 | 2,976 | 2,548 |
Life insurance | |||
Premiums and policy fees: | |||
Gross Amount | 2,843 | 2,661 | 2,853 |
Ceded to Other Companies | (1,113) | (826) | (1,312) |
Assumed from Other Companies | 1,037 | 934 | 836 |
Net Amount | $ 2,767 | $ 2,769 | $ 2,377 |
Percentage of Amount Assumed to Net | 37.50% | 33.70% | 35.20% |
Annuity policy fees | $ 199 | $ 163 | $ 164 |
Accident/health insurance | |||
Premiums and policy fees: | |||
Gross Amount | 32 | 37 | 42 |
Ceded to Other Companies | (19) | (23) | (90) |
Assumed from Other Companies | 28 | 90 | 41 |
Net Amount | $ 41 | $ 104 | $ (7) |
Percentage of Amount Assumed to Net | 68.30% | 86.50% | (585.70%) |
Property and liability insurance | |||
Premiums and policy fees: | |||
Gross Amount | $ 281 | $ 279 | $ 281 |
Ceded to Other Companies | (188) | (178) | (106) |
Assumed from Other Companies | 1 | 2 | 3 |
Net Amount | $ 94 | $ 103 | $ 178 |
Percentage of Amount Assumed to Net | 1.10% | 1.90% | 1.70% |
SCHEDULE V - VALUATION AND QU_2
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for losses on commercial mortgage loans - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in valuation and qualifying accounts | ||
Balance at beginning of period | $ 222 | $ 5 |
Additions, Charged to costs and expenses | 0 | 140 |
Additions, Charges to other accounts | 0 | 80 |
Deductions | (119) | (3) |
Balance at end of period | $ 103 | $ 222 |