Nature of Operations and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Recent Accounting Pronouncements

Schedule of Impact of Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Table)

							Accumulated other
	Retained earnings						comprehensive income
	Pre-Tax		Tax		After-Tax		Pre-Tax		Tax		After-Tax
	(in millions)
DAC and other actuarial balances:
Adjustment for reversal of unrealized loss from AOCI (1) (2)	$	—	$	—	$	—	$	421.5	$	(88.5)	$	333.0
Cost of reinsurance asset (liability):
Cumulative effect of amortization basis change		(9.0)		1.9		(7.1)		—		—		—
Adjustment of unrealized loss in AOCI		—		—		—		16.1		(3.4)		12.7
Reinsurance recoverable:
Adjustment for reversal of unrealized gain from AOCI (2)		—		—		—		(45.5)		9.5		(36.0)
Adjustment under the modified retrospective approach (3)		31.4		(6.6)		24.8		—		—		—
Effect of remeasurement of the recoverable at the current discount rate		—		—		—		201.8		(42.4)		159.4
Liability for future policy benefits:
Adjustment for reversal of unrealized loss from AOCI (2)		—		—		—		1,965.3		(452.2)		1,513.1
Adjustment under the modified retrospective approach (3)		(119.1)		29.8		(89.3)		17.9		(4.8)		13.1
Effect of remeasurement of the liability at the current discount rate		—		—		—		(9,043.1)		2,024.8		(7,018.3)
Market risk benefits:
Cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date		—		—		—		(4.8)		1.0		(3.8)
Adjustments to the host contract for differences between previous carrying amount and measurement of the MRB		20.9		(4.4)		16.5		—		—		—
Retained earnings adjustment for the valuation of contracts as MRBs (exclusive of nonperformance risk changes)		(258.8)		54.4		(204.4)		—		—		—
Reclassification of nonperformance risk changes between retained earnings and AOCI (4)		108.4		(22.5)		85.9		(108.4)		22.5		(85.9)
Investment in equity method subsidiary impacted by LDTI (5)		22.8		(9.1)		13.7		(25.5)		10.2		(15.3)
Total impact on opening balance as of January 1, 2021	$	(203.4)	$	43.5	$	(159.9)	$	(6,604.7)	$	1,476.7	$	(5,128.0)

(1) Includes the impact for DAC, sales inducement asset and the unearned revenue liability. We have not included the disaggregated rollforwards for the sales inducement asset within the footnote disclosures due to immateriality.

(2) Prior period unrealized gain (loss) adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI.

(3) The impact of loss cohorts, those with net premiums in excess of gross premiums, and cohorts with negative reserves, was reflected as an adjustment to the opening balance of retained earnings upon adoption of LDTI. The foreign currency translation related to the liability for future policy benefits was reflected as an adjustment to the opening balance of AOCI.

(4) The cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date for contract features previously accounted for as an embedded derivative was recorded as a reclassification from retained earnings to AOCI.

(5) Reflects the impact from our equity method investment in Brasilprev Seguros e Previdencia, which had transition impacts for the liability for future policy benefits and the additional liability for certain benefit features.

	Increase (decrease)
	(in millions)
Assets
Other investments (1)	$	(1.6)
Reinsurance recoverable and deposit receivable		187.7
Premiums due and other receivables (2)		(24.4)
Deferred acquisition costs		450.9
Market risk benefit asset (3)		18.9
Other assets (4)		19.3
Total assets	$	650.8
Liabilities
Contractholder funds (5)	$	(397.9)
Future policy benefits and claims (6)		7,143.4
Market risk benefit liability (3)		663.5
Other policyholder funds (7)		48.8
Deferred income taxes		(1,519.1)
Total liabilities		5,938.7
Stockholders’ equity
Retained earnings		(159.9)
Accumulated other comprehensive income		(5,128.0)
Total stockholders’ equity		(5,287.9)
Total liabilities and stockholders’ equity	$	650.8

(1) Reflects the impact on our investment in Brasilprev Seguros e Previdencia, which is accounted for using the equity method.

(2) Includes the impact on the cost of reinsurance asset.

(3) This is a new line item on the consolidated statements of financial position as a result of implementing LDTI. These contract features were previously recorded as embedded derivatives within contractholder funds or additional liabilities for certain benefit features within future policy benefits and claims on the consolidated statements of financial position.

(4) Reflects the impact on the sales inducement asset.

(5) Reflects the impact of contract features previously recorded as embedded derivatives that are recorded as MRBs under LDTI.

(6) Includes the impact on the liability for future policy benefits and cost of reinsurance liability. Also includes the impact on contract features classified as additional liabilities for certain benefit features that are recorded as MRBs under LDTI.

(7) Reflects the impact on the unearned revenue liability.

Disaggregated Rollforward at Adoption - Deferred Acquisition Costs (Table)

	September 30, 2023		December 31, 2022
	(in millions)
Retirement and Income Solutions:
Workplace savings and retirement solutions	$	504.1	$	498.0
Individual variable annuities		277.7		278.0
Pension risk transfer		13.8		8.1
Individual fixed deferred annuities		112.2		131.0
Investment only		12.7		14.9
Total Retirement and Income Solutions		920.5		930.0
Benefits and Protection:
Specialty Benefits:
Individual disability		658.0		626.1
Life Insurance:
Universal life		1,549.3		1,569.7
Term life		692.1		685.7
Participating life		86.6		93.0
Total Benefits and Protection		2,986.0		2,974.5
Short-duration contracts		34.2		34.7
Other balances (1)		7.7		8.8
Total DAC per consolidated statements of financial position	$	3,948.4	$	3,948.0

(1) Includes insignificant balances for long-duration contracts.

Disaggregated Rollforward at Adoption - Unearned Revenue Liability (Table)

Benefits and Protection

The balances and changes in the unearned revenue liability for 2021 for Life Insurance – Universal life were as follows:

	For the year ended
	December 31, 2021
	(in millions)
Balance at beginning of period	$	384.4
Deferrals		66.1
Revenue recognized		(25.2)
Balance at end of period	$	425.3

Disaggregated Rollforward at Adoption - Liability for Future Policy Benefits (Table)

Retirement and Income Solutions and Principal Asset Management – Principal International

	For the year ended December 31, 2021
					Principal
					Asset
					Management –
	Retirement and Income				Principal
	Solutions				International
					Latin America
	Pension		Individual		Individual
	risk		fixed income		fixed income
	transfer		annuities		annuities
	(in millions)
Present value of expected future policy benefit payments
Balance at beginning of period	$	25,863.7	$	7,145.8	$	6,561.5
Effect of changes in discount rate assumptions at beginning of period		(4,827.9)		(1,213.5)		(2,096.0)
Balance at beginning of period at original discount rate		21,035.8		5,932.3		4,465.5
Effect of actual variances from expected experience		(2.4)		(1.3)		(4.9)
Adjusted beginning of period balance at original discount rate		21,033.4		5,931.0		4,460.6
Interest accrual		916.7		240.5		444.3
Benefit payments		(1,772.5)		(532.0)		(436.0)
Issuances		1,801.7		82.9		141.3
Foreign currency translation adjustment		—		—		(751.9)
Balance at end of period at original discount rate		21,979.3		5,722.4		3,858.3
Effect of changes in discount rate assumptions at end of period		3,386.5		812.6		478.5
Future policy benefits	$	25,365.8	$	6,535.0	$	4,336.8

Benefits and Protection and Corporate

	For the year ended December 31, 2021
	Benefits and Protection				Corporate
	Specialty		Life
	Benefits		Insurance
	Individual				Long-term
	disability		Term life		care insurance
	(in millions)
Present value of expected net premiums
Balance at beginning of period	$	3,148.3	$	3,799.0	$	66.7
Effect of changes in discount rate assumptions at beginning of period		(340.7)		(861.1)		(17.6)
Balance at beginning of period at original discount rate		2,807.6		2,937.9		49.1
Effect of changes in cash flow assumptions		—		—		2.8
Effect of actual variances from expected experience		122.0		211.4		(0.8)
Adjusted beginning of period balance at original discount rate		2,929.6		3,149.3		51.1
Interest accrual		95.4		151.1		2.9
Net premiums collected		(280.4)		(315.0)		(5.2)
Issuances		206.4		518.2		—
Balance at end of period at original discount rate		2,951.0		3,503.6		48.8
Effect of changes in discount rate assumptions at end of period		198.9		690.1		14.0
Balance at end of period	$	3,149.9	$	4,193.7	$	62.8
Present value of expected future policy benefit payments
Balance at beginning of period	$	5,649.2	$	4,959.3	$	324.3
Effect of changes in discount rate assumptions at beginning of period		(834.1)		(1,179.9)		(111.1)
Balance at beginning of period at original discount rate		4,815.1		3,779.4		213.2
Effect of changes in cash flow assumptions		—		—		0.5
Effect of actual variances from expected experience		118.8		216.0		(4.6)
Adjusted beginning of period balance at original discount rate		4,933.9		3,995.4		209.1
Interest accrual		181.0		194.3		12.4
Benefit payments		(179.7)		(335.7)		(13.5)
Issuances		212.1		543.4		—
Balance at end of period at original discount rate		5,147.3		4,397.4		208.0
Effect of changes in discount rate assumptions at end of period		501.0		913.9		89.5
Balance at end of period	$	5,648.3	$	5,311.3	$	297.5
Future policy benefits (1)	$	2,498.4	$	1,117.6	$	234.7
Reinsurance impact		(549.9)		(0.1)		(234.7)
Future policy benefits after reinsurance	$	1,948.5	$	1,117.5	$	—

(1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums.

Disaggregated Rollforward at Adoption - Additional Liability for Certain Benefit Features (Table)

Additional Liability for Certain Benefit Features

Benefits and Protection

The balances and changes in the additional liability for certain benefits features for 2021 for Life Insurance - Universal life were as follows:

	For the year ended,
	December 31, 2021
	(in millions)
Balance at beginning of period	$	3,463.9
Effect of changes in cash flow assumptions		(11.1)
Effect of actual variances from expected experience		18.1
Interest accrual		158.3
Net assessments collected		324.7
Benefit payments		(83.1)
Other (1)		(56.6)
Balance at end of period	$	3,814.2

(1)Reflects model refinements accounted for as a change in accounting estimate.

Disaggregated Rollforward at Adoption - Market Risk Benefits (Table)

	For the year ended December 31, 2021
	Retirement and Income		Principal Asset Management –
	Solutions		Principal International
			Asia
	Individual variable annuities		Guaranteed pension
	(in millions)
Balance at beginning of period	$	(591.3)	$	(53.3)
Effect of changes in nonperformance risk at beginning of period		106.7		6.5
Adjusted balance at beginning of period		(484.6)		(46.8)
Effect of:
Interest accrual and expected policyholder behavior		(120.7)		(5.3)
Benefit payments		0.4		5.7
Changes in interest rates		154.3		7.6
Changes in equity markets		106.4		1.4
Changes in equity index volatility		15.1		—
Actual policyholder behavior different from expected behavior		2.3		3.6
Changes in future expected policyholder behavior		(96.6)		0.5
Changes in other future expected assumptions		38.2		2.3
Foreign currency translation adjustment		—		0.2
Adjusted balance at end of period		(385.2)		(30.8)
Effect of changes in nonperformance risk at end of period		(109.5)		(4.3)
Balance at end of period	$	(494.7)	$	(35.1)

Actuarial recohorting pre-tax impacts to comprehensive income (Table)

	For the nine
	months ended
	September 30, 2022
	(in millions)
Increase to income before taxes
Cost of reinsurance amortization (1)	$	33.7
Change in additional liability for certain benefit features (1)		167.4
Total increase to income before income taxes		201.1
Increase to pre-tax other comprehensive income
Cost of reinsurance unrealized losses		(2.1)
Change in additional liability for certain benefit features unrealized gains		7.8
Total increase to pre-tax other comprehensive income		5.7
Total increase to pre-tax comprehensive income	$	206.8

(1) Reported in liability for future policy benefits remeasurement (gain) loss.

Deferred acquisition costs

Recent Accounting Pronouncements

Schedule of Impact of Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Table)

			Adjustment
			for reversal of
	Balance as of		unrealized loss		Balance as of
	December 31, 2020		from AOCI (1)		January 1, 2021 (2)
	(in millions)
Retirement and Income Solutions:
Workplace savings and retirement solutions	$	424.6	$	52.6	$	477.2
Individual variable annuities		281.7		0.2		281.9
Pension risk transfer (3)		—		—		—
Individual fixed deferred annuities		11.5		181.2		192.7
Investment only		12.6		—		12.6
Total Retirement and Income Solutions		730.4		234.0		964.4
Benefits and Protection:
Specialty Benefits:
Individual disability		529.8		—		529.8
Life Insurance:
Universal life		1,443.0		165.3		1,608.3
Term life		607.9		—		607.9
Participating life		60.3		51.6		111.9
Total Benefits and Protection		2,641.0		216.9		2,857.9
Total	$	3,371.4	$	450.9	$	3,822.3

(1) Prior period adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI.

(2) Does not include DAC for short-duration contracts or insignificant balances for long-duration contracts not included in our levels of aggregation for disclosures. Refer to Note 5, Deferred Acquisition Costs and Other Actuarial Balances, for further information on DAC.

(3) This product began recording DAC upon implementing LDTI.

Unearned revenue liability

Recent Accounting Pronouncements

Schedule of Impact of Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Table)

Unearned Revenue Liability

			Adjustment
			for reversal of
	Balance as of		unrealized gain		Balance as of
	December 31, 2020		from AOCI (1)		January 1, 2021 (2)
	(in millions)
Benefits and Protection - Life Insurance:
Universal life	$	335.6	$	48.8	$	384.4
Total	$	335.6	$	48.8	$	384.4

(1) Prior period adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI.

(2) Reported within other policyholder funds in the consolidated statements of financial position. Refer to Note 5, Deferred Acquisition Costs and Other Actuarial Balances, for further information on the unearned revenue liability.

Liability for future policy benefits

Recent Accounting Pronouncements

Schedule of Impact of Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Table)

Liability for Future Policy Benefits

							Effect of
					Adjustment		remeasurement
			Adjustment		under the		of the liability
	Balance as of		for reversal of		modified		at the current		Balance as of
	December 31,		unrealized loss		retrospective		discount		January 1,
	2020		from AOCI (1)		approach (2)		rate (3)		2021 (4)
	(in millions)
Retirement and Income Solutions:
Pension risk transfer	$	21,982.8	$	(947.0)	$	—	$	4,827.9	$	25,863.7
Individual fixed income annuities		6,147.2		(215.0)		0.1		1,213.5		7,145.8
Total Retirement and Income Solutions		28,130.0		(1,162.0)		0.1		6,041.4		33,009.5
Principal Asset Management - Principal International:
Latin America:
Individual fixed income annuities		5,038.4		(634.6)		61.7		2,096.0		6,561.5
Benefits and Protection:
Specialty Benefits:
Individual disability		2,173.8		(168.7)		2.4		493.4		2,500.9
Life Insurance:
Term life		834.5		—		7.0		318.8		1,160.3
Total Benefits and Protection		3,008.3		(168.7)		9.4		812.2		3,661.2
Corporate:
Long-term care insurance		134.1		—		30.0		93.5		257.6
Total	$	36,310.8	$	(1,965.3)	$	101.2	$	9,043.1	$	43,489.8

(1) Prior period adjustments in AOCI related to premium deficiency testing were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI.

(2) As a result of updating cash flow assumptions and measuring the liability for future policy benefits at the issue-year cohort level, the impact of loss cohorts, those with net premiums in excess of gross premiums, and cohorts with negative reserves, was reflected as an adjustment to the opening balance of retained earnings upon adoption of LDTI.

(3) The remeasurement of the liability at the current upper-medium grade fixed-income instrument yield, which was generally lower than the locked-in interest accretion rate, was reflected as an adjustment to the opening balance of AOCI upon the adoption of LDTI.

(4) Reported within future policy benefits and claims in the consolidated statements of financial position. Refer to Note 8, Future Policy Benefits and Claims, for further information on the liability for future policy benefits.

Market risk benefits

Recent Accounting Pronouncements

Schedule of Impact of Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Table)

Market Risk Benefits

			Cumulative
			effect of
			changes in the		Retained earnings
			nonperformance		adjustment
			risk between the		for the valuation of
			original contract		contracts as MRBs
	Asset (liability)		issue date and		(exclusive of		Asset (liability)
	balance as of		the transition		nonperformance		balance as of
	December 31, 2020 (1)		date (2)		risk changes) (3)		January 1, 2021 (4)
	(in millions)
Retirement and Income Solutions:
Individual variable annuities	$	(348.6)	$	(4.8)	$	(237.9)	$	(591.3)
Principal Asset Management - Principal International:
Asia:
Guaranteed pension (5)		(53.3)		—		—		(53.3)
Total	$	(401.9)	$	(4.8)	$	(237.9)	$	(644.6)

(1) The balance as of December 31, 2020, for MRBs represents the contract features that meet the definition of an MRB under LDTI and the related carrying amount of those features prior to adoption. These contract features were previously accounted for as an embedded derivative, or as an additional liability for annuitization benefits or death or other insurance benefits.

(2) The cumulative effect of the change in our own nonperformance risk between the original contract issuance date and the transition date of LDTI for contract features previously accounted for as an additional liability for certain benefit features was recorded as an adjustment to the opening balance of AOCI.

(3) The cumulative difference, exclusive of the nonperformance risk change, between the pre-adoption carrying amount and the fair value measurement for MRBs was recorded as an adjustment to the opening balance of retained earnings.

(4) Refer to Note 9, Market Risk Benefits, for further information on MRBs. The cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date for contract features previously accounted for as an embedded derivative was recorded as a reclassification from retained earnings to AOCI.

(5) This product had nominal transition adjustments.

ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts

Recent Accounting Pronouncements

Disaggregated Rollforward at Adoption - Deferred Acquisition Costs (Table)

Retirement and Income Solutions

	For the year ended December 31, 2021
	Workplace
	savings and		Individual		Pension		Individual
	retirement		variable		risk		fixed deferred		Investment
	solutions		annuities		transfer (1)		annuities		only
	(in millions)
Balance at beginning of period	$	477.2	$	281.9	$	—	$	192.7	$	12.6
Costs deferred		50.1		26.4		2.7		7.6		9.1
Amortized to expense		(38.3)		(27.1)		—		(38.1)		(3.6)
Balance at end of period	$	489.0	$	281.2	$	2.7	$	162.2	$	18.1

(1) Amortization during 2021 was nominal.

Benefits and Protection

	For the year ended December 31, 2021
	Specialty
	Benefits		Life Insurance
	Individual
	disability		Universal life		Term life		Participating life
	(in millions)
Balance at beginning of period	$	529.8	$	1,608.3	$	607.9	$	111.9
Costs deferred		89.8		84.3		126.5		1.9
Amortized to expense		(38.9)		(96.4)		(55.5)		(11.5)
Balance at end of period	$	580.7	$	1,596.2	$	678.9	$	102.3