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INSURANCE INTANGIBLES, UNEARNED REVENUE RESERVES AND UNEARNED FRONT-END LOADS
9 Months Ended
Sep. 30, 2021
Insurance [Abstract]  
INSURANCE INTANGIBLES, UNEARNED REVENUE RESERVES AND UNEARNED FRONT-END LOADS NET INVESTMENT INCOME - INSURANCE
Net investment income for Global Atlantic is comprised primarily of interest income, including amortization of premiums and accretion of discounts, based on yields that change due to expectations in projected cash flows, dividend income from common and preferred stock, earnings from investments accounted for under equity method accounting, and lease income on other investments.

The components of net investment income were as follows:

Three Months Ended Nine Months Ended
September 30, 2021September 30, 2021
Fixed maturity securities – interest and other income$632,314 $1,512,377 
Mortgage and other loan receivables247,917 617,334 
Investments in transportation and other leased assets56,317 146,004 
Short-term and other investment income23,285 41,349 
Policy loans3,203 22,138 
Investments in real estate4,501 10,028 
Investments in renewable energy62,468 96,400 
Equity securities – dividends and other income764 23 
Income from (to) funds withheld at interest(135,632)(216,057)
Gross investment income895,137 2,229,596 
Less investment expenses:
Investment management and administration88,789 190,458 
Transportation and renewable energy asset depreciation and maintenance47,331 117,749 
Interest expense on derivative collateral and repurchase agreements636 1,730 
Net investment income$758,381 $1,919,659 
NET INVESTMENT GAINS (LOSSES) - INSURANCE
Net investment (losses) gains from insurance operations primarily consists out of (i) realized gains and (losses) from the disposal of investments, (ii) unrealized gains and (losses) from investments held for trading, equity securities, or with fair value remeasurements recognized in earnings as a result of the election of a fair-value option, (iii) unrealized gains and (losses) on funds withheld at interest, (iv) unrealized gains and (losses) from derivatives not designated in an hedging relationship, and (v) allowances for credit losses, and other impairments of investments.

Net investment gains (losses) were as follows:
Three Months Ended Nine Months Ended
September 30, 2021September 30, 2021
Equity securities and other investments$359,101 $431,728 
Derivatives40,792 70,098 
Trading fixed maturity securities(141,683)(197,047)
Allowance for credit losses on mortgage and other loan receivables(69,386)(250,690)
AFS fixed maturity securities(15,231)(88,233)
Allowance for losses on AFS fixed maturity securities(3,809)21,287 
Allowance for loan commitment losses provision(3,677)(15,372)
Mortgage and other loans receivables(2,905)15,527 
Funds withheld receivable at interest(1,075)45,685 
Net investment gains (losses)$162,127 $32,983 
Allowance for credit losses

Available-for-sale fixed maturity securities

The table below presents a roll-forward of the allowance for credit losses recognized for available-for-sale fixed maturity securities held by Global Atlantic:
Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
CorporateStructuredTotalCorporateStructuredTotal
Balance, as of beginning of period(1)
$— $91,646 $91,646 $— $120,895 $120,895 
Initial impairments for credit losses recognized on securities not previously impaired— 19,921 19,921 — 47,530 47,530 
Initial credit loss allowance recognized on PCD securities— 1,576 1,576 — 7,204 7,204 
Accretion of initial credit loss allowance on PCD securities— 1,879 1,879 — 2,200 2,200 
Reductions due to sales (or maturities, pay downs or prepayments) during the period of securities previously identified as credit impaired— (2,510)(2,510)— (12,612)(12,612)
Net additions / reductions for securities previously impaired— (16,112)(16,112)— (68,817)(68,817)
Balance, as of end of period$ $96,400 $96,400 $ $96,400 $96,400 

(1)Includes securities designated as purchased credit deteriorated as of the time of the acquisition of Global Atlantic.


Mortgage and other loan receivables

Changes in the allowance for credit losses on mortgage and other loan receivables held by Global Atlantic are summarized below:

Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
Commercial Mortgage LoansResidential Mortgage LoansConsumer and Other Loan ReceivablesTotalCommercial Mortgage LoansResidential Mortgage LoansConsumer and Other Loan ReceivablesTotal
Balance, as of beginning of period (1)
$58,255 $76,536 $163,135 $297,926 $58,203 $62,056 $— $120,259 
Net provision (release)17,750 (2,793)54,429 69,386 17,802 10,888 222,000 250,690 
Loans purchased with credit deterioration— — — — — 799 838 1,637 
Charge-offs— (3,162)5,274 2,112 — (3,162)— (3,162)
Balance, as of end of period$76,005 $70,581 $222,838 $369,424 $76,005 $70,581 $222,838 $369,424 

(1) Includes loans designated as purchased credit deteriorated as of the time of the acquisition of Global Atlantic.
Proceeds and gross gains and losses from voluntary sales

The proceeds from voluntary sales and the gross gains and losses on those sales of AFS fixed maturity securities were as follows:

Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
AFS fixed maturity securities:
Proceeds from voluntary sales$7,440,645 $12,766,887 
Gross gains16,816 38,061 
Gross losses(30,086)(103,190)
INSURANCE INTANGIBLES, UNEARNED REVENUE RESERVES AND UNEARNED FRONT-END LOADS
The following reflects the changes to the deferred policy acquisition costs ("DAC") asset:
Nine Months Ended
September 30, 2021
Balance, as of GA Acquisition Date
$ 
Acquisition/reinsurance51,322 
Deferrals259,203 
Amortized to expense during the period(1)
(13,016)
Adjustment for unrealized investment losses (gains) during the period4,907 
Balance, as of end of period$302,416 

(1)     These amounts are reported within amortization of policy acquisition costs in the consolidated statements of operations.

The following reflects the changes to the value of business acquired ("VOBA") asset:
Nine Months Ended
September 30, 2021
Balance, as of GA Acquisition Date
$1,024,520 
Amortized to expense during the period(1)
(47,866)
Balance, as of end of period$976,654 

(1)     These amounts are reported within amortization of policy acquisition costs in the consolidated statements of operations.

The following reflects the changes to the negative VOBA liability:

Nine Months Ended
September 30, 2021
Balance, as of Acquisition Date$1,273,414 
Amortized to expense during the period(1)
(118,291)
Balance, as of end of period$1,155,123 

(1)     These amounts are reported within amortization of policy acquisition costs in the consolidated statements of operations.

The following reflects the changes to the unearned revenue reserve ("URR") and unearned front-end load ("UFEL):

Nine Months Ended
September 30, 2021
Balance, as of GA Acquisition Date
$ 
Deferrals41,000 
Amortized to expense during the period(1)
(1,302)
Adjustment for unrealized investment losses during the period(4,100)
Balance, as of end of period$35,598 

(1)     These amounts are reported within policy fees in the consolidated statements of operations.