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POLICY LIABILITIES
3 Months Ended
Mar. 31, 2024
Insurance [Abstract]  
POLICY LIABILITIES POLICY LIABILITIES
The following reflects the reconciliation of the components of policy liabilities to the total balance reported in the consolidated statements of financial condition as of March 31, 2024 and December 31, 2023:
March 31, 2024December 31, 2023
Policyholders’ account balances$129,509,137 $125,187,354 
Liability for future policy benefits25,410,733 17,823,750 
Additional liability for annuitization, death, or other insurance benefits7,213,357 7,129,785 
Market risk benefit liability1,023,053 1,120,968 
Other policy-related liabilities(1)
10,442,406 8,796,414 
Total policy liabilities$173,598,686 $160,058,271 
(1)Other policy-related liabilities as of March 31, 2024 and December 31, 2023 primarily consist of negative VOBA ($837.8 million and $867.9 million, respectively), policy liabilities accounted under a fair value option (both $1.2 billion), embedded derivatives associated with contractholder deposit funds ($4.5 billion and $4.0 billion, respectively), cost-of-reinsurance liabilities ($3.0 billion and $1.8 billion, respectively) and outstanding claims ($240.0 million and $235.1 million, respectively).
Policyholders’ account balances
The following reflects the policyholders’ account balances roll-forward for the three months ended March 31, 2024 and 2023, and the policyholders’ account balances weighted average interest rates, net amount at risk, and cash surrender value as of those dates:
Three months ended March 31, 2024
Fixed rate annuitiesFixed indexed annuitiesInterest sensitive lifeFunding agreements
Other(1)
Total
Balance as of beginning of period$56,762,736 $30,168,445 $21,969,053 $7,015,998 $9,271,122 $125,187,354 
Issuances and premiums received4,784,285 1,549,004 312,020 695,933 1,339,437 8,680,679 
Benefit payments, surrenders, and withdrawals(2,879,479)(1,294,134)(306,463)(68,159)(411,941)(4,960,176)
Interest(2)
498,543 165,239 177,275 69,519 74,324 984,900 
Other activity(3)
(102,899)25,879 (305,139)(21,815)20,354 (383,620)
Balance as of end of period$59,063,186 $30,614,433 $21,846,746 $7,691,476 $10,293,296 $129,509,137 
Less: reinsurance recoverable(10,557,317)(3,189,167)(7,159,910)— (3,830,017)(24,736,411)
Balance as of end of period, net of reinsurance recoverable$48,505,869 $27,425,266 $14,686,836 $7,691,476 $6,463,279 $104,772,726 
Average interest rate3.58 %2.30 %3.22 %3.80 %3.47 %3.15 %
Net amount at risk, gross of reinsurance(4)
$— $— $117,008,523 $— $1,161,762 $118,170,285 
Cash surrender value(5)
$45,612,785 $29,313,985 $13,827,297 $— $4,604,037 $93,358,104 
(1)“Other” consists of activity related to payout annuities without life contingencies, preneed, variable annuities and life products.
(2)Interest includes interest credited to policyholders’ account values, and interest accreted in other components of the policyholder account balance, including investment-type contract values, host amounts for contractholder deposits with embedded derivatives, funding agreements and other associated reserves.
(3) “Other activity” includes policy charges, fees and commissions, transfers, assumption changes, fair value changes and the impact of hedge fair value adjustments.
(4)Net amount at risk represents the difference between the face value of the insurance policy and the reserve accumulated under that same policy.
(5)Cash surrender values are reported net of any applicable surrender charges, net of reinsurance.
Three months ended March 31, 2023
Fixed rate annuitiesFixed indexed annuitiesInterest sensitive lifeFunding agreements
Other(1)
Total
Balance as of beginning of period$48,510,703 $29,123,926 $17,397,185 $7,535,489 $9,713,933 $112,281,236 
Issuances and premiums received3,416,916 1,640,745 144,797 — 100,616 5,303,074 
Benefit payments, surrenders, and withdrawals(2,329,373)(937,627)(230,514)(224,107)(401,156)(4,122,777)
Interest(2)
340,106 114,739 107,298 51,423 74,209 687,775 
Other activity(3)
(63,346)(45,130)(25,172)86,057 78,474 30,883 
Balance as of end of period$49,875,006 $29,896,653 $17,393,594 $7,448,862 $9,566,076 $114,180,191 
Less: reinsurance recoverable(6,699,771)(3,311,541)(3,467,814)— (3,119,287)(16,598,413)
Balance as of end of period, net of reinsurance recoverable$43,175,235 $26,585,112 $13,925,780 $7,448,862 $6,446,789 $97,581,778 
Average interest rate2.85 %1.70 %3.09 %2.75 %2.69 %2.53 %
Net amount at risk, gross of reinsurance(4)
$— $— $84,498,038 $— $1,182,896 $85,680,934 
Cash surrender value(5)
$40,420,172 $27,236,116 $12,948,054 $— $4,744,008 $85,348,350 
(1)“Other” consists of activity related to payout annuities without life contingencies, preneed, variable annuities and life products.
(2)Interest includes interest credited to policyholders’ account values, and interest accreted in other components of the policyholder account balance, including investment-type contract values, host amounts for contractholder deposits with embedded derivatives, funding agreements and other associated reserves.
(3)“Other activity” includes policy charges, fees and commissions, transfers, assumption changes, fair value changes and the impact of hedge fair value adjustments.
(4)Net amount at risk represents the difference between the face value of the insurance policy and the reserve accumulated under that same policy.
(5)Cash surrender values are reported net of any applicable surrender charges, net of reinsurance.
The following table presents the account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums. Account values, as disclosed below, differ from policyholder account balances as they exclude balances associated with index credits, contractholder deposit fund host balances, funding agreements, and other associated reserves. In addition, policyholder account balances include discounts and premiums on assumed business which are not reflected in account values.
As of March 31, 2024
Account values with adjustable crediting rates subject to guaranteed minimums:
Range of guaranteed minimum crediting rates:At guaranteed minimum
1 - 49 bps above guaranteed minimum
50 - 99 bps above guaranteed minimum
100 - 150 bps above guaranteed minimum
Greater than 150 bps above guaranteed minimum
Total
Less than 1.00%
$2,894,495 $30,211 $559,718 $2,726,724 $28,705,318 $34,916,466 
1.00% - 1.99%
1,443,207 939,437 914,146 1,924,889 7,614,747 12,836,426 
2.00% - 2.99%
855,374 45,699 56,328 99,215 1,338,545 2,395,161 
3.00% - 4.00%
11,515,571 1,472,797 391,942 1,183,923 1,294,192 15,858,425 
Greater than 4.00%
11,888,750 1,353,373 141,937 115,460 288,949 13,788,469 
Total$28,597,397 $3,841,517 $2,064,071 $6,050,211 $39,241,751 $79,794,947 
Percentage of total36 %%%%48 %100 %
As of December 31, 2023
Account values with adjustable crediting rates subject to guaranteed minimums:
Range of guaranteed minimum crediting rates:At guaranteed minimum
1 - 49 bps above guaranteed minimum
50 - 99 bps above guaranteed minimum
100 - 150 bps above guaranteed minimum
Greater than 150 bps above guaranteed minimum
Total
Less than 1.00%
$2,706,701 $25,839 $660,189 $3,546,450 $25,940,436 $32,879,615 
1.00% - 1.99%
1,471,320 1,013,423 999,852 1,968,519 6,603,795 12,056,909 
2.00% - 2.99%
896,276 44,850 55,874 109,411 1,310,234 2,416,645 
3.00% - 4.00%
12,494,439 1,186,572 414,111 953,560 1,067,325 16,116,007 
Greater than 4.00%
12,095,647 1,385,538 138,112 117,561 298,493 14,035,351 
Total$29,664,383 $3,656,222 $2,268,138 $6,695,501 $35,220,283 $77,504,527 
Percentage of total38 %%%%45 %100 %
Liability for future policy benefits
The following tables summarize the balances of, and changes in, the liability for future policy benefits for traditional and limited-payment contracts for the three months ended March 31, 2024 and 2023:
Three Months Ended
March 31, 2024March 31, 2023
Payout annuities(1)
Other(2)
Total
Payout annuities(1)
Other(2)
Total
Present value of expected net premiums
Balance as of beginning of the period$— $(208,370)$(208,370)$— $(255,401)$(255,401)
Balance at original discount rate$— $(241,058)$(241,058)$— $(303,610)$(303,610)
Effect of actual variances from expected experience— 2,481 2,481 — 992 992 
Adjusted beginning of period balance (238,577)(238,577) (302,618)(302,618)
Issuances— (1,138,831)(1,138,831)— — — 
Interest(949)(949)— (1,206)(1,206)
Net premiums collected— 8,416 8,416 — 8,283 8,283 
Ending balance at original discount rate (1,369,941)(1,369,941) (295,541)(295,541)
Effect of changes in discount rate assumptions— 36,556 36,556 — 43,489 43,489 
Balance as of the end of the period$ $(1,333,385)$(1,333,385)$ $(252,052)$(252,052)
Three Months Ended
March 31, 2024March 31, 2023
Payout annuities(1)
Other(2)
Total
Payout annuities(1)
Other(2)
Total
Present value of expected future policy benefits
Balance as of beginning of the period$17,427,353 $604,767 $18,032,120 $14,021,514 $679,807 $14,701,321 
Balance at original discount rate$20,040,000 $701,655 $20,741,655 $17,180,626 $806,555 $17,987,181 
Effect of actual variances from expected experience(5,403)(4,126)(9,529)(7,777)3,539 (4,238)
Adjusted beginning of period balance20,034,597 697,529 20,732,126 17,172,849 810,094 17,982,943 
Issuances521,384 8,829,048 9,350,432 559,421 15 559,436 
Interest145,265 2,146 147,411 93,654 2,467 96,121 
Benefit payments(443,016)(16,726)(459,742)(389,426)(25,861)(415,287)
Ending balance at original discount rate20,258,230 9,511,997 29,770,227 17,436,498 786,715 18,223,213 
Effect of changes in discount rate assumptions(2,934,499)(91,610)(3,026,109)(2,721,312)(115,387)(2,836,699)
Balance as of the end of the period17,323,731 9,420,387 26,744,118 14,715,186 671,328 15,386,514 
Net liability for future policy benefits17,323,731 8,087,002 25,410,733 14,715,186 419,276 15,134,462 
Less: reinsurance recoverable(3)
(9,184,956)(6,395,483)(15,580,439)(7,636,570)1,750 (7,634,820)
Net liability for future policy benefits, net of reinsurance recoverables$8,138,775 $1,691,519 $9,830,294 $7,078,616 $421,026 $7,499,642 
(1)Payout annuities generally only have a single premium received at contract inception. As a result, the liability for future policy benefits generally would not reflect a present value for future premiums for payout annuities.
(2)“Other” consists of activity related to long-term care insurance, variable annuities, traditional life insurance, preneed insurance and fixed-rate annuity products. Mortality and morbidity risks associated with the long-term care insurance have been ceded to a third-party reinsurer.
(3)Reinsurance recoverables associated with the liability for future policy benefits is net of the effect of changes in discount rate assumptions of $(141.4) million and $237.1 million for the three months ended March 31, 2024 and 2023, respectively.
The following table summarizes the amount of gross premiums related to traditional and limited-payment contracts recognized in the consolidated statements of operations for the three months ended March 31, 2024 and 2023:
Gross premiums
Three Months Ended March 31,
20242023
Payout annuities$582,588 $492,727 
Other8,547,653 14,391 
Total products$9,130,241 $507,118 
The following table reflects the weighted-average duration and weighted-average interest rates of the future policy benefit liability as of March 31, 2024 and December 31, 2023:
As of March 31, 2024
Payout annuitiesOther
Weighted-average interest rates, original discount rate3.44 %4.85 %
Weighted-average interest rates, current discount rate5.22 %5.29 %
Weighted-average liability duration (years, current rates)8.4210.70
As of December 31, 2023
Payout annuitiesOther
Weighted-average interest rates, original discount rate3.37 %2.57 %
Weighted-average interest rates, current discount rate4.95 %4.95 %
Weighted-average liability duration (years, current rates)8.589.03
The following reflects the undiscounted ending balance of expected future gross premiums and expected future benefits and payments for traditional and limited-payment contracts, as of March 31, 2024 and December 31, 2023:
As of March 31, 2024
Payout annuitiesOther
Expected future benefit payments, undiscounted$29,845,573 $16,966,712 
Expected future benefit payments, discounted (original discount rate)20,258,230 9,511,997 
Expected future benefit payments, discounted (current discount rate)17,323,731 9,420,387 
Expected future gross premiums, undiscounted— 1,880,510 
Expected future gross premiums, discounted (original discount rate)— 1,447,508 
Expected future gross premiums, discounted (current discount rate)— 1,398,867 
As of December 31, 2023
Payout annuitiesOther
Expected future benefit payments, undiscounted$29,164,580 $832,608 
Expected future benefit payments, discounted (original discount rate)19,899,423 689,760 
Expected future benefit payments, discounted (current discount rate)17,427,352 604,768 
Expected future gross premiums, undiscounted— 377,693 
Expected future gross premiums, discounted (original discount rate)— 317,710 
Expected future gross premiums, discounted (current discount rate)— 262,653 
Additional liability for annuitization, death, or other insurance benefits
The following tables reflect the additional liability for annuitization, death, or other insurance benefits roll-forward for the three months ended March 31, 2024 and 2023:
Three Months Ended March 31,
20242023
Balance as of beginning of period$7,251,266 $5,104,810 
Effect of changes in cash flow assumptions— — 
Effect of changes in experience(29,667)(21,177)
Adjusted balance as of beginning of period7,221,599 5,083,633 
Issuances6,079 5,684 
Assessments175,430 85,683 
Benefits paid(136,605)(84,913)
Interest59,363 26,296 
Balance as of end of period7,325,866 5,116,383 
Less: impact of unrealized investment gain and losses112,509 117,958 
Less: reinsurance recoverable, end of period1,460,314 — 
Balance, end of year, net of reinsurance recoverable and impact of unrealized investment
gains and losses
$5,753,043 $4,998,425 
The additional liability for annuitization, death, or other insurance benefits relates primarily to secondary guarantees on certain interest-sensitive life products, and preneed insurance.
The following reflects the amount of gross assessments recognized for the additional liability for annuitization, death, or other insurance benefits in the consolidated statements of operations for the three months ended March 31, 2024 and 2023:
Gross assessments
Three Months Ended March 31,
20242023
Total amount recognized within revenue in the consolidated statements of operations$168,504 $146,376 
The following reflects the weighted average duration and weighted average interest rate for the additional liability for annuitization, death, or other insurance benefits as of March 31, 2024 and December 31, 2023:
As of
March 31, 2024December 31, 2023
Weighted-average interest, current discount rate3.27 %3.09 %
Weighted-average liability duration (years)27.7527.64
Market risk benefits
The following table presents the balances of, and changes in, market risk benefits:
Three months ended
March 31, 2024March 31, 2023
Fixed-indexed annuityVariable- and other annuitiesTotalFixed-indexed annuityVariable- and other annuitiesTotal
Balance as of beginning of period$868,268 $252,683 $1,120,951 $548,536 $120,322 $668,858 
Balance as of beginning of period, before impact of changes in instrument-specific credit risk$790,616 $225,593 $1,016,209 $656,880 $150,633 $807,513 
Issuances3,408 (2)3,406 (36)(9)(45)
Interest10,914 2,926 13,840 8,854 1,957 10,811 
Attributed fees collected24,660 21,874 46,534 24,143 21,095 45,238 
Benefit payments(1,649)(1,807)(3,456)(802)(18)(820)
Effect of changes in interest rates(68,282)(40,975)(109,257)71,737 49,005 120,742 
Effect of changes in equity markets(12,806)(42,848)(55,654)(3,822)(21,986)(25,808)
Effect of actual experience different from assumptions6,352 (5,001)1,351 772 (12,676)(11,904)
Balance as of end of period before impact of changes in instrument-specific credit risk753,213 159,760 912,973 757,726 188,001 945,727 
Effect of changes in instrument-specific credit risk82,969 27,080 110,049 (146,505)(44,165)(190,670)
Balance as of end of period836,182 186,840 1,023,022 611,221 143,836 755,057 
Less: reinsurance recoverable as of the end of the period— (12,820)(12,820)— (14,913)(14,913)
Balance as of end of period, net of reinsurance recoverable$836,182 $174,020 $1,010,202 $611,221 $128,923 $740,144 
Net amount at risk$4,356,548 $1,289,163 $5,645,711 $3,980,500 $1,277,299 $5,257,799 
Weighted-average attained age of contract holders (years)706970707170

The following reflects the reconciliation of the market risk benefits reflected in the preceding table to the amounts reported in an asset and liability position, respectively, in the consolidated statements of financial condition as of March 31, 2024 and December 31, 2023:
As of March 31, 2024As of December 31, 2023
AssetLiabilityNetAssetLiabilityNet
Fixed-indexed annuities$23 $836,205 $(836,182)$— $868,268 $(868,268)
Variable- and other annuities186,848 (186,840)17 252,700 (252,683)
Total$31 $1,023,053 $(1,023,022)$17 $1,120,968 $(1,120,951)
Separate account liabilities
Separate account assets and liabilities consist of investment accounts established and maintained by Global Atlantic for certain variable annuity and interest-sensitive life insurance contracts. Some of these contracts include minimum guarantees such as GMDBs and GMWBs that guarantee a minimum payment to the policyholder.
The assets that support these variable annuity and interest-sensitive life insurance contracts are measured at fair value and are reported as separate account assets on the consolidated statements of financial condition. An equivalent amount is reported as separate account liabilities. Market risk benefit assets and liabilities for minimum guarantees are valued and presented separately from separate account assets and separate account liabilities. For more information on market risk benefits see “—Market risk benefits” in this footnote. Policy charges assessed against the policyholders for mortality, administration and other services are included in “Policy fees” in the consolidated statements of operations.
The following table presents the balances of and changes in separate account liabilities:
March 31, 2024March 31, 2023
Variable annuitiesInterest-sensitive lifeTotalVariable annuitiesInterest-sensitive lifeTotal
Balance as of beginning of period$3,565,029 $541,971 $4,107,000 $3,627,769 $503,025 $4,130,794 
Premiums and deposits6,519 3,444 9,963 10,655 3,581 14,236 
Surrenders, withdrawals and benefit payments(134,786)(5,223)(140,009)(108,408)(3,716)(112,124)
Investment performance241,056 44,942 285,998 141,071 31,944 173,015 
Other(28,267)(11,512)(39,779)(29,652)(11,466)(41,118)
Balance as of end of period$3,649,551 $573,622 $4,223,173 $3,641,435 $523,368 $4,164,803 
Cash surrender value as of end of period(1)
$3,649,551 $573,622 $4,223,173 $3,641,435 $523,368 $4,164,803 
(1)Cash surrender value attributed to the separate accounts does not reflect the impact of surrender charges; surrender charges are attributed to policyholder account balances recorded in the general account.
The following table presents the aggregate fair value of assets, by major investment asset type, supporting separate accounts:
March 31, 2024December 31, 2023
Asset type:
Managed volatility equity/fixed income blended fund$2,152,615 $2,131,149 
Equity1,688,119 1,596,467 
Fixed income149,305 152,398 
Money market232,510 226,387 
Alternative624 599 
Total assets supporting separate account liabilities$4,223,173 $4,107,000