
	Successor					Predecessor
	June 30, 2022					December 31, 2021
	Notional Amount	Fair Value				Notional Amount	Fair Value
(In millions)		Assets		Liabilities			Assets		Liabilities
Derivatives designated as hedges
Foreign currency hedges
Swaps	6,617	$	678	$	109	6,371	$	281	$	56
Forwards	5,009	427		3		6,395	189		2
Interest rate swaps	4,468	—		676		2,783	—		173
Forwards on net investments	235	7		—		231	—		4
Interest rate swaps	6,770	28		8		500	—		1
Total derivatives designated as hedges		1,140		796			470		236
Derivatives not designated as hedges
Equity options	60,234	1,076		105		57,890	3,629		115
Futures	21	20		1		33	67		—
Total return swaps	137	—		14		231	10		—
Foreign currency swaps	2,928	149		90		2,592	57		19
Interest rate swaps	461	69		1		483	78		1
Credit default swaps	10	—		1		10	—		3
Foreign currency forwards	11,623	478		215		7,382	76		98
Embedded derivatives
Funds withheld including related party		(5,087)		—			1,360		45
Interest sensitive contract liabilities		—		5,451			—		14,907
Total derivatives not designated as hedges		(3,295)		5,878			5,277		15,188
Total derivatives		$	(2,155)	$	6,674		$	5,747	$	15,424

Cash Flow Hedges – We used foreign currency swaps to convert foreign currency denominated cash flows of investments or liabilities to US dollars to reduce cash flow fluctuations due to changes in currency exchange rates. Effective January 1, 2022, our cash flow hedges were redesignated to fair value hedges as they no longer qualified for cash flow hedge accounting. The following is a summary of the gains (losses) related to cash flow hedges:

Fair Value Hedges – We use foreign currency forward contracts, foreign currency swaps, foreign currency interest rate swaps and interest rate swaps that are designated and accounted for as fair value hedges to hedge certain exposures to foreign currency risk and interest rate risk. The foreign currency forward price is agreed upon at the time of the contract and payment is made at a specified future date.


	Successor				Predecessor
	June 30, 2022				December 31, 2021
(In millions)	Carrying amount of the hedged assets or liabilities1		Cumulative amount of fair value hedging gains (losses)		Carrying amount of the hedged assets or liabilities1		Cumulative amount of fair value hedging gains (losses)
AFS securities
Foreign currency forwards	$	3,966	$	(354)	$	4,224	$	(136)
Foreign currency swaps	4,524		(441)		—		—
Mortgage loans – Foreign currency forwards	—		—		1,686		(44)
Interest sensitive contract liabilities

Foreign currency swaps	1,067		93		—		—
Foreign currency interest rate swaps	4,348		495		2,773		121
Interest rate swaps	6,770		93		500		—

1 The carrying amount disclosed for AFS securities is amortized cost.


							Amount Excluded
(In millions)	Derivatives		Hedged Items		Net		Recognized in income through amortization approach		Recognized in income through changes in fair value
Three months ended June 30, 2022 (Successor)
Investment related gains (losses)
Foreign currency forwards	$	201	$	(232)	$	(31)	$	16	$	—
Foreign currency swaps	242		(252)		(10)		—		—
Foreign currency interest rate swaps	(335)		298		(37)		—		—
Interest rate swaps	(5)		18		13		—		—
Interest sensitive contract benefits

Foreign currency interest rate swaps	15		(14)		1		—		—

Three months ended June 30, 2021 (Predecessor)
Investment related gains (losses)
Foreign currency forwards	$	(13)	$	29	$	16	$	—	$	—
Foreign currency interest rate swaps	5		(9)		(4)		—		—
Interest sensitive contract benefits
Foreign currency interest rate swaps	5		(4)		1		—		—


							Amount Excluded
(In millions)	Derivatives		Hedged Items		Net		Recognized in income through amortization approach		Recognized in income through changes in fair value
Six months ended June 30, 2022 (Successor)
Investment related gains (losses)
Foreign currency forwards	$	328	$	(358)	$	(30)	$	30	$	1
Foreign currency swaps	333		(347)		(14)		—		—
Foreign currency interest rate swaps	(494)		495		1		—		—
Interest rate swaps	(77)		93		16		—		—
Interest sensitive contract benefits

Foreign currency interest rate swaps	25		(23)		2		—		—

Six months ended June 30, 2021 (Predecessor)
Investment related gains (losses)
Foreign currency forwards	$	205	$	(188)	$	17	$	—	$	—
Foreign currency interest rate swaps	(31)		32		1		—		—
Interest sensitive contract benefits
Foreign currency interest rate swaps	6		(5)		1		—		—

Net Investment Hedges – We use foreign currency forwards to hedge the foreign currency exchange rate risk of our investments in subsidiaries that have a reporting currency other than the US dollar. We assess hedge effectiveness based on the changes in forward rates. During the three months ended June 30, 2022 and 2021, these derivatives had gains of $23 million and $0 million, respectively. During the six months ended June 30, 2022 and 2021, these derivatives had gains of $25 million and losses of $2 million, respectively. These derivatives are included in foreign currency translation and other adjustments on the condensed consolidated statements of comprehensive income (loss). As of June 30, 2022 and December 31, 2021, the cumulative foreign currency translations recorded in accumulated other comprehensive income (loss) (AOCI) related to these net investment hedges were gains of $25 million and $1 million, respectively. During the three and six months ended June 30, 2022 and 2021, there were no amounts deemed ineffective.

Equity options – We use equity indexed options to economically hedge fixed indexed annuity products that guarantee the return of principal to the policyholder and credit interest based on a percentage of the gain in a specified market index, primarily the S&P 500. To hedge against adverse changes in equity indices, we enter into contracts to buy equity indexed options. The contracts are net settled in cash based on differentials in the indices at the time of exercise and the strike price.

Futures – Futures contracts are purchased to hedge the growth in interest credited to the customer as a direct result of increases in the related indices. We enter into exchange-traded futures with regulated futures commission clearing brokers who are members of a trading exchange. Under exchange-traded futures contracts, we agree to purchase a specified number of contracts with other parties and to post variation margin on a daily basis in an amount equal to the difference in the daily fair values of those contracts.

Total return swaps – We purchase total rate of return swaps to gain exposure and benefit from a reference asset or index without ownership. Total rate of return swaps are contracts in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of the underlying asset or index, which includes both the income it generates and any capital gains.

Interest rate swaps – We use interest rate swaps to reduce market risks from interest rate changes and to alter interest rate exposure arising from duration mismatches between assets and liabilities. With an interest rate swap, we agree with another party to exchange the difference between fixed-rate and floating-rate interest amounts tied to an agreed-upon notional principal amount at specified intervals.

Credit default swaps – Credit default swaps provide a measure of protection against the default of an issuer or allow us to gain credit exposure to an issuer or traded index. We use credit default swaps coupled with a bond to synthetically create the characteristics of a reference bond. These transactions have a lower cost and are generally more liquid relative to the cash market. We receive a periodic premium for these transactions as compensation for accepting credit risk.

Hedging credit risk involves buying protection for existing credit risk. The exposure resulting from the agreements, which is usually the notional amount, is equal to the maximum proceeds that must be paid by a counterparty for a defaulted security. If a credit event occurs on a reference entity, then a counterparty who sold protection is required to pay the buyer the trade notional amount less any recovery value of the security.

Embedded derivatives – We have embedded derivatives which are required to be separated from their host contracts and reported as derivatives. Host contracts include reinsurance agreements structured on a modified coinsurance (modco) or funds withheld basis and indexed annuity products.


	Successor		Predecessor		Successor		Predecessor
(In millions)	Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Equity options	$	(1,571)	$	1,044	$	(2,279)	$	1,546
Futures	(86)		44		(119)		55
Swaps	(74)		5		(11)		36
Foreign currency forwards	362		(19)		517		(50)
Embedded derivatives on funds withheld	(2,682)		1,391		(5,202)		258
Amounts recognized in investment related gains (losses)	(4,051)		2,465		(7,094)		1,845
Embedded derivatives in indexed annuity products1	1,487		(1,183)		2,444		(848)
Total net gains (losses) on derivatives not designated as hedges	$	(2,564)	$	1,282	$	(4,650)	$	997

1 Included in interest sensitive contract benefits on the condensed consolidated statements of income (loss).

Credit Risk—We may be exposed to credit-related losses in the event of counterparty nonperformance on derivative financial instruments. Generally, the current credit exposure of our derivative contracts is the fair value at the reporting date less any collateral received from the counterparty.

We manage credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties. Where possible, we maintain collateral arrangements and use master netting agreements that provide for a single net payment from one counterparty to another at each due date and upon termination. We have also established counterparty exposure limits, where possible, in order to evaluate if there is sufficient collateral to support the net exposure.

Collateral arrangements typically require the posting of collateral in connection with its derivative instruments. Collateral agreements often contain posting thresholds, some of which may vary depending on the posting party’s financial strength ratings. Additionally, a decrease in our financial strength rating to a specified level can result in settlement of the derivative position.


			Gross amounts not offset on the condensed consolidated balance sheets
(In millions)	Gross amount recognized1		Financial instruments2		Collateral (received)/pledged		Net amount		Off-balance sheet securities collateral3		Net amount after securities collateral
June 30, 2022 (Successor)
Derivative assets	$	2,932	$	(1,204)	$	(1,904)	$	(176)	$	—	$	(176)
Derivative liabilities	(1,223)		1,204		304		285		—		285

December 31, 2021 (Predecessor)
Derivative assets	$	4,387	$	(430)	$	(3,934)	$	23	$	—	$	23
Derivative liabilities	(472)		430		32		(10)		—		(10)

1 The gross amounts of recognized derivative assets and derivative liabilities are reported on the condensed consolidated balance sheets. As of June 30, 2022 and December 31, 2021, amounts not subject to master netting or similar agreements were immaterial.
2 Represents amounts offsetting derivative assets and derivative liabilities that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative assets or gross derivative liabilities for presentation on the condensed consolidated balance sheets.
3 For non-cash collateral received, we do not recognize the collateral on our balance sheet unless the obligor (transferor) has defaulted under the terms of the secured contract and is no longer entitled to redeem the pledged asset. Amounts do not include any excess of collateral pledged or received.