QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
þ | Accelerated filer | ¨ | |||||||||||||||
Non-accelerated filer | ¨ | Smaller reporting company | |||||||||||||||
Emerging growth company |
Page | ||||||||
Item 1. | Consolidated Financial Statements (at September 30, 2023 (Unaudited) and December 31, 2022 and for the Three Months and Nine Months Ended September 30, 2023 and 2022 (Unaudited)): | |||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
September 30, 2023 | December 31, 2022 | |||||||||||||
Assets | ||||||||||||||
Investments: | ||||||||||||||
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $ | $ | $ | ||||||||||||
Equity securities, at estimated fair value | ||||||||||||||
Mortgage loans (net of allowance for credit losses of $ | ||||||||||||||
Policy loans | ||||||||||||||
Limited partnerships and limited liability companies | ||||||||||||||
Short-term investments, principally at estimated fair value | ||||||||||||||
Other invested assets, principally at estimated fair value (net of allowance for credit losses of $ | ||||||||||||||
Total investments | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Accrued investment income | ||||||||||||||
Premiums, reinsurance and other receivables (net of allowance for credit losses of $ | ||||||||||||||
Deferred policy acquisition costs and value of business acquired | ||||||||||||||
Current income tax recoverable | ||||||||||||||
Deferred income tax asset | ||||||||||||||
Market risk benefit assets | ||||||||||||||
Other assets | ||||||||||||||
Separate account assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Equity | ||||||||||||||
Liabilities | ||||||||||||||
Future policy benefits | $ | $ | ||||||||||||
Policyholder account balances | ||||||||||||||
Market risk benefit liabilities | ||||||||||||||
Other policy-related balances | ||||||||||||||
Payables for collateral under securities loaned and other transactions | ||||||||||||||
Long-term debt | ||||||||||||||
Other liabilities | ||||||||||||||
Separate account liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Contingencies, Commitments and Guarantees (Note 13) | ||||||||||||||
Equity | ||||||||||||||
Brighthouse Financial, Inc.’s stockholders’ equity: | ||||||||||||||
Preferred stock, par value $ | ||||||||||||||
Common stock, par value $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings (deficit) | ( | ( | ||||||||||||
Treasury stock, at cost; | ( | ( | ||||||||||||
Accumulated other comprehensive income (loss) | ( | ( | ||||||||||||
Total Brighthouse Financial, Inc.’s stockholders’ equity | ||||||||||||||
Noncontrolling interests | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Premiums | $ | $ | $ | $ | |||||||||||||||||||
Universal life and investment-type product policy fees | |||||||||||||||||||||||
Net investment income | |||||||||||||||||||||||
Other revenues | |||||||||||||||||||||||
Net investment gains (losses) | ( | ( | ( | ( | |||||||||||||||||||
Net derivative gains (losses) | ( | ( | ( | ||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Expenses | |||||||||||||||||||||||
Policyholder benefits and claims (including liability remeasurement gains (losses) of ($ | |||||||||||||||||||||||
Interest credited to policyholder account balances | |||||||||||||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | |||||||||||||||||||||||
Change in market risk benefits | ( | ( | ( | ( | |||||||||||||||||||
Other expenses | |||||||||||||||||||||||
Total expenses | |||||||||||||||||||||||
Income (loss) before provision for income tax | ( | ||||||||||||||||||||||
Provision for income tax expense (benefit) | ( | ||||||||||||||||||||||
Net income (loss) | ( | ||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | |||||||||||||||||||||||
Net income (loss) attributable to Brighthouse Financial, Inc. | ( | ||||||||||||||||||||||
Less: Preferred stock dividends | |||||||||||||||||||||||
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders | $ | $ | $ | ( | $ | ||||||||||||||||||
Comprehensive income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | |||||||||||||||||||||||
Comprehensive income (loss) attributable to Brighthouse Financial, Inc. | $ | ( | $ | ( | $ | ( | $ | ( |
Earnings per common share | |||||||||||||||||||||||
Basic | $ | $ | $ | ( | $ | ||||||||||||||||||
Diluted | $ | $ | $ | ( | $ |
Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Treasury Stock at Cost | Accumulated Other Comprehensive Income (Loss) | Brighthouse Financial, Inc.’s Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired in connection with share repurchases | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in noncontrolling interests | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of income tax | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired in connection with share repurchases | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in noncontrolling interests | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of income tax | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ |
Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Treasury Stock at Cost | Accumulated Other Comprehensive Income (Loss) | Brighthouse Financial, Inc.’s Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired in connection with share repurchases | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in noncontrolling interests | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of income tax | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired in connection with share repurchases | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in noncontrolling interests | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of income tax | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Net cash provided by (used in) operating activities | $ | ( | $ | ( | |||||||
Cash flows from investing activities | |||||||||||
Sales, maturities and repayments of: | |||||||||||
Fixed maturity securities | |||||||||||
Equity securities | |||||||||||
Mortgage loans | |||||||||||
Limited partnerships and limited liability companies | |||||||||||
Purchases of: | |||||||||||
Fixed maturity securities | ( | ( | |||||||||
Equity securities | ( | ( | |||||||||
Mortgage loans | ( | ( | |||||||||
Limited partnerships and limited liability companies | ( | ( | |||||||||
Cash received in connection with freestanding derivatives | |||||||||||
Cash paid in connection with freestanding derivatives | ( | ( | |||||||||
Net change in policy loans | ( | ( | |||||||||
Net change in short-term investments | |||||||||||
Net change in other invested assets | ( | ( | |||||||||
Net cash provided by (used in) investing activities | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Policyholder account balances: | |||||||||||
Deposits | |||||||||||
Withdrawals | ( | ( | |||||||||
Net change in payables for collateral under securities loaned and other transactions | ( | ||||||||||
Long-term debt repaid | ( | ( | |||||||||
Dividends on preferred stock | ( | ( | |||||||||
Treasury stock acquired in connection with share repurchases | ( | ( | |||||||||
Financing element on certain derivative instruments and other derivative related transactions, net | ( | ||||||||||
Other, net | ( | ( | |||||||||
Net cash provided by (used in) financing activities | |||||||||||
Change in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
Supplemental disclosures of cash flow information | |||||||||||
Net cash paid (received) for: | |||||||||||
Interest | $ | $ | |||||||||
Income tax | $ | $ | ( | ||||||||
Retained Earnings (Deficit) | AOCI | |||||||||||||
(In millions) | ||||||||||||||
Liability for future policy benefits | $ | ( | $ | ( | ||||||||||
Market risk benefits and related adjustments | ( | ( | ||||||||||||
DAC and VOBA | ||||||||||||||
Reinsurance recoverables | ( | |||||||||||||
Deferred income tax asset | ||||||||||||||
Total | $ | ( | $ | ( |
Term and Whole Life Insurance | Income Annuities | Structured Settlement and Pension Risk Transfer Annuities | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | |||||||||||||||||
Removal of related balances in AOCI | ( | ( | ||||||||||||||||||
Change in cash flow assumptions | ( | |||||||||||||||||||
Initial recognition of deferred profit liabilities | ||||||||||||||||||||
Change in discount rate assumptions | ||||||||||||||||||||
Adjusted balance at January 1, 2021 | ||||||||||||||||||||
Less: Reinsurance recoverable | ||||||||||||||||||||
Adjusted balance at January 1, 2021, net of reinsurance | $ | $ | $ |
Variable Annuities | ||||||||
(In millions) | ||||||||
Balance at December 31, 2020 | $ | |||||||
Adjustment for the difference between carrying amount and estimated fair value, except for the difference due to nonperformance risk | ||||||||
Adjustment for cumulative effect of changes in nonperformance risk since issuance | ||||||||
Adjusted balance at January 1, 2021 | ||||||||
Less: Reinsurance recoverable | ||||||||
Adjusted balance at January 1, 2021, net of reinsurance | $ |
Variable Annuities | Fixed Rate Annuities | Index-Linked Annuities | Term and Whole Life Insurance | Universal Life Insurance | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
DAC: | ||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Removal of related amounts in AOCI | ( | |||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2021 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
VOBA: | ||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Removal of related amounts in AOCI | ||||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2021 | $ | $ | $ | $ | $ |
December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||
As Previously Reported | Effect of Change | As Currently Reported | As Previously Reported | Effect of Change | As Currently Reported | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Future policy benefits | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Policyholder account balances | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Market risk benefit liabilities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total liabilities | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Retained earnings (deficit) | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total equity | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Total liabilities and equity | $ | $ | ( | $ | $ | $ | $ |
Year Ended December 31, 2022 | Year Ended December 31, 2021 | |||||||||||||||||||||||||||||||||||||
As Previously Reported | Effect of Change | As Currently Reported | As Previously Reported | Effect of Change | As Currently Reported | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Universal life and investment-type product policy fees | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Net derivative gains (losses) | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Total revenues | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Policyholder benefits and claims | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Change in market risk benefits | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
Total expenses | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | ( | $ | $ |
Three Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||
Annuities | Life | Run-off | Corporate & Other | Total | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Pre-tax adjusted earnings | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||
Provision for income tax expense (benefit) | ( | ( | ||||||||||||||||||||||||||||||
Post-tax adjusted earnings | ( | |||||||||||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | ||||||||||||||||||||||||||||||||
Less: Preferred stock dividends | ||||||||||||||||||||||||||||||||
Adjusted earnings | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Adjustments for: | ||||||||||||||||||||||||||||||||
Net investment gains (losses) | ( | |||||||||||||||||||||||||||||||
Net derivative gains (losses), excluding investment hedge adjustments of $ | ( | |||||||||||||||||||||||||||||||
Change in market risk benefits | ||||||||||||||||||||||||||||||||
Market value adjustments | ||||||||||||||||||||||||||||||||
Provision for income tax (expense) benefit | ( | |||||||||||||||||||||||||||||||
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders | $ | |||||||||||||||||||||||||||||||
Interest revenue | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Interest expense | $ | $ | $ | $ |
Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||
Annuities | Life | Run-off | Corporate & Other | Total | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Pre-tax adjusted earnings | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||
Provision for income tax expense (benefit) | ( | ( | ( | |||||||||||||||||||||||||||||
Post-tax adjusted earnings | ( | ( | ( | |||||||||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | ||||||||||||||||||||||||||||||||
Less: Preferred stock dividends | ||||||||||||||||||||||||||||||||
Adjusted earnings | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||
Adjustments for: | ||||||||||||||||||||||||||||||||
Net investment gains (losses) | ( | |||||||||||||||||||||||||||||||
Net derivative gains (losses), excluding investment hedge adjustments of $ | ( | |||||||||||||||||||||||||||||||
Change in market risk benefits | ||||||||||||||||||||||||||||||||
Market value adjustments | ||||||||||||||||||||||||||||||||
Provision for income tax (expense) benefit | ( | |||||||||||||||||||||||||||||||
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders | $ | |||||||||||||||||||||||||||||||
Interest revenue | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Interest expense | $ | $ | $ | $ |
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||
Annuities | Life | Run-off | Corporate & Other | Total | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Pre-tax adjusted earnings | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||
Provision for income tax expense (benefit) | ( | ( | ( | |||||||||||||||||||||||||||||
Post-tax adjusted earnings | ( | ( | ||||||||||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | ||||||||||||||||||||||||||||||||
Less: Preferred stock dividends | ||||||||||||||||||||||||||||||||
Adjusted earnings | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||
Adjustments for: | ||||||||||||||||||||||||||||||||
Net investment gains (losses) | ( | |||||||||||||||||||||||||||||||
Net derivative gains (losses), excluding investment hedge adjustments of $ | ( | |||||||||||||||||||||||||||||||
Change in market risk benefits | ||||||||||||||||||||||||||||||||
Market value adjustments | ||||||||||||||||||||||||||||||||
Provision for income tax (expense) benefit | ||||||||||||||||||||||||||||||||
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders | $ | ( | ||||||||||||||||||||||||||||||
Interest revenue | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Interest expense | $ | $ | $ | $ |
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||
Annuities | Life | Run-off | Corporate & Other | Total | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Pre-tax adjusted earnings | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||
Provision for income tax expense (benefit) | ( | ( | ||||||||||||||||||||||||||||||
Post-tax adjusted earnings | ( | ( | ||||||||||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | ||||||||||||||||||||||||||||||||
Less: Preferred stock dividends | ||||||||||||||||||||||||||||||||
Adjusted earnings | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||
Adjustments for: | ||||||||||||||||||||||||||||||||
Net investment gains (losses) | ( | |||||||||||||||||||||||||||||||
Net derivative gains (losses), excluding investment hedge adjustments of $ | ||||||||||||||||||||||||||||||||
Change in market risk benefits | ||||||||||||||||||||||||||||||||
Market value adjustments | ||||||||||||||||||||||||||||||||
Provision for income tax (expense) benefit | ( | |||||||||||||||||||||||||||||||
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders | $ | |||||||||||||||||||||||||||||||
Interest revenue | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Interest expense | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Annuities | $ | $ | $ | $ | ||||||||||||||||||||||
Life | ||||||||||||||||||||||||||
Run-off | ||||||||||||||||||||||||||
Corporate & Other | ||||||||||||||||||||||||||
Adjustments | ( | ( | ( | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||
(In millions) | ||||||||||||||
Annuities | $ | $ | ||||||||||||
Life | ||||||||||||||
Run-off | ||||||||||||||
Corporate & Other | ||||||||||||||
Total | $ | $ |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Term and Whole Life Insurance | Income Annuities | Structured Settlement and Pension Risk Transfer Annuities | Term and Whole Life Insurance | Income Annuities | Structured Settlement and Pension Risk Transfer Annuities | |||||||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||||||||||||
Present value of expected net premiums: | ||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Beginning balance at original discount rate | ||||||||||||||||||||||||||||||||||||||
Effect of model refinements | ||||||||||||||||||||||||||||||||||||||
Effect of changes in cash flow assumptions | ||||||||||||||||||||||||||||||||||||||
Effect of actual variances from expected experience | ( | |||||||||||||||||||||||||||||||||||||
Adjusted beginning of period balance | ||||||||||||||||||||||||||||||||||||||
Issuances | ||||||||||||||||||||||||||||||||||||||
Interest accrual | ||||||||||||||||||||||||||||||||||||||
Net premiums collected | ( | ( | ||||||||||||||||||||||||||||||||||||
Ending balance at original discount rate | ||||||||||||||||||||||||||||||||||||||
Effect of changes in discount rate assumptions | ( | ( | ||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Present value of expected future policy benefits: | ||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Beginning balance at original discount rate | ||||||||||||||||||||||||||||||||||||||
Effect of model refinements | ||||||||||||||||||||||||||||||||||||||
Effect of changes in cash flow assumptions | ||||||||||||||||||||||||||||||||||||||
Effect of actual variances from expected experience | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Adjusted beginning of period balance | ||||||||||||||||||||||||||||||||||||||
Issuances | ||||||||||||||||||||||||||||||||||||||
Interest accrual | ||||||||||||||||||||||||||||||||||||||
Benefit payments | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Ending balance at original discount rate | ||||||||||||||||||||||||||||||||||||||
Effect of changes in discount rate assumptions | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net liability for future policy benefits, end of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Less: Reinsurance recoverable, end of period | ||||||||||||||||||||||||||||||||||||||
Net liability for future policy benefits, after reinsurance recoverable | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Weighted-average duration of liability | ||||||||||||||||||||||||||||||||||||||
Weighted-average interest accretion rate | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||
Current discount rate | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||
Gross premiums or assessments recognized during period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Expected future gross premiums, undiscounted | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Expected future gross premiums, discounted | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Expected future benefit payments, undiscounted | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Expected future benefit payments, discounted | $ | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
(Dollars in millions) | ||||||||||||||
Balance, beginning of period | $ | $ | ||||||||||||
Beginning balance before the effect of unrealized gains and losses | ||||||||||||||
Effect of changes in cash flow assumptions | ( | |||||||||||||
Effect of actual variances from expected experience | ||||||||||||||
Adjusted beginning of period balance | ||||||||||||||
Interest accrual | ||||||||||||||
Net assessments collected | ||||||||||||||
Benefit payments | ( | ( | ||||||||||||
Effect of realized capital gains (losses) | ||||||||||||||
Ending balance before the effect of unrealized gains and losses | ||||||||||||||
Effect of unrealized gains and losses | ( | ( | ||||||||||||
Balance, end of period | ||||||||||||||
Less: Reinsurance recoverable, end of period | ||||||||||||||
Net additional liability, after reinsurance recoverable | $ | $ | ||||||||||||
Weighted-average duration of liability | ||||||||||||||
Weighted-average interest accretion rate | % | % | ||||||||||||
Gross assessments recognized during period | $ | $ |
September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In millions) | ||||||||||||||
Liabilities reported in the preceding rollforward tables | $ | $ | ||||||||||||
Long-term care insurance (1) | ||||||||||||||
ULSG liabilities, including liability for profits followed by losses | ||||||||||||||
Participating whole life insurance (2) | ||||||||||||||
Deferred profit liabilities | ||||||||||||||
Other | ||||||||||||||
Total liability for future policy benefits | $ | $ |
Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
Term and Whole Life Insurance | Income Annuities | Structured Settlement and Pension Risk Transfer Annuities | Term and Whole Life Insurance | Income Annuities | Structured Settlement and Pension Risk Transfer Annuities | |||||||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||||||||||||
Present value of expected net premiums: | ||||||||||||||||||||||||||||||||||||||
Balance, beginning of year | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Beginning balance at original discount rate | ||||||||||||||||||||||||||||||||||||||
Effect of model refinements | ||||||||||||||||||||||||||||||||||||||
Effect of changes in cash flow assumptions | ||||||||||||||||||||||||||||||||||||||
Effect of actual variances from expected experience | ||||||||||||||||||||||||||||||||||||||
Adjusted beginning of year balance | ||||||||||||||||||||||||||||||||||||||
Issuances | ||||||||||||||||||||||||||||||||||||||
Interest accrual | ||||||||||||||||||||||||||||||||||||||
Net premiums collected | ( | ( | ||||||||||||||||||||||||||||||||||||
Ending balance at original discount rate | ||||||||||||||||||||||||||||||||||||||
Effect of changes in discount rate assumptions | ( | |||||||||||||||||||||||||||||||||||||
Balance, end of year | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Present value of expected future policy benefits: | ||||||||||||||||||||||||||||||||||||||
Balance, beginning of year | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Beginning balance at original discount rate | ||||||||||||||||||||||||||||||||||||||
Effect of model refinements | ( | |||||||||||||||||||||||||||||||||||||
Effect of changes in cash flow assumptions | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Effect of actual variances from expected experience | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Adjusted beginning of year balance | ||||||||||||||||||||||||||||||||||||||
Issuances | ||||||||||||||||||||||||||||||||||||||
Interest accrual | ||||||||||||||||||||||||||||||||||||||
Benefit payments | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Ending balance at original discount rate | ||||||||||||||||||||||||||||||||||||||
Effect of changes in discount rate assumptions | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Balance, end of year | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net liability for future policy benefits, end of year | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Less: Reinsurance recoverable, end of year | ||||||||||||||||||||||||||||||||||||||
Net liability for future policy benefits, after reinsurance recoverable | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Universal Life Insurance | Variable Annuities (1) | Index-linked Annuities | Fixed Rate Annuities | ULSG | Company-Owned Life Insurance (1) | |||||||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Premiums and deposits | ||||||||||||||||||||||||||||||||||||||
Surrenders and withdrawals | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
Benefit payments | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Net transfers from (to) separate account | ||||||||||||||||||||||||||||||||||||||
Interest credited | ||||||||||||||||||||||||||||||||||||||
Policy charges | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
Changes related to embedded derivatives | ||||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Weighted-average crediting rate (2) | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Premiums and deposits | ||||||||||||||||||||||||||||||||||||||
Surrenders and withdrawals | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
Benefit payments | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Net transfers from (to) separate account | ( | |||||||||||||||||||||||||||||||||||||
Interest credited | ||||||||||||||||||||||||||||||||||||||
Policy charges | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
Changes related to embedded derivatives | ( | |||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Weighted-average crediting rate (2) | % | % | % | % | % | % |
September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In millions) | ||||||||||||||
Policyholder account balances reported in the preceding rollforward table | $ | $ | ||||||||||||
Funding agreements classified as investment contracts | ||||||||||||||
Other investment contract liabilities | ||||||||||||||
Total policyholder account balances | $ | $ |
Range of Guaranteed Minimum Crediting Rate | At Guaranteed Minimum | 1 to 50 Basis Points Above | 51 to 150 Basis Points Above | Greater than 150 Basis Points Above | Total | |||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||
Annuities (1): | ||||||||||||||||||||||||||||||||
Less than 2.00% | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2.00% to 3.99% | ||||||||||||||||||||||||||||||||
Greater than 3.99% | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Life insurance (2) (3): | ||||||||||||||||||||||||||||||||
Less than 2.00% | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2.00% to 3.99% | ||||||||||||||||||||||||||||||||
Greater than 3.99% | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
ULSG (3): | ||||||||||||||||||||||||||||||||
Less than 2.00% | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2.00% to 3.99% | ||||||||||||||||||||||||||||||||
Greater than 3.99% | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Annuities (1): | ||||||||||||||||||||||||||||||||
Less than 2.00% | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2.00% to 3.99% | ||||||||||||||||||||||||||||||||
Greater than 3.99% | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Life insurance (2) (3): | ||||||||||||||||||||||||||||||||
Less than 2.00% | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2.00% to 3.99% | ||||||||||||||||||||||||||||||||
Greater than 3.99% | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
ULSG (3): | ||||||||||||||||||||||||||||||||
Less than 2.00% | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2.00% to 3.99% | ||||||||||||||||||||||||||||||||
Greater than 3.99% | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | Years Ended December 31, | |||||||||||||||||||||||||
2023 | 2022 | 2022 | 2021 | |||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Balance, beginning of period, before effect of changes in nonperformance risk | ||||||||||||||||||||||||||
Decrements | ( | ( | ||||||||||||||||||||||||
Effect of changes in future expected assumptions | ||||||||||||||||||||||||||
Effect of actual different from expected experience | ( | ( | ( | |||||||||||||||||||||||
Effect of changes in interest rates | ( | ( | ( | ( | ||||||||||||||||||||||
Effect of changes in fund returns | ( | ( | ||||||||||||||||||||||||
Issuances | ( | ( | ( | ( | ||||||||||||||||||||||
Effect of changes in risk margin | ( | ( | ( | ( | ||||||||||||||||||||||
Aging of the block and other | ||||||||||||||||||||||||||
Balance, end of period, before effect of changes in nonperformance risk | ||||||||||||||||||||||||||
Effect of changes in nonperformance risk | ||||||||||||||||||||||||||
Balance, end of period | ||||||||||||||||||||||||||
Less: Reinsurance recoverable, end of period | ||||||||||||||||||||||||||
Balance, end of period, net of reinsurance (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted-average attained age of contract holder |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Variable Annuities | Universal Life Insurance | Company-Owned Life Insurance | Variable Annuities | Universal Life Insurance | Company-Owned Life Insurance | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Premiums and deposits | ||||||||||||||||||||||||||||||||||||||
Surrenders and withdrawals | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Benefit payments | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Investment performance | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Policy charges | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Net transfers from (to) general account | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Other | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ |
September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In millions) | ||||||||||||||
Separate account liabilities reported in the preceding rollforward table | $ | $ | ||||||||||||
Variable income annuities | ||||||||||||||
Pension risk transfer annuities | ||||||||||||||
Total separate account liabilities | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||
(In millions) | ||||||||||||||
Equity securities | $ | $ | ||||||||||||
Fixed maturity securities | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Other assets | ||||||||||||||
Total aggregate estimated fair value of assets | $ | $ |
Universal Life Insurance | Variable Annuities | Index-linked Annuities | Fixed Rate Annuities | ULSG | Company-Owned Life Insurance | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Account balances reported in the preceding rollforward tables: | ||||||||||||||||||||||||||||||||||||||
Policyholder account balances | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Separate account liabilities | ||||||||||||||||||||||||||||||||||||||
Total account balances | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net amount at risk | $ | $ | N/A | N/A | $ | $ | ||||||||||||||||||||||||||||||||
Cash surrender value | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Account balances reported in the preceding rollforward tables: | ||||||||||||||||||||||||||||||||||||||
Policyholder account balances | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Separate account liabilities | ||||||||||||||||||||||||||||||||||||||
Total account balances | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net amount at risk | $ | $ | N/A | N/A | $ | $ | ||||||||||||||||||||||||||||||||
Cash surrender value | $ | $ | $ | $ | $ | $ |
Variable Annuities | Fixed Rate Annuities | Index-linked Annuities | Term and Whole Life Insurance | Universal Life Insurance | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||
DAC: | ||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Capitalization | ||||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Balance, end of period | ||||||||||||||||||||||||||||||||
VOBA: | ||||||||||||||||||||||||||||||||
Balance, beginning of period | ||||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Balance, end of period | ||||||||||||||||||||||||||||||||
Total DAC and VOBA: | ||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||
DAC: | ||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Capitalization | ||||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Balance, end of period | ||||||||||||||||||||||||||||||||
VOBA: | ||||||||||||||||||||||||||||||||
Balance, beginning of period | ||||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Balance, end of period | ||||||||||||||||||||||||||||||||
Total DAC and VOBA: | ||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ |
Variable Annuities | Fixed Rate Annuities | Index-linked Annuities | Term and Whole Life Insurance | Universal Life Insurance | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
DAC: | ||||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2021 (1) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Capitalization | ( | |||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Balance at December 31, 2021 | ||||||||||||||||||||||||||||||||
Capitalization | ( | |||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
VOBA: | ||||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2021 (1) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Balance at December 31, 2021 | ||||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Balance at December 31, 2022 | ||||||||||||||||||||||||||||||||
Total DAC and VOBA: | ||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Variable Annuities | Fixed Rate Annuities | Variable Annuities | Fixed Rate Annuities | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Universal Life Insurance | ULSG | Variable Annuities | Universal Life Insurance | ULSG | Variable Annuities | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Capitalization | ||||||||||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost | Allowance for Credit Losses | Gross Unrealized | Estimated Fair Value | Amortized Cost | Allowance for Credit Losses | Gross Unrealized | Estimated Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Gains | Losses | Gains | Losses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. corporate | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign corporate | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government and agency | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMBS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CMBS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ABS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivision | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign government | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Due in One Year or Less | Due After One Year Through Five Years | Due After Five Years Through Ten Years | Due After Ten Years | Structured Securities (1) | Total Fixed Maturity Securities | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Amortized cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Estimated fair value | $ | $ | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | Less than 12 Months | 12 Months or Greater | ||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. corporate | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Foreign corporate | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. government and agency | |||||||||||||||||||||||||||||||||||||||||||||||
RMBS | |||||||||||||||||||||||||||||||||||||||||||||||
CMBS | |||||||||||||||||||||||||||||||||||||||||||||||
ABS | |||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivision | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign government | |||||||||||||||||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Total number of securities in an unrealized loss position |
U.S. Corporate | RMBS | Foreign Corporate | CMBS | Total | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Allowance on securities where credit losses were not previously recorded | ||||||||||||||||||||||||||||||||
Reductions for securities sold | ( | ( | ( | |||||||||||||||||||||||||||||
Change in allowance on securities with an allowance recorded in a previous period | ||||||||||||||||||||||||||||||||
Write-offs charged against allowance (1) | ( | ( | ||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Allowance on securities where credit losses were not previously recorded | ||||||||||||||||||||||||||||||||
Reductions for securities sold | ( | ( | ||||||||||||||||||||||||||||||
Change in allowance on securities with an allowance recorded in a previous period | ||||||||||||||||||||||||||||||||
Write-offs charged against allowance (1) | ( | ( | ||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Carrying Value | % of Total | Carrying Value | % of Total | ||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
Commercial | $ | % | $ | % | |||||||||||||||||||
Agricultural | |||||||||||||||||||||||
Residential | |||||||||||||||||||||||
Total mortgage loans (1) | |||||||||||||||||||||||
Allowance for credit losses | ( | ( | ( | ( | |||||||||||||||||||
Total mortgage loans, net | $ | % | $ | % |
Commercial | Agricultural | Residential | Total | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Nine Months Ended September 30, 2023 | |||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Current period provision | |||||||||||||||||||||||
Charge-offs, net of recoveries | ( | ( | ( | ||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | |||||||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Current period provision | ( | ( | |||||||||||||||||||||
Charge-offs, net of recoveries | ( | ( | |||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ |
2023 | 2022 | 2021 | 2020 | 2019 | Prior | Total | |||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||||||
September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
Commercial mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Loan-to-value ratios: | |||||||||||||||||||||||||||||||||||||||||
Less than 65% | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
65% to 75% | |||||||||||||||||||||||||||||||||||||||||
76% to 80% | |||||||||||||||||||||||||||||||||||||||||
Greater than 80% | |||||||||||||||||||||||||||||||||||||||||
Total commercial mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Agricultural mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Loan-to-value ratios: | |||||||||||||||||||||||||||||||||||||||||
Less than 65% | |||||||||||||||||||||||||||||||||||||||||
65% to 75% | |||||||||||||||||||||||||||||||||||||||||
Greater than 80% | |||||||||||||||||||||||||||||||||||||||||
Total agricultural mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Performing | |||||||||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||
Total residential mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
2022 | 2021 | 2020 | 2019 | 2018 | Prior | Total | |||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||
Commercial mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Loan-to-value ratios: | |||||||||||||||||||||||||||||||||||||||||
Less than 65% | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
65% to 75% | |||||||||||||||||||||||||||||||||||||||||
76% to 80% | |||||||||||||||||||||||||||||||||||||||||
Greater than 80% | |||||||||||||||||||||||||||||||||||||||||
Total commercial mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Agricultural mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Loan-to-value ratios: | |||||||||||||||||||||||||||||||||||||||||
Less than 65% | |||||||||||||||||||||||||||||||||||||||||
65% to 75% | |||||||||||||||||||||||||||||||||||||||||
Greater than 80% | |||||||||||||||||||||||||||||||||||||||||
Total agricultural mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Performing | |||||||||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||
Total residential mortgage loans | |||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Amortized Cost | % of Total | Amortized Cost | % of Total | ||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
Debt-service coverage ratios: | |||||||||||||||||||||||
Greater than 1.20x | $ | % | $ | % | |||||||||||||||||||
1.00x - 1.20x | |||||||||||||||||||||||
Less than 1.00x | |||||||||||||||||||||||
Total | $ | % | $ | % |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Commercial | Agricultural | Residential | Total | Commercial | Agricultural | Residential | Total | ||||||||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Current | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
30-59 days past due | |||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | |||||||||||||||||||||||||||||||||||||||||||||||
90-179 days past due | |||||||||||||||||||||||||||||||||||||||||||||||
180+ days past due | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial | Agricultural | Residential (1) | Total | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
September 30, 2023 | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2022 | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
(In millions) | |||||||||||
Fixed maturity securities | $ | ( | $ | ( | |||||||
Derivatives | |||||||||||
Other | ( | ||||||||||
Subtotal | ( | ( | |||||||||
Amounts allocated from: | |||||||||||
Future policy benefits | |||||||||||
Deferred income tax benefit (expense) | |||||||||||
Net unrealized investment gains (losses) | $ | ( | $ | ( |
Nine Months Ended September 30, 2023 | |||||
(In millions) | |||||
Balance at December 31, 2022 | $ | ( | |||
Unrealized investment gains (losses) during the period | ( | ||||
Unrealized investment gains (losses) relating to: | |||||
Future policy benefits | |||||
Deferred income tax benefit (expense) | |||||
Balance at September 30, 2023 | $ | ( | |||
Change in net unrealized investment gains (losses) | $ | ( |
September 30, 2023 | December 31, 2022 | ||||||||||
(In millions) | |||||||||||
Securities on loan: (1) | |||||||||||
Amortized cost | $ | $ | |||||||||
Estimated fair value | $ | $ | |||||||||
Cash collateral received from counterparties (2) | $ | $ | |||||||||
Reinvestment portfolio — estimated fair value | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Open (1) | 1 Month or Less | 1 to 6 Months | Total | Open (1) | 1 Month or Less | 1 to 6 Months | Total | ||||||||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. government and agency | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
U.S. corporate | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign corporate | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign government | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
(In millions) | |||||||||||
Invested assets on deposit (regulatory deposits) (1) | $ | $ | |||||||||
Invested assets held in trust (reinsurance agreements) (2) | |||||||||||
Invested assets pledged as collateral (3) | |||||||||||
Total invested assets on deposit, held in trust and pledged as collateral | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Carrying Amount | Maximum Exposure to Loss | Carrying Amount | Maximum Exposure to Loss | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Fixed maturity securities | $ | $ | $ | $ | |||||||||||||||||||
Limited partnerships and LLCs | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Investment income: | |||||||||||||||||||||||
Fixed maturity securities | $ | $ | $ | $ | |||||||||||||||||||
Equity securities | |||||||||||||||||||||||
Mortgage loans | |||||||||||||||||||||||
Policy loans | |||||||||||||||||||||||
Limited partnerships and LLCs (1) | ( | ||||||||||||||||||||||
Cash, cash equivalents and short-term investments | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total investment income | |||||||||||||||||||||||
Less: Investment expenses | |||||||||||||||||||||||
Net investment income | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Fixed maturity securities | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Equity securities | ( | ( | ( | ( | |||||||||||||||||||
Mortgage loans | ( | ( | |||||||||||||||||||||
Limited partnerships and LLCs | ( | ( | |||||||||||||||||||||
Other | ( | ( | ( | ( | |||||||||||||||||||
Total net investment gains (losses) | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Proceeds | $ | $ | $ | $ | |||||||||||||||||||
Gross investment gains | $ | $ | $ | $ | |||||||||||||||||||
Gross investment losses | ( | ( | ( | ( | |||||||||||||||||||
Net investment gains (losses) | $ | ( | $ | ( | $ | ( | $ | ( |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||
Primary Underlying Risk Exposure | Gross Notional Amount | Estimated Fair Value | Gross Notional Amount | Estimated Fair Value | |||||||||||||||||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||||||
Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||||||||||||||||||
Interest rate forwards | Interest rate | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Foreign currency swaps | Foreign currency exchange rate | ||||||||||||||||||||||||||||||||||||||||
Total qualifying hedges | |||||||||||||||||||||||||||||||||||||||||
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | |||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Interest rate | ||||||||||||||||||||||||||||||||||||||||
Interest rate floors | Interest rate | ||||||||||||||||||||||||||||||||||||||||
Interest rate caps | Interest rate | ||||||||||||||||||||||||||||||||||||||||
Interest rate options | Interest rate | ||||||||||||||||||||||||||||||||||||||||
Interest rate forwards | Interest rate | ||||||||||||||||||||||||||||||||||||||||
Foreign currency swaps | Foreign currency exchange rate | ||||||||||||||||||||||||||||||||||||||||
Foreign currency forwards | Foreign currency exchange rate | ||||||||||||||||||||||||||||||||||||||||
Credit default swaps — written | Credit | ||||||||||||||||||||||||||||||||||||||||
Credit default swaptions | Credit | ||||||||||||||||||||||||||||||||||||||||
Equity index options | Equity market | ||||||||||||||||||||||||||||||||||||||||
Equity total return swaps | Equity market | ||||||||||||||||||||||||||||||||||||||||
Hybrid options | Equity market | ||||||||||||||||||||||||||||||||||||||||
Total non-designated or non-qualifying derivatives | |||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Net Derivative Gains (Losses) Recognized for Derivatives | Net Derivative Gains (Losses) Recognized for Hedged Items | Net Investment Income | Amount of Gains (Losses) Deferred in AOCI | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Three Months Ended September 30, 2023 | |||||||||||||||||||||||
Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||
Interest rate | $ | $ | $ | $ | ( | ||||||||||||||||||
Foreign currency exchange rate | ( | ( | |||||||||||||||||||||
Total cash flow hedges | ( | ( | |||||||||||||||||||||
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | |||||||||||||||||||||||
Interest rate | ( | ||||||||||||||||||||||
Foreign currency exchange rate | ( | ||||||||||||||||||||||
Credit | |||||||||||||||||||||||
Equity market | ( | ||||||||||||||||||||||
Embedded | |||||||||||||||||||||||
Total non-qualifying hedges | ( | ( | |||||||||||||||||||||
Total | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Three Months Ended September 30, 2022 | |||||||||||||||||||||||
Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||
Interest rate | $ | $ | $ | $ | ( | ||||||||||||||||||
Foreign currency exchange rate | ( | ||||||||||||||||||||||
Total cash flow hedges | ( | ||||||||||||||||||||||
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | |||||||||||||||||||||||
Interest rate | ( | ||||||||||||||||||||||
Foreign currency exchange rate | ( | ||||||||||||||||||||||
Credit | |||||||||||||||||||||||
Equity market | |||||||||||||||||||||||
Embedded | |||||||||||||||||||||||
Total non-qualifying hedges | ( | ( | |||||||||||||||||||||
Total | $ | ( | $ | ( | $ | $ |
Net Derivative Gains (Losses) Recognized for Derivatives | Net Derivative Gains (Losses) Recognized for Hedged Items | Net Investment Income | Amount of Gains (Losses) Deferred in AOCI | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Nine Months Ended September 30, 2023 | |||||||||||||||||||||||
Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||
Interest rate | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Foreign currency exchange rate | ( | ( | |||||||||||||||||||||
Total cash flow hedges | ( | ( | |||||||||||||||||||||
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | |||||||||||||||||||||||
Interest rate | ( | ||||||||||||||||||||||
Foreign currency exchange rate | ( | ||||||||||||||||||||||
Credit | |||||||||||||||||||||||
Equity market | |||||||||||||||||||||||
Embedded | ( | ||||||||||||||||||||||
Total non-qualifying hedges | ( | ( | |||||||||||||||||||||
Total | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||
Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||
Interest rate | $ | $ | $ | $ | ( | ||||||||||||||||||
Foreign currency exchange rate | ( | ||||||||||||||||||||||
Total cash flow hedges | ( | ||||||||||||||||||||||
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | |||||||||||||||||||||||
Interest rate | ( | ||||||||||||||||||||||
Foreign currency exchange rate | ( | ||||||||||||||||||||||
Credit | ( | ||||||||||||||||||||||
Equity market | |||||||||||||||||||||||
Embedded | |||||||||||||||||||||||
Total non-qualifying hedges | ( | ||||||||||||||||||||||
Total | $ | $ | ( | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
Rating Agency Designation of Referenced Credit Obligations (1) | Estimated Fair Value of Credit Default Swaps | Maximum Amount of Future Payments under Credit Default Swaps | Weighted Average Years to Maturity (2) | Estimated Fair Value of Credit Default Swaps | Maximum Amount of Future Payments under Credit Default Swaps | Weighted Average Years to Maturity (2) | ||||||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||||||||||||
Aaa/Aa/A | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Baa | ||||||||||||||||||||||||||||||||||||||
Ba | ||||||||||||||||||||||||||||||||||||||
Caa and Lower | ( | ( | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Gross Amounts Not Offset on the Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||||||||
Gross Amount Recognized | Financial Instruments (1) | Collateral Received/Pledged (2) | Net Amount | Securities Collateral Received/Pledged (3) | Net Amount After Securities Collateral | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Derivative assets | $ | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Derivative liabilities | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Derivative assets | $ | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Derivative liabilities | $ | $ | ( | $ | ( | $ | $ | ( | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||
(In millions) | ||||||||||||||
Estimated fair value of derivatives in a net liability position (1) | $ | $ | ||||||||||||
Estimated fair value of collateral provided (2): | ||||||||||||||
Fixed maturity securities | $ | $ | ||||||||||||
September 30, 2023 | |||||||||||||||||||||||
Fair Value Hierarchy | Total Estimated Fair Value | ||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||
U.S. corporate | $ | $ | $ | $ | |||||||||||||||||||
Foreign corporate | |||||||||||||||||||||||
U.S. government and agency | |||||||||||||||||||||||
RMBS | |||||||||||||||||||||||
CMBS | |||||||||||||||||||||||
ABS | |||||||||||||||||||||||
State and political subdivision | |||||||||||||||||||||||
Foreign government | |||||||||||||||||||||||
Total fixed maturity securities | |||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||
Short-term investments | |||||||||||||||||||||||
Derivative assets: (1) | |||||||||||||||||||||||
Interest rate | |||||||||||||||||||||||
Foreign currency exchange rate | |||||||||||||||||||||||
Credit | |||||||||||||||||||||||
Equity market | |||||||||||||||||||||||
Total derivative assets | |||||||||||||||||||||||
Market risk benefit assets | |||||||||||||||||||||||
Separate account assets | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Market risk benefit liabilities | $ | $ | $ | $ | |||||||||||||||||||
Derivative liabilities: (1) | |||||||||||||||||||||||
Interest rate | |||||||||||||||||||||||
Foreign currency exchange rate | |||||||||||||||||||||||
Credit | |||||||||||||||||||||||
Equity market | |||||||||||||||||||||||
Total derivative liabilities | |||||||||||||||||||||||
Embedded derivatives on index-linked annuities (2) | |||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||
Fair Value Hierarchy | Total Estimated Fair Value | ||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||
U.S. corporate | $ | $ | $ | $ | |||||||||||||||||||
Foreign corporate | |||||||||||||||||||||||
U.S. government and agency | |||||||||||||||||||||||
RMBS | |||||||||||||||||||||||
CMBS | |||||||||||||||||||||||
ABS | |||||||||||||||||||||||
State and political subdivision | |||||||||||||||||||||||
Foreign government | |||||||||||||||||||||||
Total fixed maturity securities | |||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||
Short-term investments | |||||||||||||||||||||||
Derivative assets: (1) | |||||||||||||||||||||||
Interest rate | |||||||||||||||||||||||
Foreign currency exchange rate | |||||||||||||||||||||||
Credit | |||||||||||||||||||||||
Equity market | |||||||||||||||||||||||
Total derivative assets | |||||||||||||||||||||||
Market risk benefit assets | |||||||||||||||||||||||
Separate account assets | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Market risk benefit liabilities | $ | $ | $ | $ | |||||||||||||||||||
Derivative liabilities: (1) | |||||||||||||||||||||||
Interest rate | |||||||||||||||||||||||
Foreign currency exchange rate | |||||||||||||||||||||||
Credit | |||||||||||||||||||||||
Equity market | |||||||||||||||||||||||
Total derivative liabilities | |||||||||||||||||||||||
Embedded derivatives on index-linked annuities (2) | |||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | Impact of Increase in Input on Estimated Fair Value | |||||||||||||||||||||||||||||||||||||||||||||
Valuation Techniques | Significant Unobservable Inputs | Range | Range | ||||||||||||||||||||||||||||||||||||||||||||
Market Risk Benefits | |||||||||||||||||||||||||||||||||||||||||||||||
Variable annuity guaranteed minimum benefits | • | Option pricing techniques | • | Mortality rates | - | - | Decrease (1) | ||||||||||||||||||||||||||||||||||||||||
• | Lapse rates | - | - | Decrease (2) | |||||||||||||||||||||||||||||||||||||||||||
• | Utilization rates | - | - | Increase (3) | |||||||||||||||||||||||||||||||||||||||||||
• | Withdrawal rates | - | - | (4) | |||||||||||||||||||||||||||||||||||||||||||
• | Long-term equity volatilities | - | - | Increase (5) | |||||||||||||||||||||||||||||||||||||||||||
• | Nonperformance risk spread | - | ( | - | Decrease (6) | ||||||||||||||||||||||||||||||||||||||||||
Embedded Derivatives | |||||||||||||||||||||||||||||||||||||||||||||||
Index-linked annuity crediting rates | • | Option pricing techniques | • | Mortality rates | - | - | Decrease (1) | ||||||||||||||||||||||||||||||||||||||||
• | Lapse rates | - | - | Decrease (2) | |||||||||||||||||||||||||||||||||||||||||||
• | Withdrawal rates | - | - | (4) | |||||||||||||||||||||||||||||||||||||||||||
• | Nonperformance risk spread | - | - | Decrease (6) |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||||||||||
Fixed Maturity Securities | ||||||||||||||||||||||||||||||||||||||||||||
Corporate (1) | Structured Securities | Foreign Government | Equity Securities | Short-term Investments | Net Derivatives (2) | Embedded Derivatives on Index-Linked Annuities | ||||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) | ( | |||||||||||||||||||||||||||||||||||||||||||
Total realized/unrealized gains (losses) included in AOCI | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Purchases (5) | ||||||||||||||||||||||||||||||||||||||||||||
Sales (5) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Issuances (5) | ||||||||||||||||||||||||||||||||||||||||||||
Settlements (5) | ( | |||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3 (6) | ||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 (6) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) | ||||||||||||||||||||||||||||||||||||||||||||
Total realized/unrealized gains (losses) included in AOCI | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Purchases (5) | ||||||||||||||||||||||||||||||||||||||||||||
Sales (5) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Issuances (5) | ||||||||||||||||||||||||||||||||||||||||||||
Settlements (5) | ( | |||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3 (6) | ||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 (6) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2023 (7) | $ | ( | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
Changes in unrealized gains (losses) included in OCI for the instruments still held as of September 30, 2023 (7) | $ | ( | $ | ( | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2022 (7) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Changes in unrealized gains (losses) included in OCI for the instruments still held as of September 30, 2022 (7) | $ | ( | $ | ( | $ | ( | $ | $ | $ | $ |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||||||||||
Fixed Maturity Securities | ||||||||||||||||||||||||||||||||||||||||||||
Corporate (1) | Structured Securities | Foreign Government | Equity Securities | Short-term Investments | Net Derivatives (2) | Embedded Derivatives on Index-Linked Annuities | ||||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Total realized/unrealized gains (losses) included in AOCI | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Purchases (5) | ||||||||||||||||||||||||||||||||||||||||||||
Sales (5) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Issuances (5) | ||||||||||||||||||||||||||||||||||||||||||||
Settlements (5) | ( | |||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3 (6) | ||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 (6) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Total realized/unrealized gains (losses) included in AOCI | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Purchases (5) | ||||||||||||||||||||||||||||||||||||||||||||
Sales (5) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Issuances (5) | ||||||||||||||||||||||||||||||||||||||||||||
Settlements (5) | ||||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3 (6) | ||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 (6) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2023 (7) | $ | ( | $ | $ | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
Changes in unrealized gains (losses) included in OCI for the instruments still held as of September 30, 2023 (7) | $ | ( | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2022 (7) | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Changes in unrealized gains (losses) included in OCI for the instruments still held as of September 30, 2022 (7) | $ | ( | $ | ( | $ | ( | $ | $ | $ | $ |
September 30, 2023 | |||||||||||||||||||||||||||||
Fair Value Hierarchy | |||||||||||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | |||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Mortgage loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Policy loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Other invested assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Premiums, reinsurance and other receivables | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Policyholder account balances | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Long-term debt | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Other liabilities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Separate account liabilities | $ | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||||||||
Fair Value Hierarchy | |||||||||||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | |||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Mortgage loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Policy loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Other invested assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Premiums, reinsurance and other receivables | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Policyholder account balances | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Long-term debt | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Other liabilities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Separate account liabilities | $ | $ | $ | $ | $ |
Shares Authorized | Shares Issued | Shares Outstanding | ||||||||||||||||||
Not designated | ||||||||||||||||||||
Total |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Series | Per Share | Aggregate | Per Share | Aggregate | Per Share | Aggregate | Per Share | Aggregate | ||||||||||||||||||||||||||||||||||||||||||
(In millions, except per share data) | (In millions, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||||
A | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
B | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
C | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
D | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Unrealized Investment Gains (Losses), Net of Related Offsets (1) | Unrealized Gains (Losses) on Derivatives | Changes in Nonperformance Risk on Market Risk Benefits | Changes in Discount Rates on the Liability for Future Policy Benefits | Other (2) | Total | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | ( | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
OCI before reclassifications | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Deferred income tax benefit (expense) (3) | ( | ( | ||||||||||||||||||||||||||||||||||||
AOCI before reclassifications, net of income tax | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | ( | ( | ||||||||||||||||||||||||||||||||||||
Deferred income tax benefit (expense) (3) | ( | ( | ||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI, net of income tax | ( | ( | ||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | ( | $ | $ | ( | $ | $ | ( | $ | ( |
Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Unrealized Investment Gains (Losses), Net of Related Offsets (1) | Unrealized Gains (Losses) on Derivatives | Changes in Nonperformance Risk on Market Risk Benefits | Changes in Discount Rates on the Liability for Future Policy Benefits | Other (2) | Total | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | ( | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
OCI before reclassifications | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Deferred income tax benefit (expense) (3) | ( | ( | ( | |||||||||||||||||||||||||||||||||||
AOCI before reclassifications, net of income tax | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | ( | |||||||||||||||||||||||||||||||||||||
Deferred income tax benefit (expense) (3) | ( | ( | ||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI, net of income tax | ( | |||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | ( | $ | $ | ( | $ | $ | ( | $ | ( |
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Unrealized Investment Gains (Losses), Net of Related Offsets (1) | Unrealized Gains (Losses) on Derivatives | Changes in Nonperformance Risk on Market Risk Benefits | Changes in Discount Rates on the Liability for Future Policy Benefits | Other (2) | Total | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | ( | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
OCI before reclassifications | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Deferred income tax benefit (expense) (3) | ( | ( | ||||||||||||||||||||||||||||||||||||
AOCI before reclassifications, net of income tax | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | ( | |||||||||||||||||||||||||||||||||||||
Deferred income tax benefit (expense) (3) | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI, net of income tax | ( | |||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | ( | $ | $ | ( | $ | $ | ( | $ | ( |
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Unrealized Investment Gains (Losses), Net of Related Offsets (1) | Unrealized Gains (Losses) on Derivatives | Changes in Nonperformance Risk on Market Risk Benefits | Changes in Discount Rates on the Liability for Future Policy Benefits | Other (2) | Total | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
OCI before reclassifications | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Deferred income tax benefit (expense) (3) | ( | ( | ( | |||||||||||||||||||||||||||||||||||
AOCI before reclassifications, net of income tax | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | ( | |||||||||||||||||||||||||||||||||||||
Deferred income tax benefit (expense) (3) | ( | ( | ||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI, net of income tax | ( | |||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | ( | $ | $ | ( | $ | $ | ( | $ | ( |
AOCI Components | Amounts Reclassified from AOCI | Consolidated Statements of Operations and Comprehensive Income (Loss) Locations | ||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Net unrealized investment gains (losses): | ||||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | $ | ( | $ | ( | $ | ( | $ | ( | Net investment gains (losses) | |||||||||||||||||||||||
Net unrealized investment gains (losses) | ( | ( | ( | ( | Net derivative gains (losses) | |||||||||||||||||||||||||||
Net unrealized investment gains (losses), before income tax | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Income tax (expense) benefit | ||||||||||||||||||||||||||||||||
Net unrealized investment gains (losses), net of income tax | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Unrealized gains (losses) on derivatives - cash flow hedges: | ||||||||||||||||||||||||||||||||
Interest rate swaps | ( | Net derivative gains (losses) | ||||||||||||||||||||||||||||||
Interest rate swaps | Net investment income | |||||||||||||||||||||||||||||||
Foreign currency swaps | Net derivative gains (losses) | |||||||||||||||||||||||||||||||
Gains (losses) on cash flow hedges, before income tax | ||||||||||||||||||||||||||||||||
Income tax (expense) benefit | ( | ( | ( | |||||||||||||||||||||||||||||
Gains (losses) on cash flow hedges, net of income tax | ||||||||||||||||||||||||||||||||
Defined benefit plans adjustment: | ||||||||||||||||||||||||||||||||
Amortization of net actuarial gains (losses) | ( | ( | ||||||||||||||||||||||||||||||
Amortization of defined benefit plans, before income tax | ( | ( | ||||||||||||||||||||||||||||||
Income tax (expense) benefit | ||||||||||||||||||||||||||||||||
Amortization of defined benefit plans, net of income tax | ( | ( | ||||||||||||||||||||||||||||||
Total reclassifications, net of income tax | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Compensation | $ | $ | $ | $ | |||||||||||||||||||
Contracted services and other labor costs | |||||||||||||||||||||||
Transition services agreements | |||||||||||||||||||||||
Establishment costs | |||||||||||||||||||||||
Premium and other taxes, licenses and fees | |||||||||||||||||||||||
Separate account fees | |||||||||||||||||||||||
Volume related costs, excluding compensation, net of DAC capitalization | |||||||||||||||||||||||
Interest expense on debt | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total other expenses | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions, except share and per share data) | ||||||||||||||||||||||||||
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders | $ | $ | $ | ( | $ | |||||||||||||||||||||
Weighted average common shares outstanding — basic | ||||||||||||||||||||||||||
Dilutive effect of share-based awards | ||||||||||||||||||||||||||
Weighted average common shares outstanding — diluted | ||||||||||||||||||||||||||
Earnings per common share: | ||||||||||||||||||||||||||
Basic | $ | $ | $ | ( | $ | |||||||||||||||||||||
Diluted | $ | $ | $ | ( | $ |
Page | |||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Income (loss) available to shareholders before provision for income tax | $ | 562 | $ | 485 | $ | (381) | $ | 4,610 | ||||||||||||||||||
Less: Provision for income tax expense (benefit) | 109 | 97 | (109) | 945 | ||||||||||||||||||||||
Net income (loss) available to shareholders (1) | $ | 453 | $ | 388 | $ | (272) | $ | 3,665 | ||||||||||||||||||
Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends | $ | 401 | $ | 141 | $ | 965 | $ | 781 | ||||||||||||||||||
Less: Provision for income tax expense (benefit) | 75 | 26 | 173 | 142 | ||||||||||||||||||||||
Adjusted earnings | $ | 326 | $ | 115 | $ | 792 | $ | 639 |
Component of Adjusted Earnings | How Derived from GAAP (1) | ||||||||||
(i) | Fee income | (i) | Universal life and investment-type product policy fees plus Other revenues. | ||||||||
(ii) | Net investment spread | (ii) | Net investment income plus Investment Hedge Adjustments reduced by Interest credited to policyholder account balances (excluding Market Value Adjustments) and interest on future policy benefits. | ||||||||
(iii) | Insurance-related activities | (iii) | Premiums less Policyholder benefits and claims, excluding interest on future policy benefits. | ||||||||
(iv) | Amortization of DAC and VOBA | (iv) | Amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”). | ||||||||
(v) | Other expenses | (v) | Other expenses. | ||||||||
(vi) | Provision for income tax expense (benefit) | (vi) | Tax impact of the above items, calculated using the statutory tax rate of 21%, net of impacts related to the dividends received deduction, tax credits and current period non-recurring items. |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In millions) | ||||||||||||||
Market risk benefits | $ | (251) | $ | (210) | ||||||||||
Included in pre-tax adjusted earnings: | ||||||||||||||
Other annuity business | 15 | (69) | ||||||||||||
Life business | (90) | (20) | ||||||||||||
Run-off | 119 | 162 | ||||||||||||
Total included in pre-tax adjusted earnings | 44 | 73 | ||||||||||||
Total impact on income (loss) available to shareholders before provision for income tax | $ | (207) | $ | (137) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Premiums | $ | 194 | $ | 162 | $ | 602 | $ | 495 | ||||||||||||||||||
Universal life and investment-type product policy fees | 542 | 597 | 1,749 | 1,886 | ||||||||||||||||||||||
Net investment income | 1,202 | 877 | 3,457 | 3,089 | ||||||||||||||||||||||
Other revenues | 125 | 122 | 348 | 378 | ||||||||||||||||||||||
Net investment gains (losses) | (53) | (45) | (213) | (179) | ||||||||||||||||||||||
Net derivative gains (losses) | (840) | (592) | (3,226) | 1,331 | ||||||||||||||||||||||
Total revenues | 1,170 | 1,121 | 2,717 | 7,000 | ||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Policyholder benefits and claims (including liability remeasurement gains (losses) of ($234), $35, ($234) and $35, respectively) | 590 | 534 | 1,966 | 1,926 | ||||||||||||||||||||||
Interest credited to policyholder account balances | 426 | 405 | 1,300 | 937 | ||||||||||||||||||||||
Amortization of DAC and VOBA | 155 | 159 | 468 | 474 | ||||||||||||||||||||||
Change in market risk benefits | (1,064) | (984) | (2,170) | (2,625) | ||||||||||||||||||||||
Interest expense on debt | 38 | 38 | 114 | 114 | ||||||||||||||||||||||
Other expenses | 435 | 457 | 1,339 | 1,482 | ||||||||||||||||||||||
Total expenses | 580 | 609 | 3,017 | 2,308 | ||||||||||||||||||||||
Income (loss) before provision for income tax | 590 | 512 | (300) | 4,692 | ||||||||||||||||||||||
Provision for income tax expense (benefit) | 109 | 97 | (109) | 945 | ||||||||||||||||||||||
Net income (loss) | 481 | 415 | (191) | 3,747 | ||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | 2 | 2 | 4 | 4 | ||||||||||||||||||||||
Net income (loss) attributable to Brighthouse Financial, Inc. | 479 | 413 | (195) | 3,743 | ||||||||||||||||||||||
Less: Preferred stock dividends | 26 | 25 | 77 | 78 | ||||||||||||||||||||||
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders | $ | 453 | $ | 388 | $ | (272) | $ | 3,665 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Change in market risk benefits | $ | 1,064 | $ | 984 | $ | 2,170 | $ | 2,625 | ||||||||||||||||||
Net investment gains (losses) | (53) | (45) | (213) | (179) | ||||||||||||||||||||||
Net derivative gains (losses), excluding investment hedge adjustments | (865) | (615) | (3,312) | 1,293 | ||||||||||||||||||||||
Market value adjustments | 15 | 20 | 9 | 90 | ||||||||||||||||||||||
Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends | 401 | 141 | 965 | 781 | ||||||||||||||||||||||
Income (loss) available to shareholders before provision for income tax | 562 | 485 | (381) | 4,610 | ||||||||||||||||||||||
Provision for income tax expense (benefit) | 109 | 97 | (109) | 945 | ||||||||||||||||||||||
Net income (loss) available to shareholders | $ | 453 | $ | 388 | $ | (272) | $ | 3,665 |
Three Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||
Annuities | Life | Run-off | Corporate & Other | Total | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Net income (loss) available to shareholders | $ | 1,017 | $ | (88) | $ | (573) | $ | 97 | $ | 453 | ||||||||||||||||||||||
Add: Provision for income tax expense (benefit) | 75 | (20) | 182 | (128) | 109 | |||||||||||||||||||||||||||
Income (loss) available to shareholders before provision for income tax | 1,092 | (108) | (391) | (31) | 562 | |||||||||||||||||||||||||||
Less: Net investment gains (losses) | (31) | (10) | (12) | — | (53) | |||||||||||||||||||||||||||
Less: Net derivative gains (losses), excluding investment hedge adjustments of $ | (334) | (5) | (514) | (12) | (865) | |||||||||||||||||||||||||||
Less: Change in market risk benefits | 1,064 | — | — | — | 1,064 | |||||||||||||||||||||||||||
Less: Market value adjustments | — | — | 15 | — | 15 | |||||||||||||||||||||||||||
Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends | 393 | (93) | 120 | (19) | 401 | |||||||||||||||||||||||||||
Less: Provision for income tax expense (benefit) | 74 | (20) | 25 | (4) | 75 | |||||||||||||||||||||||||||
Adjusted earnings | $ | 319 | $ | (73) | $ | 95 | $ | (15) | $ | 326 |
Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||
Annuities | Life | Run-off | Corporate & Other | Total | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Net income (loss) available to shareholders | $ | 869 | $ | (29) | $ | (600) | $ | 148 | $ | 388 | ||||||||||||||||||||||
Add: Provision for income tax expense (benefit) | 96 | (10) | 114 | (103) | 97 | |||||||||||||||||||||||||||
Income (loss) available to shareholders before provision for income tax | 965 | (39) | (486) | 45 | 485 | |||||||||||||||||||||||||||
Less: Net investment gains (losses) | (26) | (5) | (27) | 13 | (45) | |||||||||||||||||||||||||||
Less: Net derivative gains (losses), excluding investment hedge adjustments of $ | (239) | 10 | (459) | 73 | (615) | |||||||||||||||||||||||||||
Less: Change in market risk benefits | 984 | — | — | — | 984 | |||||||||||||||||||||||||||
Less: Market value adjustments | — | — | 20 | — | 20 | |||||||||||||||||||||||||||
Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends | 246 | (44) | (20) | (41) | 141 | |||||||||||||||||||||||||||
Less: Provision for income tax expense (benefit) | 44 | (10) | (4) | (4) | 26 | |||||||||||||||||||||||||||
Adjusted earnings | $ | 202 | $ | (34) | $ | (16) | $ | (37) | $ | 115 |
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||
Annuities | Life | Run-off | Corporate & Other | Total | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Net income (loss) available to shareholders | $ | 99 | $ | (76) | $ | (60) | $ | (235) | $ | (272) | ||||||||||||||||||||||
Add: Provision for income tax expense (benefit) | 209 | (18) | (451) | 151 | (109) | |||||||||||||||||||||||||||
Income (loss) available to shareholders before provision for income tax | 308 | (94) | (511) | (84) | (381) | |||||||||||||||||||||||||||
Less: Net investment gains (losses) | (159) | (17) | (26) | (11) | (213) | |||||||||||||||||||||||||||
Less: Net derivative gains (losses), excluding investment hedge adjustments of $ | (2,840) | (2) | (459) | (11) | (3,312) | |||||||||||||||||||||||||||
Less: Change in market risk benefits | 2,170 | — | — | — | 2,170 | |||||||||||||||||||||||||||
Less: Market value adjustments | — | — | 9 | — | 9 | |||||||||||||||||||||||||||
Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends | 1,137 | (75) | (35) | (62) | 965 | |||||||||||||||||||||||||||
Less: Provision for income tax expense (benefit) | 213 | (18) | (8) | (14) | 173 | |||||||||||||||||||||||||||
Adjusted earnings | $ | 924 | $ | (57) | $ | (27) | $ | (48) | $ | 792 |
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||
Annuities | Life | Run-off | Corporate & Other | Total | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Net income (loss) available to shareholders | $ | 6,047 | $ | 43 | $ | (2,584) | $ | 159 | $ | 3,665 | ||||||||||||||||||||||
Add: Provision for income tax expense (benefit) | 325 | 14 | 794 | (188) | 945 | |||||||||||||||||||||||||||
Income (loss) available to shareholders before provision for income tax | 6,372 | 57 | (1,790) | (29) | 4,610 | |||||||||||||||||||||||||||
Less: Net investment gains (losses) | (105) | (30) | (63) | 19 | (179) | |||||||||||||||||||||||||||
Less: Net derivative gains (losses), excluding investment hedge adjustments of $ | 2,774 | 12 | (1,628) | 135 | 1,293 | |||||||||||||||||||||||||||
Less: Change in market risk benefits | 2,625 | — | — | — | 2,625 | |||||||||||||||||||||||||||
Less: Market value adjustments | — | — | 90 | — | 90 | |||||||||||||||||||||||||||
Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends | 1,078 | 75 | (189) | (183) | 781 | |||||||||||||||||||||||||||
Less: Provision for income tax expense (benefit) | 202 | 14 | (40) | (34) | 142 | |||||||||||||||||||||||||||
Adjusted earnings | $ | 876 | $ | 61 | $ | (149) | $ | (149) | $ | 639 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Fee income | $ | 667 | $ | 719 | $ | 2,097 | $ | 2,264 | ||||||||||||||||||
Net investment spread | 758 | 449 | 2,152 | 2,023 | ||||||||||||||||||||||
Insurance-related activities | (368) | (346) | (1,282) | (1,354) | ||||||||||||||||||||||
Amortization of DAC and VOBA | (155) | (159) | (468) | (474) | ||||||||||||||||||||||
Other expenses | (473) | (495) | (1,453) | (1,596) | ||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends | 28 | 27 | 81 | 82 | ||||||||||||||||||||||
Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends | 401 | 141 | 965 | 781 | ||||||||||||||||||||||
Provision for income tax expense (benefit) | 75 | 26 | 173 | 142 | ||||||||||||||||||||||
Adjusted earnings | $ | 326 | $ | 115 | $ | 792 | $ | 639 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Fee income | $ | 494 | $ | 514 | $ | 1,533 | $ | 1,690 | ||||||||||||||||||
Net investment spread | 406 | 264 | 1,126 | 983 | ||||||||||||||||||||||
Insurance-related activities | (37) | (56) | (101) | (152) | ||||||||||||||||||||||
Amortization of DAC and VOBA | (129) | (130) | (388) | (386) | ||||||||||||||||||||||
Other expenses | (341) | (346) | (1,033) | (1,057) | ||||||||||||||||||||||
Pre-tax adjusted earnings | 393 | 246 | 1,137 | 1,078 | ||||||||||||||||||||||
Provision for income tax expense (benefit) | 74 | 44 | 213 | 202 | ||||||||||||||||||||||
Adjusted earnings | $ | 319 | $ | 202 | $ | 924 | $ | 876 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Fee income | $ | 60 | $ | 63 | $ | 200 | $ | 161 | ||||||||||||||||||
Net investment spread | 62 | 28 | 183 | 222 | ||||||||||||||||||||||
Insurance-related activities | (150) | (67) | (234) | (146) | ||||||||||||||||||||||
Amortization of DAC and VOBA | (26) | (29) | (80) | (88) | ||||||||||||||||||||||
Other expenses | (39) | (39) | (144) | (74) | ||||||||||||||||||||||
Pre-tax adjusted earnings | (93) | (44) | (75) | 75 | ||||||||||||||||||||||
Provision for income tax expense (benefit) | (20) | (10) | (18) | 14 | ||||||||||||||||||||||
Adjusted earnings | $ | (73) | $ | (34) | $ | (57) | $ | 61 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Fee income | $ | 111 | $ | 142 | $ | 368 | $ | 413 | ||||||||||||||||||
Net investment spread | 233 | 99 | 667 | 701 | ||||||||||||||||||||||
Insurance-related activities | (181) | (223) | (947) | (1,055) | ||||||||||||||||||||||
Amortization of DAC and VOBA | — | — | — | — | ||||||||||||||||||||||
Other expenses | (43) | (38) | (123) | (248) | ||||||||||||||||||||||
Pre-tax adjusted earnings | 120 | (20) | (35) | (189) | ||||||||||||||||||||||
Provision for income tax expense (benefit) | 25 | (4) | (8) | (40) | ||||||||||||||||||||||
Adjusted earnings | $ | 95 | $ | (16) | $ | (27) | $ | (149) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Fee income | $ | 2 | $ | — | $ | (4) | $ | — | ||||||||||||||||||
Net investment spread | 57 | 58 | 176 | 117 | ||||||||||||||||||||||
Insurance-related activities | — | — | — | (1) | ||||||||||||||||||||||
Amortization of DAC and VOBA | — | — | — | — | ||||||||||||||||||||||
Other expenses | (50) | (72) | (153) | (217) | ||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends | 28 | 27 | 81 | 82 | ||||||||||||||||||||||
Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends | (19) | (41) | (62) | (183) | ||||||||||||||||||||||
Provision for income tax expense (benefit) | (4) | (4) | (14) | (34) | ||||||||||||||||||||||
Adjusted earnings | $ | (15) | $ | (37) | $ | (48) | $ | (149) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Market risk benefits mark-to-market | $ | 886 | $ | 786 | $ | 1,755 | $ | 2,092 | ||||||||||||||||||
Annuity guaranteed benefit rider fees, net of claims | 193 | 211 | 453 | 578 | ||||||||||||||||||||||
Ceded reinsurance | (15) | (13) | (38) | (45) | ||||||||||||||||||||||
Total changes attributable to annuity guaranteed benefits | 1,064 | 984 | 2,170 | 2,625 | ||||||||||||||||||||||
Variable annuity hedges | (1,186) | (772) | (894) | (1,277) | ||||||||||||||||||||||
Shield embedded derivatives | 773 | 549 | (1,993) | 4,002 | ||||||||||||||||||||||
Total | $ | 651 | $ | 761 | $ | (717) | $ | 5,350 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Yield % | Amount | Yield % | Amount | Yield % | Amount | Yield % | Amount | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Investment income (1) | 4.34 | % | $ | 1,264 | 3.35 | % | $ | 939 | 4.22 | % | $ | 3,656 | 3.96 | % | $ | 3,243 | ||||||||||||||||||||||||||||||||||
Investment fees and expenses (2) | (0.14) | (37) | (0.15) | (39) | (0.14) | (113) | (0.14) | (116) | ||||||||||||||||||||||||||||||||||||||||||
Adjusted net investment income (3) | 4.20 | % | $ | 1,227 | 3.20 | % | $ | 900 | 4.08 | % | $ | 3,543 | 3.82 | % | $ | 3,127 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Net investment income | $ | 1,202 | $ | 877 | $ | 3,457 | $ | 3,089 | ||||||||||||||||||
Less: Investment hedge adjustments | (25) | (23) | (86) | (38) | ||||||||||||||||||||||
Adjusted net investment income — in the above yield table | $ | 1,227 | $ | 900 | $ | 3,543 | $ | 3,127 |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Estimated Fair Value | % of Total | Estimated Fair Value | % of Total | |||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||
Publicly-traded | $ | 62,579 | 83.0 | % | $ | 62,199 | 82.3 | % | ||||||||||||||||||
Privately-placed | 12,854 | 17.0 | 13,378 | 17.7 | ||||||||||||||||||||||
Total fixed maturity securities | $ | 75,433 | 100.0 | % | $ | 75,577 | 100.0 | % | ||||||||||||||||||
Percentage of cash and invested assets | 67.1 | % | 67.1 | % |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NAIC Designation | NRSRO Rating | Amortized Cost | Allowance for Credit Losses | Unrealized Gain (Loss) | Estimated Fair Value | % of Total | Amortized Cost | Allowance for Credit Losses | Unrealized Gain (Loss) | Estimated Fair Value | % of Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | Aaa/Aa/A | $ | 56,471 | $ | 6 | $ | (6,635) | $ | 49,830 | 66.0 | % | $ | 53,935 | $ | 2 | $ | (4,870) | $ | 49,063 | 64.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||
2 | Baa | 27,103 | — | (3,973) | 23,130 | 30.7 | 27,269 | — | (3,546) | 23,723 | 31.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal investment grade | 83,574 | 6 | (10,608) | 72,960 | 96.7 | 81,204 | 2 | (8,416) | 72,786 | 96.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Ba | 1,996 | — | (206) | 1,790 | 2.4 | 2,343 | — | (232) | 2,111 | 2.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | B | 662 | 4 | (78) | 580 | 0.8 | 677 | 1 | (88) | 588 | 0.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Caa and lower | 113 | 8 | (14) | 91 | 0.1 | 120 | 4 | (24) | 92 | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | In or near default | 28 | 4 | (12) | 12 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal below investment grade | 2,799 | 16 | (310) | 2,473 | 3.3 | 3,140 | 5 | (344) | 2,791 | 3.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | 86,373 | $ | 22 | $ | (10,918) | $ | 75,433 | 100.0 | % | $ | 84,344 | $ | 7 | $ | (8,760) | $ | 75,577 | 100.0 | % |
Fixed Maturity Securities — by Sector & Credit Quality Rating | ||||||||||||||||||||||||||||||||||||||||||||
NAIC Designation | 1 | 2 | 3 | 4 | 5 | 6 | Total Estimated Fair Value | |||||||||||||||||||||||||||||||||||||
NRSRO Rating | Aaa/Aa/A | Baa | Ba | B | Caa and Lower | In or Near Default | ||||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
U.S. corporate | $ | 15,287 | $ | 15,691 | $ | 1,353 | $ | 507 | $ | 60 | $ | 12 | $ | 32,910 | ||||||||||||||||||||||||||||||
Foreign corporate | 4,340 | 5,909 | 370 | 59 | — | — | 10,678 | |||||||||||||||||||||||||||||||||||||
U.S. government and agency | 7,693 | 109 | — | — | — | — | 7,802 | |||||||||||||||||||||||||||||||||||||
RMBS | 7,019 | 22 | 1 | — | 9 | — | 7,051 | |||||||||||||||||||||||||||||||||||||
CMBS | 5,929 | 354 | 21 | 2 | 2 | — | 6,308 | |||||||||||||||||||||||||||||||||||||
ABS | 5,456 | 619 | 17 | 12 | 10 | — | 6,114 | |||||||||||||||||||||||||||||||||||||
State and political subdivision | 3,521 | 72 | 1 | — | 10 | — | 3,604 | |||||||||||||||||||||||||||||||||||||
Foreign government | 585 | 354 | 27 | — | — | — | 966 | |||||||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | 49,830 | $ | 23,130 | $ | 1,790 | $ | 580 | $ | 91 | $ | 12 | $ | 75,433 | ||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
U.S. corporate | $ | 14,697 | $ | 15,683 | $ | 1,671 | $ | 499 | $ | 57 | $ | — | $ | 32,607 | ||||||||||||||||||||||||||||||
Foreign corporate | 3,758 | 6,377 | 373 | 68 | — | — | 10,576 | |||||||||||||||||||||||||||||||||||||
U.S. government and agency | 7,887 | 129 | — | — | — | — | 8,016 | |||||||||||||||||||||||||||||||||||||
RMBS | 7,490 | 14 | 12 | 2 | 10 | — | 7,528 | |||||||||||||||||||||||||||||||||||||
CMBS | 6,240 | 351 | 9 | 7 | 4 | — | 6,611 | |||||||||||||||||||||||||||||||||||||
ABS | 4,648 | 672 | 17 | 12 | 10 | — | 5,359 | |||||||||||||||||||||||||||||||||||||
State and political subdivision | 3,682 | 105 | 1 | — | 11 | — | 3,799 | |||||||||||||||||||||||||||||||||||||
Foreign government | 661 | 392 | 28 | — | — | — | 1,081 | |||||||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | 49,063 | $ | 23,723 | $ | 2,111 | $ | 588 | $ | 92 | $ | — | $ | 75,577 |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Estimated Fair Value | % of Total | Estimated Fair Value | % of Total | |||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||
Industrial | $ | 13,485 | 30.9 | % | $ | 13,290 | 30.7 | % | ||||||||||||||||||
Finance | 12,033 | 27.7 | 11,988 | 27.8 | ||||||||||||||||||||||
Consumer | 9,735 | 22.3 | 9,459 | 21.9 | ||||||||||||||||||||||
Utility | 5,773 | 13.2 | 5,767 | 13.4 | ||||||||||||||||||||||
Communications | 2,562 | 5.9 | 2,679 | 6.2 | ||||||||||||||||||||||
Total | $ | 43,588 | 100.0 | % | $ | 43,183 | 100.0 | % |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
Estimated Fair Value | % of Total | Net Unrealized Gains (Losses) | Estimated Fair Value | % of Total | Net Unrealized Gains (Losses) | |||||||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||||||||||||
Security type: | ||||||||||||||||||||||||||||||||||||||
Pass-through securities | $ | 3,721 | 52.8 | % | $ | (752) | $ | 3,846 | 51.1 | % | $ | (590) | ||||||||||||||||||||||||||
Collateralized mortgage obligations | 3,330 | 47.2 | (426) | 3,682 | 48.9 | (311) | ||||||||||||||||||||||||||||||||
Total RMBS | $ | 7,051 | 100.0 | % | $ | (1,178) | $ | 7,528 | 100.0 | % | $ | (901) | ||||||||||||||||||||||||||
Risk profile: | ||||||||||||||||||||||||||||||||||||||
Agency | $ | 5,782 | 82.0 | % | $ | (1,110) | $ | 6,137 | 81.5 | % | $ | (842) | ||||||||||||||||||||||||||
Prime | 137 | 2.0 | (20) | 149 | 2.0 | (20) | ||||||||||||||||||||||||||||||||
Alt-A | 752 | 10.6 | (39) | 788 | 10.5 | (37) | ||||||||||||||||||||||||||||||||
Sub-prime | 380 | 5.4 | (9) | 454 | 6.0 | (2) | ||||||||||||||||||||||||||||||||
Total RMBS | $ | 7,051 | 100.0 | % | $ | (1,178) | $ | 7,528 | 100.0 | % | $ | (901) | ||||||||||||||||||||||||||
Ratings profile: | ||||||||||||||||||||||||||||||||||||||
Rated Aaa (1) | $ | 547 | 7.8 | % | $ | 6,643 | 88.2 | % | ||||||||||||||||||||||||||||||
Designated NAIC 1 | $ | 7,019 | 99.5 | % | $ | 7,490 | 99.5 | % |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
2003 - 2011 | $ | 89 | $ | 76 | $ | 90 | $ | 82 | ||||||||||||||||||
2012 | 9 | 7 | 41 | 38 | ||||||||||||||||||||||
2013 | 76 | 69 | 204 | 197 | ||||||||||||||||||||||
2014 | 294 | 262 | 322 | 294 | ||||||||||||||||||||||
2015 | 950 | 859 | 966 | 879 | ||||||||||||||||||||||
2016 | 461 | 416 | 463 | 421 | ||||||||||||||||||||||
2017 | 718 | 638 | 732 | 667 | ||||||||||||||||||||||
2018 | 1,633 | 1,464 | 1,668 | 1,538 | ||||||||||||||||||||||
2019 | 998 | 836 | 1,021 | 879 | ||||||||||||||||||||||
2020 | 541 | 425 | 534 | 426 | ||||||||||||||||||||||
2021 | 846 | 783 | 821 | 748 | ||||||||||||||||||||||
2022 | 470 | 448 | 462 | 442 | ||||||||||||||||||||||
2023 | 27 | 25 | — | — | ||||||||||||||||||||||
Total | $ | 7,112 | $ | 6,308 | $ | 7,324 | $ | 6,611 |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Estimated Fair Value | % of Total | Net Unrealized Gains (Losses) | Estimated Fair Value | % of Total | Net Unrealized Gains (Losses) | ||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||||
Collateral type: | |||||||||||||||||||||||||||||||||||
Collateralized obligations | $ | 3,653 | 59.7 | % | $ | (34) | $ | 3,239 | 60.5 | % | $ | (124) | |||||||||||||||||||||||
Consumer loans | 349 | 5.7 | (27) | 420 | 7.8 | (36) | |||||||||||||||||||||||||||||
Student loans | 386 | 6.3 | (27) | 393 | 7.3 | (34) | |||||||||||||||||||||||||||||
Automobile loans | 444 | 7.3 | (8) | 216 | 4.0 | (9) | |||||||||||||||||||||||||||||
Credit card loans | 257 | 4.2 | (11) | 158 | 3.0 | (10) | |||||||||||||||||||||||||||||
Other loans | 1,025 | 16.8 | (73) | 933 | 17.4 | (80) | |||||||||||||||||||||||||||||
Total | $ | 6,114 | 100.0 | % | $ | (180) | $ | 5,359 | 100.0 | % | $ | (293) | |||||||||||||||||||||||
Ratings profile: | |||||||||||||||||||||||||||||||||||
Rated Aaa | $ | 3,272 | 53.5 | % | $ | 2,300 | 42.9 | % | |||||||||||||||||||||||||||
Designated NAIC 1 | $ | 5,456 | 89.2 | % | $ | 4,648 | 86.7 | % |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost | % of Total | Allowance for Credit Losses | % of Amortized Cost | Amortized Cost | % of Total | Allowance for Credit Losses | % of Amortized Cost | ||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial | $ | 13,307 | 58.3 | % | $ | 67 | 0.5 | % | $ | 13,574 | 58.9 | % | $ | 49 | 0.4 | % | |||||||||||||||||||||||||||||||
Agricultural | 4,461 | 19.6 | 15 | 0.3 | % | 4,365 | 18.9 | 15 | 0.3 | % | |||||||||||||||||||||||||||||||||||||
Residential | 5,051 | 22.1 | 55 | 1.1 | % | 5,116 | 22.2 | 55 | 1.1 | % | |||||||||||||||||||||||||||||||||||||
Total | $ | 22,819 | 100.0 | % | $ | 137 | 0.6 | % | $ | 23,055 | 100.0 | % | $ | 119 | 0.5 | % |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Amount | % of Total | Amount | % of Total | |||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||
Geographic region: | ||||||||||||||||||||||||||
South Atlantic | $ | 2,783 | 20.9 | % | $ | 3,026 | 22.3 | % | ||||||||||||||||||
Pacific | 2,649 | 19.9 | 2,765 | 20.4 | ||||||||||||||||||||||
Middle Atlantic | 2,155 | 16.2 | 2,344 | 17.3 | ||||||||||||||||||||||
West South Central | 1,516 | 11.4 | 1,642 | 12.1 | ||||||||||||||||||||||
Mountain | 1,143 | 8.6 | 1,140 | 8.4 | ||||||||||||||||||||||
New England | 753 | 5.7 | 741 | 5.4 | ||||||||||||||||||||||
East North Central | 736 | 5.5 | 794 | 5.8 | ||||||||||||||||||||||
International | 405 | 3.0 | 390 | 2.9 | ||||||||||||||||||||||
West North Central | 359 | 2.7 | 361 | 2.7 | ||||||||||||||||||||||
East South Central | 306 | 2.3 | 306 | 2.2 | ||||||||||||||||||||||
Multi-region and Other (1) | 502 | 3.8 | 65 | 0.5 | ||||||||||||||||||||||
Total recorded investment | 13,307 | 100.0 | % | 13,574 | 100.0 | % | ||||||||||||||||||||
Less: allowance for credit losses | 67 | 49 | ||||||||||||||||||||||||
Carrying value, net of allowance for credit losses | $ | 13,240 | $ | 13,525 | ||||||||||||||||||||||
Property type: | ||||||||||||||||||||||||||
Apartment | $ | 5,395 | 40.5 | % | $ | 5,366 | 39.5 | % | ||||||||||||||||||
Office | 3,214 | 24.2 | 3,375 | 24.9 | ||||||||||||||||||||||
Industrial | 2,073 | 15.6 | 2,051 | 15.1 | ||||||||||||||||||||||
Retail | 1,793 | 13.5 | 1,934 | 14.3 | ||||||||||||||||||||||
Hotel | 832 | 6.2 | 848 | 6.2 | ||||||||||||||||||||||
Total recorded investment | 13,307 | 100.0 | % | 13,574 | 100.0 | % | ||||||||||||||||||||
Less: allowance for credit losses | 67 | 49 | ||||||||||||||||||||||||
Carrying value, net of allowance for credit losses | $ | 13,240 | $ | 13,525 |
September 30, 2023 | December 31, 2022 | |||||||||||||
(In millions) | ||||||||||||||
Other limited partnerships | $ | 4,132 | $ | 3,941 | ||||||||||
Real estate limited partnerships and LLCs (1) | 799 | 834 | ||||||||||||
Total | $ | 4,931 | $ | 4,775 |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Carrying Value | % of Total | Carrying Value | % of Total | |||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||
Freestanding derivatives with positive estimated fair values | $ | 2,516 | 78.4 | % | $ | 2,284 | 80.1 | % | ||||||||||||||||||
Company-owned life insurance | 336 | 10.5 | 250 | 8.8 | ||||||||||||||||||||||
Federal Home Loan Bank stock | 247 | 7.7 | 201 | 7.0 | ||||||||||||||||||||||
Tax credit and renewable energy partnerships | 52 | 1.6 | 55 | 1.9 | ||||||||||||||||||||||
Leveraged leases, net of non-recourse debt | 48 | 1.5 | 48 | 1.7 | ||||||||||||||||||||||
Other | 11 | 0.3 | 14 | 0.5 | ||||||||||||||||||||||
Total | $ | 3,210 | 100.0 | % | $ | 2,852 | 100.0 | % |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Gross Notional Amount | Estimated Fair Value | Gross Notional Amount | Estimated Fair Value | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Written | $ | 1,530 | $ | 20 | $ | 1,757 | $ | 16 | ||||||||||||||||||
Purchased | — | — | — | — | ||||||||||||||||||||||
Total | $ | 1,530 | $ | 20 | $ | 1,757 | $ | 16 |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Account Value | Death Benefit NAR (1) | Living Benefit NAR (1) | % of Account Value In-the-Money (2) | Account Value | Death Benefit NAR (1) | Living Benefit NAR (1) | % of Account Value In-the-Money (2) | ||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
GMIB | $ | 30,275 | $ | 5,267 | $ | 4,312 | 39.7 | % | $ | 31,541 | $ | 5,517 | $ | 4,484 | 42.9 | % | |||||||||||||||||||||||||||||||
GMIB Max with EDB (3) | 7,213 | 6,558 | 620 | 44.4 | % | 7,868 | 6,013 | 415 | 34.8 | % | |||||||||||||||||||||||||||||||||||||
GMIB Max without EDB (3) | 4,109 | 203 | 160 | 27.9 | % | 4,464 | 196 | 92 | 18.7 | % | |||||||||||||||||||||||||||||||||||||
GMWB | 18,728 | 1,181 | 473 | 19.5 | % | 19,270 | 1,584 | 662 | 26.5 | % | |||||||||||||||||||||||||||||||||||||
GMAB | 421 | 13 | 13 | 25.9 | % | 492 | 18 | 18 | 25.4 | % | |||||||||||||||||||||||||||||||||||||
GMDB only (other than EDB) (3) | 15,889 | 1,389 | — | N/A | 15,766 | 1,737 | — | N/A | |||||||||||||||||||||||||||||||||||||||
EDB only (3) | 2,920 | 1,516 | — | N/A | 3,009 | 1,439 | — | N/A | |||||||||||||||||||||||||||||||||||||||
Total | $ | 79,555 | $ | 16,127 | $ | 5,578 | $ | 82,410 | $ | 16,504 | $ | 5,671 |
September 30, 2023 | December 31, 2022 | ||||||||||
(In millions) | |||||||||||
GMIB | $ | 8,128 | $ | 9,457 | |||||||
GMWB | 28 | 209 | |||||||||
GMDB | 671 | 720 | |||||||||
Total | $ | 8,827 | $ | 10,386 |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
Instrument Type | Gross Notional Amount (1) | Estimated Fair Value | Gross Notional Amount (1) | Estimated Fair Value | ||||||||||||||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | 23,230 | $ | 130 | $ | 268 | $ | 2,330 | $ | 38 | $ | 46 | ||||||||||||||||||||||||||
Interest rate options | 31,080 | 18 | 303 | 28,688 | 22 | 232 | ||||||||||||||||||||||||||||||||
Interest rate forwards | 15,464 | 178 | 2,727 | 16,848 | 35 | 2,387 | ||||||||||||||||||||||||||||||||
Hybrid options (2) | 630 | 7 | — | — | — | — | ||||||||||||||||||||||||||||||||
Total | $ | 70,404 | $ | 333 | $ | 3,298 | $ | 47,866 | $ | 95 | $ | 2,665 |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
Instrument Type | Gross Notional Amount (1) | Estimated Fair Value | Gross Notional Amount (1) | Estimated Fair Value | ||||||||||||||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Equity index options | $ | 12,313 | $ | 304 | $ | 432 | $ | 13,862 | $ | 525 | $ | 350 | ||||||||||||||||||||||||||
Equity total return swaps | 56,332 | 931 | 1,061 | 32,909 | 520 | 747 | ||||||||||||||||||||||||||||||||
Interest rate swaps | 30,096 | 131 | 280 | 2,330 | 38 | 46 | ||||||||||||||||||||||||||||||||
Interest rate options | 27,580 | 18 | 220 | 27,088 | 21 | 126 | ||||||||||||||||||||||||||||||||
Interest rate forwards | 8,443 | — | 1,206 | 10,565 | 35 | 1,255 | ||||||||||||||||||||||||||||||||
Hybrid options | 630 | 7 | — | — | — | — | ||||||||||||||||||||||||||||||||
Total | $ | 135,394 | $ | 1,391 | $ | 3,199 | $ | 86,754 | $ | 1,139 | $ | 2,524 |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(In millions) | |||||||||||
Sources: | |||||||||||
Changes in policyholder account balances, net | $ | 3,519 | $ | 9,281 | |||||||
Changes in payables for collateral under securities loaned and other transactions, net | — | 263 | |||||||||
Financing element on certain derivative instruments and other derivative related transactions, net | 43 | — | |||||||||
Total sources | 3,562 | 9,544 | |||||||||
Uses: | |||||||||||
Operating activities, net | 289 | 1,002 | |||||||||
Investing activities, net | 2,644 | 7,596 | |||||||||
Changes in payables for collateral under securities loaned and other transactions, net | 619 | — | |||||||||
Long-term debt repaid | 1 | 2 | |||||||||
Dividends on preferred stock | 77 | 78 | |||||||||
Treasury stock acquired in connection with share repurchases | 190 | 395 | |||||||||
Financing element on certain derivative instruments and other derivative related transactions, net | — | 137 | |||||||||
Other, net | 18 | 15 | |||||||||
Total uses | 3,838 | 9,225 | |||||||||
Net increase (decrease) in cash and cash equivalents | $ | (276) | $ | 319 |
Aggregate Principal Amount Outstanding | Issuances | Repayments | ||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
September 30, 2023 | December 31, 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
FABCP Program | $ | 2,809 | $ | 2,097 | $ | 5,618 | $ | 8,980 | $ | 4,906 | $ | 9,110 | ||||||||||||||||||||||||||
FABN Program | 2,600 | 3,450 | — | 550 | 850 | — | ||||||||||||||||||||||||||||||||
FHLB Funding Agreements | 4,400 | 3,900 | 1,925 | 5,350 | 1,425 | 2,500 | ||||||||||||||||||||||||||||||||
Farmer Mac Funding Agreements | 700 | 700 | — | 400 | — | 25 | ||||||||||||||||||||||||||||||||
Total | $ | 10,509 | $ | 10,147 | $ | 7,543 | $ | 15,280 | $ | 7,181 | $ | 11,635 |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
July 1 — July 31, 2023 | 402,893 | $ | 49.16 | 403,671 | $ | 147 | ||||||||||||||||||||
August 1 — August 31, 2023 | 465,791 | $ | 49.85 | 465,791 | $ | 124 | ||||||||||||||||||||
September 1 — September 30, 2023 | 413,725 | $ | 49.84 | 413,884 | $ | 104 | ||||||||||||||||||||
Total | 1,282,409 | 1,283,346 |
Exhibit No. | Description | |||||||
3.1 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
104* | The cover page of Brighthouse Financial, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL (included within the Exhibit 101 attachments). |
BRIGHTHOUSE FINANCIAL, INC. | |||||||||||
By: | /s/ Edward A. Spehar | ||||||||||
Name: | Edward A. Spehar | ||||||||||
Title: | Executive Vice President and Chief Financial Officer | ||||||||||
(Duly Authorized Officer and Principal Financial Officer) |
/s/ Eric T. Steigerwalt | ||
Eric T. Steigerwalt | ||
President and Chief Executive Officer |
/s/ Edward A. Spehar | ||
Edward A. Spehar | ||
Executive Vice President and Chief Financial Officer |
/s/ Eric T. Steigerwalt | ||
Eric T. Steigerwalt | ||
President and Chief Executive Officer |
/s/ Edward A. Spehar | ||
Edward A. Spehar | ||
Executive Vice President and Chief Financial Officer |
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Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Assets | ||
Amortized cost of fixed maturity securities available-for-sale | $ 86,373 | $ 84,344 |
Fixed maturity securities, allowance for credit losses | 22 | 7 |
Mortgage loans valuation allowances | 137 | 119 |
Leveraged leases, allowance for credit losses | 13 | 13 |
Premiums, reinsurance and other, allowance for credit losses | $ 13 | $ 10 |
Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, aggregate liquidation preference | $ 1,753 | $ 1,753 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 122,790,019 | 122,153,422 |
Common stock, shares outstanding | 64,703,557 | 68,278,068 |
Treasury Stock, Common, Shares | 58,086,462 | 53,875,354 |
Consolidated Statements of Operations and Comprehensive Income (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||||
Liability for Future Policy Benefit, Remeasurement Gain (Loss) | $ (234) | $ 35 | $ (234) | $ 35 |
Business, Basis of Presentation and Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business, Basis of Presentation and Summary of Significant Accounting Policies | 1. Business, Basis of Presentation and Summary of Significant Accounting Policies Business Brighthouse Financial, Inc. (“BHF” and together with its subsidiaries, “Brighthouse Financial” or the “Company”) is a holding company formed in 2016 to own the legal entities that historically operated a substantial portion of MetLife, Inc.’s former retail segment until becoming a separate, publicly-traded company in August 2017. Brighthouse Financial is one of the largest providers of annuity and life insurance products in the U.S. through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners. The Company is organized into three segments: Annuities; Life; and Run-off. In addition, the Company reports certain of its results of operations in Corporate & Other. Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates. Consolidation The accompanying interim condensed consolidated financial statements include the accounts of Brighthouse Financial, as well as partnerships and limited liability companies (“LLC”) that the Company controls. Intercompany accounts and transactions have been eliminated. The Company uses the equity method of accounting for investments in limited partnerships and LLCs when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period. When the Company has virtually no influence over the investee’s operations, the investment is carried at fair value. The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2022 consolidated balance sheet data was derived from audited consolidated financial statements included in Brighthouse Financial, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2022 Annual Report. Reclassifications Certain amounts in the prior year period’s interim condensed consolidated financial statements and related footnotes thereto have been reclassified to conform with the 2023 presentation as discussed throughout the Notes to the Interim Condensed Consolidated Financial Statements. See “— Adoption of New Accounting Pronouncements” for discussion of the adoption of new guidance on long-duration contracts in the first quarter of 2023, parts of which were retrospectively applied to prior periods presented in the interim condensed consolidated financial statements. Summary of Significant Accounting Policies In connection with the adoption of new guidance on long-duration insurance contracts, the Company updated its impacted accounting policies as described below. See Note 1 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for a description of the Company’s accounting policies that did not change. Insurance Contract Obligations The Company has obligations under insurance contracts to pay benefits over an extended period of time. The Company establishes liabilities for future obligations under long-duration insurance contracts based on the accounting model appropriate for each type of contract or contract feature. Liabilities for insurance contract benefits are generally accrued over time as revenue is recognized, or established based on the balance that accrues to the contract holder. In addition, certain insurance contracts may contain features that are required to be measured at fair value separately from the base contracts, either as a market risk benefit or embedded derivative. The discussion below provides an overview of the different accounting models for insurance contract obligations and the applicability of such models to the Company’s insurance products. Liability for Future Policy Benefits The Company establishes a liability for future policy benefits (“LFPB”) for non-participating term and whole life insurance and income annuities. LFPBs are accrued over time as revenue is recognized based on a net premium ratio. The net premium ratio is the portion of gross premiums required to provide for all future benefits. LFPBs are established using the Company’s current assumptions of future cash flows, discounted at a rate that approximates a single A corporate bond curve. The Company generally aggregates insurance contracts into groupings by issue year, product and segment for determining the net premium ratio and related LFPBs. The Company reviews cash flow assumptions regularly, and if they change significantly, LFPBs are adjusted by determining a revised net premium ratio. The revised net premium ratio is calculated as of contract inception using both actual historical experience and updated future cash flow assumptions. The recalculated net premium ratio is applied to derive a remeasurement gain or loss recognized in the current period net income. For insurance policies in-force as of December 31, 2020, January 1, 2021 is considered the contract inception date. The net premium ratio is also updated quarterly for the difference between actual and expected experience. The net premium ratio is not updated for changes in discount rate assumptions, as changes in the discount rate are updated quarterly and the impacts are reflected in other comprehensive income (loss) (“OCI”). The discount rate assumption is determined by developing a yield curve based on market observable yields for upper-medium grade fixed income instruments derived from an external index. The yield curve is applied to the expected future cash flows used in the measurement of LFPBs based on the duration characteristics of those liabilities. The most significant cash flow assumptions used in the establishment of LFPBs are mortality, policy lapses and market interest rates. See Note 4 for more information on the effect of changes in assumptions on the measurement of LFPBs. The Company also establishes an LFPB for participating term and whole life insurance using a net premium ratio and the Company’s current assumptions of future cash flows. Assumptions are determined at issuance of the policy and are not updated unless a premium deficiency exists. A premium deficiency exists when the LFPB plus the present value of expected future gross premiums are less than expected future benefits and expenses (based on current assumptions). When a premium deficiency exists, the Company will reduce any deferred acquisition costs and may also establish an additional liability to eliminate the deficiency. See Note 4 for more information on assumptions used in establishing LFPBs related to participating term and whole life insurance. Policyholder Account Balances The Company establishes a policyholder account balance liability for customer deposits on universal life insurance, universal life insurance with secondary guarantees (“ULSG”) and deferred annuity contracts. The policyholder account balance liability is equal to the sum of deposits, plus interest credited, less charges and withdrawals, excluding the impact of any applicable charge that may be incurred upon surrender. The Company also holds additional liabilities for certain product features including secondary guarantees on universal life insurance contracts and the crediting rates associated with index-linked annuities. Additional Liabilities for ULSG The Company establishes a liability in addition to the account balance for secondary guarantees on universal life insurance. These liabilities are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the contract period based on total expected assessments. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company also maintains a liability for profits followed by losses on ULSG determined by projecting future earnings and establishing a liability to offset losses that are expected to occur in later years. Both ULSG liabilities are adjusted for the effects of unrealized investment gains and losses. The Company reviews cash flow assumptions regularly, and, if they change significantly, the liability for secondary guarantees is adjusted by a cumulative charge or credit to net income. Liabilities for secondary guarantees are presented within future policy benefits with changes in the liabilities reported in policyholder benefits and claims, except for the effects of unrealized investment gains and losses, which are reported in OCI. The most significant assumptions used in estimating liabilities for secondary guarantees are the general account rate of return, premium persistency, mortality and lapses. See Note 4 for more information on the effect of changes in assumptions on the measurement of liabilities for secondary guarantees. Market Risk Benefits on Annuity Guarantees Market risk benefits (“MRB”) are contracts or contract features that provide protection to the policyholder from capital markets risk by transferring such risks to the Company. MRBs are required to be separated from the deferred annuity host contract and measured at fair value. The Company establishes MRB assets and liabilities for guaranteed minimum benefits on variable annuity contracts including guaranteed minimum death benefits (“GMDB”), guaranteed minimum income benefits (“GMIB”), guaranteed minimum accumulation benefits (“GMAB”) and guaranteed minimum withdrawal benefits (“GMWB”). MRB assets are also established for reinsured benefits related to these guarantees. Certain index-linked annuity products may also have guaranteed minimum benefits classified as MRBs. The measurement of fair value includes an adjustment for the risk that the Company fails to satisfy its obligations, which is referred to as nonperformance risk, as well as risk margin to capture the non-capital markets risks of the instrument, which represents the additional compensation a market participant would require to assume the risks related to the uncertainties in certain actuarial assumptions. MRBs are measured at estimated fair value, with changes reported in change in MRBs on the consolidated statements of operations, except for the change due to nonperformance risk, which is reported in OCI. See Note 4 for more information on the effect of changes in inputs and assumptions on the measurement of MRBs and Note 8 for more information on the determination of fair value of MRBs. Embedded Derivatives on Index-Linked Annuities The Company issues, and assumes through reinsurance, index-linked annuities which allow the policyholder to participate in returns from certain specified equity indices. The crediting rates associated with these features are classified as embedded derivatives and measured at estimated fair value, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. Embedded derivative liabilities are required to be separated from the deferred annuity host contract and measured at fair value. The estimated fair value is determined using a combination of an option pricing model and an option-budget approach. Under this approach, the Company estimates the cost of funding the crediting rate using option pricing and establishes that cost on the balance sheet as a reduction to the initial deposit amount. The estimate of fair value includes an adjustment for nonperformance risk, as well as a risk margin. Actuarial assumptions are reviewed at least annually, and if they change significantly, the estimated fair value is adjusted through net income. Capital market inputs used in the measurement of index-linked crediting rate embedded derivatives are updated quarterly through net income. The reduction to the initial deposit is accreted back up to the initial deposit over the estimated life of the contract. Embedded derivatives related to index-linked annuities are presented within policyholder account balances while changes in the estimated fair value are reported in net derivative gains (losses). For more information on the determination of estimated fair value of embedded derivatives, see Note 8. Recognition of Revenues and Deposits on Insurance Contracts Premiums related to traditional long-duration contracts are recognized as revenues when due from policyholders. When premiums for income annuities are due over a significantly shorter period than the period over which policyholder benefits are incurred, the Company establishes a deferred profit liability (“DPL”) for the excess of the gross premium over the net premium. DPLs are amortized into net income in proportion to the amount of expected future benefit payments. Assumptions used in the measurement of the DPL are updated at the same time as the related LFPBs, with the updated estimates used to recalculate the DPL as of contract inception. The remeasurement gain or loss from updating DPLs is recognized in current period net income along with the related change in LFPBs. Deposits related to universal life insurance, deferred annuity contracts and investment contracts are credited to policyholder account balances. Revenues from such contracts consist of asset-based investment management fees, cost of insurance charges, risk charges, policy administration fees and surrender charges. These fees, which are included in universal life and investment-type product policy fees, are recognized when assessed to the contract holder, except for non-level insurance charges which are deferred by the establishment of an unearned revenue liability and amortized over the expected life of the contracts. Premiums and policy fees are presented net of reinsurance. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are directly related to the successful acquisition or renewal of insurance contracts are capitalized as deferred policy acquisition costs (“DAC”). These costs mainly consist of commissions and include the portion of employees’ compensation and benefits related to time spent selling, underwriting or processing the issuance of new insurance contracts. All other acquisition-related costs are expensed as incurred. Value of business acquired (“VOBA”) is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity and investment-type contracts in-force as of the acquisition date. The Company amortizes DAC and VOBA in a manner that approximates a straight-line basis over the expected life of the related contracts. For life insurance contracts, amortization is based on projections of amounts of insurance in-force, while projections of policy counts are used for deferred annuity contracts and expected future benefits payments for income annuities. These assumptions are reviewed at least annually, and if they change significantly, updates are recognized through changes to future amortization. VOBA balances are tested annually to determine if the balance is deemed unrecoverable from expected future profits. All changes in DAC and VOBA balances are recorded to net income. Periodically, the Company modifies product benefits, features, rights or coverages that occur by the exchange of an existing contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If a modification is considered to have substantially changed the contract, the associated DAC or VOBA is written off immediately through net income and any new acquisition costs associated with the replacement contract are deferred. If the modification does not substantially change the contract, the DAC or VOBA amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed. The Company also has intangible assets representing deferred sales inducements (“DSI”), which are included in other assets, and unearned revenue liabilities, which are included in other policy-related balances. The Company defers sales inducements and unearned revenue and amortizes the balances using the same methodology and assumptions used to amortize DAC and VOBA. Adoption of New Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASU”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Except as noted below, there were no significant ASUs adopted during the period ended September 30, 2023. In March 2022, the FASB issued new guidance on Troubled Debt Restructurings (“TDR”) (ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures). This ASU eliminates TDR recognition and measurement guidance and, instead, requires that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The Company adopted this guidance on January 1, 2023. This ASU was applied prospectively and did not have a material impact on the consolidated financial statements upon adoption but could change the future recognition and measurement of modified loans and other receivables. In August 2018, the FASB issued new guidance on long-duration contracts (ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (“LDTI”)). LDTI is effective for fiscal years beginning after January 1, 2023. LDTI resulted in significant changes to the measurement, presentation and disclosure requirements for long-duration insurance contracts. A summary of the most significant changes is provided below: (1) Guaranteed benefits associated with variable annuity and certain fixed annuity contracts have been classified and presented separately on the consolidated balance sheets as MRBs. MRBs are now measured at estimated fair value through net income and reported separately on the consolidated statements of operations, except for nonperformance risk changes, which will be recognized in OCI. (2) Cash flow assumptions used to measure LFPBs on traditional long-duration contracts (including term and non-participating whole life insurance and immediate annuities) have been updated on an annual basis using a retrospective method. The resulting remeasurement gain or loss is now reported separately on the consolidated statements of operations along with the remeasurement gain or loss on universal life-type contract liabilities. (3) The discount rate assumption used to measure the liability for traditional long-duration contracts is now based on an upper-medium grade fixed income yield, updated quarterly, with changes recognized in OCI. (4) DAC for all insurance products are required to be amortized on a constant-level basis over the expected term of the contracts, using amortization methods that are not a function of revenue or profit emergence. Changes in assumptions used to amortize DAC have been recognized as a revision to future amortization amounts. (5) There was a significant increase in required disclosures, including disaggregated rollforwards of insurance contract assets and liabilities supplemented by qualitative and quantitative information regarding the cash flows, assumptions, methods and judgements used to measure those balances. The transition date was January 1, 2021. MRB changes were required to be applied on a retrospective basis, while the changes for insurance liability assumption updates and DAC amortization were applied to existing carrying amounts on the transition date. The cumulative effect, on an after-tax basis, of the adoption of ASU 2018-12 as of the transition date was a $5.4 billion decrease to retained earnings and a $3.9 billion decrease to accumulated other comprehensive income (loss) (“AOCI”). See Note 2 for more detailed information on the impacts of the ASU to the Company’s financial statements.
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Financial Services, Insurance, ASU 2018-12 Transition |
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ASU 2018-12 Transition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASU 2018-12 Transition | 2. ASU 2018-12 Transition The Company adopted ASU 2018-12 for LFPBs, DAC and other balances amortized on a basis consistent with DAC by applying the guidance to contracts in-force on the basis of their existing carrying amounts at the transition date. The Company adopted ASU 2018-12 for MRBs on a fully retrospective basis. The effect of transition adjustments on stockholders’ equity at January 1, 2021 due to the adoption of ASU 2018-12 was as follows:
For LFPBs, the transition adjustment to retained earnings relates to instances where net premiums exceed gross premiums resulting in LFPBs being increased to eliminate the premium deficiency. The premium deficiency primarily relates to structured settlement annuities. The transition adjustment related to AOCI represents the effect of the requirement to discount LFPBs based on an upper-medium grade fixed income rate as well as the removal of amounts previously recorded in AOCI for the effects of unrealized investment gains and losses. For MRBs, the transition adjustment to AOCI relates to the cumulative effect of changes in the nonperformance risk between contract issue date and transition date. In aggregate, the additional spread applied to the risk-free rate decreased from contract inception to the transition date, which had a negative impact on equity. The remaining difference between the estimated fair value and carrying amount of MRBs at transition, excluding the amounts recorded in AOCI, was recorded as an adjustment to retained earnings as of the transition date. For DAC and VOBA, the Company removed amounts previously recorded in AOCI for the effect of unrealized investment gains and losses. For reinsurance, the adjustments to both retained earnings and AOCI were made to align the measurement of reinsurance recoverables with the related LFPBs. The balances of and changes in LFPBs at January 1, 2021 due to the adoption of ASU 2018-12 were as follows:
The balance of and changes in liabilities classified as MRBs at January 1, 2021 due to the adoption of ASU 2018-12 were as follows:
The balances of and changes in DAC and VOBA on January 1, 2021 due to the adoption of ASU 2018-12 were as follows:
The following tables present amounts previously reported in 2022 and 2021, the effect on those amounts of the change due to the adoption of ASU 2018-12 as described in Note 1, and the currently reported amounts in the Unaudited Interim Consolidated Balance Sheets and Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss). See Notes 4 and 5 for more information.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | 3. Segment Information The Company is organized into three segments: Annuities; Life; and Run-off. In addition, the Company reports certain of its results of operations in Corporate & Other. Annuities The Annuities segment consists of a variety of variable, fixed, index-linked and income annuities designed to address contract holders’ needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security. Life The Life segment consists of insurance products, including term, universal, whole and variable life products designed to address policyholders’ needs for financial security and protected wealth transfer, which may be on a tax-advantaged basis. Run-off The Run-off segment consists of products that are no longer actively sold and are separately managed, including ULSG, structured settlements, pension risk transfer contracts, certain company-owned life insurance policies and certain funding agreements. Corporate & Other Corporate & Other contains the excess capital not allocated to the segments and interest expense related to the Company’s outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes long-term care business reinsured through 100% quota share reinsurance agreements and activities related to funding agreements associated with the Company’s institutional spread margin business. In connection with the adoption of ASU 2018-12, the Company reclassified direct-to-consumer life insurance that is no longer sold from Corporate & Other to the Life segment. The segment information below reflects the direct-to consumer life insurance in the Life segment for all periods presented. Financial Measures and Segment Accounting Policies Adjusted earnings is a financial measure used by management to evaluate performance and facilitate comparisons to industry results. Consistent with GAAP guidance for segment reporting, adjusted earnings is also used to measure segment performance. The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by the investor community by highlighting the results of operations and the underlying profitability drivers of the business. Adjusted earnings, which may be positive or negative, focuses on the Company’s primary businesses by excluding the impact of market volatility, which could distort trends. The following are significant items excluded from total revenues in calculating adjusted earnings: •Net investment gains (losses); and •Net derivative gains (losses), excluding earned income and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment (“Investment Hedge Adjustments”). The following are significant items excluded from total expenses in calculating adjusted earnings: •Change in MRBs; and •Change in fair value of the crediting rate on experience-rated contracts (“Market Value Adjustments”). The provision for income tax related to adjusted earnings is calculated using the statutory tax rate of 21%, net of impacts related to the dividends received deduction, tax credits and current period non-recurring items. The Company’s adjusted earnings definition and presentation has been updated for all periods presented to reflect the adoption of ASU 2018-12. The segment accounting policies are the same as those used to prepare the Company’s interim condensed consolidated financial statements, except for the adjustments to calculate adjusted earnings described above. In addition, segment accounting policies include the methods of capital allocation described below. Segment investment and capitalization targets are based on statutory oriented risk principles and metrics. Segment invested assets backing liabilities are based on net statutory liabilities plus excess capital. For the variable annuity business, the excess capital held is based on the target statutory total asset requirement consistent with the Company’s variable annuity risk management strategy. For insurance businesses other than variable annuities, excess capital held is based on a percentage of required statutory risk-based capital. Assets in excess of those allocated to the segments, if any, are held in Corporate & Other. Segment net investment income reflects the performance of each segment’s respective invested assets. Operating results by segment, as well as Corporate & Other, were as follows:
Total revenues by segment, as well as Corporate & Other, were as follows:
Total assets by segment, as well as Corporate & Other, were as follows at:
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Insurance |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance | 4. Insurance Liability for Future Policy Benefits Information regarding LFPBs for non-participating traditional and limited-payment contracts was as follows:
The measurement of LFPBs can be significantly impacted by changes in assumptions for policyholder behavior. As part of the 2023 and 2022 annual actuarial review (“AAR”), the Company updated assumptions regarding mortality and lapses for term and non-participating whole life insurance. The impact from changes in assumptions is presented in effect of changes in cash flow assumptions in the table above. Information regarding the additional insurance liabilities for universal life-type contracts with secondary guarantees was as follows:
The measurement of liabilities for secondary guarantees can be significantly impacted by changes in the expected general account rate of return, which is driven by the Company’s assumption for long-term treasury yields. The Company’s practice of projecting treasury yields uses a mean reversion approach that assumes that long-term interest rates are less influenced by short-term fluctuations and are only changed when sustained interim deviations are expected. As part of the 2023 AAR, the Company increased the long-term general account earned rate, driven by an increase in the mean reversion rate from 3.50% to 3.75%. The Company also updated assumptions regarding policyholder behavior, including mortality, premium persistency, lapses, withdrawals and maintenance expenses. As part of the 2022 AAR, the Company increased the long-term general account earned rate, driven by an increase in the mean reversion rate from 3.00% to 3.50%. Both period assumption updates are reflected in the table above. A reconciliation of the net LFPBs for nonparticipating traditional and limited-payment contracts and the additional insurance liabilities for universal life-type contracts with secondary guarantees reported in the preceding rollforward tables to LFPBs on the consolidated balance sheets was as follows at:
_______________ (1)Includes liabilities related to fully reinsured individual long-term care insurance. See Note 3. (2)Participating whole life insurance uses an interest assumption based on the non-forfeiture interest rate, ranging from 3.5% to 4.5%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts, and also includes a liability for terminal dividends. Participating whole life insurance represented 3% of the Company’s life insurance in-force at both September 30, 2023 and 2022, and 40% and 41% of gross traditional life insurance premiums for the nine months ended September 30, 2023 and 2022, respectively. Information regarding LFPBs for non-participating traditional and limited-payment contracts was as follows:
Policyholder Account Balances Information regarding policyholder account balances was as follows:
_______________ (1)Includes liabilities related to separate account products where the contract holder elected a general account investment option. (2)Excludes the effects of embedded derivatives related to index-linked crediting rates. A reconciliation of policyholder account balances reported in the preceding rollforward table to the liability for policyholder account balances on the consolidated balance sheets was as follows at:
The balance of 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 was as follows at:
_______________ (1)Includes policyholder account balances for fixed rate annuities and the fixed account portion of variable annuities. (2)Includes policyholder account balances for retained asset accounts, universal life policies and the fixed account portion of universal variable life insurance policies. (3)Amounts are gross of policy loans. Market Risk Benefits Information regarding MRB assets and liabilities associated with variable annuities was as follows:
_______________ (1)Amounts represent the sum of MRB assets and MRB liabilities presented on the consolidated balance sheets at September 30, 2023 and 2022, with the exception of ($7) million and $2 million, respectively, of index-linked annuities not included in this table, and at December 31, 2022 and 2021, with the exception of $3 million and $5 million, respectively, of index-linked annuities not included in this table. Market conditions, including, but not limited to, changes in interest rates, equity indices, market volatility and variations in actuarial assumptions, including policyholder behavior, mortality and risk margins related to non-capital markets inputs, as well as changes in nonperformance risk, may result in significant fluctuations in the estimated fair value of the guarantees. As part of the AAR in 2023 and 2022, the Company updated assumptions regarding policyholder behavior, mortality, separate account fund allocations and volatility, which are reflected in the table above. Separate Accounts Information regarding separate account liabilities was as follows:
A reconciliation of separate account liabilities reported in the preceding rollforward table to the separate account liabilities balance on the consolidated balance sheets was as follows at:
The aggregate estimated fair value of assets, by major investment asset category, supporting separate accounts was as follows at:
Net Amount at Risk and Cash Surrender Values Information regarding the net amount at risk and cash surrender value for insurance products was as follows at:
Products may contain both separate account and general account fund options; accordingly, net amount at risk and cash surrender value reported in the table above relate to the total account balance for each respective product grouping.
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Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Deferred Policy Acquisition Costs and Present Value of Future Insurance Profits, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles | 5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles Deferred Policy Acquisition Costs and Value of Business Acquired Information regarding DAC and VOBA was as follows:
_______________ (1)Includes an adjustment to eliminate balances included in AOCI related to the adoption of ASU 2018-12 (see Note 2). Deferred Sales Inducements Information regarding DSI, included in other assets, was as follows:
Unearned Revenue Information regarding unearned revenue, included in other policy-related balances, was as follows:
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Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | 6. Investments See Notes 1 and 8 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for a description of the Company’s accounting policies for investments and the fair value hierarchy for investments and the related valuation methodologies. Fixed Maturity Securities Available-for-sale Fixed Maturity Securities by Sector Fixed maturity securities by sector were as follows at:
The Company held non-income producing fixed maturity securities with an estimated fair value of $12 million at September 30, 2023. The Company did not hold non-income producing fixed maturity securities at December 31, 2022. Maturities of Fixed Maturity Securities The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at September 30, 2023:
_______________ (1)Structured securities include residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”) (collectively, “Structured Securities”). Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. Structured Securities are shown separately, as they are not due at a single maturity. Continuous Gross Unrealized Losses for Fixed Maturity Securities by Sector The estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position, by sector and by length of time that the securities have been in a continuous unrealized loss position, were as follows at:
Allowance for Credit Losses for Fixed Maturity Securities Evaluation and Measurement Methodologies For fixed maturity securities in an unrealized loss position, management first assesses whether the Company intends to sell, or whether it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to estimated fair value through net investment gains (losses). For fixed maturity securities that do not meet the aforementioned criteria, management evaluates whether the decline in estimated fair value has resulted from credit losses or other factors. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the allowance for credit loss evaluation process include, but are not limited to: (i) the extent to which estimated fair value is less than amortized cost; (ii) any changes to the rating of the security by a rating agency; (iii) adverse conditions specifically related to the security, industry or geographic area; and (iv) payment structure of the fixed maturity security and the likelihood of the issuer being able to make payments in the future or the issuer’s failure to make scheduled interest and principal payments. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss is deemed to exist and an allowance for credit losses is recorded, limited by the amount that the estimated fair value is less than the amortized cost basis, with a corresponding charge to net investment gains (losses). Any unrealized losses that have not been recorded through an allowance for credit losses are recognized in OCI. Once a security specific allowance for credit losses is established, the present value of cash flows expected to be collected from the security continues to be reassessed. Any changes in the security specific allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense in net investment gains (losses). Fixed maturity securities are also evaluated to determine whether any amounts have become uncollectible. When all, or a portion, of a security is deemed uncollectible, the uncollectible portion is written-off with an adjustment to amortized cost and a corresponding reduction to the allowance for credit losses. Accrued interest receivables are presented separate from the amortized cost basis of fixed maturity securities. An allowance for credit losses is not estimated on an accrued interest receivable, rather receivable balances 90-days past due are deemed uncollectible and are written off with a corresponding reduction to net investment income. The accrued interest receivable on fixed maturity securities totaled $689 million and $602 million at September 30, 2023 and December 31, 2022, respectively, and is included in accrued investment income. Fixed maturity securities are also evaluated to determine if they qualify as purchased financial assets with credit deterioration (“PCD”). To determine if the credit deterioration experienced since origination is more than insignificant, both (i) the extent of the credit deterioration and (ii) any rating agency downgrades are evaluated. For securities categorized as PCD assets, the present value of cash flows expected to be collected from the security are compared to the par value of the security. If the present value of cash flows expected to be collected is less than the par value, credit losses are embedded in the purchase price of the PCD asset. In this situation, both an allowance for credit losses and amortized cost gross-up is recorded, limited by the amount that the estimated fair value is less than the grossed-up amortized cost basis. Any difference between the purchase price and the present value of cash flows is amortized or accreted into net investment income over the life of the PCD asset. Any subsequent PCD asset allowance for credit losses is evaluated in a manner similar to the process described above for fixed maturity securities. Current Period Evaluation Based on the Company’s current evaluation of its fixed maturity securities in an unrealized loss position and the current intent or requirement to sell, the Company recorded an allowance for credit losses of $22 million, relating to 24 securities at September 30, 2023. Management concluded that for all other fixed maturity securities in an unrealized loss position, the unrealized loss was not due to issuer-specific credit-related factors and as a result was recognized in OCI. Where unrealized losses have not been recognized into income, it is primarily because the securities’ bond issuer(s) are of high credit quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in estimated fair value is largely due to changes in interest rates and non-issuer specific credit spreads. These issuers continued to make timely principal and interest payments and the estimated fair value is expected to recover as the securities approach maturity. Rollforward of the Allowance for Credit Losses for Fixed Maturity Securities by Sector The changes in the allowance for credit losses by sector were as follows:
_______________ (1)The Company recorded total write-offs of $8 million and $10 million for the nine months ended September 30, 2023 and 2022, respectively. Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at:
_______________ (1)Purchases of mortgage loans from third parties were $224 million and $255 million for the three months and nine months ended September 30, 2023, respectively, and $387 million and $1.6 billion for the three months and nine months ended September 30, 2022, respectively, and were primarily comprised of residential mortgage loans. Allowance for Credit Losses for Mortgage Loans Evaluation and Measurement Methodologies The allowance for credit losses is a valuation account that is deducted from the mortgage loan’s amortized cost basis to present the net amount expected to be collected on the mortgage loan. The loan balance, or a portion of the loan balance, is written-off against the allowance when management believes this amount is uncollectible. Accrued interest receivables are presented separate from the amortized cost basis of mortgage loans. An allowance for credit losses is generally not estimated on an accrued interest receivable, rather when a loan is placed in nonaccrual status the associated accrued interest receivable balance is written off with a corresponding reduction to net investment income. The accrued interest receivable on mortgage loans is included in accrued investment income and totaled $118 million and $115 million at September 30, 2023 and December 31, 2022, respectively. The allowance for credit losses is estimated using relevant available information, from internal and external sources, relating to past events, current conditions, and a reasonable and supportable forecast. Historical credit loss experience provides the basis for estimating expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics and environmental conditions. A reasonable and supportable forecast period of two-years is used with an input reversion period of one-year. Mortgage loans are evaluated in each of the three portfolio segments to determine the allowance for credit losses. The loan-level loss rates are determined using individual loan terms and characteristics, risk pools/internal ratings, national economic forecasts, prepayment speeds, and estimated default and loss severity. The resulting loss rates are applied to the mortgage loan’s amortized cost to generate an allowance for credit losses. In certain situations, the allowance for credit losses is measured as the difference between the loan’s amortized cost and liquidation value of the collateral. These situations include collateral dependent loans, modifications, foreclosure probable loans, and loans with dissimilar risk characteristics. Mortgage loans are also evaluated to determine if they qualify as PCD assets. To determine if the credit deterioration experienced since origination is more than insignificant, the extent of credit deterioration is evaluated. All re-performing/modified loan (“RPL”) pools purchased after December 31, 2019 are determined to have been acquired with evidence of more than insignificant credit deterioration since origination and are classified as PCD assets. RPLs are pools of residential mortgage loans acquired at a discount or premium which have both credit and non-credit components. For PCD mortgage loans, the allowance for credit losses is determined using a similar methodology described above, except the loss-rate is determined at the pool level instead of the individual loan level. The initial allowance for credit losses, determined on a collective basis, is then allocated to the individual loans. The initial amortized cost of the loan is grossed-up to reflect the sum of the loan’s purchase price and allowance for credit losses. The difference between the grossed-up amortized cost basis and the par value of the loan is a non-credit discount or premium, which is accreted or amortized into net investment income over the remaining life of the loan. Any subsequent PCD mortgage loan allowance for credit losses is evaluated in a manner similar to the process described above for each of the three portfolio segments. Rollforward of the Allowance for Credit Losses for Mortgage Loans by Portfolio Segment The changes in the allowance for credit losses by portfolio segment were as follows:
Credit Quality of Mortgage Loans by Portfolio Segment The amortized cost of mortgage loans by year of origination and credit quality indicator was as follows at:
The loan-to-value ratio is a measure commonly used to assess the quality of commercial and agricultural mortgage loans. The loan-to-value ratio compares the amount of the loan to the estimated fair value of the underlying property collateralizing the loan and is commonly expressed as a percentage. A loan-to-value ratio less than 100% indicates an excess of collateral value over the loan amount. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds the collateral value. Performing status is a measure commonly used to assess the quality of residential mortgage loans. A loan is considered performing when the borrower makes consistent and timely payments. The amortized cost of commercial mortgage loans by debt-service coverage ratio was as follows at:
The debt-service coverage ratio compares a property’s net operating income to its debt-service payments. Debt-service coverage ratios less than 1.00 times indicate that property operations do not generate enough income to cover the loan’s current debt payments. A debt-service coverage ratio greater than 1.00 times indicates an excess of net operating income over the debt-service payments. Past Due Mortgage Loans by Portfolio Segment The Company has a high-quality, well-performing mortgage loan portfolio, with over 99% of all mortgage loans classified as performing at both September 30, 2023 and December 31, 2022. Delinquency is defined consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans — 60 days; and agricultural mortgage loans — 90 days. The aging of the amortized cost of past due mortgage loans by portfolio segment was as follows at:
Mortgage Loans in Nonaccrual Status by Portfolio Segment Mortgage loans are placed in a nonaccrual status if there are concerns regarding collectability of future payments or the loan is past due, unless the past due loan is well collateralized. The amortized cost of mortgage loans in a nonaccrual status by portfolio segment was as follows at:
_______________ (1)The Company had no mortgage loans in nonaccrual status for which there was no related allowance for credit losses at both September 30, 2023 and December 31, 2022. Current period investment income on mortgage loans in nonaccrual status was $1 million for both the nine months ended September 30, 2023 and 2022Other Invested Assets Over 75% of other invested assets is comprised of freestanding derivatives with positive estimated fair values. See Note 7 for information about freestanding derivatives with positive estimated fair values. Other invested assets also includes the Company’s investment in company-owned life insurance, Federal Home Loan Bank (“FHLB”) stock, tax credit and renewable energy partnerships and leveraged leases. Net Unrealized Investment Gains (Losses) Unrealized investment gains (losses) on fixed maturity securities and the effect on future policy benefits, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI. The components of net unrealized investment gains (losses), included in AOCI, were as follows at:
The changes in net unrealized investment gains (losses) were as follows:
Concentrations of Credit Risk There were no investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, at both September 30, 2023 and December 31, 2022. Securities Lending Elements of the securities lending program are presented below at:
_______________ (1)Included in fixed maturity securities. (2)Included in payables for collateral under securities loaned and other transactions. The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:
_______________ (1)The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral. If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized in normal market conditions, or both. The estimated fair value of the securities on loan related to the cash collateral on open at September 30, 2023 was $699 million, primarily comprised of U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including agency RMBS, ABS, U.S. government and agency securities, U.S. and foreign corporate securities, non-agency RMBS and CMBS) with 58% invested in U.S. government and agency securities, agency RMBS and cash and cash equivalents at September 30, 2023. If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company. Invested Assets on Deposit, Held in Trust and Pledged as Collateral Invested assets on deposit, held in trust and pledged as collateral at estimated fair value were as follows at:
_______________ (1)The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $94 million and $21 million of the assets on deposit represents restricted cash and cash equivalents at September 30, 2023 and December 31, 2022, respectively. (2)The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions, of which $228 million and $240 million of the assets held in trust balance represents restricted cash and cash equivalents at September 30, 2023 and December 31, 2022, respectively. (3)The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 3 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report) and derivative transactions (see Note 7). See “— Securities Lending” for information regarding securities on loan. In addition, the Company’s investment in FHLB common stock, which is considered restricted until redeemed by the issuer, was $247 million and $201 million at redemption value at September 30, 2023 and December 31, 2022, respectively. Variable Interest Entities A variable interest entity (“VIE”) is a legal entity that does not have sufficient equity at risk to finance its activities or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. The Company enters into various arrangements with VIEs in the normal course of business and has invested in legal entities that are VIEs. VIEs are consolidated when it is determined that the Company is the primary beneficiary. A primary beneficiary is the variable interest holder in a VIE with both (i) the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In addition, the evaluation of whether a legal entity is a VIE and if the Company is a primary beneficiary includes a review of the capital structure of the VIE, the related contractual relationships and terms, the nature of the operations and purpose of the VIE, the nature of the VIE interests issued and the Company’s involvement with the entity. There were no material VIEs for which the Company has concluded that it is the primary beneficiary at either September 30, 2023 or December 31, 2022. The carrying amount and maximum exposure to loss related to the VIEs for which the Company has concluded that it holds a variable interest, but is not the primary beneficiary, were as follows at:
The Company’s investments in unconsolidated VIEs are described below. Fixed Maturity Securities The Company invests in U.S. corporate bonds, foreign corporate bonds and Structured Securities issued by VIEs. The Company is not obligated to provide any financial or other support to these VIEs, other than the original investment. The Company’s involvement with these entities is limited to that of a passive investor. The Company has no unilateral right to appoint or remove the servicer, special servicer, or investment manager, which are generally viewed as having the power to direct the activities that most significantly impact the economic performance of the VIE, nor does the Company function in any of these roles. The Company does not have the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity; as a result, the Company has determined it is not the primary beneficiary, or consolidator, of the VIE. The Company’s maximum exposure to loss on these fixed maturity securities is limited to the amortized cost of these investments. See “— Fixed Maturity Securities Available-for-sale” for information on these securities. Limited Partnerships and LLCs The Company holds investments in certain limited partnerships and LLCs which are VIEs. These ventures include limited partnerships, LLCs, private equity funds, and, to a lesser extent, tax credit and renewable energy partnerships. The Company is not considered the primary beneficiary, or consolidator, when its involvement takes the form of a limited partner interest and is restricted to a role of a passive investor, as a limited partner’s interest does not provide the Company with any substantive kick-out or participating rights, nor does it provide the Company with the power to direct the activities of the fund. The Company’s maximum exposure to loss on these investments is limited to: (i) the amount invested in debt or equity of the VIE and (ii) commitments to the VIE, as described in Note 13. Net Investment Income The components of net investment income were as follows:
_______________ (1)Includes net investment income pertaining to other limited partnership interests of $64 million and $156 million for the three months and nine months ended September 30, 2023, respectively, and ($127) million and $178 million for the three months and nine months ended September 30, 2022, respectively. Net Investment Gains (Losses) Components of Net Investment Gains (Losses) The components of net investment gains (losses) were as follows:
Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($2) million for both the three months and nine months ended September 30, 2023, and ($1) million and ($22) million for the three months and nine months ended September 30, 2022, respectively. Sales or Disposals of Fixed Maturity Securities Investment gains and losses on sales of securities are determined on a specific identification basis. Proceeds from sales or disposals of fixed maturity securities and the components of fixed maturity securities net investment gains (losses) were as follows:
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Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | 7. Derivatives Accounting for Derivatives See Notes 1 and 8 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for a description of the Company’s accounting policies for derivatives and the fair value hierarchy for derivatives. Types of Derivative Instruments and Derivative Strategies The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to minimize its exposure to various market risks. Commonly used derivative instruments include, but are not necessarily limited to: •Interest rate derivatives: swaps, floors, caps, swaptions and forwards; •Foreign currency exchange rate derivatives: forwards and swaps; •Equity market derivatives: options, total return swaps and hybrid options; and •Credit derivatives: single and index reference credit default swaps and swaptions. For detailed information on these contracts and the related strategies, see Note 7 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report. Primary Risks Managed by Derivatives The primary underlying risk exposure, gross notional amount and estimated fair value of derivatives, excluding embedded derivatives, held were as follows at:
Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify as part of a hedging relationship at both September 30, 2023 and December 31, 2022. The Company’s use of derivatives includes (i) derivatives that serve as macro hedges of the Company’s exposure to various risks and generally do not qualify for hedge accounting because they do not meet the criteria required under portfolio hedging rules; (ii) derivatives that economically hedge insurance liabilities and generally do not qualify for hedge accounting because they do not meet the criteria of being “highly effective” as outlined in Accounting Standards Codification 815 — Derivatives and Hedging; (iii) derivatives that economically hedge MRBs that do not qualify for hedge accounting because the changes in estimated fair value of the MRBs are already recorded in net income; and (iv) written credit default swaps that are used to create synthetic credit investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. The amount and location of gains (losses), including earned income, recognized for derivatives and gains (losses) pertaining to hedged items reported in net derivative gains (losses) were as follows:
At September 30, 2023, the Company held no qualified derivatives hedging exposure to future cash flows for forecasted asset purchases. At December 31, 2022, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions was less than one year. At September 30, 2023 and December 31, 2022, the balance in AOCI associated with cash flow hedges was $509 million and $638 million, respectively. Credit Derivatives In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps were as follows at:
_______________ (1)The Company has written credit protection on both single name and index references. The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s, S&P and Fitch. If no rating is available from a rating agency, then an internally developed rating is used. (2)The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts. Counterparty Credit Risk The Company may be exposed to credit-related losses in the event of counterparty nonperformance on derivative instruments. Generally, the credit exposure is the fair value at the reporting date less any collateral received from the counterparty. The Company manages its credit risk by: (i) entering into derivative transactions with creditworthy counterparties governed by master netting agreements; (ii) trading through regulated exchanges and central clearing counterparties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single party credit exposures which are subject to periodic management review. See Note 8 for a description of the impact of credit risk on the valuation of derivatives. The estimated fair values of net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
_______________ (1)Represents amounts subject to an enforceable master netting agreement or similar agreement. (2)The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreement. (3)Securities collateral received from counterparties is not reported on the consolidated balance sheets and may not be sold or re-pledged unless the counterparty is in default. Amounts do not include excess of collateral pledged or received. The Company’s collateral arrangements generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the amount owed by that counterparty reaches a minimum transfer amount. Certain of these arrangements also include credit-contingent provisions which permit the party with positive fair value to terminate the derivative at the current fair value or demand immediate full collateralization from the party in a net liability position, in the event that the financial strength or credit rating of the party in a net liability position falls below a certain level. The aggregate estimated fair values of derivatives in a net liability position containing such credit-contingent provisions and the aggregate estimated fair value of assets posted as collateral for such instruments were as follows at:
_______________ (1)After taking into consideration the existence of netting agreements. (2)Substantially all of the Company’s collateral arrangements provide for daily posting of collateral for the full value of the derivative contract. As a result, if the credit-contingent provisions of derivative contracts in a net liability position were triggered, minimal additional assets would be required to be posted as collateral or needed to settle the instruments immediately. Additionally, the Company is required to pledge initial margin for certain new over-the-counter (“OTC”) bilateral contracts between two counterparties (“OTC-bilateral”) derivative transactions to third-party custodians.
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Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | 8. Fair Value Considerable judgment is often required in interpreting market data to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. Recurring Fair Value Measurements The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are presented in the tables below. Investments that do not have a readily determinable fair value and are measured at net asset value (or equivalent) as a practical expedient to estimated fair value are excluded from the fair value hierarchy.
_______________ (1)Derivative assets are reported in other invested assets and derivative liabilities are reported in other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated balance sheets. (2)Embedded derivative liabilities on index-linked annuities are reported in policyholder account balancesValuation Controls and Procedures The Company monitors and provides oversight of valuation controls and policies for securities, mortgage loans and derivatives, which are primarily executed by its valuation service providers. The valuation methodologies used to determine fair values prioritize the use of observable market prices and market-based parameters and determines that judgmental valuation adjustments, when applied, are based upon established policies and are applied consistently over time. The valuation methodologies for securities, mortgage loans and derivatives are reviewed on an ongoing basis and revised when necessary. In addition, the Chief Accounting Officer periodically reports to the Audit Committee of Brighthouse Financial’s Board of Directors regarding compliance with fair value accounting standards. The fair value of financial assets and financial liabilities is based on quoted market prices, where available. Prices received are assessed to determine if they represent a reasonable estimate of fair value. Several controls are performed, including certain monthly controls, which include, but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed prices of securities sold to the fair value estimates, reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing due diligence to confirm that independent pricing services use market-based parameters. The process includes a determination of the observability of inputs used in estimated fair values received from independent pricing services or brokers by assessing whether these inputs can be corroborated by observable market data. Independent non-binding broker quotes, also referred to herein as “consensus pricing,” are used for a non-significant portion of the portfolio. Prices received from independent brokers are assessed to determine if they represent a reasonable estimate of fair value by considering such pricing relative to the current market dynamics and current pricing for similar financial instruments. A formal process is also applied to challenge any prices received from independent pricing services that are not considered representative of estimated fair value. If prices received from independent pricing services are not considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations are obtained. If obtaining an independent non-binding broker quotation is unsuccessful, the last available price will be used. Additional controls are performed, such as, balance sheet analytics to assess reasonableness of period-to-period pricing changes, including any price adjustments. Price adjustments are applied if prices or quotes received from independent pricing services or brokers are not considered reflective of market activity or representative of estimated fair value. The Company did not have significant price adjustments during the nine months ended September 30, 2023. Determination of Fair Value Fixed Maturity Securities The fair values for actively traded marketable bonds, primarily U.S. government and agency securities, are determined using the quoted market prices and are classified as Level 1 assets. For fixed maturity securities classified as Level 2 assets, fair values are determined using either a market or income approach and are valued based on a variety of observable inputs as described below. U.S. corporate and foreign corporate securities: Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, benchmark yields, spreads off benchmark yields, new issuances, issuer rating, trades of identical or comparable securities, or duration. Privately-placed securities are valued using the additional key inputs: market yield curve, call provisions, observable prices and spreads for similar public or private securities that incorporate the credit quality and industry sector of the issuer, and delta spread adjustments to reflect specific credit-related issues. U.S. government and agency, state and political subdivision and foreign government securities: Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, benchmark U.S. Treasury yield or other yields, spread off the U.S. Treasury yield curve for the identical security, issuer ratings and issuer spreads, broker-dealer quotes, and comparable securities that are actively traded. Structured Securities: Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, spreads for actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity, ratings, geographic region, weighted average coupon and weighted average maturity, average delinquency rates and debt-service coverage ratios. Other issuance-specific information is also used, including, but not limited to, collateral type, structure of the security, vintage of the loans, payment terms of the underlying asset, payment priority within tranche, and deal performance. Equity Securities and Short-term Investments The fair value for actively traded equity securities and short-term investments are determined using quoted market prices and are classified as Level 1 assets. For financial instruments classified as Level 2 assets, fair values are determined using a market approach and are valued based on a variety of observable inputs as described below. Equity securities and short-term investments: Fair value is determined using third-party commercial pricing services, with the primary input being quoted prices in markets that are not active. Derivatives Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the OTC market. Certain of the Company’s OTC derivatives are cleared and settled through central clearing counterparties (“OTC-cleared”), while others are OTC-bilateral. The fair values for exchange-traded derivatives are determined using the quoted market prices and are classified as Level 1 assets. For OTC-bilateral derivatives and OTC-cleared derivatives classified as Level 2 assets or liabilities, fair values are determined using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models which are based on market standard valuation methodologies and a variety of observable inputs. The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-bilateral and OTC-cleared derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and management believes they are consistent with what other market participants would use when pricing such instruments. Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s derivatives and could materially affect net income. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period. Market Risk Benefits MRBs principally include guaranteed minimum benefits on variable annuity contracts including benefits reinsured related to these guarantees. The estimated fair value of variable annuity guarantees accounted for as MRBs is determined based on the present value of projected future benefits less the present value of projected future fees attributable to the guarantees. At policy inception, the Company determines an attributed fee ratio by solving for a percentage of projected future rider fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. To the extent the rider fees are insufficient, the Company may also include fees related to mortality and expense charges in the attributed fee ratio, provided the total fees included in the calculation do not exceed total contract fees and assessments collected from the contract holder. Any additional fees not included in the attributed fee ratio are considered revenue and reported in universal life and investment-type product policy fees. The attributed fee ratio is not updated in subsequent periods. The Company updates the estimated fair value of variable annuity guarantees in subsequent periods by projecting future benefits using capital markets inputs and actuarial assumptions including expectations of policyholder behavior. A risk neutral valuation methodology is used to project the cash flows from the guarantees under multiple capital markets scenarios. The reported estimated fair value is then determined by taking the present value of these cash flows using a discount rate that incorporates a spread over the risk-free rate to reflect the Company’s nonperformance risk and adding a risk margin. The valuation of MRBs includes an adjustment for the risk that the Company fails to satisfy its obligations, which is referred to as nonperformance risk. The nonperformance risk adjustment is captured as an additional spread applied to the risk-free rate in determining the rate to discount the cash flows of the liability. The spread over the risk-free rate is based on the Company’s creditworthiness taking into consideration publicly available information relating to spreads in the secondary market for Brighthouse Financial’s debt. These observable spreads are then adjusted, as necessary, to reflect the financial strength ratings of the issuing insurance subsidiaries as compared to the credit rating of Brighthouse Financial. Risk margins are established to capture the non-capital markets risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties in certain actuarial assumptions. The establishment of risk margins requires the use of significant actuarial judgment, including assumptions of the amount needed to cover the guarantees. Actuarial assumptions are reviewed at least annually, and if they change significantly, the estimated fair value is adjusted through net income. Capital market inputs used in the measurement of variable annuity guarantees are updated quarterly through net income, except for the change attributable to the Company’s nonperformance risk, which is reported in OCI. Embedded Derivatives Embedded derivatives include crediting rates associated with index-linked annuity contracts. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income. The crediting rates associated with these features are embedded derivatives which are measured at estimated fair value separately from the host fixed annuity contract. These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. The estimated fair value of crediting rates associated with index-linked annuities is determined using a combination of an option pricing model and an option-budget approach. The valuation of these embedded derivatives also includes the establishment of a risk margin, as well as changes in nonperformance risk. Actuarial assumptions including policyholder behavior and expectations for renewals at the end of the term period are reviewed at least annually, and if they change significantly, the estimated fair value is adjusted through net income. Capital market inputs used in the measurement of crediting rate embedded derivatives are updated quarterly through net income. Transfers Into or Out of Level 3: Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) Certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were as follows at:
_______________ (1)Mortality rates vary by age and by demographic characteristics such as gender. The range shown reflects the mortality rate for policyholders between 35 and 90 years old. Mortality rate assumptions are set based on company experience and include an assumption for mortality improvement. (2)The lapse rate range reflects base lapse rates for major product categories for duration 1-20. Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. For variable annuity guarantees, a dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. (3)The utilization rate assumption for variable annuity guarantees estimates the percentage of contract holders with a GMIB or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible in a given year. The range shown represents the floor and cap of the GMIB dynamic election rates across varying levels of in-the-money. For lifetime withdrawal guarantee riders, the assumption is that everyone will begin withdrawals once account value reaches zero which is equivalent to a 100% utilization rate. Utilization rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the policyholder. (4)The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For variable annuity GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For variable annuity GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value. (5)Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing MRBs. (6)Nonperformance risk spread varies by duration. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the MRB or embedded derivative. The Company does not develop unobservable inputs used in measuring fair value for all other assets and liabilities classified within Level 3; therefore, these are not included in the table above. The other Level 3 assets and liabilities primarily included fixed maturity securities and derivatives. For fixed maturity securities valued based on non-binding broker quotes, an increase (decrease) in credit spreads would result in a higher (lower) fair value. For derivatives valued based on third-party pricing models, an increase (decrease) in credit spreads would generally result in a higher (lower) fair value. The changes in assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (excluding MRBs disclosed in Note 4) were summarized as follows:
_______________ (1)Comprised of U.S. and foreign corporate securities. (2)Freestanding derivative assets and liabilities are reported net for purposes of the rollforward. (3)Amortization of premium/accretion of discount is included in net investment income. Changes in the allowance for credit losses and direct write-offs are charged to net income (loss) on securities are included in net investment gains (losses). Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses). (4)Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (5)Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements. (6)Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and out of Level 3 in the same period are excluded from the rollforward. (7)Changes in unrealized gains (losses) included in net income (loss) for fixed maturities are reported in either net investment income or net investment gains (losses). Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses). Fair Value of Financial Instruments Carried at Other Than Fair Value The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income and payables for collateral under securities loaned and other transactions. The estimated fair value of the excluded financial instruments, which are primarily classified in Level 2, approximates carrying value as they are short-term in nature such that the Company believes there is minimal risk of material changes in interest rates or credit quality. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure. The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:
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Long-term Debt |
9 Months Ended |
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Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 9. Long-term Debt Repurchase Facility In July 2023, Brighthouse Life Insurance Company entered into an additional secured committed repurchase facility (the “Repurchase Facility”) under which Brighthouse Life Insurance Company may enter into repurchase transactions in an aggregate amount up to $500 million for a term of up to two years, which is available to Brighthouse Life Insurance Company under certain market conditions. Under the Repurchase Facility, Brighthouse Life Insurance Company may sell certain eligible securities at a purchase price based on the market value of the securities less an applicable margin based on the types of securities sold, with a concurrent agreement to repurchase such securities at a predetermined future date (up to three months) and at a price which represents the original purchase price plus interest. At September 30, 2023, there were no borrowings under the Repurchase Facility.
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Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | 10. Equity Preferred Stock Preferred stock shares authorized, issued and outstanding were as follows at both September 30, 2023 and December 31, 2022:
The per share and aggregate dividends declared for BHF’s preferred stock by series were as follows:
Common Stock Repurchase Program During the nine months ended September 30, 2023 and 2022, BHF repurchased 3,968,138 and 8,194,191 shares, respectively, of its common stock through open market purchases pursuant to 10b5-1 plans for $190 million and $395 million, respectively. At September 30, 2023, BHF had $104 million remaining under its common stock repurchase program. Accumulated Other Comprehensive Income (Loss) Information regarding changes in the balances of each component of AOCI was as follows:
__________________ (1)See Note 6 for information on offsets to investments related to future policy benefits. (2)Includes OCI related to foreign currency translation and defined benefit plan gains and losses. (3)The effects of income taxes on amounts recorded to AOCI are also recognized in AOCI. These income tax effects are released from AOCI when the related activity is reclassified into results from operations. Information regarding amounts reclassified out of each component of AOCI was as follows:
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Other Revenues and Other Expenses |
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Other Revenues and Other Expenses | 11. Other Revenues and Other Expenses Other Revenues The Company has entered into contracts with mutual funds, fund managers, and their affiliates (collectively, the “Funds”) whereby the Company is paid monthly or quarterly fees (“12b-1 fees”) for providing certain services to customers and distributors of the Funds. The 12b-1 fees are generally equal to a fixed percentage of the average daily balance of the customer’s investment in a fund. The percentage is specified in the contract between the Company and the Funds. Payments are generally collected when due and are neither refundable nor able to offset future fees. To earn these fees, the Company performs services such as responding to phone inquiries, maintaining records, providing information to distributors and shareholders about fund performance and providing training to account managers and sales agents. The passage of time reflects the satisfaction of the Company’s performance obligations to the Funds and is used to recognize revenue associated with 12b-1 fees. Other revenues consisted primarily of 12b-1 fees of $68 million and $201 million for the three months and nine months ended September 30, 2023, respectively, and $70 million and $226 million for the three months and nine months ended September 30, 2022, respectively, of which substantially all were reported in the Annuities segment. Other Expenses Information on other expenses was as follows:
Capitalization of DAC See Note 5 for additional information on the capitalization of DAC.
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Earnings Per Common Share |
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Earnings Per Common Share | 12. Earnings Per Common Share The calculation of earnings per common share was as follows:
For the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2022, weighted average shares used for calculating diluted earnings per common share excludes 187,371 of out-of-the-money stock options, as the inclusion of such shares would be antidilutive to the earnings per common share calculation due to the average share price for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2022. For the nine months ended September 30, 2023, basic loss per common share equaled diluted loss per common share. The diluted shares were not included in the per share calculation for these periods as the inclusion of such shares would have an antidilutive effect.
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Contingencies, Commitments and Guarantees |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies, Commitments and Guarantees | 13. Contingencies, Commitments and Guarantees Contingencies Litigation The Company is a defendant in a number of litigation matters. In some of the matters, large or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. The Company also receives and responds to subpoenas or other inquiries seeking a broad range of information from various state and federal regulators, agencies and officials. The issues involved in information requests and regulatory matters vary widely, but can include inquiries or investigations concerning the Company’s compliance with applicable insurance and other laws and regulations. The Company cooperates in these inquiries. Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally be difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated at September 30, 2023. Matters as to Which an Estimate Can Be Made For some loss contingency matters, the Company is able to estimate a reasonably possible range of loss. For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. In addition to amounts accrued for probable and reasonably estimable losses, as of September 30, 2023, the Company estimates the aggregate range of reasonably possible losses to be up to approximately $10 million. Matters as to Which an Estimate Cannot Be Made For other matters, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. Sales Practices Claims Over the past several years, the Company has faced claims and regulatory inquiries and investigations, alleging improper marketing or sales of individual life insurance policies, annuities or other products. The Company continues to defend vigorously against the claims in these matters. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for sales practices matters. Cost of Insurance Class Actions Richard A. Newton v. Brighthouse Life Insurance Company (U.S. District Court, Northern District of Georgia, Atlanta Division, filed May 8, 2020). Plaintiff has filed a purported class action lawsuit against Brighthouse Life Insurance Company. Plaintiff was the owner of a universal life insurance policy issued by Travelers Insurance Company, a predecessor to Brighthouse Life Insurance Company. Plaintiff seeks to certify a class of all persons who own or owned life insurance policies issued where the terms of the life insurance policy provide or provided, among other things, a guarantee that the cost of insurance rates would not be increased by more than a specified percentage in any contract year. Plaintiff also alleges that cost of insurance charges were based on improper factors and should have decreased over time due to improving mortality but did not. Plaintiff alleges, among other things, causes of action for breach of contract, fraud, suppression and concealment, and violation of the Georgia Racketeer Influenced and Corrupt Organizations Act. Plaintiff seeks to recover damages, including punitive damages, interest and treble damages, attorneys’ fees, and injunctive and declaratory relief. Brighthouse Life Insurance Company filed a motion to dismiss in June 2020, which was granted in part and denied in part in March 2021. Plaintiff was granted leave to amend the complaint. On January 18, 2023, the plaintiff filed a motion on consent to amend the second amended class action complaint to narrow the scope of the class sought to those persons who own or owned life insurance policies issued in Georgia. The motion was granted on January 23, 2023, and the third amended class action complaint was filed on January 23, 2023. The Company intends to vigorously defend this matter. Lawrence Martin v. Brighthouse Life Insurance Company (U.S. District Court, Southern District of New York, filed April 6, 2021). Plaintiff has filed a purported class action lawsuit against Brighthouse Life Insurance Company. Plaintiff is the owner of a universal life insurance policy issued by Travelers Insurance Company, a predecessor to Brighthouse Life Insurance Company. Plaintiff seeks to certify a class of similarly situated owners of universal life insurance policies issued or administered by defendants and alleges that cost of insurance charges were based on improper factors and should have decreased over time due to improving mortality but did not. Plaintiff alleges, among other things, causes of action for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment. Plaintiff seeks to recover compensatory damages, attorney’s fees, interest, and equitable relief including a constructive trust. Brighthouse Life Insurance Company filed a motion to dismiss in June 2021, which was denied in February 2022. Brighthouse Life Insurance Company of NY was initially named as a defendant when the lawsuit was filed, but was dismissed as a defendant, without prejudice, in April 2022. The Company intends to vigorously defend this matter. MOVEit Data Security Incident Litigation Kennedy v. Progress Software Corporation, et al. (U.S. District Court, District of Massachusetts, filed October 3, 2023). BHF has been named as a defendant in a purported class action lawsuit. The action relates to a data security incident at an alleged third-party vendor, PBI Research Services (“PBI”), and allegedly involves the MOVEit file transfer system that PBI uses in its provision of services (“MOVEit Incident”). As it relates to BHF, plaintiff seeks to certify a subclass of persons whose private information was allegedly maintained by BHF and accessed or acquired in connection with the MOVEit Incident. Plaintiff alleges, among other things, that BHF negligently chose to utilize PBI to store and transfer plaintiff’s and purported class members’ private information despite PBI’s use of the MOVEit software which plaintiff contends contained security vulnerabilities. The complaint asserts claims against BHF for negligence, negligence per se, and unjust enrichment, and plaintiff seeks declaratory and injunctive relief, damages, attorneys’ fees and prejudgment interest. BHF intends to vigorously defend this matter. Summary Various litigations, claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, investor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to previously, large or indeterminate amounts, including punitive and treble damages, are sought. Although, in light of these considerations, it is possible that an adverse outcome in certain cases could have a material effect upon the Company’s financial position, based on information currently known by the Company’s management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods. Other Loss Contingencies As with litigation and regulatory loss contingencies, the Company considers establishing liabilities for loss contingencies associated with disputes or other matters involving third parties, including counterparties to contractual arrangements entered into by the Company (e.g., third-party vendors and reinsurers), as well as with tax or other authorities (“other loss contingencies”). The Company establishes liabilities for such other loss contingencies when it is probable that a loss will be incurred and the amount of the loss can be reasonably estimated. In matters where it is not probable, but is reasonably possible that a loss will be incurred and the amount of loss can be reasonably estimated, such losses or range of losses are disclosed, and no accrual is made. In the absence of sufficient information to support an assessment of the reasonably possible loss or range of loss, no accrual is made and no loss or range of loss is disclosed. In the matters where the Company’s subsidiaries are acting as the reinsured or the reinsurer, such matters involve assertions by third parties primarily related to rates, fees or reinsured benefit calculations, and in certain of such matters, the counterparty has made a request to arbitrate. On a quarterly basis, the Company reviews relevant information with respect to other loss contingencies and, when applicable, updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. As of September 30, 2023, the Company estimates the range of reasonably possible losses in excess of the amounts accrued for certain other loss contingencies to be from zero up to approximately $125 million, which are primarily associated with the reinsurance-related matters described above. For certain other matters, the Company may not currently be able to estimate the reasonably possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of such loss. During the second quarter of 2022, the Company settled a reinsurance-related matter with a third party for $140 million, which is reported in other expenses. Commitments Mortgage Loan Commitments The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $294 million and $247 million at September 30, 2023 and December 31, 2022, respectively. Commitments to Fund Partnership Investments, Bank Credit Facilities and Private Corporate Bond Investments The Company commits to fund partnership investments and to lend funds under bank credit facilities and private corporate bond investments. The amounts of these unfunded commitments were $1.4 billion and $1.9 billion at September 30, 2023 and December 31, 2022, respectively. Guarantees In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to $92 million, with a cumulative maximum of $98 million, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments. In addition, the Company indemnifies its directors and officers as provided in its charters and bylaws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future. The Company’s recorded liabilities were $1 million at both September 30, 2023 and December 31, 2022 for indemnities, guarantees and commitments.
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Pay vs Performance Disclosure - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||
Net Income (Loss) Attributable to Parent | $ 479 | $ 413 | $ (195) | $ 3,743 |
Insider Trading Arrangements |
3 Months Ended |
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Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates.
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Consolidation, Policy [Policy Text Block] | Consolidation The accompanying interim condensed consolidated financial statements include the accounts of Brighthouse Financial, as well as partnerships and limited liability companies (“LLC”) that the Company controls. Intercompany accounts and transactions have been eliminated. The Company uses the equity method of accounting for investments in limited partnerships and LLCs when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period. When the Company has virtually no influence over the investee’s operations, the investment is carried at fair value. The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2022 consolidated balance sheet data was derived from audited consolidated financial statements included in Brighthouse Financial, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2022 Annual Report. Reclassifications Certain amounts in the prior year period’s interim condensed consolidated financial statements and related footnotes thereto have been reclassified to conform with the 2023 presentation as discussed throughout the Notes to the Interim Condensed Consolidated Financial Statements. See “— Adoption of New Accounting Pronouncements” for discussion of the adoption of new guidance on long-duration contracts in the first quarter of 2023, parts of which were retrospectively applied to prior periods presented in the interim condensed consolidated financial statements.
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Liability for Future Policy Benefit [Policy Text Block] | Liability for Future Policy Benefits The Company establishes a liability for future policy benefits (“LFPB”) for non-participating term and whole life insurance and income annuities. LFPBs are accrued over time as revenue is recognized based on a net premium ratio. The net premium ratio is the portion of gross premiums required to provide for all future benefits. LFPBs are established using the Company’s current assumptions of future cash flows, discounted at a rate that approximates a single A corporate bond curve. The Company generally aggregates insurance contracts into groupings by issue year, product and segment for determining the net premium ratio and related LFPBs. The Company reviews cash flow assumptions regularly, and if they change significantly, LFPBs are adjusted by determining a revised net premium ratio. The revised net premium ratio is calculated as of contract inception using both actual historical experience and updated future cash flow assumptions. The recalculated net premium ratio is applied to derive a remeasurement gain or loss recognized in the current period net income. For insurance policies in-force as of December 31, 2020, January 1, 2021 is considered the contract inception date. The net premium ratio is also updated quarterly for the difference between actual and expected experience. The net premium ratio is not updated for changes in discount rate assumptions, as changes in the discount rate are updated quarterly and the impacts are reflected in other comprehensive income (loss) (“OCI”). The discount rate assumption is determined by developing a yield curve based on market observable yields for upper-medium grade fixed income instruments derived from an external index. The yield curve is applied to the expected future cash flows used in the measurement of LFPBs based on the duration characteristics of those liabilities. The most significant cash flow assumptions used in the establishment of LFPBs are mortality, policy lapses and market interest rates. See Note 4 for more information on the effect of changes in assumptions on the measurement of LFPBs. The Company also establishes an LFPB for participating term and whole life insurance using a net premium ratio and the Company’s current assumptions of future cash flows. Assumptions are determined at issuance of the policy and are not updated unless a premium deficiency exists. A premium deficiency exists when the LFPB plus the present value of expected future gross premiums are less than expected future benefits and expenses (based on current assumptions). When a premium deficiency exists, the Company will reduce any deferred acquisition costs and may also establish an additional liability to eliminate the deficiency. See Note 4 for more information on assumptions used in establishing LFPBs related to participating term and whole life insurance.
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Policyholder Accounts, Policy [Policy Text Block] | Policyholder Account Balances The Company establishes a policyholder account balance liability for customer deposits on universal life insurance, universal life insurance with secondary guarantees (“ULSG”) and deferred annuity contracts. The policyholder account balance liability is equal to the sum of deposits, plus interest credited, less charges and withdrawals, excluding the impact of any applicable charge that may be incurred upon surrender. The Company also holds additional liabilities for certain product features including secondary guarantees on universal life insurance contracts and the crediting rates associated with index-linked annuities. Additional Liabilities for ULSG The Company establishes a liability in addition to the account balance for secondary guarantees on universal life insurance. These liabilities are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the contract period based on total expected assessments. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company also maintains a liability for profits followed by losses on ULSG determined by projecting future earnings and establishing a liability to offset losses that are expected to occur in later years. Both ULSG liabilities are adjusted for the effects of unrealized investment gains and losses. The Company reviews cash flow assumptions regularly, and, if they change significantly, the liability for secondary guarantees is adjusted by a cumulative charge or credit to net income. Liabilities for secondary guarantees are presented within future policy benefits with changes in the liabilities reported in policyholder benefits and claims, except for the effects of unrealized investment gains and losses, which are reported in OCI. The most significant assumptions used in estimating liabilities for secondary guarantees are the general account rate of return, premium persistency, mortality and lapses. See Note 4 for more information on the effect of changes in assumptions on the measurement of liabilities for secondary guarantees.
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Market Risk Benefit [Policy Text Block] | Market Risk Benefits on Annuity Guarantees Market risk benefits (“MRB”) are contracts or contract features that provide protection to the policyholder from capital markets risk by transferring such risks to the Company. MRBs are required to be separated from the deferred annuity host contract and measured at fair value. The Company establishes MRB assets and liabilities for guaranteed minimum benefits on variable annuity contracts including guaranteed minimum death benefits (“GMDB”), guaranteed minimum income benefits (“GMIB”), guaranteed minimum accumulation benefits (“GMAB”) and guaranteed minimum withdrawal benefits (“GMWB”). MRB assets are also established for reinsured benefits related to these guarantees. Certain index-linked annuity products may also have guaranteed minimum benefits classified as MRBs. The measurement of fair value includes an adjustment for the risk that the Company fails to satisfy its obligations, which is referred to as nonperformance risk, as well as risk margin to capture the non-capital markets risks of the instrument, which represents the additional compensation a market participant would require to assume the risks related to the uncertainties in certain actuarial assumptions. MRBs are measured at estimated fair value, with changes reported in change in MRBs on the consolidated statements of operations, except for the change due to nonperformance risk, which is reported in OCI. See Note 4 for more information on the effect of changes in inputs and assumptions on the measurement of MRBs and Note 8 for more information on the determination of fair value of MRBs.
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Derivatives, Embedded Derivatives [Policy Text Block] | Embedded Derivatives on Index-Linked Annuities The Company issues, and assumes through reinsurance, index-linked annuities which allow the policyholder to participate in returns from certain specified equity indices. The crediting rates associated with these features are classified as embedded derivatives and measured at estimated fair value, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. Embedded derivative liabilities are required to be separated from the deferred annuity host contract and measured at fair value. The estimated fair value is determined using a combination of an option pricing model and an option-budget approach. Under this approach, the Company estimates the cost of funding the crediting rate using option pricing and establishes that cost on the balance sheet as a reduction to the initial deposit amount. The estimate of fair value includes an adjustment for nonperformance risk, as well as a risk margin. Actuarial assumptions are reviewed at least annually, and if they change significantly, the estimated fair value is adjusted through net income. Capital market inputs used in the measurement of index-linked crediting rate embedded derivatives are updated quarterly through net income. The reduction to the initial deposit is accreted back up to the initial deposit over the estimated life of the contract. Embedded derivatives related to index-linked annuities are presented within policyholder account balances while changes in the estimated fair value are reported in net derivative gains (losses). For more information on the determination of estimated fair value of embedded derivatives, see Note 8.
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Insurance Premiums Revenue Recognition, Policy [Policy Text Block] | Recognition of Revenues and Deposits on Insurance Contracts Premiums related to traditional long-duration contracts are recognized as revenues when due from policyholders. When premiums for income annuities are due over a significantly shorter period than the period over which policyholder benefits are incurred, the Company establishes a deferred profit liability (“DPL”) for the excess of the gross premium over the net premium. DPLs are amortized into net income in proportion to the amount of expected future benefit payments. Assumptions used in the measurement of the DPL are updated at the same time as the related LFPBs, with the updated estimates used to recalculate the DPL as of contract inception. The remeasurement gain or loss from updating DPLs is recognized in current period net income along with the related change in LFPBs. Deposits related to universal life insurance, deferred annuity contracts and investment contracts are credited to policyholder account balances. Revenues from such contracts consist of asset-based investment management fees, cost of insurance charges, risk charges, policy administration fees and surrender charges. These fees, which are included in universal life and investment-type product policy fees, are recognized when assessed to the contract holder, except for non-level insurance charges which are deferred by the establishment of an unearned revenue liability and amortized over the expected life of the contracts. Premiums and policy fees are presented net of reinsurance.
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Deferred Policy Acquisition Costs, Policy [Policy Text Block] | Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are directly related to the successful acquisition or renewal of insurance contracts are capitalized as deferred policy acquisition costs (“DAC”). These costs mainly consist of commissions and include the portion of employees’ compensation and benefits related to time spent selling, underwriting or processing the issuance of new insurance contracts. All other acquisition-related costs are expensed as incurred. Value of business acquired (“VOBA”) is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity and investment-type contracts in-force as of the acquisition date. The Company amortizes DAC and VOBA in a manner that approximates a straight-line basis over the expected life of the related contracts. For life insurance contracts, amortization is based on projections of amounts of insurance in-force, while projections of policy counts are used for deferred annuity contracts and expected future benefits payments for income annuities. These assumptions are reviewed at least annually, and if they change significantly, updates are recognized through changes to future amortization. VOBA balances are tested annually to determine if the balance is deemed unrecoverable from expected future profits. All changes in DAC and VOBA balances are recorded to net income. Periodically, the Company modifies product benefits, features, rights or coverages that occur by the exchange of an existing contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If a modification is considered to have substantially changed the contract, the associated DAC or VOBA is written off immediately through net income and any new acquisition costs associated with the replacement contract are deferred. If the modification does not substantially change the contract, the DAC or VOBA amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed.
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Sales Inducements to Contract Holders, Policy [Policy Text Block] | The Company also has intangible assets representing deferred sales inducements (“DSI”), which are included in other assets, and unearned revenue liabilities, which are included in other policy-related balances. The Company defers sales inducements and unearned revenue and amortizes the balances using the same methodology and assumptions used to amortize DAC and VOBA. |
New Accounting Pronouncements, Policy [Policy Text Block] | Adoption of New Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASU”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Except as noted below, there were no significant ASUs adopted during the period ended September 30, 2023. In March 2022, the FASB issued new guidance on Troubled Debt Restructurings (“TDR”) (ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures). This ASU eliminates TDR recognition and measurement guidance and, instead, requires that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The Company adopted this guidance on January 1, 2023. This ASU was applied prospectively and did not have a material impact on the consolidated financial statements upon adoption but could change the future recognition and measurement of modified loans and other receivables. In August 2018, the FASB issued new guidance on long-duration contracts (ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (“LDTI”)). LDTI is effective for fiscal years beginning after January 1, 2023. LDTI resulted in significant changes to the measurement, presentation and disclosure requirements for long-duration insurance contracts. A summary of the most significant changes is provided below: (1) Guaranteed benefits associated with variable annuity and certain fixed annuity contracts have been classified and presented separately on the consolidated balance sheets as MRBs. MRBs are now measured at estimated fair value through net income and reported separately on the consolidated statements of operations, except for nonperformance risk changes, which will be recognized in OCI. (2) Cash flow assumptions used to measure LFPBs on traditional long-duration contracts (including term and non-participating whole life insurance and immediate annuities) have been updated on an annual basis using a retrospective method. The resulting remeasurement gain or loss is now reported separately on the consolidated statements of operations along with the remeasurement gain or loss on universal life-type contract liabilities. (3) The discount rate assumption used to measure the liability for traditional long-duration contracts is now based on an upper-medium grade fixed income yield, updated quarterly, with changes recognized in OCI. (4) DAC for all insurance products are required to be amortized on a constant-level basis over the expected term of the contracts, using amortization methods that are not a function of revenue or profit emergence. Changes in assumptions used to amortize DAC have been recognized as a revision to future amortization amounts. (5) There was a significant increase in required disclosures, including disaggregated rollforwards of insurance contract assets and liabilities supplemented by qualitative and quantitative information regarding the cash flows, assumptions, methods and judgements used to measure those balances. The transition date was January 1, 2021. MRB changes were required to be applied on a retrospective basis, while the changes for insurance liability assumption updates and DAC amortization were applied to existing carrying amounts on the transition date. The cumulative effect, on an after-tax basis, of the adoption of ASU 2018-12 as of the transition date was a $5.4 billion decrease to retained earnings and a $3.9 billion decrease to accumulated other comprehensive income (loss) (“AOCI”). See Note 2 for more detailed information on the impacts of the ASU to the Company’s financial statements.
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Investments, Policy [Policy Text Block] | For fixed maturity securities in an unrealized loss position, management first assesses whether the Company intends to sell, or whether it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to estimated fair value through net investment gains (losses). For fixed maturity securities that do not meet the aforementioned criteria, management evaluates whether the decline in estimated fair value has resulted from credit losses or other factors. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the allowance for credit loss evaluation process include, but are not limited to: (i) the extent to which estimated fair value is less than amortized cost; (ii) any changes to the rating of the security by a rating agency; (iii) adverse conditions specifically related to the security, industry or geographic area; and (iv) payment structure of the fixed maturity security and the likelihood of the issuer being able to make payments in the future or the issuer’s failure to make scheduled interest and principal payments. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss is deemed to exist and an allowance for credit losses is recorded, limited by the amount that the estimated fair value is less than the amortized cost basis, with a corresponding charge to net investment gains (losses). Any unrealized losses that have not been recorded through an allowance for credit losses are recognized in OCI. Once a security specific allowance for credit losses is established, the present value of cash flows expected to be collected from the security continues to be reassessed. Any changes in the security specific allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense in net investment gains (losses). Fixed maturity securities are also evaluated to determine whether any amounts have become uncollectible. When all, or a portion, of a security is deemed uncollectible, the uncollectible portion is written-off with an adjustment to amortized cost and a corresponding reduction to the allowance for credit losses. Accrued interest receivables are presented separate from the amortized cost basis of fixed maturity securities. An allowance for credit losses is not estimated on an accrued interest receivable, rather receivable balances 90-days past due are deemed uncollectible and are written off with a corresponding reduction to net investment income. Fixed maturity securities are also evaluated to determine if they qualify as purchased financial assets with credit deterioration (“PCD”). To determine if the credit deterioration experienced since origination is more than insignificant, both (i) the extent of the credit deterioration and (ii) any rating agency downgrades are evaluated. For securities categorized as PCD assets, the present value of cash flows expected to be collected from the security are compared to the par value of the security. If the present value of cash flows expected to be collected is less than the par value, credit losses are embedded in the purchase price of the PCD asset. In this situation, both an allowance for credit losses and amortized cost gross-up is recorded, limited by the amount that the estimated fair value is less than the grossed-up amortized cost basis. Any difference between the purchase price and the present value of cash flows is amortized or accreted into net investment income over the life of the PCD asset. Any subsequent PCD asset allowance for credit losses is evaluated in a manner similar to the process described above for fixed maturity securities.The allowance for credit losses is a valuation account that is deducted from the mortgage loan’s amortized cost basis to present the net amount expected to be collected on the mortgage loan. The loan balance, or a portion of the loan balance, is written-off against the allowance when management believes this amount is uncollectible. Accrued interest receivables are presented separate from the amortized cost basis of mortgage loans. An allowance for credit losses is generally not estimated on an accrued interest receivable, rather when a loan is placed in nonaccrual status the associated accrued interest receivable balance is written off with a corresponding reduction to net investment income.The allowance for credit losses is estimated using relevant available information, from internal and external sources, relating to past events, current conditions, and a reasonable and supportable forecast. Historical credit loss experience provides the basis for estimating expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics and environmental conditions. A reasonable and supportable forecast period of two-years is used with an input reversion period of one-year. Mortgage loans are evaluated in each of the three portfolio segments to determine the allowance for credit losses. The loan-level loss rates are determined using individual loan terms and characteristics, risk pools/internal ratings, national economic forecasts, prepayment speeds, and estimated default and loss severity. The resulting loss rates are applied to the mortgage loan’s amortized cost to generate an allowance for credit losses. In certain situations, the allowance for credit losses is measured as the difference between the loan’s amortized cost and liquidation value of the collateral. These situations include collateral dependent loans, modifications, foreclosure probable loans, and loans with dissimilar risk characteristics. Mortgage loans are also evaluated to determine if they qualify as PCD assets. To determine if the credit deterioration experienced since origination is more than insignificant, the extent of credit deterioration is evaluated. All re-performing/modified loan (“RPL”) pools purchased after December 31, 2019 are determined to have been acquired with evidence of more than insignificant credit deterioration since origination and are classified as PCD assets. RPLs are pools of residential mortgage loans acquired at a discount or premium which have both credit and non-credit components. For PCD mortgage loans, the allowance for credit losses is determined using a similar methodology described above, except the loss-rate is determined at the pool level instead of the individual loan level. The initial allowance for credit losses, determined on a collective basis, is then allocated to the individual loans. The initial amortized cost of the loan is grossed-up to reflect the sum of the loan’s purchase price and allowance for credit losses. The difference between the grossed-up amortized cost basis and the par value of the loan is a non-credit discount or premium, which is accreted or amortized into net investment income over the remaining life of the loan. Any subsequent PCD mortgage loan allowance for credit losses is evaluated in a manner similar to the process described above for each of the three portfolio segments.Delinquency is defined consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans — 60 days; and agricultural mortgage loans — 90 days.Mortgage loans are placed in a nonaccrual status if there are concerns regarding collectability of future payments or the loan is past due, unless the past due loan is well collateralized.
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Derivatives, Policy [Policy Text Block] | Types of Derivative Instruments and Derivative Strategies The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to minimize its exposure to various market risks. Commonly used derivative instruments include, but are not necessarily limited to: •Interest rate derivatives: swaps, floors, caps, swaptions and forwards; •Foreign currency exchange rate derivatives: forwards and swaps; •Equity market derivatives: options, total return swaps and hybrid options; and •Credit derivatives: single and index reference credit default swaps and swaptions. Counterparty Credit RiskGenerally, the credit exposure is the fair value at the reporting date less any collateral received from the counterparty.
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Income Tax, Policy [Policy Text Block] | The effects of income taxes on amounts recorded to AOCI are also recognized in AOCI. These income tax effects are released from AOCI when the related activity is reclassified into results from operations. |
Financial Services, Insurance, ASU 2018-12 Transition (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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ASU 2018-12 Transition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Standards Update and Change in Accounting Principle | The effect of transition adjustments on stockholders’ equity at January 1, 2021 due to the adoption of ASU 2018-12 was as follows:
The balances of and changes in LFPBs at January 1, 2021 due to the adoption of ASU 2018-12 were as follows:
The balance of and changes in liabilities classified as MRBs at January 1, 2021 due to the adoption of ASU 2018-12 were as follows:
The balances of and changes in DAC and VOBA on January 1, 2021 due to the adoption of ASU 2018-12 were as follows:
The following tables present amounts previously reported in 2022 and 2021, the effect on those amounts of the change due to the adoption of ASU 2018-12 as described in Note 1, and the currently reported amounts in the Unaudited Interim Consolidated Balance Sheets and Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss). See Notes 4 and 5 for more information.
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information, by Segment | Operating results by segment, as well as Corporate & Other, were as follows:
Total assets by segment, as well as Corporate & Other, were as follows at:
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Reconciliation of Revenue from Segments to Consolidated | Total revenues by segment, as well as Corporate & Other, were as follows:
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Insurance (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Liability for Future Policy Benefits, by Product Segment | Information regarding LFPBs for non-participating traditional and limited-payment contracts was as follows:
Information regarding the additional insurance liabilities for universal life-type contracts with secondary guarantees was as follows:
A reconciliation of the net LFPBs for nonparticipating traditional and limited-payment contracts and the additional insurance liabilities for universal life-type contracts with secondary guarantees reported in the preceding rollforward tables to LFPBs on the consolidated balance sheets was as follows at:
_______________ (1)Includes liabilities related to fully reinsured individual long-term care insurance. See Note 3. (2)Participating whole life insurance uses an interest assumption based on the non-forfeiture interest rate, ranging from 3.5% to 4.5%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts, and also includes a liability for terminal dividends. Participating whole life insurance represented 3% of the Company’s life insurance in-force at both September 30, 2023 and 2022, and 40% and 41% of gross traditional life insurance premiums for the nine months ended September 30, 2023 and 2022, respectively. Information regarding LFPBs for non-participating traditional and limited-payment contracts was as follows:
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Policyholder Account Balance | Information regarding policyholder account balances was as follows:
_______________ (1)Includes liabilities related to separate account products where the contract holder elected a general account investment option. (2)Excludes the effects of embedded derivatives related to index-linked crediting rates. A reconciliation of policyholder account balances reported in the preceding rollforward table to the liability for policyholder account balances on the consolidated balance sheets was as follows at:
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Policyholder Account Balance, Guaranteed Minimum Crediting Rate | The balance of 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 was as follows at:
_______________ (1)Includes policyholder account balances for fixed rate annuities and the fixed account portion of variable annuities. (2)Includes policyholder account balances for retained asset accounts, universal life policies and the fixed account portion of universal variable life insurance policies. (3)Amounts are gross of policy loans.
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Market Risk Benefit, Activity | Information regarding MRB assets and liabilities associated with variable annuities was as follows:
_______________ (1)Amounts represent the sum of MRB assets and MRB liabilities presented on the consolidated balance sheets at September 30, 2023 and 2022, with the exception of ($7) million and $2 million, respectively, of index-linked annuities not included in this table, and at December 31, 2022 and 2021, with the exception of $3 million and $5 million, respectively, of index-linked annuities not included in this table.
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Separate Account, Liability | Information regarding separate account liabilities was as follows:
A reconciliation of separate account liabilities reported in the preceding rollforward table to the separate account liabilities balance on the consolidated balance sheets was as follows at:
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Fair Value, Separate Account Investment | The aggregate estimated fair value of assets, by major investment asset category, supporting separate accounts was as follows at:
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Guarantees related to Annuity, Universal and Variable Life Contracts | Information regarding the net amount at risk and cash surrender value for insurance products was as follows at:
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Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Policy Acquisition Costs and Present Value of Future Insurance Profits, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Policy Acquisition Costs | Information regarding DAC and VOBA was as follows:
_______________ (1)Includes an adjustment to eliminate balances included in AOCI related to the adoption of ASU 2018-12 (see Note 2).
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Present Value of Future Insurance Profits | Information regarding DAC and VOBA was as follows:
_______________ (1)Includes an adjustment to eliminate balances included in AOCI related to the adoption of ASU 2018-12 (see Note 2).
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Deferred Sale Inducement Cost | Information regarding DSI, included in other assets, was as follows:
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Unearned Revenue | Information regarding unearned revenue, included in other policy-related balances, was as follows:
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Investments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Maturity Securities by Sector | Fixed maturity securities by sector were as follows at:
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Maturities of Fixed Maturity Securities | The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at September 30, 2023:
_______________ (1)Structured securities include residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”) (collectively, “Structured Securities”).
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Continuous Gross Unrealized Losses for Fixed Maturity Securities by Sector | The estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position, by sector and by length of time that the securities have been in a continuous unrealized loss position, were as follows at:
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Rollforward of the Allowance for Credit Losses for Fixed Maturity Securities by Sector | The changes in the allowance for credit losses by sector were as follows:
_______________ (1)The Company recorded total write-offs of $8 million and $10 million for the nine months ended September 30, 2023 and 2022, respectively.
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Mortgage Loans by Portfolio Segment | Mortgage loans are summarized as follows at:
_______________ (1)Purchases of mortgage loans from third parties were $224 million and $255 million for the three months and nine months ended September 30, 2023, respectively, and $387 million and $1.6 billion for the three months and nine months ended September 30, 2022, respectively, and were primarily comprised of residential mortgage loans.
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Rollforward of the Allowance for Credit Losses for Mortgage Loans by Portfolio Segment | The changes in the allowance for credit losses by portfolio segment were as follows:
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Credit Quality of Mortgage Loans by Portfolio Segment | The amortized cost of mortgage loans by year of origination and credit quality indicator was as follows at:
The amortized cost of commercial mortgage loans by debt-service coverage ratio was as follows at:
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Past Due Mortgage Loans by Portfolio Segment | The aging of the amortized cost of past due mortgage loans by portfolio segment was as follows at:
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Mortgage Loans in Nonaccrual Status by Portfolio Segment | The amortized cost of mortgage loans in a nonaccrual status by portfolio segment was as follows at:
_______________ (1)The Company had no mortgage loans in nonaccrual status for which there was no related allowance for credit losses at both September 30, 2023 and December 31, 2022.
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Net Unrealized Investment Gains (Losses) | The components of net unrealized investment gains (losses), included in AOCI, were as follows at:
The changes in net unrealized investment gains (losses) were as follows:
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Securities Lending | Elements of the securities lending program are presented below at:
_______________ (1)Included in fixed maturity securities. (2)Included in payables for collateral under securities loaned and other transactions. The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:
_______________ (1)The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral.
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Invested Assets on Deposit, Held in Trust and Pledged as Collateral | Invested assets on deposit, held in trust and pledged as collateral at estimated fair value were as follows at:
_______________ (1)The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $94 million and $21 million of the assets on deposit represents restricted cash and cash equivalents at September 30, 2023 and December 31, 2022, respectively. (2)The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions, of which $228 million and $240 million of the assets held in trust balance represents restricted cash and cash equivalents at September 30, 2023 and December 31, 2022, respectively. (3)The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 3 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report) and derivative transactions (see Note 7).
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Variable Interest Entities | The carrying amount and maximum exposure to loss related to the VIEs for which the Company has concluded that it holds a variable interest, but is not the primary beneficiary, were as follows at:
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Components of Net Investment Income | The components of net investment income were as follows:
_______________ (1)Includes net investment income pertaining to other limited partnership interests of $64 million and $156 million for the three months and nine months ended September 30, 2023, respectively, and ($127) million and $178 million for the three months and nine months ended September 30, 2022, respectively.
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Components of Net Investment Gains (Losses) | The components of net investment gains (losses) were as follows:
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Sales or Disposals of Fixed Maturity Securities | Proceeds from sales or disposals of fixed maturity securities and the components of fixed maturity securities net investment gains (losses) were as follows:
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Derivatives (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position | The primary underlying risk exposure, gross notional amount and estimated fair value of derivatives, excluding embedded derivatives, held were as follows at:
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Derivative Instruments, Gain (Loss) | The amount and location of gains (losses), including earned income, recognized for derivatives and gains (losses) pertaining to hedged items reported in net derivative gains (losses) were as follows:
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The amount and location of gains (losses), including earned income, recognized for derivatives and gains (losses) pertaining to hedged items reported in net derivative gains (losses) were as follows:
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Schedule of estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps | The estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps were as follows at:
_______________ (1)The Company has written credit protection on both single name and index references. The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s, S&P and Fitch. If no rating is available from a rating agency, then an internally developed rating is used. (2)The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.
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Estimated Fair Value of Derivative Assets after Master Netting Agreements and Cash Collateral | The estimated fair values of net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
_______________ (1)Represents amounts subject to an enforceable master netting agreement or similar agreement. (2)The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreement. (3)Securities collateral received from counterparties is not reported on the consolidated balance sheets and may not be sold or re-pledged unless the counterparty is in default. Amounts do not include excess of collateral pledged or received.
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Estimated Fair Value of Derivative Liabilities after Master Netting Agreements and Cash Collateral | The estimated fair values of net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
_______________ (1)Represents amounts subject to an enforceable master netting agreement or similar agreement. (2)The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreement. (3)Securities collateral received from counterparties is not reported on the consolidated balance sheets and may not be sold or re-pledged unless the counterparty is in default. Amounts do not include excess of collateral pledged or received.
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Schedule of Derivative Instruments | The aggregate estimated fair values of derivatives in a net liability position containing such credit-contingent provisions and the aggregate estimated fair value of assets posted as collateral for such instruments were as follows at:
_______________ (1)After taking into consideration the existence of netting agreements. (2)Substantially all of the Company’s collateral arrangements provide for daily posting of collateral for the full value of the derivative contract. As a result, if the credit-contingent provisions of derivative contracts in a net liability position were triggered, minimal additional assets would be required to be posted as collateral or needed to settle the instruments immediately. Additionally, the Company is required to pledge initial margin for certain new over-the-counter (“OTC”) bilateral contracts between two counterparties (“OTC-bilateral”) derivative transactions to third-party custodians.
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Fair Value (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recurring Fair Value Measurements | The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are presented in the tables below. Investments that do not have a readily determinable fair value and are measured at net asset value (or equivalent) as a practical expedient to estimated fair value are excluded from the fair value hierarchy.
_______________ (1)Derivative assets are reported in other invested assets and derivative liabilities are reported in other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated balance sheets. (2)Embedded derivative liabilities on index-linked annuities are reported in policyholder account balances.
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Fair Value Measurement Inputs and Valuation Techniques | Certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were as follows at:
_______________ (1)Mortality rates vary by age and by demographic characteristics such as gender. The range shown reflects the mortality rate for policyholders between 35 and 90 years old. Mortality rate assumptions are set based on company experience and include an assumption for mortality improvement. (2)The lapse rate range reflects base lapse rates for major product categories for duration 1-20. Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. For variable annuity guarantees, a dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. (3)The utilization rate assumption for variable annuity guarantees estimates the percentage of contract holders with a GMIB or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible in a given year. The range shown represents the floor and cap of the GMIB dynamic election rates across varying levels of in-the-money. For lifetime withdrawal guarantee riders, the assumption is that everyone will begin withdrawals once account value reaches zero which is equivalent to a 100% utilization rate. Utilization rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the policyholder. (4)The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For variable annuity GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For variable annuity GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value. (5)Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing MRBs. (6)Nonperformance risk spread varies by duration. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the MRB or embedded derivative.
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Fair Value, Measured on Recurring Basis, Unobservable Input Reconciliation | The changes in assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (excluding MRBs disclosed in Note 4) were summarized as follows:
_______________ (1)Comprised of U.S. and foreign corporate securities. (2)Freestanding derivative assets and liabilities are reported net for purposes of the rollforward. (3)Amortization of premium/accretion of discount is included in net investment income. Changes in the allowance for credit losses and direct write-offs are charged to net income (loss) on securities are included in net investment gains (losses). Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses). (4)Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (5)Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements. (6)Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and out of Level 3 in the same period are excluded from the rollforward. (7)Changes in unrealized gains (losses) included in net income (loss) for fixed maturities are reported in either net investment income or net investment gains (losses). Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).
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Fair Value of Financial Instruments Carried at Other Than Fair Value | The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:
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Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock Authorized, Issued and Outstanding | Preferred stock shares authorized, issued and outstanding were as follows at both September 30, 2023 and December 31, 2022:
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Preferred Stock Dividends Declared | The per share and aggregate dividends declared for BHF’s preferred stock by series were as follows:
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Components of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Information regarding changes in the balances of each component of AOCI was as follows:
__________________ (1)See Note 6 for information on offsets to investments related to future policy benefits. (2)Includes OCI related to foreign currency translation and defined benefit plan gains and losses. (3)The effects of income taxes on amounts recorded to AOCI are also recognized in AOCI. These income tax effects are released from AOCI when the related activity is reclassified into results from operations.
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Reclassification out of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Information regarding amounts reclassified out of each component of AOCI was as follows:
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Other Revenues and Other Expenses (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Expenses | Information on other expenses was as follows:
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Earnings Per Common Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | The calculation of earnings per common share was as follows:
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Segment Information (Reconciliation of Operating Revenues to Total Revenues) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Segment Reporting Information [Line Items] | ||||||
Total revenues | $ 1,170 | $ 1,121 | $ 2,717 | $ 7,000 | $ 6,873 | $ 4,976 |
Segment Reconciling Items | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenues | (918) | (660) | (3,525) | 1,114 | ||
Operating Segments | Annuities | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenues | 1,214 | 1,091 | 3,630 | 3,422 | ||
Operating Segments | Life | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenues | 299 | 270 | 915 | 922 | ||
Operating Segments | Run-off | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenues | 413 | 312 | 1,241 | 1,334 | ||
Operating Segments | Corporate & Other | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenues | $ 162 | $ 108 | $ 456 | $ 208 |
Segment Information (Assets) (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Segment Reporting Information [Line Items] | |||
Total assets | $ 223,516 | $ 224,847 | $ 262,257 |
Annuities | |||
Segment Reporting Information [Line Items] | |||
Total assets | 151,734 | 151,192 | |
Life | |||
Segment Reporting Information [Line Items] | |||
Total assets | 22,221 | 22,057 | |
Run-off | |||
Segment Reporting Information [Line Items] | |||
Total assets | 27,272 | 28,436 | |
Corporate & Other | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 22,289 | $ 23,162 |
Segment Information (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
Segment
| |
Segment Reporting [Abstract] | |
Number of segments | 3 |
Insurance (Reconciliation of Policyholder Account Balances) (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Sep. 30, 2022 |
---|---|---|
Policyholder Account Balance [Line Items] | ||
Policyholder Account Balance | $ 78,371 | $ 69,749 |
Rollforwards Total | ||
Policyholder Account Balance [Line Items] | ||
Policyholder Account Balance | 66,233 | 58,574 |
Funding agreements classified as investment contracts | ||
Policyholder Account Balance [Line Items] | ||
Policyholder Account Balance | 11,052 | 9,959 |
Other investment contract liabilities | ||
Policyholder Account Balance [Line Items] | ||
Policyholder Account Balance | $ 1,086 | $ 1,216 |
Insurance (Reconciliation of Separate Account Liability) (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|---|
Separate Account, Liability [Line Items] | |||
Separate account liabilities | $ 82,675 | $ 84,965 | $ 81,838 |
Variable income annuities | 152 | 137 | |
Pension risk transfer annuities | 18 | 15 | |
Rollforwards Total | |||
Separate Account, Liability [Line Items] | |||
Separate account liabilities | $ 82,505 | $ 81,686 |
Insurance (Aggregate FV of Assets Supporting Separate Accounts) (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Separate Account, Liability [Line Items] | ||
Separate account assets | $ 82,675 | $ 84,965 |
Equity securities | ||
Separate Account, Liability [Line Items] | ||
Separate account assets | 82,419 | 84,667 |
Fixed maturity securities | ||
Separate Account, Liability [Line Items] | ||
Separate account assets | 244 | 278 |
Cash and cash equivalents | ||
Separate Account, Liability [Line Items] | ||
Separate account assets | 6 | 9 |
Other | ||
Separate Account, Liability [Line Items] | ||
Separate account assets | $ 6 | $ 11 |
Insurance (Liability for Future Policy Benefits - Narrative) (Details) |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
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Insurance [Abstract] | ||||
Mean reversion rate | 0.0375 | 0.0350 | 0.0350 | 0.0300 |
Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (Information Regarding DSI) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Variable Annuities | ||
Deferred Sale Inducement Cost [Line Items] | ||
Balance, beginning of period | $ 245 | $ 272 |
Amortization | (19) | (21) |
Balance, end of period | 226 | 251 |
Fixed Rate Annuities | ||
Deferred Sale Inducement Cost [Line Items] | ||
Balance, beginning of period | 9 | 10 |
Amortization | (1) | (1) |
Balance, end of period | $ 8 | $ 9 |
Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (Unearned Revenue) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Universal Life Insurance | ||
Deferred Revenue Arrangement [Line Items] | ||
Balance, beginning of period | $ 356 | $ 358 |
Capitalization | 29 | 29 |
Amortization | (29) | (30) |
Balance, end of period | 356 | 357 |
ULSG | ||
Deferred Revenue Arrangement [Line Items] | ||
Balance, beginning of period | 488 | 344 |
Capitalization | 132 | 137 |
Amortization | (36) | (26) |
Balance, end of period | 584 | 455 |
Variable Annuities | ||
Deferred Revenue Arrangement [Line Items] | ||
Balance, beginning of period | 74 | 80 |
Capitalization | 0 | 1 |
Amortization | (6) | (6) |
Balance, end of period | $ 68 | $ 75 |
Investments (Maturities of Fixed Maturity Securities) (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Amortized cost, due in one year or less | $ 2,207 | |
Amortized cost, due after one year through five years | 16,877 | |
Amortized cost, due after five years through ten years | 15,314 | |
Amortized cost, due after ten years | 30,334 | |
Amortized cost, Structured Securities | 21,641 | |
Fixed maturity securities, amortized cost | 86,373 | $ 84,344 |
Estimated fair value, due in one year or less | 2,163 | |
Estimated fair value, due after one year through five years | 15,977 | |
Estimated fair value, due after five years through ten years | 13,185 | |
Estimated fair value, due after ten years | 24,635 | |
Estimated fair value, Structured Securities | 19,473 | |
Fixed maturity securities, estimated fair value | $ 75,433 | $ 75,577 |
Investments (Mortgage Loans in Nonaccrual Status by Portfolio Segment) (Details) - Mortgage Loans - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Financing Receivable, Nonaccrual [Line Items] | ||
Financing receivable in nonaccrual status | $ 102 | $ 78 |
Commercial | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Financing receivable in nonaccrual status | 17 | 11 |
Agricultural | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Financing receivable in nonaccrual status | 0 | 3 |
Residential | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Financing receivable in nonaccrual status | $ 85 | $ 64 |
Investments (Net Unrealized Investment Gains (Losses)) (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Components of net unrealized investment gains (losses) included in accumulated other comprehensive loss | ||
Fixed maturity securities | $ (10,918) | $ (8,760) |
Derivatives | 509 | 638 |
Other | (8) | 3 |
Subtotal | (10,417) | (8,119) |
Amounts allocated from: Future policy benefits | 1,290 | 917 |
Deferred income tax benefit (expense) | 1,917 | 1,512 |
Net unrealized investment gains (losses) | $ (7,210) | $ (5,690) |
Investments (Changes in Net Unrealized Investment Gains (Losses)) (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Investments, Debt and Equity Securities [Abstract] | |
Unrealized investment gains (losses), beginning of period | $ (5,690) |
Unrealized investment gains (losses) during the period | (2,298) |
Unrealized investment gains (losses) relating to: Future policy benefits | 373 |
Unrealized investment gains (losses) relating to: Deferred income tax benefit (expense) | 405 |
Unrealized investment gains (losses), end of period | (7,210) |
Change in net unrealized investment gains (losses) | $ (1,520) |
Investments (Securities Lending) (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Securities Financing Transaction [Line Items] | ||
Cash collateral received from counterparties | $ 3,171 | $ 3,731 |
Reinvestment portfolio — estimated fair value | 3,051 | 3,603 |
Amortized cost | ||
Securities Financing Transaction [Line Items] | ||
Securities on loan | 3,620 | 3,995 |
Estimated fair value | ||
Securities Financing Transaction [Line Items] | ||
Securities on loan | $ 3,093 | $ 3,638 |
Investments (Invested Assets on Deposit, Held In Trust and Pledged as Collateral) (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Invested assets on deposit (regulatory deposits) | $ 7,863 | $ 7,999 |
Invested assets held in trust (reinsurance agreements) | 5,536 | 5,621 |
Invested assets pledged as collateral | 14,260 | 13,920 |
Total invested assets on deposit, held in trust and pledged as collateral | $ 27,659 | $ 27,540 |
Investments (Variable Interest Entities) (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Variable Interest Entity [Line Items] | |||
Carrying amount | $ 223,516 | $ 224,847 | $ 262,257 |
VIE, Not Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Carrying amount | 19,298 | 20,032 | |
Maximum exposure to loss | 22,324 | 22,962 | |
VIE, Not Primary Beneficiary | Fixed maturity securities | |||
Variable Interest Entity [Line Items] | |||
Carrying amount | 14,940 | 15,896 | |
Maximum exposure to loss | 16,780 | 17,471 | |
VIE, Not Primary Beneficiary | Limited partnerships and LLCs | |||
Variable Interest Entity [Line Items] | |||
Carrying amount | 4,358 | 4,136 | |
Maximum exposure to loss | $ 5,544 | $ 5,491 |
Investments (Components of Net Investment Gains (Losses)) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Net Investment Gains (Losses) [Line Items] | ||||
Net investment gains (losses) | $ (53) | $ (45) | $ (213) | $ (179) |
Fixed maturity securities | ||||
Net Investment Gains (Losses) [Line Items] | ||||
Net investment gains (losses) | (54) | (38) | (185) | (140) |
Equity securities | ||||
Net Investment Gains (Losses) [Line Items] | ||||
Net investment gains (losses) | (1) | (2) | (2) | (14) |
Mortgage loans | ||||
Net Investment Gains (Losses) [Line Items] | ||||
Net investment gains (losses) | 3 | 2 | (24) | (1) |
Limited partnerships and LLCs | ||||
Net Investment Gains (Losses) [Line Items] | ||||
Net investment gains (losses) | 0 | (4) | 0 | (21) |
Other | ||||
Net Investment Gains (Losses) [Line Items] | ||||
Net investment gains (losses) | $ (1) | $ (3) | $ (2) | $ (3) |
Investments (Sales or Disposals of Fixed Maturity Securities) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sales or disposals of fixed maturity securities | $ 494 | $ 1,146 | $ 1,771 | $ 5,261 |
Fixed maturity securities, gross investment gains | 1 | 1 | 12 | 47 |
Fixed maturity securities, gross investment losses | (44) | (38) | (173) | (181) |
Fixed maturity securities, net investment gains (losses) | $ (43) | $ (37) | $ (161) | $ (134) |
Investments (Fixed Maturity Securities - Narrative) (Details) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Debt Securities, Available-for-sale [Line Items] | ||||
Fixed maturity securities, estimated fair value | $ 75,433 | $ 75,577 | ||
Fixed maturity securities, allowance for credit losses | $ 22 | $ 5 | 7 | $ 11 |
Fixed maturity securities with allowance for credit losses, number of securities | 24 | |||
Fixed maturity securities, total write-offs | $ 8 | $ 10 | ||
Non-Income Producing | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fixed maturity securities, estimated fair value | 12 | 0 | ||
Fixed maturity securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Accrued interest receivable | $ 689 | $ 602 |
Investments (Mortgage Loans - Narrative) (Details) - Mortgage Loans - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing receivables purchased from third parties | $ 224 | $ 387 | $ 255 | $ 1,600 | |
Accrued interest receivable | 118 | 118 | $ 115 | ||
Financing receivables in nonaccrual status with no allowance for credit losses | $ 0 | 0 | $ 0 | ||
Financing receivables in nonaccrual status, investment income | $ 1 | $ 1 | |||
Minimum | Performing | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing receivable, before allowance for credit losses by performance status as a percentage of financing receivables, before allowance for credit losses | 99.00% | 99.00% | 99.00% |
Investments (Other Invested Assets - Narrative) (Details) |
Sep. 30, 2023 |
---|---|
Minimum | |
Derivative [Line Items] | |
Percentage of other invested assets comprised of freestanding derivatives with positive estimated fair values | 75.00% |
Investments (Securities Lending - Narrative) (Details) $ in Millions |
Sep. 30, 2023
USD ($)
|
---|---|
Investments, Debt and Equity Securities [Abstract] | |
Cash collateral on deposit from counterparties | $ 699 |
Percentage of reinvestment portfolio invested in liquid assets | 58.00% |
Investments (Invested Assets on Deposit, Held in Trust and Pledged as Collateral - Narrative) (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Invested assets on deposit (regulatory deposits) | $ 7,863 | $ 7,999 |
Invested assets held in trust (reinsurance agreements) | 5,536 | 5,621 |
Restricted Cash and Cash Equivalents | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Invested assets on deposit (regulatory deposits) | 94 | 21 |
Invested assets held in trust (reinsurance agreements) | 228 | 240 |
FHLB common stock | $ 247 | $ 201 |
Investments (Net Investment Income - Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Net Investment Income [Line Items] | ||||
Net investment income | $ 1,202 | $ 877 | $ 3,457 | $ 3,089 |
Other limited partnership interests | ||||
Net Investment Income [Line Items] | ||||
Net investment income | $ 64 | $ (127) | $ 156 | $ 178 |
Investments (Components of Net Investment Gains (Losses) - Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | $ (53) | $ (45) | $ (213) | $ (179) |
Foreign Exchange | ||||
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | $ (2) | $ (1) | $ (2) | $ (22) |
Derivatives (Credit Risk on Freestanding Derivatives) (Details) - Derivatives Subject To Credit-Contingent Provisions - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Credit Derivatives [Line Items] | ||
Estimated fair value of derivatives in a net liability position (1) | $ 3,186 | $ 2,260 |
Fixed maturity securities | ||
Credit Derivatives [Line Items] | ||
Estimated fair value of collateral provided (2): | $ 5,567 | $ 4,894 |
Derivatives (Derivatives - Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Sep. 30, 2023 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Maximum Length of Time Hedged in Cash Flow Hedge | 1 year | |
Derivative AOCI associated with Cash Flow Hedges Pre Tax | $ 638 | $ 509 |
Long-term Debt (Narrative) (Details) - BLIC Repurchase Facility - USD ($) $ in Millions |
1 Months Ended | |
---|---|---|
Jul. 31, 2023 |
Sep. 30, 2023 |
|
Line of Credit Facility [Line Items] | ||
Credit facilities, maximum borrowing capacity | $ 500 | |
Debt instrument, term (in years) | 2 years | |
Credit facilities, outstanding balance | $ 0 |
Equity (Common Stock Repurchase Program - Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Class of Stock [Line Items] | ||||||
Stock repurchase program, aggregate amount repurchased | $ 64 | $ 136 | $ 126 | $ 259 | ||
Authorization Under 10b5-1 Plan | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase program, shares repurchased | 3,968,138 | 8,194,191 | ||||
Stock repurchase program, aggregate amount repurchased | $ 190 | $ 395 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 104 | $ 104 |
Other Revenues and Other Expenses (Other Expenses) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Other Income and Expenses [Abstract] | ||||
Compensation | $ 98 | $ 89 | $ 302 | $ 254 |
Contracted services and other labor costs | 73 | 73 | 221 | 197 |
Transition services agreements | 7 | 15 | 26 | 44 |
Establishment costs | 0 | 21 | 0 | 47 |
Premium and other taxes, licenses and fees | 15 | 13 | 49 | 41 |
Separate account fees | 93 | 98 | 277 | 314 |
Volume related costs, excluding compensation, net of DAC capitalization | 129 | 130 | 409 | 374 |
Interest expense on debt | 38 | 38 | 114 | 114 |
Other | 20 | 18 | 55 | 211 |
Total other expenses | $ 473 | $ 495 | $ 1,453 | $ 1,596 |
Other Revenues and Other Expenses (Other Revenues - Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Distribution service | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 68 | $ 70 | $ 201 | $ 226 |
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders | $ 453 | $ 388 | $ (272) | $ 3,665 |
Weighted average common shares outstanding - basic | 65,408,241 | 71,517,500 | 66,658,796 | 74,294,329 |
Dilutive effect of share-based awards | 336,110 | 441,880 | 0 | 482,846 |
Weighted average common shares outstanding - diluted | 65,744,351 | 71,959,380 | 66,658,796 | 74,777,175 |
Earnings per common share - basic | $ 6.92 | $ 5.42 | $ (4.08) | $ 49.31 |
Earnings per common share - diluted | $ 6.89 | $ 5.39 | $ (4.08) | $ 49.00 |
Antidilutive stock options excluded from the computation of earnings per common share | 187,371 | 187,371 | 187,371 |