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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Location of Significant Accounting Policies

The following table identifies our significant accounting policies presented in other Notes to Consolidated Financial Statements:


Investments			Note 4
Derivatives and Hedge Accounting			Note 5
Fair Value Measurements			Note 6
Deferred Acquisition Costs			Note 7
Reinsurance			Note 8
Reserves for Future Policy Benefits and Claims Payable			Note 9
Other Contract Holder Funds			Note 10
Separate Account Assets and Liabilities			Note 11
Market Risk Benefits			Note 12
Long-Term Debt			Note 13
Income Taxes			Note 15
Commitments, Contingencies, and Guarantees			Note 16
Share-Based Compensation			Note 18
Accumulated Other Comprehensive Income (Loss)			Note 23
Earnings Per Share			Note 25

Accounting Standards Update and Change in Accounting Principle, Effect Of Transition On Equity

The following table presents the effect of transition adjustments on shareholders' equity due to the adoption of LDTI (in millions):


	January 1, 2021
			Accumulated other
	Retained earnings		comprehensive income
Deferred acquisition costs	$	—	$	106
Reinsurance recoverable on market risk benefits	—		(34)
Reserves for future policy benefits and claims payable	97		141
Market risk benefits	(2,700)		(598)
Total	$	(2,603)	$	(385)

Schedule of Error Corrections and Prior Period Adjustments

The following table presents amounts previously reported as of December 31, 2020, to reflect the effect of the change due to the adoption of LDTI, and the adjusted amounts as of January 1, 2021 (in millions):


	As Previously		Effect of		As of
	Reported		Changes		1/1/2021
Assets












Deferred acquisition costs	$	13,897	$	146	$	14,043
Reinsurance recoverable, net of allowance for credit losses	35,270		(154)		35,116
Reinsurance recoverable on market risk benefits, at fair value	—		471		471
Market risk benefit assets, at fair value	—		690		690
Deferred income taxes, net	1,058		824		1,882
Other assets	1,179		2		1,181

Total assets	$	353,532	$	1,979	$	355,511

Liabilities and Equity
Liabilities
Reserves for future policy benefits and claims payable	$	22,512	$	(5,716)	$	16,796
Other contract holder funds	63,592		(7)		63,585
Market risk benefit liabilities, at fair value	—		10,690		10,690









Total liabilities	343,609		4,967		348,576

Equity





Accumulated other comprehensive income, net of tax expense	3,821		(385)		3,436
Retained earnings	(324)		(2,603)		(2,927)


Total equity	9,923		(2,988)		6,935
Total liabilities and equity	$	353,532	$	1,979	$	355,511


	As Previously				As Adjusted
	Reported		Effect of		As of
	December 31, 2022		Changes		December 31, 2022
Assets
Deferred acquisition costs	$	13,422	$	(499)	$	12,923
Reinsurance recoverable, net of allowance for credit losses	29,641		(595)		29,046
Reinsurance recoverable on market risk benefits, at fair value	—		221		221
Market risk benefit assets, at fair value	—		4,865		4,865
Deferred income taxes, net	385		(65)		320
Other assets	946		(2)		944
Total assets	$	311,058	$	3,925	$	314,983

Liabilities and Equity
Liabilities
Reserves for future policy benefits and claims payable	$	14,273	$	(1,955)	$	12,318
Other contract holder funds	58,195		(5)		58,190
Market risk benefit liabilities, at fair value	—		5,662		5,662
Total liabilities	301,903		3,702		305,605

Equity
Accumulated other comprehensive income, net of tax expense	(5,481)		2,103		(3,378)
Retained earnings	8,283		(1,880)		6,403
Total equity	9,155		223		9,378
Total liabilities and equity	$	311,058	$	3,925	$	314,983

The following tables present amounts previously reported in the Consolidated Income Statements for the years ended December 31, 2022 and 2021, to reflect the effect of the change due to the adoption of LDTI, and the adjusted amounts (in millions, except per share amounts):


	As Previously
	Reported for				As Adjusted
	the Year Ended				Year Ended
	December 31,		Effect of		December 31,
	2022		Changes		2022
Revenues

Total net gains (losses) on derivatives and investments	$	3,851	$	(4,688)	$	(837)
Total revenues	14,551		(4,688)		9,863

Benefits and Expenses
Death, other policy benefits and change in policy reserves, net of deferrals	2,290		(1,228)		1,062
(Gain) loss from updating future policy benefits cash flow assumptions, net	—		(34)		(34)
Market risk benefits (gains) losses, net	—		(3,536)		(3,536)
Interest credited on other contract holder funds, net of deferrals and amortization	862		4		866
Amortization of deferred acquisition costs	1,743		(517)		1,226
Total benefits and expenses	7,440		(5,311)		2,129
Pretax income (loss)	7,111		623		7,734
Income tax expense (benefit)	1,371		134		1,505
Net income (loss)	5,740		489		6,229
Net income (loss) attributable to Jackson Financial Inc.	$	5,697	$	489	$	6,186

Earnings per share
Basic	$	66.62	$	5.72	$	72.34
Diluted	$	64.23	$	5.52	$	69.75


	As Previously
	Reported for				As Adjusted
	the Year Ended				Year Ended
	December 31,		Effect of		December 31,
	2021		Changes		2021
Revenues

Total net gains (losses) on derivatives and investments	$	(2,478)	$	(2,887)	$	(5,365)
Total revenues	9,247		(2,887)		6,360

Benefits and Expenses
Death, other policy benefits and change in policy reserves, net of deferrals	970		(45)		925
(Gain) loss from updating future policy benefits cash flow assumptions, net	—		41		41
Market risk benefits (gains) losses, net	—		(3,966)		(3,966)
Interest credited on other contract holder funds, net of deferrals and amortization	834		(2)		832
Amortization of deferred acquisition costs	520		787		1,307
Total benefits and expenses	5,200		(3,185)		2,015
Pretax income (loss)	4,047		298		4,345
Income tax expense (benefit)	602		64		666
Net income (loss)	3,445		234		3,679
Net income (loss) attributable to Jackson Financial Inc.	$	3,183	$	234	$	3,417

Earnings per share
Basic	$	33.86	$	2.49	$	36.35
Diluted	$	33.69	$	2.48	$	36.17

The following tables present amounts previously reported in Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2022 and 2021, to reflect the effect of the change due to the adoption of LDTI, and the adjusted amounts (in millions):


	As Previously
	Reported for the				As Adjusted
	Year Ended				Year Ended
	December 31,		Effect of		December 31,
	2022		Changes		2022
Net income (loss)	$	5,740	$	489	$	6,229

Other comprehensive income (loss), net of tax:
Change in unrealized gains (losses) on securities with no credit impairment, net of tax expense (benefit)	(7,223)		(284)		(7,507)

Change in current discount rate related to reserve for future policy benefits, net of tax expense (benefit)	—		1,303		1,303
Change in non-performance risk on market risk benefits, net of tax expense (benefit)	—		1,468		1,468
Total other comprehensive income (loss)	(7,225)		2,487		(4,738)


Comprehensive income (loss) attributable to Jackson Financial Inc.	$	(1,528)	$	2,976	$	1,448


	As Previously
	Reported for the				As Adjusted
	Year Ended				Year Ended
	December 31,		Effect of		December 31,
	2021		Changes		2021
Net income (loss)	$	3,445	$	234	$	3,679

Other comprehensive income (loss), net of tax:
Change in unrealized gains (losses) on securities with no credit impairment, net of tax expense (benefit)	(2,080)		(64)		(2,144)

Change in current discount rate related to reserve for future policy benefits, net of tax expense (benefit)	—		397		397
Change in non-performance risk on market risk benefits, net of tax expense (benefit)	—		(332)		(332)
Total other comprehensive income (loss)	(2,077)		1		(2,076)


Comprehensive income (loss) attributable to Jackson Financial Inc.	$	1,106	$	235	$	1,341


	As Previously
	Reported for the				As Adjusted
	Year Ended				Year Ended
	December 31,		Effect of		December 31,
	2022		Changes		2022
Cash flows from operating activities:
Net income	$	5,740	$	489	$	6,229
Adjustments to reconcile net income to net cash provided by operating activities:
Net losses (gains) on derivatives	(2,024)		4,688		2,664
Net (gain) loss on market risk benefits	—		(3,536)		(3,536)
(Gain) loss from updating future policy benefits cash flow assumptions, net	—		(34)		(34)
Interest credited on other contract holder funds, gross	862		4		866
Deferred income tax expense (benefit)	1,413		134		1,547
Change in deferred acquisition costs	1,119		(518)		601
Change in funds withheld, net of reinsurance	(402)		329		(73)
Change in other assets and liabilities, net	724		(1,556)		(832)
Total adjustments	1,692		(489)		1,203
Net cash provided by (used in) operating activities	$	5,206	$	—	$	5,206


	As Previously
	Reported for the				As Adjusted
	Year Ended				Year Ended
	December 31,		Effect of		December 31,
	2021		Changes		2021
Cash flows from operating activities:
Net income	$	3,445	$	234	$	3,679
Adjustments to reconcile net income to net cash provided by operating activities:
Net losses (gains) on derivatives	2,639		2,887		5,526
Net (gain) loss on market risk benefits	—		(3,966)		(3,966)
(Gain) loss from updating future policy benefits cash flow assumptions, net	—		41		41
Interest credited on other contract holder funds, gross	834		(2)		832
Deferred income tax expense (benefit)	675		64		739
Change in deferred acquisition costs	(270)		789		519
Change in funds withheld, net of reinsurance	(757)		131		(626)
Change in other assets and liabilities, net	(403)		(178)		(581)
Total adjustments	2,718		(234)		2,484
Net cash provided by (used in) operating activities	$	5,682	$	—	$	5,682

Balances of and changes in liability for future policy benefits, and Revenue and interest recognized

The following table presents the impact of the adoption of LDTI, as of the transition date, on reserves for future policy benefits and claims payable (in millions):


	Payout		Closed		Closed
	Annuities		Block Life		Block Annuity		Total
Reserves for future policy benefits at December 31, 2020	$	1,148	$	5,809	$	5,328	$	12,285
Adjustment for loss contracts under the modified retrospective approach	4		15		18		37
Effect of remeasurement of liability at current discount rate	143		560		997		1,700
Reserves for future policy benefits at January 1, 2021	$	1,295	$	6,384	$	6,343	$	14,022
Other future policy benefits and claims payable							2,774
Reserves for future policy benefits and claims payable at January 1, 2021							$	16,796

The following table presents the transition date reclassifications and adjustments to reserves for future policy benefits by category resulting from the adoption of LDTI (in millions):


	Reserve for future policy benefits		Other (1)		Total
Reserve for future policy benefits and claims payable at December 31, 2020	$	12,285	$	10,227	$	22,512
Adjustments for LDTI transition	1,737		(7,453)		(5,716)
Reserve for future policy benefits and claims payable at January 1, 2021	$	14,022	$	2,774	$	16,796

(1) Includes variable annuity embedded derivatives that were reclassed to market risk benefits.

The following tables present the roll-forward of components of reserves for future policy benefits (in millions):


	Present Value of Expected Net Premiums
	Year Ended December 31,						Year Ended December 31,
	2023						2022
	Payout		Closed Block		Closed Block		Payout		Closed Block		Closed Block
	Annuities		Life		Annuity		Annuities		Life		Annuity
Balance, beginning of year	$	—	$	1,287	$	—	$	—	$	1,464	$	—
Beginning of period cumulative effect of changes in discount rate assumptions	—		161		—		—		(157)		—
Beginning balance at original discount rate	—		1,448		—		—		1,307		—
Effect of changes in cash flow assumptions	—		22		—		—		242		—
Effect of actual variances from expected experience	—		(95)		—		—		1		—
Balance adjusted for variances from expectation	—		1,375		—		—		1,550		—
Issuances	—		6		—		—		6		—
Interest accrual	—		38		—		—		39		—
Net premiums collected	—		(166)		—		—		(147)		—
Ending balance at original discount rate	—		1,253		—		—		1,448		—
End of period cumulative effect of changes in discount rate assumptions	—		(113)		—		—		(161)		—
Balance, end of year	$	—	$	1,140	$	—	$	—	$	1,287	$	—


	Present Value of Expected Future Policy Benefits
	Year Ended December 31,						Year Ended December 31,
	2023						2022
	Payout		Closed Block		Closed Block		Payout		Closed Block		Closed Block
	Annuities		Life		Annuity		Annuities		Life		Annuity
Balance, beginning of year	$	1,042	$	5,448	$	4,434	$	1,249	$	6,913	$	5,739
Beginning of period cumulative effect of changes in discount rate assumptions	132		958		275		(84)		(349)		(689)
Beginning balance at original discount rate (including DPL of $40, $0 and $671 in December 31, 2023, and, $38, $0 and $459 in December 31, 2022 for payout annuities, closed block life and closed block annuity, respectively)	1,174		6,406		4,709		1,165		6,564		5,050
Effect of changes in cash flow assumptions	—		65		(3)		4		331		(15)
Effect of actual variances from expected experience	(16)		(95)		(8)		(37)		38		(34)
Balance adjusted for variances from expectation	1,158		6,376		4,698		1,132		6,933		5,001
Issuances	117		15		1		126		14		4
Interest accrual	43		195		194		40		209		210
Benefits payments	(129)		(685)		(493)		(124)		(750)		(506)
Ending balance of original discount rate (including DPL of $42, $0 and $626 in December 31, 2023, and, $40, $0 and $671 in December 31, 2022 for payout annuities, closed block life and closed block annuity, respectively)	1,189		5,901		4,400		1,174		6,406		4,709
End of period cumulative effect of changes in discount rate assumptions	(99)		(767)		(185)		(132)		(958)		(275)
Balance, end of year	$	1,090	$	5,134	$	4,215	$	1,042	$	5,448	$	4,434

Reserves for future policy benefits	1,090		3,994		4,215		1,042		4,161		4,434
Less: Reinsurance recoverable	94		2,200		4		71		2,263		2
Reserves for future policy benefits, after reinsurance recoverable	$	996	$	1,794	$	4,211	$	971	$	1,898	$	4,432

Payout

Closed Block

Annuities

Life

Annuity

December 31, 2023

Weighted average duration (years)

7.0

7.2

7.0

December 31, 2022

Weighted average duration (years)

6.9

7.8

7.0

The following table presents the amount of undiscounted and discounted expected future gross premiums and expected future benefit payments for future policy benefits for non-participating traditional and limited-payment insurance contracts (in millions). The discounted premiums are calculated using the current discount rate, while the undiscounted cash flows represent the gross cash flows before any discounting is applied:


	December 31,
	2023				2022
	Undiscounted		Discounted		Undiscounted		Discounted
Payout Annuities
Expected future benefit payments	$	1,579	$	1,043	$	1,542	$	999
Expected future gross premiums	—		—		—		—
Closed Block Life
Expected future benefit payments	7,729		5,251		8,751		5,578
Expected future gross premiums	5,056		3,119		5,976		3,489
Closed Block Annuity
Expected future benefit payments	5,421		3,565		5,834		3,729
Expected future gross premiums	$	—	$	—	$	—	$	—

The following table presents the amount of revenue and interest related to non-participating traditional and limited-pay insurance contracts recognized in the Consolidated Income Statements (in millions):


	Gross Premiums				Interest Expense
	Years Ended December 31,				Years Ended December 31,
	2023		2022		2023		2022
Payout Annuities	$	22	$	10	$	43	$	40
Closed Block Life	340		390		157		170
Closed Block Annuity	1		—		194		210
Total	$	363	$	400	$	394	$	420


	December 31,
	2023		2022
Payout Annuities
Interest accretion rate	3.86	%	3.71	%
Current discount rate	5.12	%	5.40	%
Closed Block Life
Interest accretion rate	3.07	%	3.01	%
Current discount rate	5.06	%	5.34	%
Closed Block Annuity
Interest accretion rate	4.40	%	4.40	%
Current discount rate	5.12	%	5.41	%

Additional Liability, Long-Duration Insurance


	Closed Block Life
Balance, December 31, 2020	$	1,157
Adjustment for reversal of AOCI adjustments	28
Adjustment for cumulative effect of adoption of LDTI	—
Balance, January 1, 2021	$	1,185

Schedule og Market Risk Benefit, Activity

The following table presents the impact of the adoption of LDTI, as of the transition date, on MRBs, net (in millions):


	Variable		Other
	Annuities		Product Lines		Total
Balance, December 31, 2020 - Carrying amount of MRBs under prior guidance	$	7,306	$	74	$	7,380
Adjustment for reversal of AOCI adjustments	(27)		(48)		(75)
Cumulative effect of the changes in non-performance risk between the original contract issuance date and the transition date	(743)		(6)		(749)
Remaining cumulative difference (exclusive of non-performance risk change) between 12/31/20 carrying amount and fair value measurement for the MRBs	3,372		72		3,444
Balance, January 1, 2021 - Market risk benefits, net, at fair value	$	9,908	$	92	$	10,000

The following table presents the impact of the adoption of LDTI, as of the transition date, on reinsurance recoverable on market risk benefits at fair value (in millions):


	Variable		Other
	Annuities		Product Lines		Total
Balance, December 31, 2020 - Carrying amount of MRBs under prior guidance	$	340	$	67	$	407
Adjustment for reversal of AOCI adjustments	—		(47)		(47)
Cumulative difference between 12/31/2020 carrying amount and fair value measurement for the MRBs	28		83		111
Balance, January 1, 2021 - Reinsurance recoverable on market risk benefits at fair value	$	368	$	103	$	471


	Years Ended December 31,
	2023		2022
Variable annuity	$	90	$	183
Other product lines	59		38
Total	$	149	$	221

The following table presents a roll-forward of Closed Block Life additional liabilities for annuitization, death and other insurance benefits (in millions):


	Years Ended December 31,
	2023		2022
Balance, beginning of year	$	1,131	$	1,173
Beginning of period cumulative effect of changes in shadow adjustments	41		(14)
Beginning balance excluding shadow	1,172		1,159
Effect of changes in cash flow assumptions	44		6
Effect of actual variances from expected experience	46		58

Interest accrual	56		56
Net assessments collected	(148)		(107)

Ending balance excluding shadow	1,170		1,172
End of period cumulative effect of changes in shadow adjustments	(17)		(41)
Balance, end of year	$	1,153	$	1,131

The following table presents the weighted average duration of Closed Block Life additional liabilities for annuitization, death and other insurance benefits. The weighted average duration represents average cohort-level duration weighted by the benefit reserves amount:


	December 31,
	2023	2022
Weighted average duration (years)	9.7	8.1

The following table presents assessments and interest expense of Closed Block Life additional liabilities for annuitization, death and other insurance benefits recognized in the Consolidated Income Statements (in millions):


	Assessments				Interest Expense
	Years Ended December 31,				Years Ended December 31,
	2023		2022		2023		2022
Additional liability for annuitization, death and other insurance benefits	$	(148)	$	(107)	$	56	$	56


	December 31,
	2023		2022
Weighted average current discount rate	4.97	%	4.96	%

The following table presents the reconciliation of the market risk benefits balance in the Consolidated Balance Sheets (in millions):


	December 31, 2023						December 31, 2022
	Variable		Other				Variable		Other
	Annuities		Product Lines		Total		Annuities		Product Lines		Total
Market risk benefit - (assets)	$	(6,732)	$	(5)	$	(6,737)	$	(4,856)	$	(9)	$	(4,865)
Market risk benefit - liabilities	4,732		53		4,785		5,623		39		5,662
Market risk benefit - net (asset) liability	$	(2,000)	$	48	$	(1,952)	$	767	$	30	$	797

Schedule of Deferred Acquisition Costs

The following table presents the impact of the adoption of LDTI, as of the transition date, on DAC (in millions):


	Variable		Other
	Annuities		Product Lines		Total
Balance, December 31, 2020 - Deferred acquisition costs	$	13,725	$	172	$	13,897
Adjustment for reversal of AOCI adjustments	151		(5)		146
Balance, January 1, 2021 - Deferred acquisition costs	$	13,876	$	167	$	14,043

The following table presents the roll-forward of the DAC (in millions). The current period amortization is based on the end of the period estimates of mortality and persistency. The amortization pattern is revised on a prospective basis at the beginning of the period based on the period’s actual experience.


	Years Ended December 31,
	2023		2022		2021(1)
Variable Annuities
Balance, beginning of period	$	12,699	$	13,364	$	13,725
Change in accounting principle	—		—		151
Deferrals of acquisition costs	394		544		779
Amortization	(1,126)		(1,209)		(1,291)
Variable Annuities balance, end of period	$	11,967	$	12,699	$	13,364

Reconciliation of total DAC
Variable Annuities balance, end of period	$	11,967	$	12,699	$	13,364
Other product lines, end of period	335		224		161
Total balance, end of period	$	12,302	$	12,923	$	13,525

(1) See Note 2 - Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements for the transition to LDTI impact to the 2021 beginning of period balance for DAC.

Reinsurance Recoverable, Activity

The following table presents the impact of the adoption of LDTI, as of the transition date, on reinsurance recoverable (in millions):


	Total
Balance, December 31, 2020	$	35,270
Reclass of carrying amount of MRBs under prior guidance	(407)
Adjustment for loss contracts under the modified retrospective approach	—
Effect of remeasurement of liability at current discount rate	253
Balance, January 1, 2021	$	35,116