Variable Interest Entities

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

A variable interest entity (“VIE”) is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support 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. Consolidation of a VIE by its primary beneficiary is not based on majority voting interest but is based on other criteria discussed below.

We enter into various arrangements with VIEs in the normal course of business and consolidate the VIEs when we determine we are the primary beneficiary. This analysis includes a review of the VIE’s capital structure, related contractual relationships and terms, nature of the VIE’s operations and purpose, nature of the VIE’s interests issued and our involvement with the entity. When assessing the need to consolidate a VIE, we evaluate the design of the VIE as well as the related risks to which the entity was designed to expose the variable interest holders.

The primary beneficiary is the entity that has both (i) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. While also considering these factors, the consolidation conclusion depends on the breadth of our decision-making ability and our ability to influence activities that significantly affect the economic performance of the VIE.

BALANCE SHEET CLASSIFICATION AND EXPOSURE TO LOSS

Creditors or beneficial interest holders of VIEs for which the Company is the primary beneficiary generally have recourse only to the assets and cash flows of the VIEs and do not have recourse to the Company, except in limited circumstances when the Company has provided a guarantee to the VIE’s interest holders. The following table presents the total assets and total liabilities associated with our variable interests in consolidated VIEs, as classified in the Condensed Consolidated Balance Sheets:


(in millions)	Real Estate and Investment Entities(c)		Securitization and Repackaging Vehicles		Total
September 30, 2022
Assets:
Bonds available for sale	$	—	$	3,505	$	3,505
Other bond securities	—		1,345		1,345
Equity securities	60		—		60
Mortgage and other loans receivable	—		2,202		2,202
Other invested assets
Alternative investments(a)	2,572		—		2,572
Investment real estate	1,785		—		1,785
Short-term investments	172		169		341
Cash	79		—		79
Accrued investment income	—		6		6
Other assets	93		73		166
Total assets(b)	$	4,761	$	7,300	$	12,061
Liabilities:
Debt of consolidated investment entities	$	1,383	$	4,612	$	5,995
Other liabilities	85		37		122
Total liabilities	$	1,468	$	4,649	$	6,117
December 31, 2021
Assets:
Bonds available for sale	$	—	$	5,393	$	5,393
Other bond securities	—		—		—
Equity securities	223		—		223
Mortgage and other loans receivable	—		2,359		2,359
Other invested assets
Alternative investments(a)	3,017		—		3,017
Investment real estate	2,257		—		2,257
Short-term investments	467		151		618
Cash	93		—		93
Accrued investment income	—		15		15
Other assets	188		557		745
Total assets(b)	$	6,245	$	8,475	$	14,720
Liabilities:
Debt of consolidated investment entities	$	1,743	$	5,193	$	6,936
Other liabilities	112		723		835
Total liabilities	$	1,855	$	5,916	$	7,771

(a) Composed primarily of investments in real estate joint ventures at September 30, 2022 and December 31, 2021.

(b) The assets of each VIE can be used only to settle specific obligations of that VIE.

(c) Off-balance-sheet exposure primarily consisting of commitments by insurance operations and affiliates into real estate and investment entities. At September 30, 2022 and December 31, 2021, together the Company and AIG affiliates have commitments to internal parties of $2.3 billion and $2.4 billion and commitments to external parties of $0.5 billion and $0.6 billion, respectively. At September 30, 2022, $1.6 billion out of the internal commitments was from subsidiaries of Corebridge entities and $0.7 billion was from other AIG affiliates. At December 31, 2021, $1.5 billion out of the internal commitments was from subsidiaries of Corebridge entities, and $0.9 billion was from other AIG affiliates.

The following table presents the revenue, net income (loss) attributable to noncontrolling interests and net income (loss) attributable to Corebridge associated with our variable interests in consolidated VIEs, as classified in the Condensed Consolidated Income Statements:


	Real Estate and		Securitization		Affordable
	Investment		and Repackaging		Housing
(in millions)	Entities		Vehicles		Partnerships		Total
Three Months Ended September 30, 2022
Total revenue	$	214	$	(22)	$	—	$	192
Net income attributable to noncontrolling interests	126		—		—		126
Net income (loss) attributable to Corebridge	77		(73)		—		4
Three Months Ended September 30, 2021
Total revenue	$	331	$	54	$	170	$	555
Net income attributable to noncontrolling interests	149		—		2		151
Net income (loss) attributable to Corebridge	157		32		142		331
Nine Months Ended September 30, 2022
Total revenue	$	602	$	91	$	—	$	693
Net income attributable to noncontrolling interests	280		2		—		282
Net income (loss) attributable to Corebridge	286		(32)		—		254
Nine Months Ended September 30, 2021
Total revenue	$	694	$	188	$	433	$	1,315
Net income attributable to noncontrolling interests	258		1		53		312
Net income (loss) attributable to Corebridge	367		(66)		314		615

We calculate our maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional amount of VIE assets or liabilities where we have also provided credit protection to the VIE with the VIE as the referenced obligation and (iii) other commitments and guarantees to the VIE.

The following table presents total assets of unconsolidated VIEs in which we hold a variable interest, as well as our maximum exposure to loss associated with these VIEs:


			Maximum Exposure to Loss
(in millions)	Total VIE Assets			On-Balance Sheet(b)		Off-Balance Sheet (c)		Total
September 30, 2022
Real estate and investment entities(a)	$	366,108		$	5,490	$	2,965	$	8,455

Total	$	366,108		$	5,490	$	2,965	$	8,455
December 31, 2021
Real estate and investment entities(a)	$	309,866		$	4,459	$	2,452	$	6,911

Total	$	309,866		$	4,459	$	2,452	$	6,911

(a) Composed primarily of hedge funds and private equity funds.

(b) At September 30, 2022 and December 31, 2021, $5.5 billion and $4.5 billion, respectively, of our total unconsolidated VIE assets were recorded as other invested assets.

Additionally, from time to time, AIG designed internal securitizations and a series of VIEs which are not consolidated by Corebridge which securitized certain RMLs. The notes held by Corebridge and their related fair values are included in the available-for-sale disclosures that are reported in Notes 4 and 5. As of September 30, 2022, the total VIE assets of these securitizations are $139 million, of which Corebridge’s maximum exposure to loss is $40 million. As of December 31, 2021, the total VIE assets of these securitizations are $2.0 billion, of which Corebridge’s maximum exposure to loss is $1.2 billion