Market Risk Benefits

3 Months Ended

Mar. 31, 2023

Accounting Standards Update 2018-12 [Abstract]

Market Risk Benefits

Market Risk Benefits

The following table presents the balances of and changes in MRBs associated with FIAs and fixed rate annuities for the three months ended March 31, 2023 and the years ended December 31, 2022 and December 31, 2021 (in millions):

	March 31, 2023				December 31, 2022				December 31, 2021
	FIA		Fixed rate annuities		FIA		Fixed rate annuities		FIA		Fixed rate annuities
Balance, beginning of period	$	164	$	1	$	426	$	2	$	478	$	1
Balance, beginning of period, before effect of changes in the instrument-specific credit risk	$	104	$	1	$	280	$	1	$	320	$	1
Issuances and benefit payments	(4)		—		(21)		—		(9)		—
Attributed fees collected and interest accrual	30		—		107		1		99		1
Actual policyholder behavior different from expected	7		—		43		—		(22)		—
Changes in assumptions and other	1		—		(76)		—		—		—
Effects of market related movements	26		—		(231)		(1)		(108)		—
Balance, end of period, before effect of changes in the instrument-specific credit risk	$	164	$	1	$	102	$	1	$	280	$	2
Effect of changes in the instrument-specific credit risk	53		—		62		—		146		—
Balance, end of period	$	217	$	1	$	164	$	1	$	426	$	2
Weighted-average attained age of policyholders weighted by total AV (years)	68.49		72.64		68.59		72.88		68.95		73.10
Weighted-average attained age of policyholders weighted by Unlocked MRB (years)	78.33		77.73		80.84		77.56		68.77		73.72
Net amount at risk	$	1,031	$	3	$	952	$	3	$	1,304	$	4

The following table reconciles MRBs by amounts in an asset position and amounts in a liability position to the MRB amounts in the Condensed Consolidated Balance Sheets (in millions):

	March 31, 2023						December 31, 2022						December 31, 2021
	Asset		Liability		Net		Asset		Liability		Net		Asset		Liability		Net
FIA	$	106	$	323	$	217	$	117	$	281	$	164	$	41	$	467	$	426
Fixed rate annuities	—		1		1		—		1		1		—		2		2
Total	$	106	$	324	$	218	$	117	$	282	$	165	$	41	$	469	$	428

In the first quarter of 2023, the following notable changes were made to the inputs to the fair value estimates of MRB calculations:

•Risk-free rates decreased slightly, leading to an increase in the MRB associated with FIA and fixed rate annuities.

•Decreases in the equity market related projections resulted in an increase in the net amount of risk associated with FIAs, leading to an increase in the value of the associated MRBs.

•F&G’s credit spread increased, leading to a corresponding decrease in the MRBs associated with both FIA and fixed rate annuities.

In 2022, the following notable changes were made to the inputs to the fair value estimates of MRB calculations:

•Risk-free rates increased moderately, leading to a decrease in the MRBs associated with both FIA and fixed rate annuities.

•Increases in the equity markets resulted in a decrease in the net amount at risk associated with FIA and fixed rate annuities, leading to a decrease in the value of the associated MRBs.

•Volatility indices decreased, leading to a decrease in the MRBs associated with both FIA and fixed rate annuities.

•Cash flow assumptions for mortality and full and partial surrenders were unchanged during the annual third quarter review. The GMWB utilization assumption was revised in the second quarter of 2022 to reflect additional internal and industry experience for the first several contract years. This assumption update led to a decrease in the MRBs.

•F&G’s credit spread increased during the year, leading to a corresponding decrease in the MRBs value. Credit spreads on the block of business remain lower than the at-issue or at-purchase credit spreads, but the level has decreased since the beginning of 2022.

In 2021, the following notable changes were made to the inputs to the fair value estimates of MRB calculations:

•    Risk-free rates increased moderately, leading to a decrease in the MRBs associated with both FIA and fixed rate annuities.

•Increases in the equity markets resulted in a decrease in the net amount at risk associated with FIA and fixed rate annuities, leading to a decrease in the value of the associated MRBs.

Contractholder Funds

The following tables summarize balances of and changes in contractholder funds’ account balances (in millions):

	March 31, 2023
	FIA			Fixed rate annuities			Universal Life			FABN (b)		FHLB (b)
Balance, beginning of year	$	24,766		$	9,358		$	2,112		$	2,613	$	1,982
Issuances	1,186			1,522			49			—		256
Premiums received	25			1			87			—		—
Policy charges (a)	(42)			—			(60)			—		—
Surrenders and withdrawals	(403)			(257)			(21)			—		—
Benefit payments	(121)			(59)			(10)			(15)		(110)
Interest credited	21			81			5			13		11
Other	23			(1)			—			—		—
Balance, end of year	$	25,455		$	10,645		$	2,162		$	2,611	$	2,139
Embedded derivative adjustment (c)	(12)			—			45			—		—
Gross Liability, end of period	$	25,443		$	10,645		$	2,207		$	2,611	$	2,139
Less: Reinsurance	(17)			(4,691)			(933)			—		—
Net Liability, after Reinsurance	$	25,426		$	5,954		$	1,274		$	2,611	$	2,139
Weighted-average crediting rate	0.33		%	—		%	1.00		%	N/A		N/A
Net amount at risk (d)	N/A			N/A			49,426			N/A		N/A
Cash surrender value	23,726			9,929			1,724			N/A		N/A

(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.

(b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.

(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.

(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.

	December 31, 2022
	FIA			Fixed rate annuities		Universal Life			FABN (b)		FHLB (b)
Balance, beginning of year	21,997			6,367		1,907			1,904		1,543
Issuances	4,462			3,758		167			700		1,192
Premiums received	106			3		295			—		—
Policy charges (a)	(166)			(1)		(209)			—		—
Surrenders and withdrawals	(1,322)			(797)		(74)			—		—
Benefit payments	(485)			(192)		(22)			(35)		(789)
Interest credited	198			220		48			45		36
Other	(24)			—		—			(1)		—
Balance, end of year	$	24,766		$	9,358	$	2,112		$	2,613	$	1,982
Embedded derivative adjustment (c)	(343)			—		15			—		—
Gross Liability, end of period	$	24,423		$	9,358	$	2,127		$	2,613	$	1,982
Less: Reinsurance	(17)			(3,723)		(947)			—		—
Net Liability, after Reinsurance	$	24,406		$	5,635	$	1,180		$	2,613	$	1,982
Weighted-average crediting rate	0.85		%	—		2.39		%	N/A		N/A
Net amount at risk (d)	N/A			N/A		53,348			N/A		N/A
Cash surrender value	188			5,992		1,698			N/A		N/A

(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.

(b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.

(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.

(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.

	December 31, 2021
	FIA			Fixed rate annuities		Universal Life			FABN (b)		FHLB (b)
Balance, beginning of year	$	18,703		$	5,142	$	1,696		$	—	$	1,203
Issuances	4,400			1,743		114			1,899		759
Premiums received	103			3		233			—		—
Policy charges (a)	(148)			(1)		(167)			—		—
Surrenders and withdrawals	(1,303)			(543)		(68)			—		—
Benefit payments	(440)			(145)		(19)			(7)		(447)
Interest credited	686			167		118			12		30
Other	(4)			1		—			—		(2)
Balance, end of year	$	21,997		$	6,367	$	1,907		$	1,904	$	1,543
Embedded derivative adjustment (c)	603			—		74			—		—
Gross Liability, end of period	$	22,600		$	6,367	$	1,981		$	1,904	$	1,543
Less: Reinsurance	(17)			(1,692)		(984)			—		—
Net Liability, after Reinsurance	$	22,583		$	4,675	$	997		$	1,904	$	1,543
Weighted-average crediting rate	3.43		%	—		6.77		%	N/A		N/A
Net amount at risk (d)	N/A			N/A		41,326			N/A		N/A
Cash surrender value	20,455			5,992		1,572			N/A		N/A

(a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance.

(b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials.

(c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.

(d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.

The following table reconciles contractholder funds’ account balances to the contractholder funds liability in the Condensed Consolidated Balance Sheet (in millions):

	March 31, 2023		December 31, 2022		December 31, 2021
FIA	$	25,443	$	24,423	$	22,600
Fixed rate annuities	10,645		9,358		6,367
Immediate annuities	326		332		352
Universal life	2,207		2,127		1,981
Traditional life	5		5		5
Funding Agreement-FABN	2,611		2,613		1,904
FHLB	2,139		1,982		1,543
PRT	3		3		1
Total	$	43,379	$	40,843	$	34,753

The following tables present the account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums (in millions):

	March 31, 2023
	At Guaranteed Minimum		1 Basis Point-50 Basis Points Above		51 Basis Points-150 Basis Points Above		Greater Than 150 Basis Points Above		Total
FIA
0.00%-1.50%	$	23,348	$	806	$	406	$	370	$	24,930
1.51%-2.50%	149		—		1		—		150
Greater than 2.50%	373		—		2		—		375
Total	$	23,870	$	806	$	409	$	370	$	25,455
Fixed Rate Annuities
0.00%-1.50%	$	12	$	31	$	1,867	$	7,522	$	9,432
1.51%-2.50%	8		13		28		187		236
Greater than 2.50%	962		3		4		8		977
Total	$	982	$	47	$	1,899	$	7,717	$	10,645
Universal Life
0.00%-1.50%	$	1,752	$	4	$	—	$	18	$	1,774
1.51%-2.50%	—		—		—		—		—
Greater than 2.50%	344		43		1		—		388
Total	$	2,096	$	47	$	1	$	18	$	2,162

	December 31, 2022
	At Guaranteed Minimum		1 Basis Point-50 Basis Points Above		51 Basis Points-150 Basis Points Above		Greater Than 150 Basis Points Above		Total
FIA
0.00%-1.50%	$	22,848	$	801	$	410	$	151	$	24,210
1.51%-2.50%	162		—		1		—		163
Greater than 2.50%	390		—		3		—		393
Total	$	23,400	$	801	$	414	$	151	$	24,766
Fixed Rate Annuities
0.00%-1.50%	$	10	$	32	$	1,871	$	6,379	$	8,292
1.51%-2.50%	9		14		30		1		54
Greater than 2.50%	997		4		4		7		1,012
Total	$	1,016	$	50	$	1,905	$	6,387	$	9,358
Universal Life
0.00%-1.50%	$	1,701	$	3	$	—	$	17	$	1,721
1.51%-2.50%	—		—		—		—		—
Greater than 2.50%	346		44		1		—		391
Total	$	2,047	$	47	$	1	$	17	$	2,112

	December 31, 2021
	At Guaranteed Minimum		1 Basis Point-50 Basis Points Above		51 Basis Points-150 Basis Points Above		Greater Than 150 Basis Points Above		Total
FIA
0.00%-1.50%	$	20,162	$	803	$	388	$	—	$	21,353
1.51%-2.50%	171		11		25		—		207
Greater than 2.50%	431		3		3		—		437
Total	$	20,764	$	817	$	416	$	—	$	21,997
Fixed Rate Annuities
0.00%-1.50%	$	2	$	28	$	1,928	$	3,219	$	5,177
1.51%-2.50%	9		15		37		1		62
Greater than 2.50%	954		142		25		7		1,128
Total	$	965	$	185	$	1,990	$	3,227	$	6,367
Universal Life
0.00%-1.50%	$	1,486	$	2	$	—	$	13	$	1,501
1.51%-2.50%	—		—		—		—		—
Greater than 2.50%	359		46		1		—		406
Total	$	1,845	$	48	$	1	$	13	$	1,907