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Life Policy and Investment Contract Reserves (Tables)
 3 Months Ended
Mar. 31, 2023
Liability for Future Policy Benefit, before Reinsurance [Abstract]  
Reserve For Losses Loss Adjustment Expenses Table
The following table summarizes our life policy and investment contract reserves and provides a reconciliation of the balances described in the below tables to those in the condensed consolidated balance sheets:
(Dollars in millions)March 31,
2023		December 31,
2022
Life policy reserves:
Term$1,011 $961 
Whole life427 408 
Other94 94 
Subtotal1,532 1,463 
Investment contract reserves:
Deferred annuities711 734 
Universal life583 578 
Structured settlements128 129 
Other105 111 
Subtotal1,527 1,552 
Total life policy and investment contract reserves$3,059 $3,015 
Adopted Accounting Updates
The following table illustrates the effect of adopting ASU 2018-12 in the condensed consolidated balance sheets:
(Dollars in millions)March 31, 2023December 31, 2022
As originally reportedAs adjustedDifference
Reinsurance recoverable$698 $640 $665 $25 
Prepaid reinsurance premiums57 79 51 (28)
Deferred policy acquisition costs1,048 1,014 1,013 (1)
Total assets30,474 29,736 29,732 (4)
Life policy and investment contract reserves3,059 3,059 3,015 (44)
Deferred income tax1,104 1,045 1,054 9 
Total liabilities19,733 19,205 19,170 (35)
Retained earnings11,818 11,702 11,711 9 
Accumulated other comprehensive income(527)(636)(614)22 
Total shareholders' equity10,741 10,531 10,562 31 
Total liabilities and shareholders' equity30,474 29,736 29,732 (4)

The following table illustrates the effect of adopting ASU 2018-12 in the condensed consolidated statements of income and condensed consolidated statements of comprehensive income:
(Dollars in millions, except per share data)Three months ended March 31,
20232022
As originally reportedAs adjustedDifference
Earned premiums$1,918 $1,690 $1,693 $3 
Insurance losses and contract holders' benefits1,398 1,039 1,032 (7)
Underwriting, acquisition and insurance expenses556 519 520 1 
Deferred income tax expense27 (128)(126)2 
Net Income (Loss)225 (273)(266)7 
Change in life policy reserves, reinsurance recoverable and other, net of tax(36)— 155 155 
Other comprehensive income (loss)87 (589)(434)155 
Comprehensive Income (Loss)312 (862)(700)162 
Net income (loss) per share:
Basic$1.43 $(1.70)$(1.66)$0.04 
Diluted1.42 (1.70)(1.66)0.04 
The table below shows the ASU 2018-12 adoption impacts to the life policy and investment contract reserves as of January 1, 2021 (transition date), pre-tax:
(Dollars in millions)TermWhole lifeDeferred annuityUniversal lifeOtherTotal
At January 1, 2021
Balance, pre-adoption at December 31, 2020$901 $363 $761 $567 $323 $2,915 
Removal of shadow adjustments— — — — 13 13 
Net premiums in excess of gross premiums14 1 — — — 15 
Remeasurement at market value discount rates372 245 — — — 617 
Balance, post-adoption at January 1, 2021$1,287 $609 $761 $567 $336 $3,560 

The table below shows the ASU 2018-12 adoption impacts to the life reinsurance recoverable asset as of January 1, 2021, pre-tax:
(Dollars in millions)TermWhole lifeDeferred annuityUniversal lifeOtherTotal
At January 1, 2021
Balance, pre-adoption at December 31, 2020$113 $26 $— $— $78 $217 
Remeasurement at market value discount rates29 18 — — — 47 
Other adjustments20 1 — 2 — 23 
Balance, post-adoption at January 1, 2021$162 $45 $— $2 $78 $287 
Liability for Future Policy Benefit, Activity
The following table shows the balances and changes in the term and whole life policy reserves included in life policy and investment contract reserves:
(Dollars in millions)Three months ended March 31,
20232022
TermWhole lifeTermWhole life
Present value of expected net premiums:
Balance, beginning of period$1,643 $208 $1,801 $241 
Beginning balance at original discount rate1,708 217 1,503 201 
Effect of changes in cash flow assumptions— — (4)— 
Effect of actual variances from expected experience(3)1 11 — 
Adjusted beginning of period balance1,705 218 1,510 201 
Issuances38 7 59 11 
Interest accrual18 2 15 2 
Net premiums collected(46)(7)(42)(7)
Ending balance at original discount rate1,715 220 1,542 207 
Effect of changes in discount rate assumptions(16)(3)144 19 
Balance, end of period1,699 217 1,686 226 
Present value of expected future policy benefits:
Balance, beginning of period2,584 614 2,993 826 
Beginning balance at original discount rate2,692 607 2,425 577 
Effect of changes in cash flow assumptions— — (4)— 
Effect of actual variances from expected experience(2)1 18 — 
Adjusted beginning of period balance2,690 608 2,439 577 
Issuances38 6 59 11 
Interest accrual30 8 27 7 
Benefits paid(46)(8)(62)(9)
Ending balance at original discount rate2,712 614 2,463 586 
Effect of changes in discount rate assumptions(21)30 282 150 
Balance, end of period2,691 644 2,745 736 
Net liability for future policy benefits:
Present value of expected future policy benefits less expected net premiums992 427 1,059 510 
Impact of flooring at cohort level 19 — 20 — 
Net life policy reserves1,011 427 1,079 510 
Less reinsurance recoverable at original discount rate(96)(25)(100)(27)
Less effect of discount rate assumption changes on reinsurance recoverable(10)(6)(14)(11)
Net life policy reserves, after reinsurance recoverable$905 $396 $965 $472 
Weighted-average duration of the net life policy reserves12161218
Undiscounted and Discounted Expected Future Benefit Payments and Expected Gross Premiums
The following table shows the amount of undiscounted and discounted expected future benefit payments and expected gross premiums for our term and whole life policies:
(Dollars in millions)At March 31,
20232022
UndiscountedDiscountedUndiscountedDiscounted
Term
Expected future benefit payments$4,696 $2,691 $4,128 $2,745 
Expected future gross premiums4,470 2,674 4,000 2,754 
Whole life
Expected future benefit payments$1,586 $644 $1,511 $736 
Expected future gross premiums618 384 580 400 
Revenue and Interest Recognized in Income
The following table shows the amount of revenue and interest recognized in the condensed consolidated statements of income related to our term and whole life policies:
(Dollars in millions)Three months ended March 31,
20232022
Gross premiums
Term$73 $69 
Whole life12 12 
Total$85 $81 
Interest accretion
Term$12 $12 
Whole life6 5 
Total$18 $17 
Weighted Average Interest Rate for Life Policy Products
The following table shows the weighted-average interest rate for our term and whole life products:
At March 31,
20232022
Term
Interest accretion rate5.32 %5.37 %
Current discount rate4.81 3.40 
Whole life
Interest accretion rate5.94 %5.98 %
Current discount rate5.06 3.77 
Policyholder Account Balance
The following table shows the balances and changes in policyholders' account balances included in investment contract reserves:
(Dollars in millions)Three months ended March 31,
20232022
Deferred annuityUniversal lifeDeferred annuityUniversal life
Balance, beginning of period$734 $457 $763 $454 
Premiums received10 11 6 11 
Policy charges— (10)— (10)
Surrenders and withdrawals(36)(3)(12)(3)
Benefit payments(3)(2)(6)(1)
Interest credited6 5 5 5 
Balance, end of period$711 $458 $756 $456 
Weighted average crediting rate3.36 %4.26 %2.95 %4.25 %
Net amount at risk$— $4,064 $— $4,172 
Cash surrender value706 424 752 421 
Policyholder Account Balance, Guaranteed Minimum Crediting Rate
The following table shows the balance of account values by range of guaranteed minimum crediting rates, in basis points, and the related range of the difference between rates being credited to policyholders and the respective guaranteed minimums for our deferred annuity and universal life contracts:
(Dollars in millions)At guaranteed minimum1 to 50 basis points above51-150 basis points aboveGreater than 150 basis pointsTotal
At March 31, 2023
Deferred annuity
1.00-3.00%$9 $423 $17 $212 661 
3.01-4.00%50 — — — 50 
Total$59 $423 $17 $212 $711 
Universal life
1.00-3.00%$60 $47 $9 $2 $118 
3.01-4.00%53 — — — 53 
Greater than 4.00%287 — — — 287 
Total$400 $47 $9 $2 $458 
At March 31, 2022
Deferred annuity
1.00-3.00%$479 $— $177 $50 $706 
3.01-4.00%50 — — — 50 
Total$529 $— $177 $50 $756 
Universal life
1.00-3.00%$61 $44 $7 $1 $113 
3.01-4.00%51 — — — 51 
Greater than 4.00%292 — — — 292 
Total$404 $44 $7 $1 $456 
Additional Liability, Long-Duration Insurance
The following table shows the balances and changes in the other additional liability related to the no-lapse guarantees contained within our universal life contracts:
(Dollars in millions)Three months ended March 31,
20232022
Balance, beginning of period$121 $133 
Balance, beginning of period before shadow reserve adjustments123 131 
Effect of changes in cash flow assumptions— — 
Effect of actual variances from expected experience(1)3 
Adjusted beginning of period balance122 134 
Interest accrual1 1 
Excess death benefits— (8)
Attributed assessments3 3 
Effect of changes in interest rate assumptions1 (3)
Balance, end of period before shadow reserve adjustments127 127 
Shadow reserve adjustments(2)— 
Balance, end of period125 127 
Less reinsurance recoverable, end of period6 5 
Net other additional liability, after reinsurance recoverable$131 $132 
Weighted-average duration of the other additional liability3435
Separate Account, Liability
The following table shows balances and changes in separate account balances during the period:
(Dollars in millions)Three months ended March 31,
20232022
Balance, beginning of period$892 $959 
Interest credited before policy charges10 10 
Change in unrealized gains and losses impacting separate account liabilities— (52)
Benefit payments(2)(10)
Other(1)(4)
Balance, end of period$899 $903 
Cash surrender value$896 $869