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Life Policy and Investment Contract Reserves (Tables)
 6 Months Ended
Jun. 30, 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)June 30,
2023		December 31,
2022
Life policy reserves:
Term$1,015 $961 
Whole life421 408 
Other95 94 
Subtotal1,531 1,463 
Investment contract reserves:
Deferred annuities696 734 
Universal life578 578 
Structured settlements126 129 
Other107 111 
Subtotal1,507 1,552 
Total life policy and investment contract reserves$3,038 $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)June 30, 2023December 31, 2022
As originally reportedAs adjustedDifference
Reinsurance recoverable$694 $640 $665 $25 
Prepaid reinsurance premiums95 79 51 (28)
Deferred policy acquisition costs1,109 1,014 1,013 (1)
Total assets31,352 29,736 29,732 (4)
Life policy and investment contract reserves3,038 3,059 3,015 (44)
Deferred income tax1,158 1,045 1,054 9 
Total liabilities20,322 19,205 19,170 (35)
Retained earnings12,235 11,702 11,711 9 
Accumulated other comprehensive income(626)(636)(614)22 
Total shareholders' equity11,030 10,531 10,562 31 
Total liabilities and shareholders' equity31,352 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 June 30,
20232022
As originally reportedAs adjustedDifference
Earned premiums$1,943 $1,773 $1,773 $— 
Insurance losses and contract holders' benefits1,340 1,309 1,322 13 
Underwriting, acquisition and insurance expenses579 534 533 (1)
Deferred income tax expense81 (263)(265)(2)
Net Income (Loss)534 (808)(818)(10)
Change in life policy reserves, reinsurance recoverable and other, net of tax23 1 143 142 
Other comprehensive income (loss)(99)(482)(340)142 
Comprehensive Income (Loss)435 (1,290)(1,158)132 
Net income (loss) per share:
Basic$3.40 $(5.06)$(5.12)$(0.06)
Diluted3.38 (5.06)(5.12)(0.06)
(Dollars in millions, except per share data)Six months ended June 30,
20232022
As originally reportedAs adjustedDifference
Earned premiums$3,861 $3,463 $3,466 $3 
Insurance losses and contract holders' benefits2,738 2,348 2,354 6 
Underwriting, acquisition and insurance expenses1,135 1,053 1,053 — 
Deferred income tax expense108 (391)(391)— 
Net Income (Loss)759 (1,081)(1,084)(3)
Change in life policy reserves, reinsurance recoverable and other, net of tax(13)1 298 297 
Other comprehensive income (loss)(12)(1,071)(774)297 
Comprehensive Income (Loss)747 (2,152)(1,858)294 
Net income (loss) per share:
Basic$4.83 $(6.76)$(6.77)$(0.01)
Diluted4.80 (6.76)(6.77)(0.01)
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), pretax:
(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, pretax:
(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 balances and changes in the term and whole life policy reserves included in life policy and investment contract reserves is as follows:
(Dollars in millions)Three months ended June 30,
20232022
TermWhole lifeTermWhole life
Present value of expected net premiums:
Balance, beginning of period$1,699 $217 $1,686 $226 
Beginning balance at original discount rate1,715 220 1,542 207 
Effect of changes in cash flow assumptions(5)(6)149 (1)
Effect of actual variances from expected experience(9)— (3)— 
Adjusted beginning of period balance1,701 214 1,688 206 
Issuances40 10 45 8 
Interest accrual17 2 17 2 
Net premiums collected(46)(7)(46)(7)
Ending balance at original discount rate1,712 219 1,704 209 
Effect of changes in discount rate assumptions(48)(7)19 1 
Balance, end of period1,664 212 1,723 210 
Present value of expected future policy benefits:
Balance, beginning of period2,691 644 2,745 736 
Beginning balance at original discount rate2,712 614 2,463 586 
Effect of changes in cash flow assumptions5 (10)166 (3)
Effect of actual variances from expected experience(11)— (1)— 
Adjusted beginning of period balance2,706 604 2,628 583 
Issuances40 11 45 7 
Interest accrual30 7 28 8 
Benefits paid(39)(7)(38)(8)
Ending balance at original discount rate2,737 615 2,663 590 
Effect of changes in discount rate assumptions(75)18 39 56 
Balance, end of period2,662 633 2,702 646 
Net liability for future policy benefits:
Present value of expected future policy benefits less expected net premiums998 421 979 436 
Impact of flooring at cohort level17 — 20 2 
Net life policy reserves1,015 421 999 438 
Less reinsurance recoverable at original discount rate(100)(25)(104)(25)
Less effect of discount rate assumption changes on reinsurance recoverable(8)(5)(13)(7)
Net life policy reserves, after reinsurance recoverable$907 $391 $882 $406 
Weighted-average duration of the net life policy reserves in years12161217
(Dollars in millions)Six months ended June 30,
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(5)(6)145 (1)
Effect of actual variances from expected experience(12)1 8 — 
Adjusted beginning of period balance1,691 212 1,656 200 
Issuances78 17 104 19 
Interest accrual35 4 32 4 
Net premiums collected(92)(14)(88)(14)
Ending balance at original discount rate1,712 219 1,704 209 
Effect of changes in discount rate assumptions(48)(7)19 1 
Balance, end of period1,664 212 1,723 210 
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 assumptions5 (10)162 (3)
Effect of actual variances from expected experience(13)1 17 — 
Adjusted beginning of period balance2,684 598 2,604 574 
Issuances78 17 104 18 
Interest accrual60 15 55 15 
Benefits paid(85)(15)(100)(17)
Ending balance at original discount rate2,737 615 2,663 590 
Effect of changes in discount rate assumptions(75)18 39 56 
Balance, end of period2,662 633 2,702 646 
Net liability for future policy benefits:
Present value of expected future policy benefits less expected net premiums998 421 979 436 
Impact of flooring at cohort level 17 — 20 2 
Net life policy reserves1,015 421 999 438 
Less reinsurance recoverable at original discount rate(100)(25)(104)(25)
Less effect of discount rate assumption changes on reinsurance recoverable(8)(5)(13)(7)
Net life policy reserves, after reinsurance recoverable$907 $391 $882 $406 
Weighted-average duration of the net life policy reserves in years12161217
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 June 30,
20232022
UndiscountedDiscountedUndiscountedDiscounted
Term
Expected future benefit payments$4,738 $2,662 $4,589 $2,702 
Expected future gross premiums4,345 2,583 4,378 2,690 
Whole life
Expected future benefit payments$1,610 $633 $1,517 $646 
Expected future gross premiums641 390 583 372 
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 June 30,Six months ended June 30,
2023202220232022
Gross premiums
Term$73 $71 $146 $140 
Whole life13 12 25 24 
Total$86 $83 $171 $164 
Interest accretion
Term$12 $11 $24 $23 
Whole life5 6 11 11 
Total$17 $17 $35 $34 
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 June 30,
20232022
Term
Interest accretion rate5.29 %5.16 %
Current discount rate5.11 4.20 
Whole life
Interest accretion rate5.93 %5.98 %
Current discount rate5.22 4.74 
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 June 30,Six months ended June 30,
2023202220232022
Deferred annuityUniversal lifeDeferred annuityUniversal lifeDeferred annuityUniversal lifeDeferred annuityUniversal life
Balance, beginning of period$711 $458 $756 $456 $734 $457 $763 $454 
Premiums received15 9 5 10 25 20 11 21 
Policy charges— (10)— (9)— (20)— (19)
Surrenders and withdrawals(32)(4)(8)(2)(68)(7)(20)(5)
Benefit payments(3)(2)(4)(2)(6)(4)(10)(3)
Interest credited5 5 6 4 11 10 11 9 
Balance, end of period$696 $456 $755 $457 $696 $456 $755 $457 
Weighted average crediting rate3.41 %4.29 %3.06 %4.25 %3.41 %4.29 %3.06 %4.25 %
Net amount at risk$— $4,030 $— $4,141 $— $4,030 $— $4,141 
Cash surrender value691 423 750 422 691 423 750 422 
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 June 30, 2023
Deferred annuity
1.00-3.00%$5 $400 $17 $224 646 
3.01-4.00%50 — — — 50 
Total$55 $400 $17 $224 $696 
Universal life
1.00-3.00%$61 $— $56 $3 $120 
3.01-4.00%53 — — — 53 
Greater than 4.00%283 — — — 283 
Total$397 $— $56 $3 $456 
At June 30, 2022
Deferred annuity
1.00-3.00%$475 $— $173 $56 $704 
3.01-4.00%51 — — — 51 
Total$526 $— $173 $56 $755 
Universal life
1.00-3.00%$60 $45 $7 $2 $114 
3.01-4.00%52 — — — 52 
Greater than 4.00%291 — — — 291 
Total$403 $45 $7 $2 $457 
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 June 30,Six months ended June 30,
2023202220232022
Balance, beginning of period$125 $127 $121 $133 
Balance, beginning of period before shadow reserve adjustments127 127 123 131 
Effect of changes in cash flow assumptions(5)(2)(5)(2)
Effect of actual variances from expected experience— 2 (1)5 
Adjusted beginning of period balance122 127 117 134 
Interest accrual1 1 2 2 
Excess death benefits(2)(4)(2)(12)
Attributed assessments3 3 6 6 
Effect of changes in interest rate assumptions— (4)1 (7)
Balance, end of period before shadow reserve adjustments124 123 124 123 
Shadow reserve adjustments(2)(1)(2)(1)
Balance, end of period122 122 122 122 
Less reinsurance recoverable, end of period7 6 7 6 
Net other additional liability, after reinsurance recoverable$129 $128 $129 $128 
Weighted-average duration of the other additional liability in years32353235
Separate Account, Liability
The following table shows balances and changes in separate account balances during the period:
(Dollars in millions)Three months ended June 30,Six months ended June 30,
2023202220232022
Balance, beginning of period$899 $903 $892 $959 
Interest credited before policy charges10 10 20 20 
Change in unrealized gains and losses impacting separate account liabilities— (53)— (105)
Benefit payments(1)— (3)(10)
Other3 — 2 (4)
Balance, end of period$911 $860 $911 $860 
Cash surrender value$906 $878 $906 $878