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Life Policy And Investment Contract Reserves
 12 Months Ended
Dec. 31, 2023
Liability for Future Policy Benefit, before Reinsurance [Abstract]  
Life Policy And Investment Contract Reserves Life Policy and Investment Contract Reserves
In 2023, we adopted ASU 2018-12 which resulted in changes to the life policy and investment contract reserves and the expansion of required disclosures. The below disclosures represent application of the updated guidance. See Note 1, Summary of Significant Accounting Policies, for further discussion.

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 consolidated balance sheets:
(Dollars in millions)At December 31,
 20232022
Life policy reserves:
Term$1,066 $961 
Whole life434 408 
Other97 94 
Subtotal1,597 1,463 
Investment contract reserves:
Deferred annuities656 734 
Universal life585 578 
Structured settlements123 129 
Other107 111 
Subtotal1,471 1,552 
Total life policy and investment contract reserves$3,068 $3,015 
 
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 

Other above includes structured settlements, other life policy reserves and other investment contract reserves.

The removal of shadow adjustments above represents an increase to the life policy and investment contract reserve balance as it is no longer required under ASU 2018-12 for liabilities amortized in accordance with deferred acquisition costs. Shadow adjustments were historically included to present the carrying amount of the liability as if unrealized holding gains and losses had been realized.
The net premiums in excess of gross premiums adjustment represents an increase to the liability due to the remeasured net premiums exceeding the present value of future gross premiums on certain cohorts. The remeasured net premiums were calculated as the present value of future benefits and related expenses using updated cash flow assumptions as of the transition date less the carrying amount of the liability prior to transition, using the discount rate assumption that was in place prior to adoption of ASU 2018-12.

The remeasurement at market value discount rates adjustment represents the increase to the liability as a result of updating the discount rate assumption for our term and whole life products from the rates used prior to adoption of ASU 2018-12 to market value discount rates that existed at the transition date. As the discount rate assumption decreased significantly from the date the contracts were initially made, this adjustment represents the largest impact on the liability as a result of the initial adoption of ASU 2018-12. The life reinsurance recoverable asset is included in the remeasurement as the assumptions used in estimating the life reinsurance recoverable are consistent with those used in estimating the related liabilities. Other adjustments includes a reclassification from prepaid reinsurance premiums to reinsurance recoverable.

The shadow removal and remeasurement at market value discount rates adjustments were recorded as an increase to the life policy and investment contract reserves liability and a decrease to opening AOCI as of the transition date. The net premiums in excess of gross premiums adjustment was recorded as an increase to the life policy and investment contract reserves liability and a decrease to the opening balance of retained earnings as of the transition date.
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)Years ended December 31,
202320222021
TermWhole lifeTermWhole lifeTermWhole life
Present value of expected net premiums:
Balance, beginning of period$1,643 $208 $1,801 $241 $1,935 $234 
Beginning balance at original discount rate1,708 217 1,503 201 1,503 182 
Effect of changes in cash flow assumptions(7)(7)123 (5)(177)(3)
Effect of actual variances from expected experience(20)3 (1)— 28 2 
Adjusted beginning of period balance1,681 213 1,625 196 1,354 181 
Issuances143 31 194 40 248 39 
Interest accrual72 9 65 8 62 8 
Net premiums collected(184)(28)(176)(27)(161)(27)
Ending balance at original discount rate1,712 225 1,708 217 1,503 201 
Effect of changes in discount rate assumptions(12)(2)(65)(9)298 40 
Balance, end of period1,700 223 1,643 208 1,801 241 
Present value of expected future policy benefits:
Balance, beginning of period2,584 614 2,993 826 3,222 843 
Beginning balance at original discount rate2,692 607 2,425 577 2,418 545 
Effect of changes in cash flow assumptions2 (10)140 (7)(181)(4)
Effect of actual variances from expected experience(24)3 8 (1)31 2 
Adjusted beginning of period balance2,670 600 2,573 569 2,268 543 
Issuances143 30 194 40 248 39 
Interest accrual121 31 112 29 109 29 
Benefits paid(169)(33)(187)(31)(200)(34)
Ending balance at original discount rate2,765 628 2,692 607 2,425 577 
Effect of changes in discount rate assumptions(14)29 (108)7 568 249 
Balance, end of period2,751 657 2,584 614 2,993 826 
Net liability for future policy benefits:
Present value of expected future policy benefits less expected net premiums1,051 434 941 406 1,192 585 
Impact of flooring at cohort level15 — 20 2 14 — 
Net life policy reserves1,066 434 961 408 1,206 585 
Less reinsurance recoverable at original discount rate(97)(23)(99)(25)(107)(27)
Less effect of discount rate assumption changes on reinsurance recoverable(10)(5)(9)(5)(19)(15)
Net life policy reserves, after reinsurance recoverable$959 $406 $853 $378 $1,080 $543 
Weighted-average duration of the net life policy reserves111611161218

The total impact of flooring at cohort level in the above table includes the effect of discount rate assumption changes of $2 million, $9 million and $6 million at December 31, 2023, 2022 and 2021, respectively.
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 December 31,
20232022
UndiscountedDiscountedUndiscountedDiscounted
Term
Expected future benefit payments$4,791 $2,751 $4,655 $2,584 
Expected future gross premiums4,374 2,652 4,436 2,582 
Whole life
Expected future benefit payments$1,648 $657 $1,562 $614 
Expected future gross premiums659 409 606 368 

The following table shows the amount of revenue and interest recognized in the consolidated statements of income related to our term and whole life policies:
(Dollars in millions)Years ended December 31,
202320222021
Gross premiums
Term$289 $280 $270 
Whole life52 47 47 
Total$341 $327 $317 
Interest accretion
Term$49 $47 $47 
Whole life22 21 21 
Total$71 $68 $68 

Adverse development that resulted in an immediate charge to income due to net premiums exceeding gross premiums was immaterial for the years ended December 31, 2023, 2022 and 2021, respectively.

The following table shows the weighted-average interest rate for our term and whole life products:
At December 31,
20232022
Term
Interest accretion rate5.28 %5.38 %
Current discount rate4.81 5.24 
Whole life
Interest accretion rate5.90 %5.96 %
Current discount rate5.10 5.35 

The discount rate assumption was developed by calculating forward rates from market yield curves of upper-medium grade fixed-income instruments.
The following table shows the balances and changes in policyholders' account balances included in investment contract reserves:
(Dollars in millions)Years ended December 31,
202320222021
Deferred annuityUniversal lifeDeferred annuityUniversal lifeDeferred annuityUniversal life
Balance, beginning of period$734 $457 $763 $454 $761 $451 
Premiums received44 39 29 39 44 39 
Policy charges— (39)— (39)— (38)
Surrenders and withdrawals(130)(13)(62)(11)(47)(10)
Benefit payments(14)(6)(18)(5)(17)(7)
Interest credited22 19 22 19 22 19 
Balance, end of period$656 $457 $734 $457 $763 $454 
Weighted average crediting rate3.51 %4.30 %3.36 %4.27 %2.88 %4.25 %
Net amount at risk$— $3,949 $— $4,082 $— $4,198 
Cash surrender value651 426 729 424 757 419 

The net amount at risk above represents the guaranteed benefit amount in excess of the current account balances.

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 December 31, 2023
Deferred annuity
1.00-3.00%$5 $361 $16 $226 $608 
3.01-4.00%48 — — — 48 
Total$53 $361 $16 $226 $656 
Universal life
1.00-3.00%$55 $4 $57 $4 $120 
3.01-4.00%49 5 — — 54 
Greater than 4.00%283 — — — 283 
Total$387 $9 $57 $4 $457 
At December 31, 2022
Deferred annuity
1.00-3.00%$5 $446 $18 $214 $683 
3.01-4.00%51 — — — 51 
Total$56 $446 $18 $214 $734 
Universal life
1.00-3.00%$61 $46 $8 $2 $117 
3.01-4.00%52 — — — 52 
Greater than 4.00%288 — — — 288 
Total$401 $46 $8 $2 $457 
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)Years ended December 31,
202320222021
Balance, beginning of period$121 $133 $116 
Balance, beginning of period before shadow reserve adjustments123 131 113 
Effect of changes in cash flow assumptions(6)(1)4 
Effect of actual variances from expected experience— 6 — 
Adjusted beginning of period balance117 136 117 
Interest accrual4 4 4 
Excess death benefits(6)(18)(4)
Attributed assessments12 12 12 
Effect of changes in interest rate assumptions2 (11)2 
Balance, end of period before shadow reserve adjustments129 123 131 
Shadow reserve adjustments(1)(2)2 
Balance, end of period128 121 133 
Less reinsurance recoverable, end of period6 5 3 
Net other additional liability, after reinsurance recoverable$134 $126 $136 
Weighted-average duration of the other additional liability323435

The following table shows balances and changes in separate account balances during the period:
(Dollars in millions)Years ended December 31,
202320222021
Balance, beginning of period$892 $959 $952 
Interest credited before policy charges42 38 37 
Change in unrealized gains and losses impacting separate account liabilities— (85)(22)
Benefit payments(10)(15)(6)
Other1 (5)(2)
Balance, end of period$925 $892 $959 
Cash surrender value$917 $890 $870