MONY CLOSED BLOCK OF BUSINESS

6 Months Ended

Jun. 30, 2021

In 1998, MONY Life Insurance Company (“MONY”) converted from a mutual insurance company to a stock corporation (“demutualization”). In connection with its demutualization, an accounting mechanism known as a closed block (the “Closed Block”) was established for certain individuals’ participating policies in force as of the date of demutualization. Assets, liabilities, and earnings of the Closed Block are specifically identified to support its participating policyholders. The Company acquired the Closed Block in conjunction with the acquisition of MONY in 2013.

Assets allocated to the Closed Block inure solely to the benefit of the Closed Block’s policyholders and will not revert to the benefit of MONY or the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of MONY’s general account, any of MONY’s separate accounts or any affiliate of MONY without the approval of the Superintendent of The New York State Department of Financial Services (the “Superintendent”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the general account.

Summarized financial information for the Closed Block as of June 30, 2021 and December 31, 2020 is as follows:


	As of
	June 30, 2021		December 31, 2020
	(Dollars In Millions)
Closed block liabilities
Future policy benefits, policyholders’ account balances and other policyholder liabilities	$	5,342	$	5,406
Policyholder dividend obligation	444		580
Other liabilities	45		7
Total closed block liabilities	5,831		5,993
Closed block assets
Fixed maturities, available-for-sale, at fair value	4,789		4,903

Commercial mortgage loans	68		68
Policy loans	578		596
Cash and other invested assets	36		46
Other assets	88		91
Total closed block assets	5,559		5,704
Excess of reported closed block liabilities over closed block assets	272		289
Portion of above representing accumulated other comprehensive income:
Net unrealized gains (losses) - net of policyholder dividend obligation: 2021 - $357 and 2020- $493; and net of income tax: 2021 - $(75) and 2020 - $(104)	—		—
Future earnings to be recognized from closed block assets and closed block liabilities	$	272	$	289

Reconciliation of the policyholder dividend obligation is as follows:


	For The Six Months Ended June 30,
	2021		2020
	(Dollars In Millions)
Policyholder dividend obligation, beginning balance	$	580	$	279
Applicable to net revenue (losses)	—		(14)
Change in net unrealized gains (losses) - allocated to the policyholder dividend obligation	(136)		166
Policyholder dividend obligation, ending balance	$	444	$	431

Closed Block revenues and expenses were as follows:


	For The Three Months Ended June 30,				For The Six Months Ended June 30,
	2021		2020		2021		2020
	(Dollars In Millions)
Revenues
Premiums and other income	$	35	$	38	$	69	$	73
Net investment income	47		51		95		102
Net realized gains (losses)	3		(1)		26		(1)
Total revenues	85		88		190		174
Benefits and other deductions
Benefits and settlement expenses	82		84		170		161
Other operating expenses	—		—		1		1
Total benefits and other deductions	82		84		171		162
Net revenues before income taxes	3		4		19		12
Income tax expense	1		1		4		2
Net revenues	$	2	$	3	$	15	$	10