OFFSETTING OF ASSETS AND LIABILITIES

12 Months Ended

Dec. 31, 2021

Certain of the Company’s derivative instruments are subject to enforceable master netting arrangements that provide for the net settlement of all derivative contracts between the Company and a counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event either minimum thresholds, or in certain cases ratings levels, have been reached. Additionally, certain of the Company’s repurchase agreements provide for net settlement on termination of the agreement. Refer to Note 14, Debt and Other Obligations for details of the Company’s repurchase agreement programs.

Collateral received includes both cash and non-cash collateral. Cash collateral received by the Company is recorded on the consolidated balance sheet as “cash”, with a corresponding amount recorded in “other liabilities” to represent the Company’s obligation to return the collateral. Non-cash collateral received by the Company is not recognized on the consolidated balance sheet unless the Company exercises its right to sell or re-pledge the underlying asset. As of December 31, 2021 and 2020, there was no fair value of non-cash collateral received.

The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2021:


	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet		Net Amounts of Assets Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet
							Financial Instruments		Collateral Received		Net Amount
	(Dollars In Millions)
Offsetting of Derivative Assets
Derivatives:
Free-Standing derivatives	$	1,152	$	—	$	1,152	$	806	$	178	$	168
Total derivatives, subject to a master netting arrangement or similar arrangement	1,152		—		1,152		806		178		168
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	62		—		62		—		—		62
Embedded derivative - GLWB	169		—		169		—		—		169
Derivatives with PLC	—		—		—		—		—		—
Embedded derivative - FIA	64		—		64		—		—		64
Total derivatives, not subject to a master netting arrangement or similar arrangement	295		—		295		—		—		295
Total derivatives	1,447		—		1,447		806		178		463
Total Assets	$	1,447	$	—	$	1,447	$	806	$	178	$	463


	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Balance Sheet		Net Amounts of Liabilities Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet
							Financial Instruments		Collateral Posted		Net Amount
	(Dollars In Millions)
Offsetting of Derivative Liabilities
Derivatives:
Free-Standing derivatives	$	830	$	—	$	830	$	806	$	22	$	2
Total derivatives, subject to a master netting arrangement or similar arrangement	830		—		830		806		22		2
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	280		—		280		—		—		280
Funds withheld derivative	10		—		10		—		—		10
Embedded derivative - GLWB	644		—		644		—		—		644
Embedded derivative - FIA	659		—		659		—		—		659
Embedded derivative - IUL	269		—		269		—		—		269
Other	87		—		87		—		—		87
Total derivatives, not subject to a master netting arrangement or similar arrangement	1,949		—		1,949		—		—		1,949
Total derivatives	2,779		—		2,779		806		22		1,951
Repurchase agreements(1)	1,393		—		1,393		—		—		1,393
Total Liabilities	$	4,172	$	—	$	4,172	$	806	$	22	$	3,344

(1)Borrowings under repurchase agreements are for a term less than 90 days.

The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2020.


	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet		Net Amounts of Assets Presented in the Balance Sheet		Gross Amounts Not Offset in Balance Sheet
							Financial Instruments		Collateral Received		Net Amount
	(Recast)
	(Dollars In Millions)
Offsetting of Derivative Assets
Derivatives:
Free-Standing derivatives	$	1,337	$	—	$	1,337	$	865	$	290	$	182
Total derivatives, subject to a master netting arrangement or similar arrangement	1,337		—		1,337		865		290		182
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	101		—		101		—		—		101
Embedded derivative - GLWB	138		—		138		—		—		138

Other	60		—		60		—		—		60
Total derivatives, not subject to a master netting arrangement or similar arrangement	299		—		299		—		—		299
Total derivatives	1,636		—		1,636		865		290		481
Total Assets	$	1,636	$	—	$	1,636	$	865	$	290	$	481


	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Balance Sheet		Net Amounts of Liabilities Presented in Balance Sheet		Gross Amounts Not Offset in the Balance Sheet
							Financial Instruments		Collateral Posted		Net Amount
	(Recast)
	(Dollars In Millions)
Offsetting of Derivative Liabilities
Derivatives:
Free-Standing derivatives	$	871	$	—	$	871	$	865	$	4	$	2
Total derivatives, subject to a master netting arrangement or similar arrangement	871		—		871		865		4		2
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	389		—		389		—		—		389
Funds withheld derivative	10		—		10		—		—		10
Embedded derivative - GLWB	960		—		960		—		—		960
Embedded derivative - FIA	633		—		633		—		—		633
Embedded derivative - IUL	201		—		201		—		—		201
Other	55		—		55		—		—		55
Total derivatives, not subject to a master netting arrangement or similar arrangement	2,248		—		2,248		—		—		2,248
Total derivatives	3,119		—		3,119		865		4		2,250
Repurchase agreements(1)	437		—		437		—		—		437
Total Liabilities	$	3,556	$	—	$	3,556	$	865	$	4	$	2,687

(1)Borrowings under repurchase agreements are for a term less than 90 days.