Foreign currency forwards and options are executed for the Aflac Japan segment in order to hedge the currency risk on the carrying value of certain U.S. dollar-denominated investments. The average maturity of these forwards and options can change depending on factors such as market conditions and types of investments being held. In situations where the maturity of the forwards and options is shorter than the underlying investment being hedged, the Company may enter into new forwards and options near maturity of the existing derivative in order to continue hedging the underlying investment. In forward transactions, Aflac Japan agrees with another party to buy a fixed amount of yen and sell a corresponding amount of U.S. dollars at a specified future date. The Company also uses one-sided foreign currency put options to mitigate the settlement risk on U.S. dollar-denominated assets related to extreme foreign currency rate changes. From time to time, Aflac Japan also executes foreign currency option transactions in a collar strategy, where Aflac Japan agrees with another party to simultaneously purchase put options and sell call options. In the purchased put transactions, Aflac Japan obtains the option to buy a fixed amount of yen and sell a corresponding amount of U.S. dollars at a specified future date. In the sold call transactions, Aflac Japan agrees to sell a fixed amount of yen and buy a corresponding amount of U.S. dollars at a specified future date. The combination of purchasing the put option and selling the call option results in no net premium being paid (i.e. a costless or zero-cost collar).

From time to time, the Company may also enter into foreign currency forwards and options to hedge the currency risk associated with the net investment in Aflac Japan. In these forward transactions, the Company agrees with another party to buy a fixed amount of U.S. dollars and sell a corresponding amount of yen at a specified price at a specified future date. In the option transactions, the Company may use a combination of foreign currency options to protect expected future cash flows by simultaneously purchasing yen put options (options that protect against a weakening yen) and selling yen call options (options that limit participation in a strengthening yen). The combination of these two actions create a zero-cost collar. Additionally, the Company enters into purchased options to hedge cash flows from the net investment in Aflac Japan.

The Company enters into foreign currency swaps pursuant to which it exchanges an initial principal amount in one currency for an initial principal amount of another currency, with an agreement to re-exchange the principal amounts at a future date. There may also be periodic exchanges of payments at specified intervals based on the agreed upon rates and notional amounts. Foreign currency swaps are used primarily in the consolidated VIEs in the Company's Aflac Japan portfolio to convert foreign-denominated cash flows to yen, the functional currency of Aflac Japan, in order to minimize cash flow fluctuations. The Company also uses foreign currency swaps to economically convert certain of its U.S. dollar-denominated senior note and subordinated debenture principal and interest obligations into yen-denominated obligations.

Swaptions are used to mitigate the adverse impact resulting from significant changes in the fair value of U.S. dollar-denominated available-for-sale securities due to fluctuation in interest rates. In a payer swaption, the Company pays a premium to obtain the right, but not the obligation, to enter into a swap contract where it will pay a fixed rate and receive a floating rate. Interest rate swaption collars are combinations of two swaption positions. In order to maximize the efficiency of the collars while minimizing cost, a collar strategy is used whereby the Company purchases a long payer swaption (the Company purchases an option that allows it to enter into a swap where the Company will pay the fixed rate and receive the floating rate of the swap) and sells a short receiver swaption (the Company sells an option that provides the counterparty with the right to enter into a swap where the Company will receive the fixed rate and pay the floating rate of the swap). The combination of purchasing the long payer swaption and selling the short receiver swaption results in no net premium being paid (i.e. a costless or zero-cost collar).

Bond purchase commitments result from repackaged bond structures that are consolidated VIEs whereby there is a delay in the trade date and settlement date of the bond within the structure to ensure completion of all necessary legal agreements to support the consolidated VIE that issues the repackaged bond. Since the Company has a commitment to purchase the underlying bond at a specified price, the agreement meets the definition of a derivative where the value is derived based on the current market value of the bond compared to the fixed purchase price to be paid on the settlement date.

The table below summarizes the balance sheet classification of the Company's derivative fair value amounts, as well as the gross asset and liability fair value amounts, at December 31. The fair value amounts presented do not include income accruals. Derivative assets are included in other assets, while derivative liabilities are included in other liabilities within the Company’s consolidated balance sheets. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and are not reflective of exposure or credit risk.


	2023									2022
(In millions)				Asset Derivatives			Liability Derivatives						Asset Derivatives			Liability Derivatives
Hedge Designation/ Derivative Type	Notional Amount			Fair Value			Fair Value			Notional Amount			Fair Value			Fair Value
Cash flow hedges:
Foreign currency swaps - VIE		$	18		$	0		$	4		$	18		$	0		$	3
Total cash flow hedges		18			0			4			18			0			3
Fair value hedges:

Foreign currency options		2,158			0			0			7,940			45			0

Total fair value hedges		2,158			0			0			7,940			45			0
Net investment hedge:
Foreign currency forwards		2,611			179			27			4,982			383			85
Foreign currency options		456			0			0			2,630			7			0
Total net investment hedge		3,067			179			27			7,612			390			85
Non-qualifying strategies:
Foreign currency swaps		1,200			31			0			1,900			66			0
Foreign currency swaps - VIE		3,417			55			503			3,420			62			387
Foreign currency forwards		7,402			59			477			5,049			17			640
Foreign currency options		22,557			2			0			5,521			30			0

Interest rate swaps		17,230			11			419			17,730			7			583


Total non-qualifying strategies		51,806			158			1,399			33,620			182			1,610
Total derivatives		$	57,049		$	337		$	1,430		$	49,190		$	617		$	1,698

For certain variable-rate U.S. dollar-denominated available-for-sale securities held by Aflac Japan via consolidated VIEs, foreign currency swaps are used to swap the U.S. Dollar (USD) variable rate interest and principal payments to fixed rate Japanese Yen (JPY) interest and principal payments. The Company has designated foreign currency swaps as a hedge of the variability in cash flows of a forecasted transaction or of amounts to be received or paid related to a recognized asset (“cash flow” hedge). The remaining maximum length of time for which these cash flows are hedged is approximately three years. The derivatives in the Company's consolidated VIEs that are not designated as accounting hedges are discussed in the Non-qualifying Strategies section of this note.

The Company designates and accounts for certain foreign currency forwards, options, and interest rate swaptions as fair value hedges when they meet the requirements for hedge accounting. The Company recognizes gains and losses on these derivatives as well as the offsetting gain or loss on the related hedged items in current earnings.

Foreign currency forwards and options hedge the foreign currency exposure of certain U.S. dollar-denominated available-for-sale fixed-maturity investments held in Aflac Japan. The change in the fair value of the foreign currency forwards related to the changes in the difference between the spot rate and the forward price is excluded from the assessment of hedge effectiveness. The change in fair value of the foreign currency option related to the time value of the option is recognized in current earnings and is excluded from the assessment of hedge effectiveness.

Interest rate swaptions hedge the interest rate exposure of certain U.S. dollar-denominated available-for-sale securities held in Aflac Japan. For these hedging relationships, the Company excludes time value from the assessment of hedge effectiveness and recognizes changes in the intrinsic value of the swaptions in current earnings within net investment income. The change in the time value of the swaptions is recognized in other comprehensive income (loss) and amortized into earnings (net investment income) over its legal term.


(In millions)		Hedging Derivatives						Hedged Items
Hedging Derivatives	Hedged Items	Total Gains (Losses)		Gains (Losses) Excluded from Effectiveness Testing(1)		Gains (Losses) Included in Effectiveness Testing(2)		Gains (Losses)(2)		Net Investment Gains (Losses) Recognized for Fair Value Hedge
2023:

Foreign currency options	Fixed maturity securities	$	(65)	$	(65)	$	0	$	0	$	0

Total gains (losses)		$	(65)	$	(65)	$	0	$	0	$	0
2022:

Foreign currency options	Fixed maturity securities	$	(18)	$	(18)	$	0	$	0	$	0

Total gains (losses)		$	(18)	$	(18)	$	0	$	0	$	0
2021:
Foreign currency forwards	Fixed maturity securities	$	(7)	$	0	$	(7)	$	6	$	(1)
Foreign currency options	Fixed maturity securities	(26)		(25)		(1)		4		3

Total gains (losses)		$	(33)	$	(25)	$	(8)	$	10	$	2

(1) Gains (losses) excluded from effectiveness testing includes the forward point on foreign currency forwards and time value change on foreign currency options which are reported in the consolidated statements of earnings as net investment gains (losses). It also includes the change in the fair value of the interest rate swaptions related to the time value of the swaptions which is recognized as a component of other comprehensive income (loss).

(2) Gains and losses on foreign currency forwards and options and related hedged items are reported in the consolidated statements of earnings as net investment gains (losses). For interest rate swaptions and related hedged items, gains and losses included in the hedge assessment, premium amortization and time value amortization while the hedge items are still outstanding are reported within net investment income. The time value gains and losses for interest rate swaptions when the related hedged items are redeemed are reported in net investment gains (losses) consistent with the impact of the hedged item. For the years ended December 31, 2023 and 2022, gains and losses included in the hedge assessment on interest rate swaptions and related hedged items were immaterial.

The following table shows the carrying amounts of assets designated and qualifying as hedged items in fair value hedges of interest rate risk and the related cumulative hedge adjustment included in the carrying amount. The Company had no fair value hedges of interest rate risk as of December 31, 2023 and 2022; therefore, the amounts presented in the table below are related to previous fair value hedges of interest rate risk that were discontinued.

The Company's investment in Aflac Japan is affected by changes in the yen/dollar exchange rate. To mitigate this exposure, the Parent Company's yen-denominated liabilities (see Note 9) have been designated as non-derivative hedges and certain foreign currency forwards and options have been designated as derivative hedges of the foreign currency exposure of the Company's net investment in Aflac Japan.

For the Company's derivative instruments in consolidated VIEs that do not qualify for hedge accounting treatment, all changes in their fair value are reported in current period earnings within net investment gains (losses). The amount of gain or loss recognized in earnings for the Company's VIEs is attributable to the derivatives in those investment structures. While the change in value of the swaps is recorded in current period earnings, the change in value of the available-for-sale fixed maturity securities associated with these swaps is recorded in other comprehensive income.

As of December 31, 2023, the Parent Company had $1.2 billion notional amount of cross-currency interest rate swap agreements related to certain of its U.S. dollar-denominated senior notes to effectively convert a portion of the interest on the notes from U.S. dollar to Japanese yen. Changes in the values of these swaps are recorded in current period earnings.

The Company uses foreign currency forwards and options to economically mitigate the currency risk of some of its U.S. dollar-denominated loan receivables held within the Aflac Japan segment. These arrangements are not designated as accounting hedges, as the foreign currency remeasurement of the loan receivables impacts current period earnings, and substantially offsets gains and losses from foreign currency forwards within net investment gains (losses). The Company also has certain foreign currency forwards on U.S. dollar-denominated available-for-sale securities where hedge accounting is not being applied.


	2023										2022										2021
(In millions)	Net Investment Income (1)			Net Investment Gains (Losses)				Other Comprehensive Income (Loss)(2)			Net Investment Income (1)			Net Investment Gains (Losses)				Other Comprehensive Income (Loss)(2)			Net Investment Income (1)			Net Investment Gains (Losses)				Other Comprehensive Income (Loss)(2)
Qualifying hedges:
Cash flow hedges:
Foreign currency swaps - VIE		$	(1)		$	(4)			$	5		$	(1)		$	(4)			$	4		$	(1)		$	(4)			$	3
Total cash flow hedges		(1)			(4)		(3)		5			(1)			(4)		(3)		4			(1)			(4)		(3)		3
Fair value hedges:
Foreign currency forwards					0										0										(1)
Foreign currency options					(65)										(18)										(22)
Interest rate swaptions (4)		(1)			0				1			0			0				0			(1)			(1)				2
Total fair value hedges		(1)			(65)				1			0			(18)				0			(1)			(24)				2
Net investment hedge:
Non-derivative hedging instruments					0				257						0				371						0				328
Foreign currency forwards					234				313						(80)				673						29				525
Foreign currency options					(5)				0						(1)				0						(4)				0
Total net investment hedge					229				570						(81)				1,044						25				853
Non-qualifying strategies:
Foreign currency swaps					4										159										135
Foreign currency swaps - VIE					(201)										9										(188)
Foreign currency forwards					(349)										(650)										(707)
Foreign currency options					(53)										0										(3)
Interest rate swaps					(88)										(546)										(38)
Interest rate swaptions					0										1										0
Forward bond purchase commitment - VIE					(4)										(21)										(1)
Total non-qualifying strategies					(691)										(1,048)										(802)
Total		$	(2)		$	(531)			$	576		$	(1)		$	(1,151)			$	1,048		$	(2)		$	(805)			$	858

(1) Interest expense/income on cash flow hedges is recorded in net investment income. For interest rate swaptions classified as fair value hedges, the change in the time value of the swaptions is recognized in other comprehensive income (loss) and amortized into net investment income over its legal term. If the swaption is early terminated but the hedge item is still outstanding, the amortization of disposal amount of the swaptions is recorded in net investment income over the remaining life of the hedged items.

(2) Gains and losses on cash flow hedges and the change in the fair value of interest rate swaptions related to the time value of the swaptions in fair value hedges are recorded as unrealized gains (losses). Gains and losses on net investment hedges related to changes in foreign currency spot rates are recorded in the unrealized foreign currency translation gains (losses) line in the consolidated statements of comprehensive income (loss).

(4) Includes $1 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the year ended December 31, 2023, compared with $1 and $2 of losses during the years ended December 31, 2022 and 2021, respectively, related to fair value hedges excluded component. Impact shown net of effect of hedged items (see Fair Value Hedges section of this Note 4 for further detail).

The Company is a direct counterparty to the foreign currency swaps that it has entered into in connection with certain of its senior notes and subordinated debentures; foreign currency forwards; and foreign currency options, and therefore the Company is exposed to credit risk in the event of nonperformance by the counterparties in those contracts. The risk of counterparty default for the Company's foreign currency swaps, certain foreign currency forwards, and foreign currency options is mitigated by collateral posting requirements that counterparties to those transactions must meet.

The Company engages in over-the-counter (OTC) bilateral derivative transactions directly with unaffiliated third parties under International Swaps and Derivatives Association, Inc. (ISDA) agreements and other documentation. Most of the ISDA agreements also include Credit Support Annexes (CSAs) provisions, which generally provide for two-way collateral postings at the first dollar of exposure. The Company mitigates the risk that counterparties to transactions might be unable to fulfill their contractual obligations by monitoring counterparty credit exposure and collateral value while generally requiring that collateral be posted at the outset of the transaction. In addition, a significant portion of the derivative transactions have provisions that give the counterparty the right to terminate the transaction upon a downgrade of the Company's financial strength rating. The actual amount of payments that the Company could be required to make depends on market conditions, the fair value of outstanding affected transactions, and other factors prevailing at and after the time of the downgrade.

The Company also engages in OTC cleared derivative transactions through regulated central clearing counterparties. These positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to these derivatives.

Collateral posted by the Company to third parties for derivative transactions can generally be repledged or resold by the counterparties. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position by counterparty was approximately $1.2 billion and $1.3 billion as of December 31, 2023 and 2022, respectively. If the credit-risk-related contingent features underlying these agreements had been triggered on December 31, 2023, the Company estimates that it would be required to post a maximum of $363 million of additional collateral to these derivative counterparties. The Company is generally allowed to sell or repledge collateral obtained from its derivative counterparties, although it does not typically exercise such rights. See the Offsetting tables below for collateral posted or received as of the reported balance sheet dates.

Most 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 Parent Company or its subsidiaries and the respective counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements with the master netting arrangements generally provide that the Company will receive or pledge financial collateral at the first dollar of exposure.

The Company has securities lending agreements with unaffiliated financial institutions that post collateral to the Company in return for the use of its fixed maturity and public equity securities (see Note 3). When the Company has entered into securities lending agreements with the same counterparty, the agreements generally provide for net settlement in the event of default by the counterparty. This right of set-off allows the Company to keep and apply collateral received if the counterparty failed to return the securities borrowed from the Company as contractually agreed.


2023
										Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Assets			Gross Amount Offset in Balance Sheet			Net Amount of Assets Presented in Balance Sheet			Financial Instruments			Securities Collateral		Cash Collateral Received			Net Amount
Derivative assets:
Derivative assets subject to a master netting agreement or offsetting arrangement
OTC - bilateral		$	271		$	0		$	271		$	(85)	$	(53)		$	(130)		$	3
OTC - cleared		11			0			11			(11)		0			0			0
Total derivative assets subject to a master netting agreement or offsetting arrangement		282			0			282			(96)		(53)			(130)			3
Derivative assets not subject to a master netting agreement or offsetting arrangement
OTC - bilateral		55						55											55
Total derivative assets not subject to a master netting agreement or offsetting arrangement		55						55											55
Total derivative assets		337			0			337			(96)		(53)			(130)			58
Securities lending and similar arrangements		1,480			0			1,480			0		0			(1,480)			0
Total		$	1,817		$	0		$	1,817		$	(96)	$	(53)		$	(1,610)		$	58


2022
										Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Assets			Gross Amount Offset in Balance Sheet			Net Amount of Assets Presented in Balance Sheet			Financial Instruments			Securities Collateral			Cash Collateral Received			Net Amount
Derivative assets:
Derivative assets subject to a master netting agreement or offsetting arrangement
OTC - bilateral		$	548		$	0		$	548		$	(167)		$	(60)		$	(320)		$	1
OTC - cleared		7			0			7			(7)			0			0			0
Total derivative assets subject to a master netting agreement or offsetting arrangement		555			0			555			(174)			(60)			(320)			1
Derivative assets not subject to a master netting agreement or offsetting arrangement
OTC - bilateral		62						62												62
Total derivative assets not subject to a master netting agreement or offsetting arrangement		62						62												62
Total derivative assets		617			0			617			(174)			(60)			(320)			63
Securities lending and similar arrangements		1,788			0			1,788			0			0			(1,788)			0
Total		$	2,405		$	0		$	2,405		$	(174)		$	(60)		$	(2,108)		$	63


2023
										Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Liabilities			Gross Amount Offset in Balance Sheet			Net Amount of Liabilities Presented in Balance Sheet			Financial Instruments			Securities Collateral		Cash Collateral Pledged			Net Amount
Derivative liabilities:
Derivative liabilities subject to a master netting agreement or offsetting arrangement
OTC - bilateral		$	504		$	0		$	504		$	(85)	$	(381)		$	(37)		$	1
OTC - cleared		419			0			419			(11)		(19)			(389)			0
Total derivative liabilities subject to a master netting agreement or offsetting arrangement		923			0			923			(96)		(400)			(426)			1
Derivative liabilities not subject to a master netting agreement or offsetting arrangement
OTC - bilateral		507						507											507
Total derivative liabilities not subject to a master netting agreement or offsetting arrangement		507						507											507
Total derivative liabilities		1,430			0			1,430			(96)		(400)			(426)			508
Securities lending and similar arrangements		1,503			0			1,503			(1,480)		0			0			23
Total		$	2,933		$	0		$	2,933		$	(1,576)	$	(400)		$	(426)		$	531


2022
										Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Liabilities			Gross Amount Offset in Balance Sheet			Net Amount of Liabilities Presented in Balance Sheet			Financial Instruments			Securities Collateral		Cash Collateral Pledged			Net Amount
Derivative liabilities:
Derivative liabilities subject to a master netting agreement or offsetting arrangement
OTC - bilateral		$	725		$	0		$	725		$	(167)	$	(506)		$	(52)		$	0
OTC - cleared		583			0			583			(7)		0			(577)			(1)
Total derivative liabilities subject to a master netting agreement or offsetting arrangement		1,308			0			1,308			(174)		(506)			(629)			(1)
Derivative liabilities not subject to a master netting agreement or offsetting arrangement
OTC - bilateral		390						390											390
Total derivative liabilities not subject to a master netting agreement or offsetting arrangement		390						390											390
Total derivative liabilities		1,698			0			1,698			(174)		(506)			(629)			389
Securities lending and similar arrangements		1,809			0			1,809			(1,788)		0			0			21
Total		$	3,507		$	0		$	3,507		$	(1,962)	$	(506)		$	(629)		$	410