Separate Account Assets and Liabilities

9 Months Ended

Sep. 30, 2023

14. Separate Account Assets and Liabilities

We report variable contracts within the separate accounts when investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contract holder and the separate account meets additional accounting criteria to qualify for separate account treatment. The assets supporting the variable portion of variable annuity and variable universal life contracts that qualify for separate account treatment are carried at fair value and are reported as separate account assets, with an equivalent summary total reported as separate account liabilities. The assets of separate accounts are legally segregated and are not subject to claims that arise from any of our other businesses.

Policy values for variable products and investment contracts are expressed in terms of investment units. Each unit is linked to an asset portfolio. The value of a unit increases or decreases based on the value of the linked asset portfolio. The current liability at any time is the sum of the current unit value of all investment units in the separate accounts, plus any liabilities for MRBs.

Amounts assessed against the policyholders for mortality, administrative and other services are included in policy fees. Investment performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to policyholders of such separate accounts are offset within the same line in the Condensed Consolidated Statements of Income (Loss).

For discussion of the fair value measurement of guaranteed benefits that are accounted for as MRBs, see Note 5.

The following table presents fair value of separate account investment options:


	September 30, 2023						September 30, 2022
(in millions)	Individual Retirement		Group Retirement		Life Insurance		Institutional Markets		Total		Individual Retirement		Group Retirement		Life Insurance		Institutional Markets		Total
Equity Funds	$	23,493	$	26,206	$	736	$	590	$	51,025	$	21,696	$	23,226	$	648	$	547	$	46,117
Bond Funds	3,775		3,262		42		1,286		8,365		3,661		3,910		46		1,287		8,904
Balanced Funds	16,649		5,095		48		1,919		23,711		17,346		4,853		46		2,361		24,606
Money Market Funds	696		603		22		302		1,623		682		539		17		437		1,675
Total	$	44,613	$	35,166	$	848	$	4,097	$	84,724	$	43,385	$	32,528	$	757	$	4,632	$	81,302

The following table presents the balances and changes in Separate account liabilities:


Nine Months Ended September 30, 2023	Individual Retirement		Group Retirement		Life Insurance		Institutional Markets		Total
(in millions)
Balance, beginning of year	$	45,178	$	34,361	$	799	$	4,515	$	84,853
Premiums and deposits	1,124		1,033		27		40		2,224
Policy charges	(964)		(333)		(37)		(69)		(1,403)
Surrenders and withdrawals	(2,728)		(2,205)		(19)		(503)		(5,455)
Benefit payments	(640)		(374)		(5)		(61)		(1,080)
Investment performance	2,470		2,806		85		160		5,521
Net transfers from (to) general account and other	173		(122)		(2)		15		64

Balance, end of period	$	44,613	$	35,166	$	848	$	4,097	$	84,724

Cash surrender value*	$	43,566	$	34,980	$	828	$	4,100	$	83,474


Nine Months Ended September 30, 2022	Individual Retirement		Group Retirement		Life Insurance		Institutional Markets		Total
(in millions)
Balance, beginning of year	$	57,927	$	45,138	$	1,044	$	5,002	$	109,111
Premiums and deposits	1,905		1,248		28		54		3,235
Policy charges	(988)		(356)		(38)		(75)		(1,457)
Surrenders and withdrawals	(2,492)		(1,931)		(19)		(42)		(4,484)
Benefit payments	(684)		(407)		(5)		(16)		(1,112)
Investment performance	(12,440)		(10,831)		(252)		(328)		(23,851)
Net transfers from (to) general account and other	157		(333)		(1)		37		(140)

Balance, end of period	$	43,385	$	32,528	$	757	$	4,632	$	81,302

Cash surrender value*	$	42,313	$	32,340	$	756	$	4,633	$	80,042

*The cash surrender value represents the amount of the contract holder’s account balance distributable at the balance sheet date less applicable surrender charges.

Separate account liabilities primarily represent the contract holder's account balance in separate account assets and will be equal and offsetting to total separate account assets.