DAC, VOBA, DSI And DFEL

9 Months Ended

Sep. 30, 2023

DAC, VOBA, DSI and DFEL [Abstract]

DAC, VOBA, DSI and DFEL

7. DAC, VOBA, DSI and DFEL

The following table reconciles DAC, VOBA and DSI (in millions) to the Consolidated Balance Sheets:

	As of		As of
	September 30,		December 31,
	2023		2022
DAC, VOBA and DSI
Variable Annuities	$	3,871	$	3,879
Fixed Annuities		454		479
Traditional Life		1,417		1,383
UL and Other		6,192		6,100
Group Protection		147		141
Retirement Plan Services		260		253
Total DAC, VOBA and DSI	$	12,341	$	12,235

The following table reconciles DFEL (in millions) to the Consolidated Balance Sheets:

	As of		As of
	September 30,		December 31,
	2023		2022
DFEL
Variable Annuities	$	280	$	286
UL and Other		5,373		4,766
Total DFEL	$	5,653	$	5,052

The following tables summarize the changes in DAC (in millions):

	For the Nine Months Ended September 30, 2023
																Retirement
	Variable			Fixed			Traditional			UL and			Group			Plan
	Annuities			Annuities			Life			Other			Protection			Services
Balance as of beginning-of-year	$	3,751		$	439		$	1,333		$	5,605		$	141		$	236
Deferrals		269			31			148			346			79			16
Amortization		(272	)		(51	)		(108	)		(221	)		(73	)		(14	)
Balance as of end-of-period	$	3,748		$	419		$	1,373		$	5,730		$	147		$	238

	For the Year Ended December 31, 2022
																Retirement
	Variable			Fixed			Traditional			UL and			Group			Plan
	Annuities			Annuities			Life			Other			Protection			Services
Balance as of beginning-of-year	$	3,717		$	448		$	1,195		$	5,360		$	140		$	235
Deferrals		391			60			266			539			98			20
Amortization		(357	)		(69	)		(128	)		(294	)		(97	)		(19	)
Balance as of end-of-year	$	3,751		$	439		$	1,333		$	5,605		$	141		$	236

DAC amortization expense of $247 million and $739 million was recorded in commissions and other expenses on the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023, respectively, and $241 million and $721 million for the corresponding periods in 2022.

The following tables summarize the changes in VOBA (in millions):

	For the Nine Months Ended
	September 30, 2023
	Fixed			Traditional			UL and
	Annuities			Life			Other
Balance as of beginning-of-year	$	17		$	50		$	465
Deferrals		-			-			1
Amortization		(2	)		(6	)		(33	)
Balance as of end-of-period	$	15		$	44		$	433

	For the Year Ended
	December 31, 2022
	Fixed			Traditional			UL and
	Annuities			Life			Other
Balance as of beginning-of-year	$	20		$	59		$	511
Deferrals		-			-			2
Amortization		(3	)		(9	)		(48	)
Balance as of end-of-year	$	17		$	50		$	465

VOBA amortization expense of $13 million and $41 million was recorded in commissions and other expenses on the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023, respectively, and $15 million and $45 million for the corresponding periods in 2022. No additions or write-offs were recorded for each respective year.

The following tables summarize the changes in DSI (in millions):10

	For the Nine Months Ended September 30, 2023
									Retirement
	Variable			Fixed			UL and		Plan
	Annuities			Annuities			Other		Services
Balance as of beginning-of-year	$	128		$	23		$	30	$	17
Deferrals		4			-			1		5
Amortization		(9	)		(3	)		(2)		-
Balance as of end-of-period	$	123		$	20		$	29	$	22

	For the Year Ended December 31, 2022
										Retirement
	Variable			Fixed			UL and			Plan
	Annuities			Annuities			Other			Services
Balance as of beginning-of-year	$	139		$	27		$	31		$	14
Deferrals		1			-			1			4
Amortization		(12	)		(4	)		(2	)		(1	)
Balance as of end-of-year	$	128		$	23		$	30		$	17

DSI amortization expense of $5 million and $14 million was recorded in interest credited on the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023, respectively, and $5 million and $15 million for the corresponding periods in 2022.

The following tables summarize the changes in DFEL (in millions):

	For the Nine
	Months Ended						For the Year Ended
	September 30, 2023						December 31, 2022
	Variable			UL and			Variable			UL and
	Annuities			Other			Annuities			Other
Balance as of beginning-of-year	$	286		$	4,766		$	291		$	3,934
Deferrals		14			800			23			1,061
Amortization		(20	)		(193	)		(28	)		(229	)
Balance as of end-of-period	$	280		$	5,373		$	286		$	4,766

DFEL amortization of $74 million and $213 million was recorded in fee income on the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023, respectively, and $63 million and $191 million for the corresponding periods in 2022.