| Schedule of Changes in Liability for Future Policy Benefits |
The following tables show the components of the change in the liability for future policy benefits, which is included in other insurance liabilities and other long-term insurance liabilities on the unaudited condensed consolidated balance sheets, during the nine months ended September 30, 2024 and 2023: | | | | | | | | | | | | | Nine Months Ended
September 30, 2024 | | In millions | Large Case
Pensions | | Long-Term
Care | Present value of expected net premiums (1) | | | | | Liability for future policy benefits, beginning of the period - current discount rate | | | $ | 293 | | | | | | | Beginning liability for future policy benefits at original (locked-in) discount rate | | | $ | 288 | | | Effect of changes in cash flow assumptions | | | — | | | Effect of actual variances from expected experience | | | 12 | | | Adjusted beginning liability for future policy benefits - original (locked-in) discount rate | | | 300 | | | | | | | Interest accrual (using locked-in discount rate) | | | 11 | | | Net premiums (actual) | | | (29) | | | | | | | Ending liability for future policy benefits at original (locked-in) discount rate | | | 282 | | | Effect of changes in discount rate assumptions | | | 6 | | | Liability for future policy benefits, end of the period - current discount rate | | | $ | 288 | | | | | | | Present value of expected future policy benefits | | | | | Liability for future policy benefits, beginning of the period - current discount rate | $ | 2,139 | | | $ | 1,640 | | | | | | | Beginning liability for future policy benefits at original (locked-in) discount rate | $ | 2,251 | | | $ | 1,632 | | | Effect of changes in cash flow assumptions | — | | | — | | | Effect of actual variances from expected experience | (20) | | | 5 | | | Adjusted beginning liability for future policy benefits - original (locked-in) discount rate | 2,231 | | | 1,637 | | | Issuances | 26 | | | — | | | Interest accrual (using locked-in discount rate) | 69 | | | 61 | | | Benefit payments (actual) | (192) | | | (55) | | | | | | | | | | | Ending liability for future policy benefits at original (locked-in) discount rate | 2,134 | | | 1,643 | | | Effect of changes in discount rate assumptions | (90) | | | 12 | | | Liability for future policy benefits, end of the period - current discount rate | $ | 2,044 | | | $ | 1,655 | | | | | | | Net liability for future policy benefits | $ | 2,044 | | | $ | 1,367 | | | Less: Reinsurance recoverable | — | | | — | | | Net liability for future policy benefits, net of reinsurance recoverable | $ | 2,044 | | | $ | 1,367 | |
_____________________________________________ (1)The present value of expected net premiums is equivalent to the present value of expected gross premiums for the long-term care insurance contracts as net premiums are set equal to gross premiums. | | | | | | | | | | | | | Nine Months Ended
September 30, 2023 | | In millions | Large Case
Pensions | | Long-Term
Care | Present value of expected net premiums (1) | | | | | Liability for future policy benefits, beginning of the period - current discount rate | | | $ | 300 | | | | | | | Beginning liability for future policy benefits at original (locked-in) discount rate | | | $ | 302 | | | Effect of changes in cash flow assumptions | | | — | | | Effect of actual variances from expected experience | | | 7 | | | Adjusted beginning liability for future policy benefits - original (locked-in) discount rate | | | 309 | | | | | | | Interest accrual (using locked-in discount rate) | | | 11 | | | Net premiums (actual) | | | (29) | | | | | | | Ending liability for future policy benefits at original (locked-in) discount rate | | | 291 | | | Effect of changes in discount rate assumptions | | | (12) | | | Liability for future policy benefits, end of the period - current discount rate | | | $ | 279 | | | | | | | Present value of expected future policy benefits | | | | | Liability for future policy benefits, beginning of the period - current discount rate | $ | 2,253 | | | $ | 1,566 | | | | | | | Beginning liability for future policy benefits at original (locked-in) discount rate | $ | 2,425 | | | $ | 1,613 | | | Effect of changes in cash flow assumptions | — | | | — | | | Effect of actual variances from expected experience | 1 | | | 9 | | | Adjusted beginning liability for future policy benefits - original (locked-in) discount rate | 2,426 | | | 1,622 | | | Issuances | 8 | | | — | | | Interest accrual (using locked-in discount rate) | 74 | | | 61 | | | Benefit payments (actual) | (210) | | | (53) | | | | | | | | | | | Ending liability for future policy benefits at original (locked-in) discount rate | 2,298 | | | 1,630 | | | Effect of changes in discount rate assumptions | (247) | | | (146) | | | Liability for future policy benefits, end of the period - current discount rate | $ | 2,051 | | | $ | 1,484 | | | | | | | Net liability for future policy benefits | $ | 2,051 | | | $ | 1,205 | | | Less: Reinsurance recoverable | — | | | — | | | Net liability for future policy benefits, net of reinsurance recoverable | $ | 2,051 | | | $ | 1,205 | |
_____________________________________________ (1)The present value of expected net premiums is equivalent to the present value of expected gross premiums for the long-term care insurance contracts as net premiums are set equal to gross premiums. The amount of undiscounted expected gross premiums and expected future benefit payments for long-duration insurance liabilities as of September 30, 2024 and 2023 were as follows: | | | | | | | | | | | | | In millions | September 30,
2024 | | September 30,
2023 | | Large case pensions | | | | | Expected future benefit payments | $ | 3,091 | | $ | 3,337 | | Expected gross premiums | — | | — | | | | | | Long-term care | | | | | Expected future benefit payments | $ | 3,198 | | $ | 3,237 | | Expected gross premiums | 402 | | 419 |
The weighted-average interest rate used in the measurement of the long-duration insurance liabilities as of September 30, 2024 and 2023 were as follows: | | | | | | | | | | | | | September 30,
2024 | | September 30,
2023 | | Large case pensions | | | | | Interest accretion rate | 4.20% | | 4.20% | | Current discount rate | 4.82% | | 5.86% | | | | | | Long-term care | | | | | Interest accretion rate | 5.11% | | 5.11% | | Current discount rate | 5.07% | | 5.99% |
The weighted-average durations (in years) of the long-duration insurance liabilities as of September 30, 2024 and 2023 were as follows: | | | | | | | | | | | | | September 30,
2024 | | September 30,
2023 | | Large case pensions | 7.3 | | 7.4 | | Long-term care | 11.8 | | 12.2 |
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| Roll Forward of Policyholders' Funds |
The following table shows the components of the change in policyholders’ funds related to long-duration insurance contracts, which are included in policyholders’ funds and other long-term liabilities on the unaudited condensed consolidated balance sheets, during the nine months ended September 30, 2024 and 2023: | | | | | | | | | | | | | Nine Months Ended
September 30, | | In millions, except weighted average crediting rate | 2024 | | 2023 | | Policyholders’ funds, beginning of the period | $ | 332 | | $ | 345 | | | | | | Deposits received | 2 | | 1 | | Policy charges | (1) | | (2) | | Surrenders and withdrawals | (9) | | (23) | | | | | | | | | | Interest credited | 8 | | 9 | | Change in net unrealized gains (losses) | 17 | | (4) | | Other | (18) | | (23) | | Policyholders’ funds, end of the period | $ | 331 | | $ | 303 | | | | | | Weighted average crediting rate | 4.30% | | 4.40% | | | | | | Net amount at risk | $ | — | | | $ | — | | | | | | | Cash surrender value | $ | 310 | | | $ | 324 | | | | | | | | | | | | | | | | | |
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| Summary of Separate Account Assets |
Separate Accounts financial assets as of September 30, 2024 and December 31, 2023 were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2024 | | December 31, 2023 | | In millions | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Cash and cash equivalents | $ | 1 | | | $ | 164 | | | $ | — | | | $ | 165 | | | $ | 2 | | | $ | 166 | | | $ | — | | | $ | 168 | | | Debt securities | 202 | | | 697 | | | — | | | 899 | | | 558 | | | 1,949 | | | — | | | 2,507 | | | | | | | | | | | | | | | | | | | Common/collective trusts | — | | | 2,372 | | | — | | | 2,372 | | | — | | | 529 | | | — | | | 529 | | Total (1) | $ | 203 | | | $ | 3,233 | | | $ | — | | | $ | 3,436 | | | $ | 560 | | | $ | 2,644 | | | $ | — | | | $ | 3,204 | |
_____________________________________________ (1)Excludes $102 million of other payables and $46 million of other receivables at September 30, 2024 and December 31, 2023, respectively. The following table shows the fair value of assets, by major investment category, supporting Separate Accounts as of September 30, 2024 and December 31, 2023: | | | | | | | | | | | | | In millions | September 30,
2024 | | December 31,
2023 | | | | | | Cash and cash equivalents | $ | 165 | | | $ | 168 | | | Debt securities: | | | | | U.S. government securities | 223 | | | 573 | | | States, municipalities and political subdivisions | 16 | | | 28 | | | U.S. corporate securities | 527 | | | 1,632 | | | | | | | | | | | Foreign securities | 52 | | | 202 | | | Residential mortgage-backed securities | 68 | | | 51 | | | Commercial mortgage-backed securities | 3 | | | 6 | | | Other asset-backed securities | 10 | | | 15 | | | Total debt securities | 899 | | | 2,507 | | | | | | | Common/collective trusts | 2,372 | | | 529 | | | | | | Total (1) | $ | 3,436 | | | $ | 3,204 | |
_____________________________________________ (1)Excludes $102 million of other payables and $46 million of other receivables at September 30, 2024 and December 31, 2023, respectively.
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| Roll Forward of Separate Accounts |
The following table shows the components of the change in Separate Accounts liabilities during the nine months ended September 30, 2024 and 2023: | | | | | | | | | | | | | Nine Months Ended
September 30, | | In millions | 2024 | | 2023 | | | | | | Separate Accounts liability, beginning of the period | $ | 3,250 | | | $ | 3,228 | | | Premiums and deposits | 661 | | | 657 | | | | | | | Surrenders and withdrawals | (203) | | | (7) | | | Benefit payments | (706) | | | (714) | | | Investment earnings | 327 | | | 42 | | | Net transfers from general account | 8 | | | 4 | | | Other | (3) | | | (10) | | | Separate Accounts liability, end of the period | $ | 3,334 | | | $ | 3,200 | | | | | | | Cash surrender value, end of the period | $ | 2,209 | | | $ | 2,136 | |
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