UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 ________________________________________

FORM 10-Q

________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from              to             

Commission File Number 033-37587        

____________________________________________________________ 

Pruco Life Insurance Company

(Exact Name of Registrant as Specified in its Charter)

Arizona	22-1944557
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

213 Washington Street

Newark, NJ 07102

(973) 802-6000

(Address and Telephone Number of Registrant's Principal Executive Offices)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Not Applicable	Not Applicable	Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of the Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer", "accelerated filer", "smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer	☒	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐  No  ☒

As of November 8, 2024, 250,000 shares of the registrant’s Common Stock (par value $10) were outstanding. As of such date, The Prudential Insurance Company of America, a New Jersey corporation, owned all of the registrant’s Common Stock.

Pruco Life Insurance Company meets the conditions set

forth in General Instruction (H) (1) (a) and (b) on Form 10-Q and

is therefore filing this Form 10-Q in the reduced disclosure format.

TABLE OF CONTENTS

		Page Number
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Unaudited Interim Consolidated Statements of Financial Position as of September 30, 2024 and December 31, 2023	4
	Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and 2023	5
	Unaudited Interim Consolidated Statements of Equity for the three and nine months ended September 30, 2024 and 2023	6
	Unaudited Interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	8
	Notes to Unaudited Interim Consolidated Financial Statements	9
	1.    Business and Basis of Presentation	9
	2.    Significant Accounting Policies and Pronouncements	10
	3.    Investments	11
	4.    Derivatives and Hedging	23
	5.    Fair Value of Assets and Liabilities	29
	6.    Deferred Policy Acquisition Costs, Deferred Reinsurance, and Deferred Sales Inducements	42
	7.    Separate Accounts	44
	8.    Liability for Future Policy Benefits	46
	9.    Policyholders' Account Balances	53
	10.  Market Risk Benefits	57
	11.  Reinsurance	59
	12.  Income Taxes	67
	13.  Equity	68
	14.  Related Party Transactions	69
	15.  Commitments and Contingent Liabilities	75
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	79
Item 4.	Controls and Procedures	86
PART II—OTHER INFORMATION		87
Item 1.	Legal Proceedings	87
Item 1A.	Risk Factors	87
Item 6.	Exhibits	88
SIGNATURES		89

2

FORWARD-LOOKING STATEMENTS

Certain of the statements included in this Quarterly Report on Form 10-Q, constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “includes,” “plans,” “assumes,” “estimates,” “projects,” “intends,” “should,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Pruco Life Insurance Company and its subsidiaries. There can be no assurance that future developments affecting Pruco Life Insurance Company and its subsidiaries will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (1) losses on investments or financial contracts due to deterioration in credit quality or value, or counterparty default; (2) losses on insurance products due to mortality experience or policyholder behavior experience that differs significantly from our expectations when we price our products; (3) changes in interest rates and equity prices that may (a) adversely impact the profitability of our products, the value of separate accounts supporting these products or the value of assets we manage, (b) result in losses on derivatives we use to hedge risk or increase collateral posting requirements and (c) limit opportunities to invest at appropriate returns; (4) guarantees within certain of our products which are market sensitive and may decrease our earnings or increase the volatility of our results of operations or financial position; (5) liquidity needs resulting from (a) derivative collateral market exposure, (b) asset/liability mismatches, (c) the lack of available funding in the financial markets or (d) unexpected cash demands due to severe mortality calamity or lapse events; (6) financial or customer losses, or regulatory and legal actions, due to inadequate or failed processes or systems, external events and human error or misconduct such as (a) disruption of our systems and data, (b) an information security breach, (c) a failure to protect the privacy of sensitive data (d) reliance on third parties or (e) labor and employment matters; (7) changes in the regulatory landscape, including related to (a) financial sector regulatory reform, (b) changes in tax laws, (c) fiduciary rules and other standards of care, (d) state insurance laws and developments regarding group-wide supervision, capital and reserves, and (e) privacy and cybersecurity regulation; (8) technological changes which may adversely impact companies in our investment portfolio or cause insurance experience to deviate from our assumptions; (9) ratings downgrades; (10) market conditions that may adversely affect the sales or persistency of our products; (11) competition; and (12) reputational damage. Pruco Life Insurance Company does not intend, and is under no obligation, to update any particular forward-looking statement included in this document. See “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2023 for discussion of certain risks relating to our business and investment in our securities.

3

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

PRUCO LIFE INSURANCE COMPANY

Unaudited Interim Consolidated Statements of Financial Position

September 30, 2024 and December 31, 2023 (in thousands, except share amounts)

	September 30, 2024		December 31, 2023
ASSETS
Fixed maturities, available for sale, at fair value (allowance for credit losses: 2024-$14,575; 2023-$2,008) (amortized cost: 2024–$35,694,374; 2023–$27,538,066)	$	34,956,806	$	26,131,780
Fixed maturities, trading, at fair value (amortized cost: 2024–$3,877,899; 2023–$3,476,746)	3,507,269		2,796,446
Equity securities, at fair value (cost: 2024– $531,417; 2023–$824,270)	552,549		844,950
Policy loans	1,524,636		1,472,677
Short-term investments (net of allowance for credit losses: 2024-$49; 2023-$0)	538,649		380,366
Commercial mortgage and other loans (net of $44,309 and $37,689 allowance for credit losses at September 30, 2024 and December 31, 2023, respectively)	7,223,568		6,122,721
Other invested assets (includes $56,573 and $85,025 of assets measured at fair value at September 30, 2024 and December 31, 2023, respectively)	1,465,970		1,222,985
Total investments	49,769,447		38,971,925
Cash and cash equivalents	3,313,710		2,139,792
Deferred policy acquisition costs	7,706,078		7,097,511
Accrued investment income	444,591		333,838
Reinsurance recoverables	43,285,050		38,709,651
Receivables from parent and affiliates	618,259		332,583
Deferred sales inducements	330,264		351,424
Income tax assets	1,924,854		1,737,651
Market risk benefit assets	2,499,234		2,367,243
Other assets	2,934,252		2,078,938
Separate account assets	122,779,095		119,188,485
TOTAL ASSETS	$	235,604,834	$	213,309,041
LIABILITIES AND EQUITY
LIABILITIES
Policyholders’ account balances	$	65,658,560	$	53,012,800
Future policy benefits	25,253,059		23,205,205
Market risk benefit liabilities	4,915,163		5,144,401
Cash collateral for loaned securities	330,370		218,310
Short-term debt to affiliates	0		180,411
Payables to parent and affiliates	2,068,283		2,667,696
Other liabilities	9,683,019		5,170,308
Separate account liabilities	122,779,095		119,188,485
Total liabilities	230,687,549		208,787,616
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 15)
EQUITY
Common stock ($10 par value; 1,000,000 shares authorized; 250,000 shares issued and outstanding)	2,500		2,500
Additional paid-in capital	4,507,604		5,052,602
Retained earnings / (accumulated deficit)	(202,881)		(532,951)
Accumulated other comprehensive income (loss)	359,542		(30,920)
Total Pruco Life Insurance Company equity	4,666,765		4,491,231
Noncontrolling interests	250,520		30,194
Total equity	4,917,285		4,521,425
TOTAL LIABILITIES AND EQUITY	$	235,604,834	$	213,309,041

See Notes to Unaudited Interim Consolidated Financial Statements

4

PRUCO LIFE INSURANCE COMPANY

Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss)

Three and Nine Months Ended September 30, 2024 and 2023 (in thousands)

 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
REVENUES
Premiums (includes $(53), $1,832, $(2,575) and $6,924 of gains (losses) from change in estimates on deferred profit liability amortization for the three months ended September 30, 2024 and 2023 and the nine months ended September 30, 2024 and 2023, respectively)	$	97,089	$	85,140	$	284,192	$	251,761
Policy charges and fee income	408,767		346,481		3,706,806		1,096,508
Net investment income	638,692		460,864		1,724,005		1,203,389
Asset administration fees	56,428		56,754		168,173		177,744
Other income (loss)	386,095		(63,555)		737,269		286,750
Realized investment gains (losses), net	(616,495)		(468,256)		245,387		(581,241)
Change in value of market risk benefits, net of related hedging gain (loss)	(175,401)		(247,471)		(365,993)		(266,156)
TOTAL REVENUES	795,175		169,957		6,499,839		2,168,755
BENEFITS AND EXPENSES
Policyholders’ benefits	130,681		145,409		4,372,968		397,552
Change in estimates of liability for future policy benefits	2,434		6,565		(15,745)		1,030
Interest credited to policyholders’ account balances	256,160		163,074		706,934		467,112
Amortization of deferred policy acquisition costs	148,755		132,242		165,750		398,884
General, administrative and other expenses	310,285		271,473		905,123		858,809
TOTAL BENEFITS AND EXPENSES	848,315		718,763		6,135,030		2,123,387
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURE	(53,140)		(548,806)		364,809		45,368
Income tax expense (benefit)	(45,500)		(104,883)		25,287		(8,318)
INCOME (LOSS) FROM OPERATIONS BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURE	(7,640)		(443,923)		339,522		53,686
Equity in earnings of operating joint venture, net of taxes	(95)		(404)		(338)		(736)
NET INCOME (LOSS)	$	(7,735)	$	(444,327)	$	339,184	$	52,950
Less: Income (loss) attributable to noncontrolling interests	6,042		0		9,114		0
NET INCOME (LOSS) ATTRIBUTABLE TO PRUCO LIFE INSURANCE COMPANY	$	(13,777)	$	(444,327)	$	330,070	$	52,950
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	5,756		(2,835)		1,578		431
Net unrealized investment gains (losses)	1,116,531		(618,892)		647,531		(500,018)
Interest rate remeasurement of future policy benefits	(87,870)		90,909		(21,655)		73,321
Gain (loss) from changes in non-performance risk on market risk benefits	50,314		(429,966)		(133,611)		(497,289)
Total	1,084,731		(960,784)		493,843		(923,555)
Less: Income tax expense (benefit) related to other comprehensive income (loss)	226,942		(201,437)		103,381		(194,021)
Other comprehensive income (loss), net of taxes	857,789		(759,347)		390,462		(729,534)
Comprehensive income (loss)	850,054		(1,203,674)		729,646		(676,584)
Less: Comprehensive income (loss) attributable to noncontrolling interests	6,042		0		9,114		0
Comprehensive income (loss) attributable to Pruco Life Insurance Company	$	844,012	$	(1,203,674)	$	720,532	$	(676,584)

See Notes to Unaudited Interim Consolidated Financial Statements

5

PRUCO LIFE INSURANCE COMPANY

Unaudited Interim Consolidated Statements of Equity

Three and Nine Months Ended September 30, 2024 and 2023 (in thousands)

	Common Stock		Additional   Paid-in Capital		Retained Earnings / (Accumulated Deficit)		Accumulated Other Comprehensive   Income (Loss)		Total Pruco Life Insurance Company Equity		Noncontrolling Interests		Total  Equity
Balance, December 31, 2023	$	2,500	$	5,052,602	$	(532,951)	$	(30,920)	$	4,491,231	$	30,194	$	4,521,425
Contributions from noncontrolling interests											25,310		25,310
Contributed (distributed) capital-parent/child asset transfers			5,722						5,722				5,722
Comprehensive income (loss):
Net income (loss)					(542,422)				(542,422)		1,181		(541,241)
Other comprehensive income (loss), net of tax							(412,522)		(412,522)		0		(412,522)
Total comprehensive income (loss)					(542,422)		(412,522)		(954,944)		1,181		(953,763)
Balance, March 31, 2024	2,500		5,058,324		(1,075,373)		(443,442)		3,542,009		56,685		3,598,694
Return of capital			(550,000)						(550,000)				(550,000)
Contributions from noncontrolling interests											49,548		49,548
Contributed (distributed) capital-parent/child asset transfers			(34)						(34)				(34)
Comprehensive income (loss):
Net income (loss)					886,269				886,269		1,891		888,160
Other comprehensive income (loss), net of taxes							(54,805)		(54,805)		0		(54,805)
Total comprehensive income (loss)					886,269		(54,805)		831,464		1,891		833,355
Balance, June 30, 2024	2,500		4,508,290		(189,104)		(498,247)		3,823,439		108,124		3,931,563
Contributions from noncontrolling interests											136,354		136,354
Contributed (distributed) capital-parent/child asset transfers			(686)						(686)				(686)
Comprehensive income (loss):
Net income (loss)					(13,777)				(13,777)		6,042		(7,735)
Other comprehensive income (loss), net of tax							857,789		857,789		0		857,789
Total comprehensive income (loss)					(13,777)		857,789		844,012		6,042		850,054
Balance, September 30, 2024	$	2,500	$	4,507,604	$	(202,881)	$	359,542	$	4,666,765	$	250,520	$	4,917,285

6

	Common   Stock		Additional   Paid-in Capital		Retained Earnings / (Accumulated Deficit)		Accumulated Other Comprehensive   Income (Loss)		Total Pruco Life Insurance Company Equity		Noncontrolling Interests		Total Equity
Balance, December 31, 2022(1)	$	2,500	$	6,037,914	$	(994,154)	$	(10,065)	$	5,036,195	$	0	$	5,036,195
Contributed capital			405,000						405,000				405,000
Contributed (distributed) capital-parent/child asset transfers			1,870						1,870				1,870
Comprehensive income (loss):
Net income (loss)					279,679				279,679				279,679
Other comprehensive income (loss), net of tax							416,704		416,704		0		416,704
Total comprehensive income (loss)					279,679		416,704		696,383		0		696,383
Balance, March 31, 2023	2,500		6,444,784		(714,475)		406,639		6,139,448		0		6,139,448
Return of capital			(300,000)						(300,000)				(300,000)
Contributed (distributed) capital-parent/child asset transfers			498						498				498
Comprehensive income (loss):
Net income (loss)					217,598				217,598				217,598
Other comprehensive income (loss), net of tax							(386,891)		(386,891)		0		(386,891)
Total comprehensive income (loss)					217,598		(386,891)		(169,293)		0		(169,293)
Balance, June 30, 2023	2,500		6,145,282		(496,877)		19,748		5,670,653		0		5,670,653
Return of capital			(650,000)						(650,000)				(650,000)
Contributed (distributed) capital-parent/child asset transfers			(62)						(62)				(62)
Comprehensive income (loss):
Net income (loss)					(444,327)				(444,327)				(444,327)
Other comprehensive income (loss), net of tax							(759,347)		(759,347)		0		(759,347)
Total comprehensive income (loss)					(444,327)		(759,347)		(1,203,674)		0		(1,203,674)
Balance, September 30, 2023	$	2,500	$	5,495,220	$	(941,204)	$	(739,599)	$	3,816,917	$	0	$	3,816,917

(1)    Prior period amounts reflect the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

See Notes to Unaudited Interim Consolidated Financial Statements

7

PRUCO LIFE INSURANCE COMPANY

Unaudited Interim Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2024 and 2023 (in thousands)

	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	339,184	$	52,950
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Policy charges and fee income	(2,385,391)		47,830
Interest credited to policyholders’ account balances	706,934		467,112
Realized investment (gains) losses, net	(245,387)		581,241
Change in value of market risk benefits, net of related hedging (gains) losses	365,993		266,156
Change in:
Future policy benefits and other insurance liabilities	1,965,765		1,722,582
Reinsurance recoverables	(699,804)		(447,411)
Accrued investment income	(93,153)		(85,831)
Net payables to/receivables from parent and affiliates	35,536		(9,978)
Deferred policy acquisition costs	(923,402)		(386,514)
Income taxes	(291,914)		(430,883)
Derivatives, net	165,999		(547,545)
Other, net	3,237,170		107,768
Cash flows from (used in) operating activities	2,177,530		1,337,477
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	2,290,052		1,096,571
Fixed maturities, trading	725,117		68,734
Equity securities	956,037		189,090
Policy loans	140,426		141,484
Ceded policy loans	(84,955)		(94,874)
Short-term investments	997,435		352,689
Commercial mortgage and other loans	545,134		98,558
Other invested assets	31,060		11,800
Payments for the purchase/origination of:
Fixed maturities, available-for-sale	(10,341,310)		(5,957,466)
Fixed maturities, trading	(1,367,554)		(746,093)
Equity securities	(661,555)		(86,748)
Policy loans	(171,967)		(1,111,590)
Ceded policy loans	77,459		127,365
Short-term investments	(1,155,119)		(473,889)
Commercial mortgage and other loans	(1,616,916)		(665,136)
Other invested assets	(309,750)		(137,809)
Notes receivable from parent and affiliates, net	(338,431)		4,302
Derivatives, net	172,756		(56,949)
Other, net	0		(3,924)
Cash flows from (used in) investing activities	(10,112,081)		(7,243,885)
CASH FLOWS FROM FINANCING ACTIVITIES:
Policyholders’ account deposits	12,851,141		9,193,418
Ceded policyholders’ account deposits	(957,473)		(875,022)
Policyholders’ account withdrawals	(3,108,080)		(2,805,559)
Ceded policyholders’ account withdrawals	593,474		454,740
Net change in securities sold under agreement to repurchase and cash collateral for loaned securities	112,070		97,263
Contributed / (return of) capital	(550,000)		(545,000)
Contributed (distributed) capital - parent/child asset transfers	6,332		2,919
Net change in all other financing arrangements (maturities 90 days or less)	0		(584)
Repayments of debt (maturities longer than 90 days)	(180,411)		0
Drafts outstanding	(63,534)		(109,199)
Contributions from noncontrolling interests	211,212		0
Other, net	193,738		(58,917)
Cash flows from (used in) financing activities	9,108,469		5,354,059
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	1,173,918		(552,349)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	2,139,792		2,397,627
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	3,313,710	$	1,845,278

Significant Non-Cash Transactions

"Cash flows from (used in) operating activities" for the nine months ended September 30, 2024 excludes certain non-cash activities in the amount of $1,129 million related to the Company's affiliated reinsurance with Prudential Universal Reinsurance Entity Company ("PURE") and The Prudential Insurance Company of America ("Prudential Insurance"). See Note 11 for additional information.

"Cash flows from (used in) operating activities" for the nine months ended September 30, 2023 excludes certain non-cash activities in the amount of $470 million related to the novated indexed variable annuities under the reinsurance agreement with Fortitude Life Insurance & Annuity Company ("FLIAC"). See Note 11 for more details regarding this transaction.

See Notes to Unaudited Interim Consolidated Financial Statements

8

PRUCO LIFE INSURANCE COMPANY

Notes to Unaudited Interim Consolidated Financial Statements

1.    BUSINESS AND BASIS OF PRESENTATION

Pruco Life Insurance Company (“Pruco Life”) is a wholly-owned subsidiary of Prudential Insurance, which in turn is a direct wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”). Pruco Life is a stock life insurance company organized in 1971 under the laws of the State of Arizona. It is licensed to sell life insurance and annuities in the District of Columbia, Guam and in all states except New York, and sells such products primarily through affiliated and unaffiliated distributors.

Pruco Life has one wholly-owned insurance subsidiary, Pruco Life Insurance Company of New Jersey (“PLNJ”). PLNJ is a stock life insurance company organized in 1982 under the laws of the State of New Jersey. It is licensed to sell life insurance and annuities in New Jersey and New York only. Pruco Life and its subsidiaries are together referred to as the "Company", "we" or "our" and all financial information is shown on a consolidated basis.

Prudential Financial Sale of PALAC

Effective April 1, 2022, Prudential Financial completed the sale of Prudential Annuities Life Assurance Corporation (“PALAC”) to Fortitude Group Holdings, LLC (“Fortitude”). As such, PALAC is no longer an affiliate of Prudential Financial or the Company. Fortitude subsequently renamed the company Fortitude Life Insurance & Annuity Company (“FLIAC”).

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). The Unaudited Interim Consolidated Financial Statements include the accounts of Pruco Life and entities over which the Company exercises control, including majority-owned subsidiaries. Intercompany balances and transactions have been eliminated.

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company's Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining future policy benefits; policyholders' account balances and reinsurance related to the fair value of embedded derivative instruments associated with the index-linked features of certain universal life and annuity products; market risk benefits ("MRBs"); the valuation of investments including derivatives, the measurement of allowance for credit losses, and the recognition of other-than-temporary impairments; reinsurance recoverables; any provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters.

9

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

2.    SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of ASUs to the FASB Accounting Standards Codification ("ASC"). The Company considers the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of September 30, 2024, and as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material.

ASUs issued but not yet adopted as of September 30, 2024

Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures	This ASU requires entities, including those with a single operating or reportable segment, to provide more detailed information about significant segment expenses that are regularly provided to the chief operating decision maker. The ASU also clarifies that all of the disclosures required in the guidance apply to all public entities, including those with a single operating or reportable segment.	Effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, using the retrospective method.	The ASU has no impact on the Company's Consolidated Financial Statements but will result in expanded disclosures in the Notes to the Consolidated Financial Statements.
ASU 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses	This ASU requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements.	The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted, and should be applied either prospectively or retrospectively.	The Company is currently assessing the impact of the ASU on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.

10

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

3.    INVESTMENTS

Fixed Maturity Securities

The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated:

	September 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	1,445,892	$	55,377	$	72,214	$	0	$	1,429,055
Obligations of U.S. states and their political subdivisions	600,925		3,108		16,403		0		587,630
Foreign government securities	425,732		5,546		47,756		0		383,522
U.S. public corporate securities	13,470,713		244,576		653,173		920		13,061,196
U.S. private corporate securities	5,987,215		85,668		197,291		3,380		5,872,212
Foreign public corporate securities	3,483,095		76,199		89,969		21		3,469,304
Foreign private corporate securities	5,524,144		185,124		308,157		10,254		5,390,857
Asset-backed securities(1)	3,450,724		44,992		5,676		0		3,490,040
Commercial mortgage-backed securities	929,684		9,742		43,990		0		895,436
Residential mortgage-backed securities(2)	376,250		6,120		4,816		0		377,554
Total fixed maturities, available-for-sale	$	35,694,374	$	716,452	$	1,439,445	$	14,575	$	34,956,806

(1)Includes credit-tranched securities collateralized by loan obligations, education loans, auto loans and home equity loans.

(2)Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	1,009,937	$	38,858	$	73,508	$	0	$	975,287
Obligations of U.S. states and their political subdivisions	789,856		5,288		18,517		0		776,627
Foreign government securities	330,830		1,840		50,684		0		281,986
U.S. public corporate securities	10,159,089		98,047		760,274		950		9,495,912
U.S. private corporate securities	5,207,699		37,435		254,828		812		4,989,494
Foreign public corporate securities	1,809,347		12,658		115,673		238		1,706,094
Foreign private corporate securities	4,902,391		109,806		381,215		0		4,630,982
Asset-backed securities(1)	2,016,028		23,035		11,512		1		2,027,550
Commercial mortgage-backed securities	913,347		4,776		66,345		0		851,778
Residential mortgage-backed securities(2)	399,542		4,016		7,481		7		396,070
Total fixed maturities, available-for-sale	$	27,538,066	$	335,759	$	1,740,037	$	2,008	$	26,131,780

(1)Includes credit-tranched securities collateralized by loan obligations, education loans, auto loans and home equity loans.

(2)Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

11

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the fair value and gross unrealized losses on fixed maturity, available-for-sale securities without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated:

	September 30, 2024
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross   Unrealized  Losses		Fair Value		Gross   Unrealized  Losses		Fair Value		Gross   Unrealized  Losses
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	0	$	261,544	$	72,214	$	261,544	$	72,214
Obligations of U.S. states and their political subdivisions	136,153		990		191,893		15,413		328,046		16,403
Foreign government securities	17,644		83		228,866		47,673		246,510		47,756
U.S. public corporate securities	475,396		8,277		5,252,550		644,896		5,727,946		653,173
U.S. private corporate securities	658,961		16,690		2,477,333		180,579		3,136,294		197,269
Foreign public corporate securities	100,693		427		800,890		89,533		901,583		89,960
Foreign private corporate securities	73,843		4,714		2,290,320		303,443		2,364,163		308,157
Asset-backed securities	231,205		1,053		182,428		4,623		413,633		5,676
Commercial mortgage-backed securities	0		0		533,822		43,990		533,822		43,990
Residential mortgage-backed securities	79		4		131,368		4,812		131,447		4,816
Total fixed maturities, available-for-sale	$	1,693,974	$	32,238	$	12,351,014	$	1,407,176	$	14,044,988	$	1,439,414

	December 31, 2023
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross   Unrealized  Losses		Fair Value		Gross   Unrealized  Losses		Fair Value		Gross   Unrealized  Losses
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	98,174	$	945	$	214,889	$	72,563	$	313,063	$	73,508
Obligations of U.S. states and their political subdivisions	83,729		293		218,375		18,224		302,104		18,517
Foreign government securities	10,226		116		233,757		50,568		243,983		50,684
U.S. public corporate securities	782,904		10,009		5,201,353		750,265		5,984,257		760,274
U.S. private corporate securities	707,674		16,613		2,794,697		238,181		3,502,371		254,794
Foreign public corporate securities	92,955		1,063		948,963		114,169		1,041,918		115,232
Foreign private corporate securities	429,212		8,035		2,461,367		373,180		2,890,579		381,215
Asset-backed securities	208,970		1,761		532,814		9,750		741,784		11,511
Commercial mortgage-backed securities	42,621		298		580,931		66,047		623,552		66,345
Residential mortgage-backed securities	35,904		435		124,956		7,046		160,860		7,481
Total fixed maturities, available-for-sale	$	2,492,369	$	39,568	$	13,312,102	$	1,699,993	$	15,804,471	$	1,739,561

12

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

As of September 30, 2024 and December 31, 2023, the gross unrealized losses on fixed maturity, available-for-sale securities without an allowance were $1,354 million and $1,634 million, respectively, related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $85 million and $106 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of September 30, 2024, the $1,407 million of gross unrealized losses of twelve months or more were concentrated in the Company’s corporate securities within the finance, consumer non-cyclical and utility sectors. As of December 31, 2023, the $1,700 million of gross unrealized losses of twelve months or more were concentrated in the Company's corporate securities within the finance, consumer non-cyclical and utility sectors.

In accordance with its policy described in Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, the Company concluded that an adjustment to earnings for credit losses related to these fixed maturity securities was not warranted at September 30, 2024. This conclusion was based on a detailed analysis of the underlying credit and cash flows for each security. Gross unrealized losses are primarily attributable to increases in interest rates, general credit spread widening and foreign currency exchange rate movements. As of September 30, 2024, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost basis.

The following table sets forth the amortized cost and fair value of fixed maturities, available-for-sale by contractual maturities, as of the date indicated:

	September 30, 2024
	Amortized Cost		Fair Value
	(in thousands)
Fixed maturities, available-for-sale:
Due in one year or less	$	1,451,746	$	1,437,659
Due after one year through five years	11,583,221		11,565,272
Due after five years through ten years	9,102,232		9,116,421
Due after ten years	8,800,517		8,074,424
Asset-backed securities	3,450,724		3,490,040
Commercial mortgage-backed securities	929,684		895,436
Residential mortgage-backed securities	376,250		377,554
Total fixed maturities, available-for-sale	$	35,694,374	$	34,956,806

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above as they do not have a single maturity date.

The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on write-downs and the allowance for credit losses of fixed maturities, available-for-sale, for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(in thousands)
Fixed maturities, available-for-sale:
Proceeds from sales(1)	$	248,635	$	151,383	$	676,660	$	280,064
Proceeds from maturities/prepayments	483,079		318,188		1,618,992		806,521
Gross investment gains from sales and maturities	2,921		1,377		13,265		10,826
Gross investment losses from sales and maturities	(9,153)		(10,920)		(33,625)		(28,445)
Write-downs recognized in earnings(2)	(9,534)		4		(9,534)		11
(Addition to) release of allowance for credit losses	(11,227)		608		(12,567)		454

(1)Excludes activity from non-cash related proceeds due to the timing of trade settlements of $(5.6) million and $10.0 million for the nine months ended September 30, 2024 and 2023, respectively.

(2)Amounts represent write-downs of credit adverse securities and securities actively marketed for sale.

13

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the activity in the allowance for credit losses for fixed maturity available-for-sale securities, as of the dates indicated:

	Three Months Ended September 30, 2024
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Securities		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in thousands)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	0	$	0	$	3,343	$	0	$	0	$	5	$	3,348
Additions to allowance for credit losses not previously recorded	0		0		12,026		0		0		0		12,026
Reductions for securities sold during the period	0		0		0		0		0		0		0
Additions (reductions) on securities with previous allowance	0		0		(794)		0		0		(5)		(799)
Assets transferred to parent and affiliates	0		0		0		0		0		0		0
Balance, end of period	$	0	$	0	$	14,575	$	0	$	0	$	0	$	14,575

	Three Months Ended September 30, 2023
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Securities		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in thousands)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	0	$	0	$	4,917	$	0	$	0	$	6	$	4,923
Additions to allowance for credit losses not previously recorded	0		0		374		0		0		0		374
Reductions for securities sold during the period	0		0		(1,280)		0		0		0		(1,280)
Additions (reductions) on securities with previous allowance	0		0		296		0		0		2		298
Balance, end of period	$	0	$	0	$	4,307	$	0	$	0	$	8	$	4,315

14

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2024
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Securities		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in thousands)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	0	$	0	$	2,000	$	1	$	0	$	7	$	2,008
Additions to allowance for credit losses not previously recorded	0		0		12,422		0		0		5		12,427
Reductions for securities sold during the period	0		0		(42)		0		0		0		(42)
Additions (reductions) on securities with previous allowance	0		0		(284)		(1)		0		(12)		(297)
Assets transferred to parent and affiliates	0		0		479		0		0		0		479
Balance, end of period	$	0	$	0	$	14,575	$	0	$	0	$	0	$	14,575

	Nine Months Ended September 30, 2023
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Securities		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in thousands)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	0	$	5	$	4,755	$	0	$	0	$	9	$	4,769
Additions to allowance for credit losses not previously recorded	0		0		3,539		0		0		0		3,539
Reductions for securities sold during the period	0		(1)		(5,054)		0		0		0		(5,055)
Additions (reductions) on securities with previous allowance	0		(4)		1,067		0		0		(1)		1,062
Balance, end of period	$	0	$	0	$	4,307	$	0	$	0	$	8	$	4,315

See Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for additional information about the Company's methodology for developing our allowance and expected losses.

For the three months ended September 30, 2024, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions within the consumer non-cyclical and technology sectors within corporate securities due to adverse projected cashflows. For the three months ended September 30, 2023, the net decrease in the allowance for credit losses on available-for-sale securities was primarily related to net reductions within the utility sector within corporate securities due to an investment restructuring.

For the nine months ended September 30, 2024, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions within the consumer non-cyclical, capital goods and technology sectors within corporate securities due to adverse projected cashflows. For the nine months ended September 30, 2023, the net decrease in the allowance for credit losses on available-for-sale securities was primarily related to net reductions within the capital goods and utility sectors within corporate securities due to investment restructurings, partially offset by net additions within the technology and finance sectors within corporate securities due to adverse projected cashflows.

15

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Company did not have any fixed maturity securities purchased with credit deterioration as of both September 30, 2024 and December 31, 2023.

Fixed Maturities, Trading

The net change in unrealized gains (losses) from fixed maturities, trading still held at period end, recorded within “Other income (loss),” was $149.0 million and $(221.6) million during the three months ended September 30, 2024 and 2023, respectively, and $16.8 million and $(179.0) million during the nine months ended September 30, 2024 and 2023, respectively.

Equity Securities

The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income (loss),” was $37.6 million and $(10.9) million during the three months ended September 30, 2024 and 2023, respectively, and $16.2 million and $(2.8) million during the nine months ended September 30, 2024 and 2023, respectively.

Commercial Mortgage and Other Loans

The following table sets forth the composition of “Commercial mortgage and other loans”, as of the dates indicated:

	September 30, 2024				December 31, 2023
	Amount		% of Total		Amount		% of Total
	($ in thousands)
Commercial mortgage and agricultural property loans by property type:
Apartments/Multi-Family	$	1,892,110	26.1	%	$	1,578,785	25.7	%
Hospitality	100,890		1.4		102,952		1.7
Industrial	2,865,789		39.5		2,486,230		40.4
Office	597,283		8.2		604,611		9.8
Other	694,191		9.6		456,720		7.4
Retail	406,850		5.5		363,706		5.9
Total commercial mortgage loans	6,557,113		90.3		5,593,004		90.9
Agricultural property loans	703,309		9.7		562,046		9.1
Total commercial mortgage and agricultural property loans	7,260,422		100.0	%	6,155,050		100.0	%
Allowance for credit losses	(44,309)				(37,689)
Total net commercial mortgage and agricultural property loans	7,216,113				6,117,361
Other loans:
Other collateralized loans	7,455				5,360
Total other loans	7,455				5,360
Total net commercial mortgage and other loans	$	7,223,568			$	6,122,721

As of September 30, 2024, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States (with the largest concentrations in California (26%), Texas (9%) and Washington (6%)), and included loans secured by properties in Europe (9%), Mexico (1%) and Australia (1%).

16

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated:

	Three Months Ended September 30,
	2024						2023
	Commercial Mortgage Loans		Agricultural Property Loans		Total		Commercial Mortgage Loans		Agricultural Property Loans		Total
	(in thousands)
Allowance, beginning of period	$	40,692	$	880	$	41,572	$	21,133	$	960	$	22,093
Addition to (release of) allowance for expected losses	1,389		1,348		2,737		5,055		(48)		5,007
Allowance, end of period	$	42,081	$	2,228	$	44,309	$	26,188	$	912	$	27,100

	Nine Months Ended September 30,
	2024						2023
	Commercial Mortgage Loans		Agricultural Property Loans		Total		Commercial Mortgage Loans		Agricultural Property Loans		Total
	(in thousands)
Allowance, beginning of period	$	36,758	$	931	$	37,689	$	19,665	$	598	$	20,263
Addition to (release of) allowance for expected losses	5,323		1,297		6,620		6,523		314		6,837
Allowance, end of period	$	42,081	$	2,228	$	44,309	$	26,188	$	912	$	27,100

See Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for additional information about the Company's methodology for developing our allowance and expected losses.

For the three months ended September 30, 2024, the net increase in the allowance for credit losses on commercial mortgage and other loans was in the loan specific allowance within agricultural property loans and in the general allowance due to loan originations. For the three months ended September 30, 2023, the net increase in the allowance for credit losses on commercial mortgage and other loans was due to an increase in the loan specific allowance in commercial mortgage loans within the office sector and an increase in the general allowance due to declining market conditions and loan originations.

For the nine months ended September 30, 2024, the net increase in the allowance for credit losses on commercial mortgage and other loans was primarily related to an increase in the loan specific allowance in commercial mortgage loans within the office sector and within agricultural property loans and in the general allowance due to loan originations partially offset by loan payoffs. For the nine months ended September 30, 2023, the net increase in the allowance for credit losses on commercial mortgage and other loans was primarily related to an increase in loan specific allowance in commercial mortgage loans within the office sector and an increase in the general allowance due to declining market conditions and loan originations.

17

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the dates indicated:

	September 30, 2024
	Amortized Cost by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total
	(in thousands)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%	$	123,866	$	251,014	$	272,694	$	484,606	$	76,205	$	1,219,508	$	2,554	$	2,430,447
60%-69.99%	873,753		692,435		298,812		401,981		173,843		358,886		0		2,799,710
70%-79.99%	170,165		202,273		151,128		295,221		76,922		50,697		0		946,406
80% or greater	1,196		0		59,671		84,448		3,866		231,369		0		380,550
Total	$	1,168,980	$	1,145,722	$	782,305	$	1,266,256	$	330,836	$	1,860,460	$	2,554	$	6,557,113
Debt Service Coverage Ratio:
Greater than 1.2x	$	1,119,178	$	1,041,778	$	767,191	$	1,266,256	$	260,688	$	1,740,855	$	2,554	$	6,198,500
1.0 - 1.2x	49,802		103,944		15,114		0		0		57,284		0		226,144
Less than 1.0x	0		0		0		0		70,148		62,321		0		132,469
Total	$	1,168,980	$	1,145,722	$	782,305	$	1,266,256	$	330,836	$	1,860,460	$	2,554	$	6,557,113
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%	$	137,525	$	90,427	$	168,416	$	131,740	$	23,625	$	39,716	$	18,988	$	610,437
60%-69.99%	0		19,396		49,210		0		0		0		0		68,606
70%-79.99%	0		0		0		0		0		0		0		0
80% or greater	0		0		7,242		0		1,696		0		15,328		24,266
Total	$	137,525	$	109,823	$	224,868	$	131,740	$	25,321	$	39,716	$	34,316	$	703,309
Debt Service Coverage Ratio:
Greater than 1.2x	$	134,137	$	95,734	$	215,626	$	130,030	$	23,625	$	39,716	$	18,988	$	657,856
1.0 - 1.2x	3,388		14,089		9,242		0		1,696		0		15,328		43,743
Less than 1.0x	0		0		0		1,710		0		0		0		1,710
Total	$	137,525	$	109,823	$	224,868	$	131,740	$	25,321	$	39,716	$	34,316	$	703,309

18

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2023
	Amortized Cost by Origination Year
	2023		2022		2021		2020		2019		Prior		Total
	(in thousands)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%	$	249,037	$	245,914	$	482,718	$	109,249	$	265,053	$	1,068,763	$	2,420,734
60%-69.99%	675,153		355,984		449,878		172,721		225,803		206,237		2,085,776
70%-79.99%	218,015		133,343		255,299		77,812		20,924		86,806		792,199
80% or greater	0		47,555		73,702		3,817		16,508		152,713		294,295
Total	$	1,142,205	$	782,796	$	1,261,597	$	363,599	$	528,288	$	1,514,519	$	5,593,004
Debt Service Coverage Ratio:
Greater than 1.2x	$	1,038,315	$	779,282	$	1,261,597	$	292,561	$	497,407	$	1,402,831	$	5,271,993
1.0 - 1.2x	103,890		3,514		0		0		15,632		40,521		163,557
Less than 1.0x	0		0		0		71,038		15,249		71,167		157,454
Total	$	1,142,205	$	782,796	$	1,261,597	$	363,599	$	528,288	$	1,514,519	$	5,593,004
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%	$	73,774	$	179,375	$	132,042	$	25,875	$	15,824	$	25,771	$	452,661
60%-69.99%	47,489		56,210		0		0		0		0		103,699
70%-79.99%	5,686		0		0		0		0		0		5,686
80% or greater	0		0		0		0		0		0		0
Total	$	126,949	$	235,585	$	132,042	$	25,875	$	15,824	$	25,771	$	562,046
Debt Service Coverage Ratio:
Greater than 1.2x	$	126,949	$	233,585	$	130,353	$	24,063	$	15,824	$	25,771	$	556,545
1.0 - 1.2x	0		2,000		0		1,812		0		0		3,812
Less than 1.0x	0		0		1,689		0		0		0		1,689
Total	$	126,949	$	235,585	$	132,042	$	25,875	$	15,824	$	25,771	$	562,046

See Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for additional information about the Company’s commercial mortgage and other loans credit quality monitoring process.

The Company may grant loan modifications in its commercial mortgage and other loan portfolios to borrowers experiencing financial difficulties. These loan modifications may be in the form of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension or some combination thereof. The amount, timing and extent of modifications granted and subsequent performance are considered in determining any allowance for credit losses.

The following tables set forth the amortized cost basis of loan modifications made to borrowers experiencing financial difficulties for the dates indicated:

	Three Months Ended September 30, 2024
	Term Extension		% of Amortized Cost		Other Than Insignificant Delay in Payment		% of Amortized Cost
	($ in thousands)
Commercial mortgage loans	$	0	0.0	%	$	13,860	0.2	%

19

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2024
	Term Extension		% of Amortized Cost		Other Than Insignificant Delay in Payment		% of Amortized Cost
	($ in thousands)
Commercial mortgage loans	$	16,706	0.3	%	$	13,860	0.2	%

The modifications added less than one year to the weighted average life in the commercial mortgage loan portfolio.

During both the three and nine months ended September 30, 2023, the Company did not modify any loans to borrowers experiencing financial difficulties.

For the nine months ended September 30, 2024, all commercial mortgage and other loans that were modified to borrowers experiencing financial difficulties were current. The Company did not have any commitments to lend additional funds to borrowers experiencing financial difficulties on modified loans as of both September 30, 2024 and December 31, 2023.

The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status as of the dates indicated:

	September 30, 2024
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)		Total Loans		Non-Accrual Status(2)
	(in thousands)
Commercial mortgage loans	$	6,543,821	$	0	$	0	$	13,292	$	6,557,113	$	14,487
Agricultural property loans	678,706		0		0		24,603		703,309		24,603
Other collateralized loans	7,455		0		0		0		7,455		0
Total	$	7,229,982	$	0	$	0	$	37,895	$	7,267,877	$	39,090

(1)As of September 30, 2024, there were no loans in this category accruing interest.

(2)For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

	December 31, 2023
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)		Total Loans		Non-Accrual Status(2)
	(in thousands)
Commercial mortgage loans	$	5,593,004	$	0	$	0	$	0	$	5,593,004	$	0
Agricultural property loans	562,046		0		0		0		562,046		1,301
Other collateralized loans	5,360		0		0		0		5,360		0
Total	$	6,160,410	$	0	$	0	$	0	$	6,160,410	$	1,301

(1)As of December 31, 2023, there were no loans in this category accruing interest.

(2)For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Loans on non-accrual status recognized interest of $1 million for both the three and nine months ended September 30, 2024. Loans on non-accrual status that did not have a related allowance for credit losses were $2 million and $0 million as of September 30, 2024 and December 31, 2023, respectively.

20

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

For the three and nine months ended September 30, 2024, there were $0.0 million and $12.6 million commercial mortgage and other loans acquired, respectively, other than those through direct origination, and there were no commercial mortgage and other loans sold.

For both the three and nine months ended September 30, 2023, there were no commercial mortgage and other loans acquired, other than those through direct origination, and there were no commercial mortgage and other loans sold.

The Company did not have any commercial mortgage and other loans purchased with credit deterioration as of both September 30, 2024 and December 31, 2023.

Other Invested Assets

The following table sets forth the composition of “Other invested assets,” as of the dates indicated:

	September 30, 2024		December 31, 2023
	(in thousands)
LPs/LLCs:
Equity method:
Private equity	$	383,918	$	333,863
Hedge funds	926,861		720,360
Real estate-related	98,176		83,339
Subtotal equity method	1,408,955		1,137,562
Fair value:
Private equity	31,762		48,483
Hedge funds	14		137
Real estate-related	16,410		18,687
Subtotal fair value	48,186		67,307
Total LPs/LLCs	1,457,141		1,204,869
Derivative instruments	8,387		17,718
Other(1)	442		398
Total other invested assets	$	1,465,970	$	1,222,985

(1)Assets consist of investments in separate account funds.

Accrued Investment Income

The following table sets forth the composition of “Accrued investment income,” as of the dates indicated:

	September 30, 2024		December 31, 2023
	(in thousands)
Fixed maturities	$	388,170	$	272,031
Equity securities	381		220
Commercial mortgage and other loans	26,520		21,070
Policy loans	21,949		35,210
Other invested assets	0		43
Short-term investments and cash equivalents	7,571		5,264
Total accrued investment income	$	444,591	$	333,838

There were no significant write-downs on accrued investment income for both the three and nine months ended September 30, 2024 and 2023.

21

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(in thousands)
Fixed maturities, available-for-sale	$	439,805	$	312,405	$	1,172,544	$	822,933
Fixed maturities, trading	40,719		26,104		111,345		65,739
Equity securities	6,190		3,886		16,395		9,206
Commercial mortgage and other loans	84,328		58,673		236,006		163,646
Policy loans	16,995		15,962		48,028		31,580
Other invested assets	35,066		36,152		87,133		77,875
Short-term investments and cash equivalents	41,976		27,347		129,298		88,105
Gross investment income	665,079		480,529		1,800,749		1,259,084
Less: investment expenses	(26,387)		(19,665)		(76,744)		(55,695)
Net investment income	$	638,692	$	460,864	$	1,724,005	$	1,203,389

Realized Investment Gains (Losses), Net

The following table sets forth “Realized investment gains (losses), net” by investment type, for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(in thousands)
Fixed maturities(1)	$	(26,993)	$	(8,931)	$	(42,461)	$	(17,154)
Commercial mortgage and other loans	(3,533)		(5,059)		(8,152)		(7,143)
Other invested assets	(36,941)		10,856		(3,795)		24,052
Derivatives	(549,017)		(465,176)		299,886		(582,846)
Short-term investments and cash equivalents	(11)		54		(91)		1,850
Realized investment gains (losses), net	$	(616,495)	$	(468,256)	$	245,387	$	(581,241)

(1)Includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading.

Net Unrealized Gains (Losses) on Investments within AOCI

The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:

	September 30, 2024		December 31, 2023
	(in thousands)
Fixed maturity securities, available-for-sale with an allowance	$	(7,861)	$	1,987
Fixed maturity securities, available-for-sale without an allowance	(715,132)		(1,406,265)
Derivatives designated as cash flow hedges(1)	1,734		11,934
Affiliated notes	(4,029)		(8,760)
Other investments(2)	1,658		(1,089)
Net unrealized gains (losses) on investments	$	(723,630)	$	(1,402,193)

(1)For more information on cash flow hedges, see Note 4.

(2)Includes net unrealized gains (losses) on certain joint ventures that are strategic in nature and are included in "Other assets".

22

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Repurchase Agreements and Securities Lending

In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. As of both September 30, 2024 and December 31, 2023, the Company had no repurchase agreements.

The following table sets forth the composition of “Cash collateral for loaned securities,” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated:

	September 30, 2024						December 31, 2023
	Remaining Contractual Maturities of the Agreements						Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 Days		Total		Overnight & Continuous		Up to 30 Days		Total
	(in thousands)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	152,625	$	0	$	152,625	$	0	$	0	$	0
Obligations of U.S. states and their political subdivisions	1,194		0		1,194		0		0		0
Foreign government securities	135		0		135		486		0		486
U.S. public corporate securities	9,537		352		9,889		27,247		0		27,247
U.S. private corporate securities	17		0		17		0		0		0
Foreign public corporate securities	15,553		0		15,553		13,101		0		13,101
Equity securities	150,957		0		150,957		177,476		0		177,476
Total cash collateral for loaned securities(1)	$	330,018	$	352	$	330,370	$	218,310	$	0	$	218,310

(1)The Company did not have any agreements with remaining contractual maturities greater than thirty days, as of the dates indicated.

4.    DERIVATIVES AND HEDGING

Types of Derivative Instruments and Derivative Strategies

The Company utilizes various derivative instruments and strategies to manage its risk. Commonly used derivative instruments include, but are not necessarily limited to:

•Interest rate contracts: futures, swaps, options, caps and floors

•Equity contracts: futures, options and total return swaps

•Foreign exchange contracts: futures, options, forwards and swaps

•Credit contracts: single and index reference credit default swaps

Other types of financial contracts that the Company accounts for as derivatives include:

•Embedded derivatives and synthetic guaranteed investment contracts (“GICs”)

For detailed information on these contracts and the related strategies, see Note 4 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

23

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Primary Risks Managed by Derivatives

The table below provides a summary of the gross notional amount and fair value of derivative contracts by the primary underlying risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral.

	September 30, 2024						December 31, 2023
Primary Underlying Risk/Instrument Type			Fair Value						Fair Value
	Gross Notional		Assets		Liabilities		Gross Notional		Assets		Liabilities
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Currency/Interest Rate
Interest Rate Swaps	$	2,897	$	135	$	(330)	$	3,064	$	0	$	(238)
Foreign Currency Swaps	2,925,541		124,783		(74,826)		2,274,636		121,243		(54,044)
Total Derivatives Designated as Hedge Accounting Instruments	$	2,928,438	$	124,918	$	(75,156)	$	2,277,700	$	121,243	$	(54,282)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	170,060,664	$	6,211,118	$	(17,190,863)	$	163,179,764	$	6,605,817	$	(17,820,436)
Interest Rate Futures	931,500		3,371		(907)		1,332,600		3,055		(210)
Interest Rate Options	29,328,000		159,714		(963,537)		29,738,000		189,112		(969,718)
Interest Rate Forwards	1,458,000		16,690		(19,240)		1,458,000		741		(3,196)
Foreign Currency
Foreign Currency Forwards	910,981		215		(13,658)		744,576		1,772		(12,232)
Credit
Credit Default Swaps	945,641		8,110		0		643,280		7,727		0
Currency/Interest Rate
Foreign Currency Swaps	2,255,074		71,157		(34,591)		2,237,331		96,618		(31,294)
Equity
Total Return Swaps	18,213,679		884,499		(1,056,653)		15,049,993		418,084		(803,452)
Equity Options	84,822,485		4,131,807		(2,682,831)		49,247,510		1,600,335		(1,552,706)
Equity Futures	860,469		2,310		(294)		418,973		1,232		(500)
Synthetic GICs	1,213,038		794		(694)		311,302		1		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	$	310,999,531	$	11,489,785	$	(21,963,268)	$	264,361,329	$	8,924,494	$	(21,193,744)
Total Derivatives(1)(2)	$	313,927,969	$	11,614,703	$	(22,038,424)	$	266,639,029	$	9,045,737	$	(21,248,026)

(1)Excludes embedded derivatives which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $11,170 million and $7,402 million as of September 30, 2024 and December 31, 2023, respectively, primarily included in "Policyholders' account balances".

(2)Recorded in “Other invested assets” and “Payables to parent and affiliates” on the Unaudited Interim Consolidated Statements of Financial Position.

24

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	September 30, 2024
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Consolidated Statements of Financial Position		Net Amounts Presented in the Consolidated Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in thousands)
Offsetting of Financial Assets:
Derivatives	$	11,613,891	$	(11,606,316)	$	7,575	$	0	$	7,575
Securities purchased under agreements to resell	275,000		0		275,000		0		275,000
Total Assets	$	11,888,891	$	(11,606,316)	$	282,575	$	0	$	282,575
Offsetting of Financial Liabilities:
Derivatives	$	22,037,730	$	(20,039,444)	$	1,998,286	$	(1,998,286)	$	0
Securities sold under agreements to repurchase	0		0		0		0		0
Total Liabilities	$	22,037,730	$	(20,039,444)	$	1,998,286	$	(1,998,286)	$	0

	December 31, 2023
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Consolidated Statements of Financial Position		Net Amounts Presented in the Consolidated Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in thousands)
Offsetting of Financial Assets:
Derivatives	$	9,045,718	$	(9,028,019)	$	17,699	$	0	$	17,699
Securities purchased under agreements to resell	25,000		0		25,000		0		25,000
Total Assets	$	9,070,718	$	(9,028,019)	$	42,699	$	0	$	42,699
Offsetting of Financial Liabilities:
Derivatives	$	21,248,026	$	(18,596,679)	$	2,651,347	$	(2,651,347)	$	0
Securities sold under agreements to repurchase	0		0		0		0		0
Total Liabilities	$	21,248,026	$	(18,596,679)	$	2,651,347	$	(2,651,347)	$	0

(1)Amounts exclude the excess of collateral received/pledged from/to the counterparty.

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above see “Credit Risk” below and Note 14. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

25

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Cash Flow Hedges

The primary derivative instruments used by the Company in its cash flow hedge accounting relationships are currency swaps and interest rate swaps. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, or equity derivatives in any of its cash flow hedge accounting relationships.

The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship.

	Three Months Ended September 30, 2024
	Realized Investment Gains (Losses)		Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)		Net Investment Income		Other Income		Change in AOCI
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Interest Rate	$	1	$	0	$	(30)	$	0	$	79
Currency/Interest Rate	5,179		0		12,517		(37,547)		(73,638)
Total cash flow hedges	5,180		0		12,487		(37,547)		(73,559)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	11,635		580,493		0		0		0
Currency	(35,766)		0		0		0		0
Currency/Interest Rate	(52,675)		0		0		(411)		0
Credit	5,128		0		0		0		0
Equity	618,400		(319,291)		0		0		0
Embedded Derivatives	(1,100,919)		0		0		0		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	(554,197)		261,202		0		(411)		0
Total	$	(549,017)	$	261,202	$	12,487	$	(37,958)	$	(73,559)

26

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2024
	Realized Investment Gains (Losses)		Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)		Net Investment Income		Other Income		Change in AOCI
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Interest Rate	$	2	$	0	$	(92)	$	0	$	69
Currency/Interest Rate	4,503		0		35,386		(23,943)		(10,269)
Total cash flow hedges	4,505		0		35,294		(23,943)		(10,200)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	84,144		(685,958)		0		0		0
Currency	(14,360)		0		0		0		0
Currency/Interest Rate	(19,144)		0		0		(289)		0
Credit	12,647		0		0		0		0
Equity	2,641,411		(808,221)		0		0		0
Embedded Derivatives	(2,409,317)		0		0		0		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	295,381		(1,494,179)		0		(289)		0
Total	$	299,886	$	(1,494,179)	$	35,294	$	(24,232)	$	(10,200)

	Three Months Ended September 30, 2023
	Realized Investment Gains (Losses)		Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)		Net Investment Income		Other Income		Change in AOCI
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Interest Rate	$	1	$	0	$	(32)	$	0	$	(12)
Currency/Interest Rate	(936)		0		10,629		19,494		(5,189)
Total cash flow hedges	(935)		0		10,597		19,494		(5,201)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	53,990		(2,059,987)		0		0		0
Currency	20,401		0		0		0		0
Currency/Interest Rate	8,059		0		0		262		0
Credit	(253)		0		0		0		0
Equity	(449,655)		266,623		0		0		0
Embedded Derivatives	(96,783)		0		0		0		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	(464,241)		(1,793,364)		0		262		0
Total	$	(465,176)	$	(1,793,364)	$	10,597	$	19,756	$	(5,201)

27

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2023
	Realized Investment Gains (Losses)		Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)		Net Investment Income		Other Income		Change in AOCI
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Interest Rate	$	2	$	0	$	(86)	$	0	$	(13)
Currency/Interest Rate	(365)		0		33,308		2,041		(44,154)
Total cash flow hedges	(363)		0		33,222		2,041		(44,167)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	69,702		(2,767,152)		0		0		0
Currency	8,375		0		0		0		0
Currency/Interest Rate	(28,263)		0		0		62		0
Credit	2,073		0		0		0		0
Equity	694,236		(331,444)		0		0		0
Embedded Derivatives	(1,325,493)		0		0		0		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	(579,370)		(3,098,596)		0		62		0
Total	$	(579,733)	$	(3,098,596)	$	33,222	$	2,103	$	(44,167)

Presented below is a rollforward of current period cash flow hedges in AOCI before taxes:

	(in thousands)
Balance, December 31, 2023	$	11,934
Amount recorded in AOCI
Interest Rate	(21)
Currency/Interest Rate	5,677
Total amount recorded in AOCI	5,656
Amount reclassified from AOCI to income
Interest Rate	90
Currency/Interest Rate	(15,946)
Total amount reclassified from AOCI to income	(15,856)
Balance, September 30, 2024	$	1,734

The changes in fair value of cash flow hedges are deferred in AOCI and are included in "Net unrealized investment gains (losses)" in the Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss); these amounts are then reclassified to earnings when the hedged item affects earnings. Using September 30, 2024 values, it is estimated that a pre-tax gain of $27 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending September 30, 2025.

The exposures the Company is hedging with these qualifying cash flow hedges include the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments.

There were no material amounts reclassified from AOCI into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging.

28

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Credit Derivatives

Credit Derivatives, where the Company has written credit protection on certain index references, have outstanding notional amounts of $946 million and $643 million as of September 30, 2024 and December 31, 2023, respectively. These credit derivatives are reported at fair value as an asset of $8 million and $8 million as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024 the notional amount of these credit derivatives had the following NAIC ratings: $911 million in NAIC 3 and $35 million in NAIC 6.

The Company has no exposure on purchased credit protection as of September 30, 2024 and December 31, 2023.

Counterparty Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. The Company manages credit risk by entering into derivative transactions with regulated derivatives exchanges for exchange traded derivatives and its affiliate, Prudential Global Funding LLC (“PGF”), related to its over-the-counter ("OTC") derivatives. PGF, in turn, manages its credit risk by: (i) entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties governed by master netting agreements, as applicable; (ii) trading through central clearing and OTC parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single-party credit exposures which are subject to periodic management review.

Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position.

5.    FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement - Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities.

Level 2 – Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs.

Level 3 – Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value.

For a discussion of the Company's valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 5 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

29

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Assets and Liabilities by Hierarchy Level – The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

	September 30, 2024
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	1,429,055	$	0	$		$	1,429,055
Obligations of U.S. states and their political subdivisions	0		587,630		0				587,630
Foreign government securities	0		382,865		657				383,522
U.S. corporate public securities	0		13,061,196		0				13,061,196
U.S. corporate private securities	0		5,021,603		850,609				5,872,212
Foreign corporate public securities	0		3,462,127		7,177				3,469,304
Foreign corporate private securities	0		4,928,028		462,829				5,390,857
Asset-backed securities(2)	0		2,879,198		610,842				3,490,040
Commercial mortgage-backed securities	0		815,182		80,254				895,436
Residential mortgage-backed securities	0		377,554		0				377,554
Subtotal	0		32,944,438		2,012,368				34,956,806
Market risk benefit assets	0		0		2,499,234				2,499,234
Fixed maturities, trading	0		3,454,406		52,863				3,507,269
Equity securities	506,870		16,439		29,240				552,549
Short-term investments	0		399,350		105,198				504,548
Cash equivalents	0		1,695,500		118				1,695,618
Other invested assets(4)	7,030		11,606,879		794		(11,606,316)		8,387
Other assets	0		0		509,723				509,723
Reinsurance recoverables	0		0		201,559				201,559
Receivables from parent and affiliates	0		152,105		339,041				491,146
Subtotal excluding separate account assets	513,900		50,269,117		5,750,138		(11,606,316)		44,926,839
Separate account assets(5)(6)	280,132		116,410,586		10,117				116,700,835
Total assets	$	794,032	$	166,679,703	$	5,760,255	$	(11,606,316)	$	161,627,674
Market risk benefit liabilities	$	0	$	0	$	4,915,163	$		$	4,915,163
Policyholders' account balances	0		0		11,854,608				11,854,608
Payables to parent and affiliates	0		22,036,023		0		(20,037,749)		1,998,274
Other liabilities(7)	1,708		26,546		693		(1,695)		27,252
Total liabilities	$	1,708	$	22,062,569	$	16,770,464	$	(20,039,444)	$	18,795,297

30

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2023
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	975,287	$	0	$		$	975,287
Obligations of U.S. states and their political subdivisions	0		776,627		0				776,627
Foreign government securities	0		281,304		682				281,986
U.S. corporate public securities	0		9,495,912		0				9,495,912
U.S. corporate private securities	0		4,476,258		513,236				4,989,494
Foreign corporate public securities	0		1,698,965		7,129				1,706,094
Foreign corporate private securities	0		4,137,004		493,978				4,630,982
Asset-backed securities(2)	0		1,928,428		99,122				2,027,550
Commercial mortgage-backed securities	0		773,663		78,115				851,778
Residential mortgage-backed securities	0		396,070		0				396,070
Subtotal	0		24,939,518		1,192,262				26,131,780
Market risk benefit assets	0		0		2,367,243				2,367,243
Fixed maturities, trading	0		2,762,398		34,048				2,796,446
Equity securities(3)	790,346		11,285		28,709				830,340
Short-term investments	31,879		280,228		1,759				313,866
Cash equivalents	447,396		1,196,729		0				1,644,125
Other invested assets(4)	23,432		9,022,304		1		(9,028,019)		17,718
Other assets	0		0		224,019				224,019
Reinsurance recoverables	0		0		69,745				69,745
Receivables from parent and affiliates	0		147,984		0				147,984
Subtotal excluding separate account assets	1,293,053		38,360,446		3,917,786		(9,028,019)		34,543,266
Separate account assets(5)(6)	176,239		113,747,569		5,985				113,929,793
Total assets	$	1,469,292	$	152,108,015	$	3,923,771	$	(9,028,019)	$	148,473,059
Market risk benefit liabilities	$	0	$	0	$	5,144,401	$		$	5,144,401
Policyholders' account balances	0		0		7,689,929				7,689,929
Payables to parent and affiliates	0		21,239,770		0		(18,588,647)		2,651,123
Other liabilities(7)	8,032		6,340		0		(8,032)		6,340
Total liabilities	$	8,032	$	21,246,110	$	12,834,330	$	(18,596,679)	$	15,491,793

(1)“Netting” amounts represent cash collateral of $(8,433) million and $(9,569) million as of September 30, 2024 and December 31, 2023, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreements.

(2)Includes credit-tranched securities collateralized by loan obligations, education loans, auto loans and home equity loans.

(3)Equity securities excluded from the fair value hierarchy include a fund for which fair value is measured at net asset value ("NAV") per share (or its equivalent) as a practical expedient. As of December 31, 2023, the fair value of this investment was $14.6 million.

(4)Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at NAV per share (or its equivalent) as a practical expedient. As of September 30, 2024 and December 31, 2023, the fair value of such investments was $48 million and $67 million, respectively.

(5)Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company's Unaudited Interim Consolidated Statements of Financial Position.

(6)Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and a corporate owned life insurance fund. As of September 30, 2024 and December 31, 2023, the fair value of such investments was $6,078 million and $5,259 million, respectively.

(7)Other liabilities includes embedded derivatives associated with reinsurance agreements.

31

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Quantitative Information Regarding Internally Priced Level 3 Assets and Liabilities – The tables below present quantitative information regarding significant internally-priced Level 3 assets and liabilities.

	September 30, 2024
	Fair Value		Valuation   Techniques	Unobservable Inputs	Minimum		Maximum		Weighted Average		Impact of  Increase in  Input on  Fair Value(1)(2)
	(in thousands)
Assets:
Corporate securities(3)	$	1,255,960	Discounted cash flow	Discount rate	6.66	%	20	%	11.66	%	Decrease
			Market comparables	EBITDA multiples(4)	5.0 X		5.0 X		5.0 X		Increase
Commercial mortgage-backed securities	$	80,254	Discounted cash flow	Liquidity premium	1.00	%	1.00	%	1.00	%	Decrease
Market risk benefit assets(5)	$	2,499,234	Discounted cash flow	Lapse rate(6)	1	%	20	%			Increase
				Spread over SOFR(7)	0.37	%	1.85	%			Increase
				Utilization rate(8)	37	%	94	%			Decrease
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	16	%			Increase
				Equity volatility curve	15	%	25	%			Decrease
Other assets(11)	$	509,723	Discounted cash flow	Lapse rate(6)	1	%	50	%			Decrease
				Spread over SOFR(7)	0.37	%	1.84	%			Decrease
				Option budget(13)	0	%	6	%			Increase
Reinsurance Recoverables	$	201,559	Discounted cash flow	Lapse rate(6)	0	%	80	%			Decrease
				Spread over SOFR(7)	0.37	%	1.84	%			Decrease
				Option budget(13)	(1)	%	7	%			Increase
Receivables from parent and affiliates	$	319,181	Liquidation	Liquidation value	100	%	100	%	100	%	Increase
Liabilities:
Market risk benefit liabilities(5)	$	4,915,163	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over SOFR(7)	0.37	%	1.85	%			Decrease
				Utilization rate(8)	37	%	94	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	16	%			Decrease
				Equity volatility curve	15	%	25	%			Increase
Policyholders' account balances(12)	$	11,854,608	Discounted cash flow	Lapse rate(6)	0	%	80	%			Decrease
				Spread over SOFR(7)	0.37	%	1.85	%			Decrease
				Mortality rate(10)	0	%	23	%			Decrease
				Option budget(13)	(1)	%	7	%			Increase

32

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2023
	Fair Value		Valuation   Techniques	Unobservable Inputs	Minimum		Maximum		Weighted  Average		Impact of  Increase in  Input on  Fair Value(1)(2)
	(in thousands)
Assets:
Corporate securities(3)	$	81,635	Discounted cash flow	Discount rate	6.98	%	20	%	9.73	%	Decrease
			Liquidation	Liquidation value	63.62	%	63.62	%	63.62	%	Increase
Commercial mortgage-backed securities	$	78,115	Discounted cash flow	Liquidity premium	0.60	%	0.75	%	0.71	%	Decrease
Market risk benefit assets(5)	$	2,367,243	Discounted cash flow	Lapse rate(6)	1	%	20	%			Increase
				Spread over SOFR(7)	0.41	%	1.91	%			Increase
				Utilization rate(8)	38	%	95	%			Decrease
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	15	%			Increase
				Equity volatility curve	15	%	25	%			Decrease
Other assets(11)	$	224,019	Discounted cash flow	Lapse rate(6)	1	%	80	%			Increase
				Spread over SOFR(7)	0.41	%	1.85	%			Increase
				Mortality rate(10)	0	%	23	%			Increase
				Option budget(13)	(1)	%	7	%			Decrease
Liabilities:
Market risk benefit liabilities(5)	$	5,144,401	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over SOFR(7)	0.41	%	1.91	%			Decrease
				Utilization rate(8)	38	%	95	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	15	%			Decrease
				Equity volatility curve	15	%	25	%			Increase
Policyholders' account balances(12)	$	7,689,929	Discounted cash flow	Lapse rate(6)	1	%	80	%			Decrease
				Spread over SOFR(7)	0.41	%	1.85	%			Decrease
				Mortality rate(10)	0	%	23	%			Decrease
				Option budget(13)	(1)	%	7	%			Increase

(1)Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.

(2)Directional impacts for MRB assets and liabilities are associated with the directional impacts of direct and assumed MRBs.

(3)Includes assets classified as fixed maturities, available-for-sale.

(4)Represents multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.

(5)Market risk benefits primarily represent fair value for all living benefit guarantees including accumulation, withdrawal and income benefits. Since the valuation methodology for these assets and liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(6)Lapse rates for contracts with living benefit guarantees are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these balances.

33

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(7)The spread over the Secured Overnight Financing Rate (“SOFR”) swap curve represents the premium added to the proxy for the risk-free rate (SOFR) to reflect the Company’s estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees as of September 30, 2024 and December 31, 2023, respectively. This spread includes an estimate of non-performance risk ("NPR"), which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements are insurance liabilities and are therefore senior to debt. Effective April 2023, the Company entered into an agreement with The Ohio National Life Insurance Company, now known as AuguStar Life Insurance Company ("AuguStar"), an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $10 billion of account values of Prudential Defined Income ("PDI") traditional variable annuity contracts with guaranteed living and death benefits. See Note 11 for additional information regarding this transaction. As a result of this transaction, a ceded MRB asset balance was established to fair value the reinsurance reimbursements to the Company. The establishment of the fair value also required an estimate of NPR for AuguStar, which may differ from the Company's; however, the NPR spreads for AuguStar were developed using a methodology similar to that of the Company.

(8)The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

(9)The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of September 30, 2024 and December 31, 2023, the minimum withdrawal rate assumption is 78% and 81%, respectively. As of September 30, 2024 and December 31, 2023 the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.

(10)The range reflects the mortality rates for the vast majority of business with living benefits and other contracts, with policyholders ranging from 50 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age, and duration. A mortality improvement assumption is also incorporated into the overall mortality table.

(11)Includes deposit assets related to reinsurance agreements using deposit method of accounting, which include amounts representing the fair value of embedded derivative instruments associated with the index-linked features of certain annuity products.

(12)Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s life and annuity products that are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(13)Option budget estimates the expected long-term cost of options used to hedge exposures associated with equity price and interest rate changes. The level of option budget determines future costs of the options, which impacts the growth in account value and the valuation of embedded derivatives.

Interrelationships Between Unobservable Inputs – In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another or multiple inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:

Corporate Securities – The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term, and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors. During weaker economic cycles, as the expectations of default increase, credit spreads widen, which results in a decrease in fair value.

Commercial Mortgage-backed Securities – Interrelationships may exist between the prepayment rate, the default rate and/or loss severity, depending on specific market conditions. In stronger economic cycles, prepayment rates are generally driven by underlying property appreciation and subsequent cash-out refinances, while default rates and loss severity may be lower. During weaker economic cycles, prepayment rates may decline, while default rates and loss severity increase. Generally, a change in the assumption used for the probability of default would be accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment rates. The impact of these factors on average life and economics varies with the deal structure and tranche subordination.

Market Risk Benefits – The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is generally highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money.

34

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Changes in Level 3 Assets and Liabilities – The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods (excluding MRBs disclosed in Note 10). When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate.

	Three Months Ended September 30, 2024(6)
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other(1)		Transfers into Level 3(7)		Transfers out of Level 3(7)		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in thousands)
Fixed maturities, available-for-sale:
Foreign government	$	664	$	(7)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	657	$	(9)
Corporate securities(3)	1,005,175		(4,778)		540,137		(223,172)		0		(28,144)		12		31,385		0		1,320,615		(1,374)
Structured securities(4)	668,035		6,232		40,941		0		0		(20,113)		0		0		(3,999)		691,096		6,710
Other assets:
Fixed maturities, trading	240,820		158		7,252		0		0		0		0		18,842		(214,209)		52,863		184
Equity securities	28,330		910		0		0		0		0		0		0		0		29,240		910
Other invested assets	763		31		0		0		0		0		0		0		0		794		31
Short-term investments	2,674		(41)		102,151		0		0		(62)		476		0		0		105,198		(41)
Cash equivalents	605		0		2		0		0		0		(489)		0		0		118		0
Other assets	363,440		9,774		62,471		0		0		(14,009)		88,047		0		0		509,723		(4,234)
Receivables from parent and affiliates	181,319		19		157,703		0		0		0		0		0		0		339,041		19
Reinsurance recoverables(5)	127,289		17,856		51,231		0		0		0		5,183		0		0		201,559		(26,796)
Separate account assets	9,799		230		820		(732)		0		0		0		0		0		10,117		231
Liabilities:
Policyholders' account balances(5)	(10,083,258)		(1,098,107)		0		0		(718,242)		0		44,999		0		0		(11,854,608)		269,505
Other liabilities	(207)		(486)		0		0		0		0		0		0		0		(693)		(486)

35

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended September 30, 2024
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)
	(in thousands)
Fixed maturities, available-for-sale	$	(15,515)	$	0	$	0	$	17,745	$	(783)	$	(12,047)	$	0	$	0	$	17,374
Other assets:
Fixed maturities, trading	0		183		0		0		(25)		0		184		0		0
Equity securities	0		910		0		0		0		0		910		0		0
Other invested assets	31		0		0		0		0		31		0		0		0
Short-term investments	(41)		0		0		0		0		(41)		0		0		0
Cash equivalents	0		0		0		0		0		0		0		0		0
Other assets	9,774		0		0		0		0		(4,234)		0		0		0
Receivables from parent and affiliates	0		0		0		19		0		0		0		0		19
Reinsurance recoverables	17,856		0		0		0		0		(26,796)		0		0		0
Separate account assets	0		0		230		0		0		0		0		231		0
Liabilities:
Policyholders' account balances	(1,098,107)		0		0		0		0		269,505		0		0		0
Other liabilities	(486)		0		0		0		0		(486)		0		0		0

36

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2024(6)
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other (1)		Transfers into Level 3(7)		Transfers out of Level 3(7)		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in thousands)
Fixed maturities, available-for-sale:
Foreign government	$	682	$	(25)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	657	$	(32)
Corporate securities(3)	1,014,343		(21,696)		868,927		(353,874)		0		(153,944)		(65,468)		32,327		0		1,320,615		(18,051)
Structured securities(4)	177,237		5,839		562,469		0		0		(73,308)		65,480		34,578		(81,199)		691,096		6,810
Other assets:
Fixed maturities, trading	34,048		(740)		232,379		0		0		(2,261)		0		18,842		(229,405)		52,863		(706)
Equity securities	28,709		258		273		0		0		0		0		0		0		29,240		258
Other invested assets	1		793		0		0		0		0		0		0		0		794		793
Short-term investments	1,759		(37)		104,457		(8)		0		(1,449)		476		0		0		105,198		(49)
Cash equivalents	0		0		607		0		0		0		(489)		0		0		118		0
Other assets	224,019		61,199		176,503		0		0		(40,045)		88,047		0		0		509,723		21,154
Receivables from parent and affiliates	0		19		390,221		(51,199)		0		0		0		0		0		339,041		19
Reinsurance recoverables	69,745		(7,851)		134,482		0		0		0		5,183		0		0		201,559		(105,511)
Separate account assets	5,985		531		5,258		(1,990)		0		(125)		0		458		0		10,117		533
Liabilities:
Policyholders' account balances(5)	(7,689,929)		(2,387,292)		0		0		(1,824,316)		0		46,929		0		0		(11,854,608)		1,100,681
Other liabilities	0		(693)		0		0		0		0		0		0		0		(693)		(693)
Don't delete hidden table

37

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2024
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)
	(in thousands)
Fixed maturities, available-for-sale	$	(19,778)	$	0	$	0	$	3,157	$	739	$	(12,822)	$	0	$	0	$	1,549
Other assets:
Fixed maturities, trading	0		(715)		0		0		(25)		0		(706)		0		0
Equity securities	0		258		0		0		0		0		258		0		0
Other invested assets	793		0		0		0		0		793		0		0		0
Short-term investments	(49)		0		0		0		12		(49)		0		0		0
Cash equivalents	0		0		0		0		0		0		0		0		0
Other assets	61,199		0		0		0		0		21,154		0		0		0
Receivables from parent and affiliates	0		0		0		19		0		0		0		0		19
Reinsurance recoverables	(7,851)		0		0		0		0		(105,511)		0		0		0
Separate account assets	0		0		531		0		0		0		0		533		0
Liabilities:
Policyholders' account balances	(2,387,292)		0		0		0		0		1,100,681		0		0		0
Other liabilities	(693)		0		0		0		0		(693)		0		0		0
Don't delete hidden table

	Three Months Ended September 30, 2023(6)
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other(1)		Transfers into Level 3(7)		Transfers out of Level 3(7)		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in thousands)
Fixed maturities, available-for-sale:
Foreign government	$	701	$	(15)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	686	$	(17)
Corporate securities(3)	721,247		(27,838)		182,465		(10,882)		0		(27,762)		(708)		117,152		(9,088)		944,586		(28,256)
Structured securities(4)	146,339		(3,871)		53,352		0		0		(339)		0		2,297		(7,600)		190,178		(3,836)
Other assets:
Fixed maturities, trading	0		18		0		0		0		0		707		0		0		725		18
Equity securities	43,374		(1,219)		2,531		0		0		0		0		0		0		44,686		(1,219)
Short-term investments	1,209		0		802		0		0		(1,427)		0		0		0		584		0
Other assets	217,613		25,539		33,850		0		0		(6,512)		0		0		0		270,490		19,028
Reinsurance recoverables	1,465		14,079		0		0		0		0		0		0		0		15,544		14,079
Separate account assets	4,982		(7)		1,049		(524)		0		0		0		0		0		5,500		(6)
Liabilities:
Policyholders' account balances(5)	(5,513,449)		(107,528)		0		0		(413,219)		0		28,467		0		0		(6,005,729)		(273,135)

38

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended September 30, 2023
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)
	(in thousands)
Fixed maturities, available-for-sale	$	(1,048)	$	0	$	0	$	(31,183)	$	507	$	(674)	$	0	$	0	$	(31,435)
Other assets:
Fixed maturities, trading	0		18		0		0		0		0		18		0		0
Equity securities	0		(1,219)		0		0		0		0		(1,219)		0		0
Short-term investments	0		0		0		0		0		0		0		0		0
Other assets	25,539		0		0		0		0		19,028		0		0		0
Reinsurance recoverables	14,079		0		0		0		0		14,079		0		0		0
Separate account assets	0		0		(7)		0		0		0		0		(6)		0
Liabilities:
Policyholders' account balances	(107,528)		0		0		0		0		(273,135)		0		0		0

	Nine Months Ended September 30, 2023(6)
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other(1)		Transfers into Level 3(7)		Transfers out of Level 3(7)		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in thousands)
Fixed maturities, available-for-sale:
Foreign government	$	724	$	(38)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	686	$	(46)
Corporate securities(3)	507,496		(20,639)		493,339		(39,721)		0		(104,604)		651		117,152		(9,088)		944,586		(21,842)
Structured securities(4)	104,724		(7,070)		200,659		(27)		0		(1,677)		0		4,537		(110,968)		190,178		(6,965)
Other assets:
Fixed maturities, trading	0		18		6,250		0		0		0		707		0		(6,250)		725		18
Equity securities	28,593		(2,030)		2,531		0		0		0		15,592		0		0		44,686		(2,030)
Short-term investments	16,945		2,573		3,490		0		0		(21,065)		(1,359)		0		0		584		51
Other assets	141,041		33,559		107,453		0		0		(11,563)		0		0		0		270,490		21,997
Reinsurance recoverables	0		15,544		0		0		0		0		0		0		0		15,544		15,544
Separate account assets	4,645		250		1,889		(1,124)		0		(160)		0		0		0		5,500		249
Liabilities:
Policyholders' account balances(5)	(3,502,096)		(1,355,011)		0		0		(1,251,457)		0		102,835		0		0		(6,005,729)		(508,105)

39

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2023
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders' account balances		Included in other comprehensive income (loss)
	(in thousands)
Fixed maturities, available-for-sale	$	(1,861)	$	0	$	0	$	(26,743)	$	857	$	(2,693)	$	0	$	0	$	(26,160)
Other assets:
Fixed maturities, trading	0		18		0		0		0		0		18		0		0
Equity securities	0		(2,030)		0		0		0		0		(2,030)		0		0
Short-term investments	1,857		0		0		(73)		789		0		0		0		51
Other assets	33,559		0		0		0		0		21,997		0		0		0
Reinsurance recoverables	15,544		0		0		0		0		15,544		0		0		0
Separate account assets	0		0		250		0		0		0		0		249		0
Liabilities:
Policyholders' account balances	(1,355,011)		0		0		0		0		(508,105)		0		0		0

(1)"Other" includes additional activity not allocated to the specific categories within the rollforward of Level 3 Assets and Liabilities.

(2)Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(3)Includes U.S. corporate private, foreign corporate public, and foreign corporate private securities.

(4)Includes asset-backed and commercial mortgage-backed securities.

(5)Purchases/issuances and settlements for Policyholders' account balances and Reinsurance recoverables are presented net in the rollforward.

(6)Excludes MRB assets of $2,499 million and $2,519 million and MRB liabilities of $4,915 million and $4,371 million for the periods ended September 30, 2024 and 2023, respectively. See Note 10 for additional information.

(7)Transfers into or out of Level 3 are generally reported at the value as of the beginning of the quarter in which the transfers occur for any such positions still held at the end of the quarter.

40

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Fair Value of Financial Instruments

The tables below present the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value.

	September 30, 2024
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in thousands)
Assets:
Commercial mortgage and other loans	$	0	$	0	$	7,166,012	$	7,166,012	$	7,223,568
Policy loans	0		0		1,524,636		1,524,636		1,524,636
Short-term investments	34,101		0		0		34,101		34,101
Cash and cash equivalents	1,343,092		275,000		0		1,618,092		1,618,092
Accrued investment income	0		444,591		0		444,591		444,591
Reinsurance recoverables	0		0		23,875		23,875		25,147
Receivables from parent and affiliates	0		127,113		0		127,113		127,113
Other assets	0		39,144		2,152,332		2,191,476		2,191,476
Total assets	$	1,377,193	$	885,848	$	10,866,855	$	13,129,896	$	13,188,724
Liabilities:
Policyholders’ account balances - investment contracts	$	0	$	836,916	$	9,050,023	$	9,886,939	$	9,899,498
Cash collateral for loaned securities	0		330,370		0		330,370		330,370
Payables to parent and affiliates	0		70,009		0		70,009		70,009
Other liabilities	0		3,024,889		31,606		3,056,495		3,056,495
Total liabilities	$	0	$	4,262,184	$	9,081,629	$	13,343,813	$	13,356,372

41

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2023
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in thousands)
Assets:
Commercial mortgage and other loans	$	0	$	0	$	5,918,386	$	5,918,386	$	6,122,721
Policy loans	0		0		1,472,677		1,472,677		1,472,677
Short-term investments	66,500		0		0		66,500		66,500
Cash and cash equivalents	470,668		24,999		0		495,667		495,667
Accrued investment income	0		333,838		0		333,838		333,838
Reinsurance recoverables	0		0		22,155		22,155		23,537
Receivables from parent and affiliates	0		184,599		0		184,599		184,599
Other assets	0		80,646		1,489,983		1,570,629		1,570,629
Total assets	$	537,168	$	624,082	$	8,903,201	$	10,064,451	$	10,270,168
Liabilities:
Policyholders’ account balances - investment contracts	$	0	$	955,647	$	5,396,885	$	6,352,532	$	6,368,061
Cash collateral for loaned securities	0		218,310		0		218,310		218,310
Short-term debt to affiliates	0		176,110		0		176,110		180,411
Payables to parent and affiliates	0		16,573		0		16,573		16,573
Other liabilities	0		2,121,861		32,423		2,154,284		2,154,283
Total liabilities	$	0	$	3,488,501	$	5,429,308	$	8,917,809	$	8,937,638

(1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or are out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.

6.    DEFERRED POLICY ACQUISITION COSTS, DEFERRED REINSURANCE AND DEFERRED SALES INDUCEMENTS

Deferred Policy Acquisition Costs ("DAC")

The following tables show a rollforward for the lines of business that contain DAC balances, along with a reconciliation to the Company's total DAC balance:

	Nine Months Ended September 30, 2024
	Fixed Annuities		Variable Annuities		Term Life		Variable / Universal Life		Total
	(in thousands)
Balance, beginning of period	$	197,937	$	3,257,761	$	743,888	$	2,897,925	$	7,097,511
Capitalization	174,397		272,819		138,395		484,131		1,069,742
Amortization expense	(29,806)		(256,552)		(52,564)		(103,817)		(442,739)
Other(1)	0		0		(97)		(18,339)		(18,436)
Balance, end of period	$	342,528	$	3,274,028	$	829,622	$	3,259,900	$	7,706,078

(1)    Other includes the impact of the Universal Life reinsurance transaction with Prudential Arizona Reinsurance Universal Company (“PAR U”) and PURE. See Note 11 for additional information.

42

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2023
	Fixed Annuities		Variable Annuities		Term Life		Variable / Universal Life		Total
	(in thousands)
Balance, beginning of period	$	102,251	$	3,736,454	$	648,837	$	2,442,883	$	6,930,425
Capitalization	77,409		180,239		114,860		412,902		785,410
Amortization expense	(15,270)		(245,590)		(47,256)		(90,768)		(398,884)
Other(1)	0		(393,385)		0		(12)		(393,397)
Balance, end of period	$	164,390	$	3,277,718	$	716,441	$	2,765,005	$	6,923,554

(1)Other includes the impact of the reinsurance agreement with AuguStar. See Note 11 for additional information.

Deferred Reinsurance Losses ("DRL")

The following tables show a rollforward for the lines of business that contain DRL balances, along with a reconciliation to the Company's total DRL balance:

	Nine Months Ended September 30, 2024
	Variable Annuities		Term Life		Total
	(in thousands)
Balance, beginning of period	$	194,110	$	61,003	$	255,113
Amortization expense	(22,230)		(5,728)		(27,958)
Other	10		0		10
Balance, end of period	$	171,890	$	55,275	$	227,165

	Nine Months Ended September 30, 2023
	Variable Annuities		Term Life		Total
	(in thousands)
Balance, beginning of period	$	223,515	$	69,378	$	292,893
Amortization expense	(22,283)		(6,350)		(28,633)
Other	(8)		0		(8)
Balance, end of period	$	201,224	$	63,028	$	264,252

43

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Deferred Reinsurance Gains ("DRG")

The following tables show a rollforward for the lines of business that contain DRG balances, along with a reconciliation to the Company's total DRG balance:

	Nine Months Ended September 30, 2024
	Fixed Annuities		Variable Annuities		Variable / Universal Life		Total
	(in thousands)
Balance, beginning of period	$	48,073	$	261,721	$	1,363,496	$	1,673,290
Amortization	(8,109)		(15,237)		(86,695)		(110,041)
Other(1)	118		98		1,092,199		1,092,415
Balance, end of period	$	40,082	$	246,582	$	2,369,000	$	2,655,664

(1)Other includes the impact of the Universal Life reinsurance transaction with PAR U, PURE and Prudential Insurance, including $1,207 million of DRG, partially offset by a $116 million write-off. See Note 11 for additional information.

	Nine Months Ended September 30, 2023
	Fixed Annuities		Variable Annuities		Variable / Universal Life		Total
	(in thousands)
Balance, beginning of period	$	57,898	$	0	$	1,434,958	$	1,492,856
Amortization	(7,141)		(10,265)		(53,834)		(71,240)
Other(1)	28		277,133		0		277,161
Balance, end of period	$	50,785	$	266,868	$	1,381,124	$	1,698,777

(1)Other includes the impact of the reinsurance agreement with AuguStar. See Note 11 for additional information.

Deferred Sales Inducements ("DSI")

The following table shows a rollforward of DSI balances for variable annuity products, which is the only line of business that contains a DSI balance, along with a reconciliation to the Company's total DSI balance:

	Nine Months Ended September 30,
	2024		2023
	(in thousands)
Balance, beginning of period	$	351,424	$	381,504
Capitalization	1,753		2,053
Amortization expense	(22,913)		(23,881)
Other	0		(2)
Balance, end of period	$	330,264	$	359,674

7. SEPARATE ACCOUNTS

The Company issues variable annuity and variable life insurance contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. Most variable annuity and variable life insurance contracts are offered with both separate and general account options. See Note 9 for additional information.

The assets supporting the variable portion of variable annuity and variable life insurance contracts are carried at fair value and reported as “Separate account assets” with an equivalent amount reported as “Separate account liabilities”. The liabilities related to the net amount at risk are reflected within “Future policy benefits” or “Market risk benefit liabilities” (or “assets,” if applicable). Amounts assessed against the contractholders for mortality, administration, and other services are included within revenue in “Policy charges and fee income” and changes in liabilities for minimum guarantees are generally included in “Policyholders’ benefits” or “Change in value of market risk benefits, net of related hedging gains (losses)”.

44

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Separate Account Assets

The aggregate fair value of assets, by major investment asset category, supporting separate accounts is as follows:

	September 30, 2024		December 31, 2023
	(in thousands)
Asset Type:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	6,814	$	2,954
Obligations of U.S. states and their political subdivisions authorities	117		0
U.S. corporate securities	21,535		9,504
Foreign corporate securities	2,705		1,763
Asset-backed securities	1,029		0
Mortgage-backed securities	180		186
Mutual funds:
Equity	77,430,801		72,614,821
Fixed Income	34,531,108		37,065,162
Other	4,526,225		4,101,661
Equity securities	121,973		104,159
Other invested assets	6,078,743		5,258,900
Short-term investments	466		2,126
Cash and cash equivalents	57,399		27,249
Total	$	122,779,095	$	119,188,485

For the nine months ended September 30, 2024 and year ended December 31, 2023, there were no transfers of assets, other than cash, from the general account to a separate account; therefore, no gains or losses were recorded.

Separate Account Liabilities

The balances of and changes in separate account liabilities as of and for the periods indicated are as follows:

	Nine Months Ended September 30, 2024
	Variable Annuities		Variable Life		Total
	(in thousands)
Balance, beginning of period	$	92,383,121	$	26,805,364	$	119,188,485
Deposits	423,070		2,430,129		2,853,199
Investment performance	9,876,434		4,267,066		14,143,500
Policy charges	(1,674,326)		(680,530)		(2,354,856)
Surrenders and withdrawals	(10,135,635)		(363,848)		(10,499,483)
Benefit payments	(49,810)		(203,852)		(253,662)
Net transfers (to) from general account	(48,394)		(275,312)		(323,706)
Other	5,642		19,976		25,618
Balance, end of period	$	90,780,102	$	31,998,993	$	122,779,095
Cash surrender value(2)	$	89,812,490	$	28,717,582	$	118,530,072

45

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2023
	Variable Annuities		Variable Life		Total
	(in thousands)
Balance, beginning of period	$	91,785,448	$	22,265,798	$	114,051,246
Deposits	327,045		2,013,783		2,340,828
Investment performance	4,080,782		2,022,446		6,103,228
Policy charges	(1,740,555)		(615,562)		(2,356,117)
Surrenders and withdrawals	(6,989,586)		(249,911)		(7,239,497)
Benefit payments	(57,037)		(158,198)		(215,235)
Net transfers (to) from general account(1)	(4,467)		(1,115,178)		(1,119,645)
Other	8,355		38,223		46,578
Balance, end of period	$	87,409,985	$	24,201,401	$	111,611,386
Cash surrender value(2)	$	86,152,668	$	21,219,141	$	107,371,809

(1) Variable life includes $900 million of funding for a policy loan to an affiliated irrevocable trust. See Note 14 for additional information.

(2) Represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges.

8. LIABILITY FOR FUTURE POLICY BENEFITS

Liability for Future Policy Benefits primarily consists of the following sub-components, which are discussed in greater detail below.

•Benefit Reserves;

•Deferred Profit Liability ("DPL"); and

•Additional Insurance Reserves ("AIR")

In 2024, the Company recognized an impact to net income attributable to our annual reviews and update of assumptions and other refinements. Overall impact is immaterial for direct and assumed Benefit Reserves and DPL, net of the impact of flooring these liabilities at zero for each issue year cohort. Additionally, for direct and assumed AIR, the Company recognized an unfavorable impact primarily due to updates to policyholder behavior assumptions on universal life policies with secondary guarantees.

In 2023, the Company recognized an impact to net income attributable to the annual reviews and update of assumptions and other refinements. Overall impact is immaterial for direct and assumed Benefit Reserves and DPL, net of the impact of flooring these liabilities at zero for each issue year cohort. Additionally, for direct and assumed AIR, the Company recognized an unfavorable impact primarily due to unfavorable model refinements, partially offset by updates to economic assumptions, including expected future rates of returns on universal life policies with secondary guarantees.

46

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Benefit Reserves

The balances of and changes in Benefit Reserves as of and for the periods indicated consist of the three tables presented below: Present Value of Expected Net Premiums rollforward, Present Value of Expected Future Policy Benefits rollforward, and Net Liability for Future Policy Benefits.

	Nine Months Ended September 30, 2024
	Present Value of Expected Net Premiums
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, beginning of period	$	10,927,833	$	0	$	10,927,833
Effect of cumulative changes in discount rate assumptions, beginning of period	225,711		0		225,711
Balance at original discount rate, beginning of period	11,153,544		0		11,153,544
Effect of assumption update	21,466		0		21,466
Effect of actual variances from expected experience and other activity	(198,894)		201		(198,693)
Adjusted balance, beginning of period	10,976,116		201		10,976,317
Issuances	608,144		25,850		633,994
Net premiums / considerations collected	(992,948)		(26,051)		(1,018,999)
Interest accrual	383,336		0		383,336
Other adjustments	7,091		0		7,091
Balance at original discount rate, end of period	10,981,739		0		10,981,739
Effect of cumulative changes in discount rate assumptions, end of period	(111,296)		0		(111,296)
Balance, end of period	$	10,870,443	$	0	$	10,870,443

	Nine Months Ended September 30, 2024
	Present Value of Expected Future Policy Benefits
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, beginning of period	$	18,426,207	$	228,788	$	18,654,995
Effect of cumulative changes in discount rate assumptions, beginning of period	331,571		19,521		351,092
Balance at original discount rate, beginning of period	18,757,778		248,309		19,006,087
Effect of assumption update	21,480		(3,643)		17,837
Effect of actual variances from expected experience and other activity	(245,193)		391		(244,802)
Adjusted balance, beginning of period	18,534,065		245,057		18,779,122
Issuances	608,144		25,850		633,994
Interest accrual	668,751		6,752		675,503
Benefit payments	(1,062,328)		(23,877)		(1,086,205)
Other adjustments	10,421		(149)		10,272
Balance at original discount rate, end of period	18,759,053		253,633		19,012,686
Effect of cumulative changes in discount rate assumptions, end of period	(159,410)		(14,751)		(174,161)
Balance, end of period	$	18,599,643	$	238,882	$	18,838,525
Other, end of period					1,610
Total balance, end of period					$	18,840,135

47

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2024
	Net Liability for Future Policy Benefits (Benefit Reserves)
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, end of period, pre-flooring	$	7,729,200	$	238,882	$	7,968,082
Flooring impact, end of period	44		0		44
Balance, end of period, post-flooring	7,729,244		238,882		7,968,126
Less: Reinsurance recoverables	6,910,121		20,461		6,930,582
Balance after reinsurance recoverables, end of period, post-flooring	$	819,123	$	218,421	$	1,037,544

	Nine Months Ended September 30, 2023
	Present Value of Expected Net Premiums
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, beginning of period	$	10,911,794	$	0	$	10,911,794
Effect of cumulative changes in discount rate assumptions, beginning of period	554,896		0		554,896
Balance at original discount rate, beginning of period	11,466,690		0		11,466,690
Effect of assumption update	(790)		0		(790)
Effect of actual variances from expected experience and other activity	(144,504)		(1,257)		(145,761)
Adjusted balance, beginning of period	11,321,396		(1,257)		11,320,139
Issuances	512,379		28,889		541,268
Net premiums / considerations collected	(1,008,159)		(27,632)		(1,035,791)
Interest accrual	391,662		0		391,662
Balance at original discount rate, end of period	11,217,278		0		11,217,278
Effect of cumulative changes in discount rate assumptions, end of period	(939,494)		0		(939,494)
Balance, end of period	$	10,277,784	$	0	$	10,277,784

48

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2023
	Present Value of Expected Future Policy Benefits
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, beginning of period	$	17,835,251	$	204,727	$	18,039,978
Effect of cumulative changes in discount rate assumptions, beginning of period	962,034		24,876		986,910
Balance at original discount rate, beginning of period	18,797,285		229,603		19,026,888
Effect of assumption update	(1,044)		0		(1,044)
Effect of actual variances from expected experience and other activity	(191,864)		6,793		(185,071)
Adjusted balance, beginning of period	18,604,377		236,396		18,840,773
Issuances	512,379		28,889		541,268
Interest accrual	670,905		6,300		677,205
Benefit payments	(1,019,151)		(25,504)		(1,044,655)
Other adjustments	2,845		(84)		2,761
Balance at original discount rate, end of period	18,771,355		245,997		19,017,352
Effect of cumulative changes in discount rate assumptions, end of period	(1,767,981)		(34,327)		(1,802,308)
Balance, end of period	$	17,003,374	$	211,670	$	17,215,044
Other, end of period					1,838
Total balance, end of period					$	17,216,882

	Nine Months Ended September 30, 2023
	Net Liability for Future Policy Benefits (Benefit Reserves)
	Term Life		Fixed Annuities		Total
	(in thousands)
Balance, end of period, pre-flooring	$	6,725,590	$	211,670	$	6,937,260
Flooring impact, end of period	1,773		0		1,773
Balance, end of period, post-flooring	6,727,363		211,670		6,939,033
Less: Reinsurance recoverables	6,241,505		17,097		6,258,602
Balance after reinsurance recoverables, end of period, post-flooring	$	485,858	$	194,573	$	680,431

The following tables provide supplemental information related to the balances of and changes in Benefit Reserves included in the disaggregated tables above, on a gross (direct and assumed) basis, as of and for the periods indicated:

	Nine Months Ended September 30, 2024
	Term Life			Fixed Annuities
	($ in thousands)
Undiscounted expected future gross premiums	$	21,790,252		$	0
Discounted expected future gross premiums (at original discount rate)	$	14,899,016		$	0
Discounted expected future gross premiums (at current discount rate)	$	14,780,675		$	0
Undiscounted expected future benefits and expenses	$	29,134,537		$	341,000
Weighted-average duration of the liability in years (at original discount rate)	10			7
Weighted-average duration of the liability in years (at current discount rate)	9			6
Weighted-average interest rate (at original discount rate)	5.13		%	3.90		%
Weighted-average interest rate (at current discount rate)	4.91		%	4.82		%

49

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2023
	Term Life			Fixed Annuities
	($ in thousands)
Undiscounted expected future gross premiums	$	21,914,391		$	0
Discounted expected future gross premiums (at original discount rate)	$	15,083,578		$	0
Discounted expected future gross premiums (at current discount rate)	$	13,840,343		$	0
Undiscounted expected future benefits and expenses	$	29,147,479		$	328,212
Weighted-average duration of the liability in years (at original discount rate)	10			7
Weighted-average duration of the liability in years (at current discount rate)	9			6
Weighted-average interest rate (at original discount rate)	5.18		%	3.62		%
Weighted-average interest rate (at current discount rate)	6.02		%	5.95		%

For additional information regarding observable market information and the techniques used to determine the interest rate assumptions seen above, see Note 2 to the Company's Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

For non-participating traditional and limited-payment products, if a cohort is in a loss position where the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for the present value of expected future policy benefits and non-level claim settlement expenses, then the liability for future policy benefits is adjusted at that time, and thereafter such that all changes, both favorable and unfavorable, in expected benefits resulting from both actual experience deviations and changes in future assumptions are recognized immediately as a gain or loss, respectively.

In the first nine months of 2024, there was a $29 million gain in net income for non-participating traditional and limited-payment products, where net premiums exceeded gross premiums for certain issue-year cohorts, which was offset by a $28 million charge, reflecting the impact of ceded reinsurance on the affected cohorts.

In the first nine months of 2023, there was a $35 million gain in net income for non-participating traditional and limited-payment products, where net premiums exceeded gross premiums for certain issue-year cohorts, which was offset by a $34 million charge, reflecting the impact of ceded reinsurance on the affected cohorts.

Deferred Profit Liability

The balances of and changes in DPL as of and for the periods indicated are as follows:

	Nine Months Ended September 30,
	2024		2023
	Fixed Annuities
	(in thousands)
Balance, beginning of period, post-flooring	$	14,818	$	18,193
Effect of assumption update	2,110		0
Effect of actual variances from expected experience and other activity	465		(6,924)
Adjusted balance, beginning of period	17,393		11,269
Profits deferred	3,786		4,834
Interest accrual	505		423
Amortization	(1,689)		(1,647)
Other adjustments	(16)		(11)
Balance, end of period, post-flooring	19,979		14,868
Less: Reinsurance recoverables	1,504		1,435
Balance after reinsurance recoverables, end of period	$	18,475	$	13,433

50

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 Additional Insurance Reserves

AIR represents the additional liability for annuitization, death, or other insurance benefits, including guaranteed minimum death benefits ("GMDB") and guaranteed minimum income benefits ("GMIB") contract features, that are above and beyond the contractholder's account balance for certain long-duration life contracts.

The following table shows a rollforward of AIR balances for variable and universal life products for the periods indicated:

	Nine Months Ended September 30,
	2024		2023
	(in thousands)
Balance, including amounts in AOCI, beginning of period, post-flooring	$	14,280,793	$	12,664,445
Flooring impact and amounts in AOCI	831,583		1,269,237
Balance, excluding amounts in AOCI, beginning of period, pre-flooring	15,112,376		13,933,682
Effect of assumption update	154,058		22,910
Effect of actual variances from expected experience and other activity	326,790		(12,611)
Adjusted balance, beginning of period	15,593,224		13,943,981
Assessments collected(1)	843,853		828,657
Interest accrual	397,904		360,309
Benefits paid	(258,579)		(219,784)
Balance, excluding amounts in AOCI, end of period, pre-flooring	16,576,402		14,913,163
Flooring impact and amounts in AOCI	(343,625)		(1,714,686)
Balance, including amounts in AOCI, end of period, post-flooring	16,232,777		13,198,477
Less: Reinsurance recoverables	16,005,948		12,979,687
Balance after reinsurance recoverables, including amounts in AOCI, end of period	$	226,829	$	218,790

(1) Represents the portion of gross assessments required to fund the future policy benefits.

	Nine Months Ended September 30,
	2024		2023
Weighted-average duration of the liability in years (at original discount rate)	22		22
Weighted-average interest rate (at original discount rate)	3.39	%	3.36	%

51

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Future Policy Benefits Reconciliation

The following table presents the reconciliation of the ending balances from the above rollforwards, Benefit Reserves, DPL, and AIR, including other liabilities, gross of related reinsurance recoverables, to the total liability for Future Policy Benefits as reported on the Company's Unaudited Interim Consolidated Statements of Financial Position as of the periods indicated:

	Nine Months Ended September 30,
	2024		2023
	(in thousands)
Benefit reserves, end of period, post-flooring	$	7,968,126	$	6,939,033
Deferred profit liability, end of period, post-flooring	19,979		14,868
Additional insurance reserves, including amounts in AOCI, end of period, post-flooring	16,232,777		13,198,477
Subtotal of amounts disclosed above	24,220,882		20,152,378
Other Future policy benefits reserves(1)	1,032,177		1,104,756
Total Future policy benefits	$	25,253,059	$	21,257,134

(1)Primarily represents balances for which disaggregated rollforward disclosures are not required, including unpaid claims and claims expenses, and incurred but not reported and in course of settlement claim liabilities.

Revenue and Interest Expense

The following tables present revenue and interest expense related to Benefit Reserves, DPL, and AIR, as well as related revenue and interest expense not presented in the above supplemental tables, in the Company's Consolidated Statement of Operations for the periods indicated:

	Nine Months Ended September 30, 2024
	Revenues(1)
	Term Life		Variable/ Universal Life		Fixed Annuities		Total
	(in thousands)
Benefit reserves	$	1,352,988	$	0	$	30,007	$	1,382,995
Deferred profit liability	0		0		(5,161)		(5,161)
Additional insurance reserves	0		1,349,352		0		1,349,352
Total	$	1,352,988	$	1,349,352	$	24,846	$	2,727,186

	Nine Months Ended September 30, 2023
	Revenues(1)
	Term Life		Variable/ Universal Life		Fixed Annuities		Total
	(in thousands)
Benefit reserves	$	1,351,460	$	0	$	32,677	$	1,384,137
Deferred profit liability	0		0		3,325		3,325
Additional insurance reserves	0		1,168,206		0		1,168,206
Total	$	1,351,460	$	1,168,206	$	36,002	$	2,555,668

(1)Represents "Gross premiums" for benefit reserves; "Revenue" for DPL and "Gross assessments" for AIR.

52

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2024
	Interest Expense
	Term Life		Variable/ Universal Life		Fixed Annuities		Total
	(in thousands)
Benefit reserves	$	285,415	$	0	$	6,752	$	292,167
Deferred profit liability	0		0		505		505
Additional insurance reserves	0		397,904		0		397,904
Total	$	285,415	$	397,904	$	7,257	$	690,576

	Nine Months Ended September 30, 2023
	Interest Expense
	Term Life		Variable/ Universal Life		Fixed Annuities		Total
	(in thousands)
Benefit reserves	$	279,242	$	0	$	6,300	$	285,542
Deferred profit liability	0		0		423		423
Additional insurance reserves	0		360,309		0		360,309
Total	$	279,242	$	360,309	$	6,723	$	646,274

9. POLICYHOLDERS' ACCOUNT BALANCES

Policyholders' Account Balances

The balances of and changes in policyholders' account balances as of and for the periods ended are as follows:

	Nine Months Ended September 30, 2024
	Fixed Annuities			Variable Annuities			Variable Life / Universal Life			Total
	($ in thousands)
Balance, beginning of period	$	6,164,313		$	22,836,765		$	20,167,713		$	49,168,791
Deposits	4,149,820			5,900,477			1,592,896			11,643,193
Interest credited	150,642			332,007			426,382			909,031
Policy charges	(4,168)			(21,369)			(1,369,727)			(1,395,264)
Surrenders and withdrawals	(409,573)			(558,335)			(595,740)			(1,563,648)
Benefit payments	(42,344)			(21,840)			(50,251)			(114,435)
Net transfers (to) from separate account	0			48,394			275,312			323,706
Change in market value and other adjustments(1)	218,164			1,974,887			139,231			2,332,282
Balance, end of period	10,226,854			30,490,986			20,585,816			61,303,656
Unearned revenue reserve										4,248,795
Other										106,109
Total Policyholders' account balance										$	65,658,560
Weighted-average crediting rate	2.45		%	1.66		%	2.79		%	2.19		%
Net amount at risk(2)	$	16		$	0		$	336,737,789		$	336,737,805
Cash surrender value(3)	$	9,070,551		$	29,028,016		$	19,188,896		$	57,287,463

53

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2023
	Fixed Annuities			Variable Annuities			Variable Life / Universal Life			Total
	($ in thousands)
Balance, beginning of period	$	3,575,824		$	16,432,032		$	18,736,365		$	38,744,221
Deposits	1,801,985			3,439,562			1,543,230			6,784,777
Interest credited	73,763			194,853			415,843			684,459
Policy charges	(5,683)			(16,564)			(1,357,363)			(1,379,610)
Surrenders and withdrawals	(161,929)			(351,475)			(579,913)			(1,093,317)
Benefit payments	(37,459)			(22,285)			(62,055)			(121,799)
Net transfers (to) from separate account (4)	0			4,467			1,115,178			1,119,645
Change in market value and other adjustments(1)	81,544			1,095,144			76,107			1,252,795
Balance, end of period	5,328,045			20,775,734			19,887,392			45,991,171
Unearned revenue reserve										3,568,084
Other										102,815
Total Policyholders' account balance										$	49,662,070
Weighted-average crediting rate	2.21		%	1.40		%	2.87		%	2.15		%
Net amount at risk(2)	$	12		$	0		$	318,075,705		$	318,075,717
Cash surrender value(3)	$	4,491,679		$	17,981,713		$	18,517,769		$	40,991,161

(1)     Primarily relates to changes in the value of embedded derivative instruments associated with the indexed options of certain products.

(2)     The net amount at risk calculation includes both general and separate account balances.

(3)    Represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges.

(4) Variable life includes $900 million of funding for a policy loan to an affiliated irrevocable trust. See Note 14 for additional information.

The Company issues variable life and universal life insurance contracts which may also include a “no-lapse guarantee” where the Company contractually guarantees to the contractholder a death benefit even when the account value drops to zero, as long as the “no-lapse guarantee” premium is paid.

The net amount at risk is generally defined as the current death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including contractholder mortality, contract lapses, and premium pattern, as well as interest rate and equity market returns.

The Company also issues annuity contracts that provide certain death benefit and/or living benefit guarantees and are accounted for as MRBs. See Note 10 for additional information, including the net amount at risk associated with these guarantees.

54

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The balance of account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums are as follows:

	September 30, 2024
Range of Guaranteed Minimum Crediting Rate (1)	At guaranteed minimum		1 -50 bps above guaranteed minimum		51 -150 bps above guaranteed minimum		Greater than 150 bps above guaranteed minimum		Total
	(in thousands)
Fixed Annuities
Less than 1.00%	$	282	$	2,972	$	10,290	$	967,347	$	980,891
1.00% - 1.99%	441,774		59,029		191,790		74,650		767,243
2.00% - 2.99%	303,925		460,949		559,932		16,511		1,341,317
3.00% - 4.00%	1,375,404		5,996		10,086		3,299		1,394,785
Greater than 4.00%	0		0		0		0		0
Total	$	2,121,385	$	528,946	$	772,098	$	1,061,807	$	4,484,236
Variable Annuities
Less than 1.00%	$	323,585	$	622,340	$	447,015	$	180	$	1,393,120
1.00% - 1.99%	153,336		211,058		2,505		0		366,899
2.00% - 2.99%	17,807		3,907		4,181		0		25,895
3.00% - 4.00%	839,084		4,128		1		0		843,213
Greater than 4.00%	2,038		0		0		0		2,038
Total	$	1,335,850	$	841,433	$	453,702	$	180	$	2,631,165
Variable Life / Universal Life
Less than 1.00%	$	0	$	0	$	0	$	162,543	$	162,543
1.00% - 1.99%	261,986		0		1,692,401		1,615,106		3,569,493
2.00% - 2.99%	29,281		1,504,536		2,695,744		377,103		4,606,664
3.00% - 4.00%	3,788,853		2,139,715		1,107,161		0		7,035,729
Greater than 4.00%	2,105,249		0		0		0		2,105,249
Total	$	6,185,369	$	3,644,251	$	5,495,306	$	2,154,752	$	17,479,678

55

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	September 30, 2023
Range of Guaranteed Minimum Crediting Rate (1)	At guaranteed minimum		1 - 50 bps above guaranteed minimum		51 -150 bps above guaranteed minimum		Greater than 150 bps above guaranteed minimum		Total
	(in thousands)
Fixed Annuities
Less than 1.00%	$	85	$	188	$	430	$	20,481	$	21,184
1.00% - 1.99%	497,237		74,579		237,130		82,040		890,986
2.00% - 2.99%	280,760		469,123		319,721		12,466		1,082,070
3.00% - 4.00%	31,048		0		0		0		31,048
Greater than 4.00%	0		0		0		0		0
Total	$	809,130	$	543,890	$	557,281	$	114,987	$	2,025,288
Variable Annuities
Less than 1.00%	$	944,205	$	821,295	$	18,262	$	2	$	1,783,764
1.00% - 1.99%	221,831		2,113		1,086		0		225,030
2.00% - 2.99%	26,319		4,332		2,979		0		33,630
3.00% - 4.00%	956,761		3,416		0		0		960,177
Greater than 4.00%	2,027		0		0		0		2,027
Total	$	2,151,143	$	831,156	$	22,327	$	2	$	3,004,628
Variable Life / Universal Life
Less than 1.00%	$	0	$	0	$	0	$	217,003	$	217,003
1.00% - 1.99%	185,341		0		2,528,250		572,113		3,285,704
2.00% - 2.99%	27,536		1,418,150		2,778,586		268,998		4,493,270
3.00% - 4.00%	4,008,791		2,241,159		1,114,429		0		7,364,379
Greater than 4.00%	2,147,756		0		0		0		2,147,756
Total	$	6,369,424	$	3,659,309	$	6,421,265	$	1,058,114	$	17,508,112

(1)     Excludes contracts without minimum guaranteed crediting rates, such as funds with indexed-linked crediting options.

Unearned Revenue Reserve ("URR")

The balances of and changes in URR as of and for the periods ended are as follows:

	Nine Months Ended September 30,
	2024		2023
	Variable Life / Universal Life
	(in thousands)
Balance, beginning of period	$	3,741,426	$	3,067,336
Unearned revenue	644,001		612,196
Amortization expense	(136,630)		(111,353)
Other adjustments	(2)		(95)
Balance, end of period	$	4,248,795	$	3,568,084
Less: Reinsurance recoverables	1,822,597		1,656,299
Balance after reinsurance recoverables, end of period	$	2,426,198	$	1,911,785

56

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

10. MARKET RISK BENEFITS

The following tables show a rollforward of MRB balances for variable annuity products, along with a reconciliation to the Company’s total net MRB positions as of the following dates:

	Nine Months Ended September 30, 2024
	Variable Annuities		Less: Reinsured Market Risk Benefits		Total, Net of Reinsurance
	(in thousands)
Balance, beginning of period	$	3,694,950	$	(917,792)	$	2,777,158
Effect of cumulative changes in non-performance risk	1,068,035		0		1,068,035
Balance, beginning of period, before effect of changes in non-performance risk	4,762,985		(917,792)		3,845,193
Attributed fees collected	830,031		(195,952)		634,079
Claims paid	(45,249)		4,781		(40,468)
Interest accrual	171,713		(42,483)		129,230
Actual in force different from expected	18,607		(14,423)		4,184
Effect of changes in interest rates	44,706		51,322		96,028
Effect of changes in equity markets	(1,633,684)		171,342		(1,462,342)
Effect of assumption update	85,619		3,984		89,603
Issuances	51,540		(3,158)		48,382
Other adjustments	14,958		27		14,985
Effect of changes in current period counterparty non-performance risk	0		(8,520)		(8,520)
Balance, end of period, before effect of changes in non-performance risk	4,301,226		(950,872)		3,350,354
Effect of cumulative changes in non-performance risk	(934,425)		0		(934,425)
Balance, end of period	$	3,366,801	$	(950,872)	$	2,415,929

57

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Nine Months Ended September 30, 2023
	Variable Annuities		Less: Reinsured Market Risk Benefits		Total, Net of Reinsurance
	(in thousands)
Balance, beginning of period	$	4,550,625	$	(422,261)	$	4,128,364
Effect of cumulative changes in non-performance risk	1,727,910		0		1,727,910
Balance, beginning of period, before effect of changes in non-performance risk	6,278,535		(422,261)		5,856,274
Attributed fees collected	878,381		(179,211)		699,170
Claims paid	(62,128)		5,903		(56,225)
Interest accrual	235,979		(38,016)		197,963
Actual in force different from expected	52,753		(6,588)		46,165
Effect of changes in interest rates	(2,869,989)		484,168		(2,385,821)
Effect of changes in equity markets	(940,654)		90,742		(849,912)
Effect of assumption update	330,769		(54,067)		276,702
Issuances	21,271		8,206		29,477
Other adjustments(1)	(17,436)		(638,198)		(655,634)
Effect of changes in current period counterparty non-performance risk	0		(75,594)		(75,594)
Balance, end of period, before effect of changes in non-performance risk	3,907,481		(824,916)		3,082,565
Effect of cumulative changes in non-performance risk	(1,230,621)		0		(1,230,621)
Balance, end of period	$	2,676,860	$	(824,916)	$	1,851,944

(1)    Other adjustments for September 30, 2023 primarily includes $638 million related to the reinsurance transaction with AuguStar. See Note 11 for additional information.

In both 2024 and 2023, the Company recognized an unfavorable impact to net income attributable to the actuarial assumption update for direct and assumed MRBs, primarily due to updates to policyholder behavior assumptions on certain variable annuities.

The Company issues certain variable annuity insurance contracts where the Company contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract adjusted for any partial withdrawals plus a minimum return, and/or (2) the highest anniversary contract value on a specified date adjusted for any withdrawals. These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods.

The Company also issues indexed variable annuity contracts for which the return is tied to the return of specific indices where the Company contractually guarantees to the contractholder a return of no less than total deposits made to the contract adjusted for any partial withdrawals upon death. In certain of these indexed variable annuity contracts, the Company also contractually guarantees to the contractholder withdrawal benefits payable during specific periods.

For guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, timing of annuitization, contract lapses and contractholder mortality.

58

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance.

For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, interest rates, market volatility and contractholder behavior.

The following table presents accompanying information to the rollforward table above.

	September 30, 2024		September 30, 2023
	Variable Annuities
	($ in thousands)
Net amount at risk(1)	$	7,321,371	$	12,504,440
Weighted-average attained age of contractholders	71		70

(1)For contracts with multiple benefit features, the highest net amount at risk for each contract is included.

The table below reconciles MRB asset and liability positions as of the following dates:

	September 30, 2024		September 30, 2023
	Variable Annuities
	(in thousands)
Direct and assumed	$	1,286,720	$	1,410,637
Ceded	1,212,514		1,108,597
Total market risk benefit assets	$	2,499,234	$	2,519,234
Direct and assumed	$	4,653,521	$	4,087,498
Ceded	261,642		283,680
Total market risk benefit liabilities	$	4,915,163	$	4,371,178
Net liability	$	2,415,929	$	1,851,944

11.    REINSURANCE

The Company participates in reinsurance with its affiliates Prudential Arizona Reinsurance Captive Company (“PARCC”), Prudential Arizona Reinsurance Term Company (“PAR Term”), PAR U, PURE, Prudential Term Reinsurance Company (“Term Re”), Dryden Arizona Reinsurance Term Company (“DART”), Lotus Reinsurance Company Ltd. (“Lotus Re”), PALAC, a former subsidiary of Prudential Financial that was sold to Fortitude on April 1, 2022, and prior to January 1, 2024 with its affiliates Prudential Universal Reinsurance Company (“PURC”) and Gibraltar Universal Life Reinsurance Company (“GUL Re”). The Company also participates in reinsurance with its parent company Prudential Insurance, as well as third parties. The reinsurance agreements provide risk diversification and additional capacity for future growth, limit the maximum net loss potential, manage statutory capital, and facilitate the Company's capital market hedging program. Life reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term (“YRT”) and coinsurance. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. The Company believes a material reinsurance liability resulting from such inability of reinsurers to meet their obligations is unlikely.

59

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Effective January 2024, the Company entered into an agreement with Somerset Reinsurance Ltd. (“Somerset Re”) to coinsure a closed block of guaranteed universal life (“GUL”) policies to PURE, a wholly-owned subsidiary of Prudential Insurance, with retrocession by PURE of such liabilities on a modified coinsurance basis, to Somerset Re. This transaction is effective as of January 1, 2024, whereby, the Company recaptured all risks associated with the subject GUL policies from PAR U, PURC and GUL Re and subsequently established YRT reinsurance for the subject GUL business with Prudential Insurance. As a result of the transactions, the Company recognized a $990 million pre-tax recapture loss and a $1,207 million DRG that will be amortized into income over the estimated remaining life of the reinsured policies.

Reserves related to reinsured long-duration contracts are accounted for using assumptions consistent with those used to account for the underlying contracts. Amounts recoverable from reinsurers for long-duration reinsurance arrangements are estimated in a manner consistent with the claim liabilities and policy benefits associated with the reinsured policies. Reinsurance policy charges and fee income ceded for universal life and variable annuity products are accounted for as a reduction of policy charges and fee income. Reinsurance premiums ceded for term insurance products are accounted for as a reduction of premiums.

Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on reinsurance are recorded within “Other assets” and the corresponding funds withheld liability for assets retained under these reinsurance agreements are recorded within “Other liabilities”. Balances associated with these agreements are included in the tables below.

"Change in value of market risk benefits, net of related hedging gain (loss)" include the impact of reinsurance agreements, particularly reinsurance agreements involving living benefit guarantees. The Company has entered into reinsurance agreements to transfer the risk related to the living benefit guarantees on variable annuities within the PLNJ business to Prudential Insurance. These reinsurance agreements are market risk benefits and have been accounted for in the same manner.

Reinsurance amounts included in the Company’s Unaudited Interim Consolidated Statements of Financial Position were as follows:

	September 30, 2024		December 31, 2023
	(in thousands)
Reinsurance recoverables	$	43,285,050	$	38,709,651
Policy loans	(1,107,607)		(1,082,584)
Deferred policy acquisition costs	(3,118,226)		(3,195,161)
Deferred sales inducements	(33,303)		(35,313)
Market risk benefit assets	1,212,865		1,165,378
Other assets	2,778,500		1,897,410
Policyholders’ account balances	5,646,936		5,977,108
Future policy benefits	7,431,811		7,026,209
Market risk benefit liabilities	263,588		249,538
Other liabilities	8,920,647		4,397,862

Unaffiliated reinsurance amounts included in the table above and in the Company's Unaudited Interim Consolidated Statements of Financial Position were as follows:

	September 30, 2024		December 31, 2023
	(in thousands)
Deferred policy acquisition costs	$	62,301	$	71,315
Market risk benefit assets	814,183		745,662
Other assets	2,680,090		1,795,422
Policyholders’ account balances	1,684,769		1,830,579
Future policy benefits	194		453
Market risk benefit liabilities	134,758		131,594
Other liabilities	2,798,751		1,915,205

60

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Reinsurance recoverables by counterparty are as follows:

	September 30, 2024		December 31, 2023
	(in thousands)
PAR U	$	19,642,785	$	15,722,061
PURC	0		7,565,968
PARCC	2,140,373		2,304,270
GUL Re	0		3,211,899
PAR Term	2,084,390		2,101,004
Prudential Insurance	4,901,818		1,311,525
Term Re	2,115,998		2,080,564
Lotus Re	2,102,136		2,051,831
DART	855,366		744,043
PURE	7,853,257		0
Unaffiliated	1,588,927		1,616,486
Total reinsurance recoverables	$	43,285,050	$	38,709,651

Reinsurance amounts, included in the Company’s Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(in thousands)
Premiums:
Direct	$	462,391	$	457,967	$	1,384,477	$	1,396,506
Assumed	29		32		92		(90)
Ceded	(365,331)		(372,859)		(1,100,377)		(1,144,655)
Net premiums	97,089		85,140		284,192		251,761
Policy charges and fee income:
Direct	808,852		753,291		2,365,340		2,238,266
Assumed	220,781		151,927		719,389		453,006
Ceded	(620,866)		(558,737)		622,077		(1,594,764)
Net policy charges and fee income	408,767		346,481		3,706,806		1,096,508
Net investment income:
Direct	651,762		463,070		1,763,262		1,216,154
Assumed	333		338		996		1,024
Ceded	(13,403)		(2,544)		(40,253)		(13,789)
Net investment income(1)	638,692		460,864		1,724,005		1,203,389
Asset administration fees:
Direct	83,659		81,422		246,123		242,730
Assumed	0		0		0		0
Ceded	(27,231)		(24,668)		(77,950)		(64,986)
Net asset administration fees	56,428		56,754		168,173		177,744
Other income (loss):
Direct	332,233		(89,144)		461,980		216,247
Assumed	(75)		116		274		(233)
Ceded	53,937		25,473		275,015		70,736
Net other income (loss)(1)	386,095		(63,555)		737,269		286,750

61

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Realized investment gains (losses), net:
Direct	(541,864)	(492,184)	235,638	(826,822)
Assumed	14,552	(31,544)	77,736	189,400
Ceded	(89,183)	55,472	(67,987)	56,181
Realized investment gains (losses), net(1)	(616,495)	(468,256)	245,387	(581,241)
Change in value of market risk benefits, net of related hedging gain (loss):
Direct	(214,414)	(54,544)	(199,087)	152,660
Assumed	(245)	283	361	(3,160)
Ceded	39,258	(193,210)	(167,267)	(415,656)
Net change in value of market risk benefits, net of related hedging gain (loss)	(175,401)	(247,471)	(365,993)	(266,156)
Policyholders’ benefits (including change in reserves):
Direct	855,117	912,588	2,765,937	2,639,868
Assumed	242,113	336,300	775,334	985,635
Ceded	(966,549)	(1,103,479)	831,697	(3,227,951)
Net policyholders’ benefits (including change in reserves)(1)	130,681	145,409	4,372,968	397,552
Change in estimates of liability for future policy benefits:
Direct	142,204	(44,155)	354,660	(61,510)
Assumed	17,025	(17,580)	81,893	8,071
Ceded	(156,795)	68,300	(452,298)	54,469
Net change in estimates of liability for future policy benefits	2,434	6,565	(15,745)	1,030
Interest credited to policyholders’ account balances:
Direct	332,064	228,399	907,648	666,947
Assumed	35,476	33,602	117,968	100,065
Ceded	(111,380)	(98,927)	(318,682)	(299,900)
Net interest credited to policyholders’ account balances	256,160	163,074	706,934	467,112
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization	(113,741)	(57,368)	(619,914)	(280,393)

(1)Amounts include reinsurance agreements using the deposit method of accounting.

62

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Unaffiliated reinsurance assumed and ceded amounts included in the table above and in the Company's Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(in thousands)
Premiums:
Assumed	$	29	$	32	$	89	$	(100)
Ceded	(27,821)		(13,942)		(79,800)		(47,319)
Policy charges and fee income:
Assumed	429		460		1,057		1,383
Ceded	(45,692)		(39,143)		(132,662)		(101,419)
Net investment income(1):
Ceded	0		10,109		0		23,022
Asset administration fees:
Ceded	(7,151)		(7,464)		(21,474)		(15,204)
Other income (loss)(1):
Assumed	(75)		185		378		(53)
Ceded	26,125		7,887		73,931		17,540
Realized investment gains (losses), net(1):
Assumed	14,552		(31,544)		77,736		189,400
Ceded	(76,021)		41,007		(29,022)		40,378
Change in value of market risk benefits, net of related hedging gain (loss):
Assumed	(245)		283		361		(3,160)
Ceded	5,318		(70,693)		(58,229)		(150,791)
Policyholders’ benefits (including change in reserves)(1):
Assumed	(145)		265		216		545
Ceded	(51,927)		(42,655)		(262,998)		(106,475)
Change in estimates of liability for future policy benefits:
Ceded	673		(1,407)		92,575		(1,823)
Interest credited to policyholders’ account balances:
Assumed	6,772		3,651		31,888		8,750
Ceded	1		85		0		0

(1)Amounts include reinsurance agreements using the deposit method of accounting.

63

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The gross and net amounts of life insurance face amount in force as of September 30, 2024 and 2023 were as follows:

	2024		2023
	(in thousands)
Direct gross life insurance face amount in force	$	1,159,660,533	$	1,115,174,542
Assumed gross life insurance face amount in force	34,827,770		35,824,627
Reinsurance ceded	(1,049,978,067)		(1,010,577,960)
Net life insurance face amount in force	$	144,510,236	$	140,421,209

Significant Affiliated Reinsurance Agreements

PAR U

Pruco Life reinsures 70% of all the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life policies, with effective dates prior to January 1, 2011.

Effective July 1, 2012, PLNJ reinsures 95% of all the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life policies, with effective dates through December 31, 2019, excluding those policies that are subject to principle-based reserving.

On January 2, 2013, Pruco Life began to assume GUL business from Prudential Insurance in connection with the acquisition of the Hartford Life Business. The GUL business assumed from Prudential Insurance was subsequently retroceded to PAR U.

Effective January 1, 2024, Pruco Life recaptured the policies equal to 70% of all the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life policies, with effective dates prior to January 1, 2011. Effective January 1, 2024, Pruco Life reinsures 25% of the risks associated with universal life policies with effective dates prior to January 1, 2015 and 100% of the risks associated with universal life policies with effective dates beginning January 1, 2015, excluding those policies that are subject to principle-based reserving.

Effective January 1, 2024, PLNJ recaptured the policies previously reinsured by PAR U with effective dates prior to January 1, 2015. Effective January 1, 2024, PLNJ reinsures 100% of the risks associated with universal life policies, with effective dates from January 1, 2015 to December 31, 2019, excluding those policies that are subject to principle-based reserving.

On March 28, 2024, PURC and GUL Re merged into PAR U.

PURE

Effective January 1, 2024, Pruco Life reinsures 75% of the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life policies, with effective dates prior to January 1, 2015.

Effective January 1, 2024, PLNJ reinsures 100% of the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life policies, with effective dates prior to January 1, 2015.

PURC

Pruco Life reinsures 70% of all the risks associated with Universal Protector policies having no-lapse guarantees as well as certain other universal life policies, with effective dates from January 1, 2011 through December 31, 2013, with PURC and 95% of all the risks associated with Universal Protector policies having no-lapse guarantees, as well as certain other universal life policies, with effective dates from January 1, 2014 through December 31, 2016.

Effective January 1, 2024, the Company recaptured the policies previously reinsured by PURC. As a result of the recapture, the Company recorded a write-off of $116 million of DRG that was recognized with the previous reinsurance agreement.

On March 28, 2024, PURC merged into PAR U.

64

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

PARCC

Prior to July 1, 2019, the Company reinsured 90% of the risks under its term life insurance policies, with effective dates prior to January 1, 2010 through an automatic coinsurance agreement with PARCC. Effective July 1, 2019, the Company amended the coinsurance agreement to increase the percentage from 90% to 100% of the policy risk amount reinsured. The amended agreement does not impact contracts issued by PLNJ, which remain at the original percentage.

GUL Re

Effective January 1, 2017, Pruco Life entered into an automatic coinsurance agreement with GUL Re to reinsure 95% of all the risks associated with Universal Protector policies having no-lapse guarantees, as well as certain other universal life policies, with effective dates on or after January 1, 2017 through December 31, 2019, excluding those policies that are subject to principle-based reserving.

Effective July 1, 2017, Pruco Life amended this agreement to include 30% of Universal Protector policies having no-lapse guarantees as well as certain other universal life policies with effective dates prior to January 1, 2014.

Effective January 1, 2024, the Company recaptured the policies previously reinsured by GUL Re.

On March 28, 2024, GUL Re merged into PAR U.

PAR Term

Prior to July 1, 2019, the Company reinsures 95% of the risks under its term life insurance policies with effective dates January 1, 2010 through December 31, 2013, through an automatic coinsurance agreement with PAR Term. Effective July 1, 2019, the Company amended the coinsurance agreement to increase the percentage from 95% to 100% of the policy risk amount reinsured. The amended agreement does not impact contracts issued by PLNJ, which remain at the original percentage.

Term Re

The Company reinsures 95% of the risks under its term life insurance policies, with effective dates on or after January 1, 2014 through December 31, 2017, through an automatic coinsurance agreement with Term Re.

Prudential Insurance

The Company has a YRT reinsurance agreement with Prudential Insurance and reinsures the majority of all mortality risks not otherwise reinsured. This agreement was terminated for new business effective January 1, 2020, with certain new business (primarily universal life policies) terminated as early as 2017. The Company now reinsures a portion of the mortality risk directly to third-party reinsurers and retains all of the non-reinsured portion of the mortality risk. Effective July 1, 2019, certain term life insurance policies were recaptured and subsequently reinsured to PARCC and PAR Term as noted above. As of January 1, 2022, most of the variable life insurance policies were recaptured resulting in a $305 million loss recorded through "Policy charges and fee income". Those policies were then reinsured to Lotus Re as mentioned below. Effective January 1, 2024, the Company recaptured all GUL policies with Prudential Insurance and subsequently entered into a YRT reinsurance agreement with Prudential Insurance to reinsure the mortality risk for the totality of GUL policies reinsured to PURE.

On January 2, 2013, Pruco Life began to assume GUL business from Prudential Insurance in connection with the acquisition of the Hartford Financial Services Group, Inc. ("Hartford Financial"). The GUL business assumed from Prudential Insurance was subsequently retroceded to PAR U. In May 2018, Hartford Financial sold a group of operating subsidiaries, which includes two of Prudential Insurance's counterparties to these reinsurance arrangements. There was no impact to the terms, rights or obligations of Prudential Insurance, or operation of these reinsurance arrangements, as a result of this change in control of such counterparties. Similarly, there was no impact to the Company's reinsurance arrangements with respect to such GUL business as a result of this change in control. In January 2021, there was a definitive agreement announced to subsequently sell the two counterparties mentioned above, which were then acquired by Sixth Street in July 2021. There was no impact to the terms, rights or obligations of the Company, or operation of these reinsurance arrangements, as a result of this change in control of such counterparties.

65

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Company has reinsured a group annuity contract with Prudential Insurance, in consideration for a single premium payment by the Company, providing reinsurance equal to 100% of all payments due under the contract.

Effective April 1, 2016, PLNJ entered into a reinsurance agreement to reinsure its variable annuity base contracts, along with the living benefit guarantees to Prudential Insurance. This reinsurance agreement covers new and in force business. Effective February 1, 2023, PLNJ began selling indexed variable annuities products, which is reinsured to Prudential Insurance through the existing reinsurance agreement. The reinsurance of the indexed variable annuities transfers all significant risks, including mortality risk, embedded in the reinsured contracts to Prudential Insurance. As a result of the agreement, reinsurance payables includes the ceded modified coinsurance arrangement, which reflects the value of the invested assets retained by the Company and the associated asset returns.

Lotus Re

Effective October 1, 2021, the Company entered into an automatic coinsurance agreement with Lotus Re to reinsure $32 million of liabilities associated with the risks associated with a portion of its variable life policies in the extended term policy status.

Effective January 1, 2022 the Company recaptured the risks that were previously ceded to Lotus Re from October 1, 2021 through December 31, 2021. Immediately thereafter, the Company entered into a reinsurance agreement with Lotus Re to cede 100% of the risks associated with a closed block of variable life business on a coinsurance and modified coinsurance basis including policies in the extended term policy status. The amount of the net liabilities associated with the transaction for coinsurance and modified coinsurance were $1,387 million and $14,037 million, respectively. As part of the consideration, the Company also ceded to Lotus Re $855 million of policy loan assets associated with the reinsured policies while receiving $820 million in cash from Lotus Re. As a result, the Company recorded a $1,352 million deferred gain, which will be recognized over the remaining life of the underlying policies. In tandem with the transaction, effective January 1, 2022, Lotus Re established an automatic YRT agreement with the Company to cede back a portion of the mortality risks associated with the reinsured policies for the purposes of the Company maintaining YRT reinsurance with external counterparties.

DART

Effective January 1, 2018, the Company entered into an automatic coinsurance agreement with DART to reinsure 95% of the risks associated with its term life insurance policies with effective dates on or after January 1, 2018 through December 31, 2019, excluding those policies that are subject to principle-based reserving.

Significant Third-Party Reinsurance Arrangements

AuguStar Life Insurance Company (Formerly Known as The Ohio National Life Insurance Company)

Effective April 1, 2023, the Company entered into an agreement with AuguStar, an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $10 billion of account values of PDI traditional variable annuity contracts with guaranteed living benefits. This block represents approximately 10% of the Company’s remaining legacy in force traditional variable annuity block by account value. The Company ceded 100% of separate account liabilities under modified coinsurance and 100% of general account liabilities under coinsurance of its PDI traditional variable annuity contracts. The general account liabilities associated with PDI's guaranteed living and death benefits and the corresponding reinsurance of those liabilities are accounted for as market risk benefits. As a result of the transaction, the Company recognized a $277 million DRG that will be amortized into income over the estimated remaining life of the reinsured policies.

66

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

FLIAC

Effective December 1, 2021, the Company entered into a reinsurance agreement with FLIAC under which the Company assumed all of FLIAC's indexed variable annuities under modified coinsurance. The reinsurance of the indexed variable annuities transfers all significant risks, including mortality risk, embedded in the reinsured contracts to the Company. As a result of the agreement, "Reinsurance recoverables" includes the assumed modified coinsurance receivable, which reflects the value of the invested assets retained by FLIAC and the associated asset returns. The Company also assumed via coinsurance all of FLIAC’s fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal income feature which are accounted for under the deposit method of accounting. The reinsurance agreement offers the policyholders the opportunity to novate their contracts from FLIAC to the Company and any such novated contracts shall cease to be reinsured under this agreement. As of September 30, 2024, the total account value of contracts novated from FLIAC to the Company were $5.3 billion for indexed variable annuities contracts and $2.0 billion for fixed annuities and fixed indexed annuities contracts, which is approximately 80% of the total reinsured block.

Somerset Re

Effective October 1, 2021, the Company entered into a reinsurance agreement with Somerset Re to coinsure business, on a quota share funds withheld basis, related to fixed indexed annuities. Under the reinsurance agreement, the Company cedes to Somerset Re its quota share of the insurance liabilities with respect to the reinsured contracts. The deposit assets on reinsurance totaled $2,523 million and $1,618 million at September 30, 2024 and December 31, 2023, respectively. The funds withheld liabilities totaled $2,425 million and $1,518 million at September 30, 2024 and December 31, 2023, respectively.

Union Hamilton

Between April 1, 2015 and December 31, 2016, the Company, excluding its subsidiary, reinsured approximately 50% of the new business related to “highest daily” living benefits rider guarantees on HDI v.3.0 product, available with Prudential Premier® Retirement Variable Annuity, to Union Hamilton. This reinsurance remains in force for the duration of the underlying annuity contracts. New sales of HDI v.3.0 subsequent to December 31, 2016 are not covered by this external reinsurance agreement. As of September 30, 2024, $2.1 billion of HDI v.3.0 account values are reinsured to Union Hamilton.

12.    INCOME TAXES

The Company uses a full year projected effective tax rate approach to calculate year-to-date taxes. In determining the full year projected tax rate, the Company considers the realizability of deferred tax assets, including those associated with unrealized investment losses, and has determined based upon the weight of available evidence that no valuation allowance is necessary related to unrealized investment losses. In addition, certain items impacting total income tax expense are recorded in the periods in which they occur. The projected effective tax rate is the ratio of projected “Income tax expense (benefit)” divided by projected “Income (loss) from operations before income taxes and equity in earnings of operating joint venture”. Taxes attributable to operating joint venture are recorded within “Equity in earnings of operating joint venture, net of taxes”. The interim period tax expense (or benefit) is the difference between the year-to-date income tax provision and the amounts reported for the previous interim periods of the fiscal year.

The Company's income tax provision, on a consolidated basis, amounted to an income tax expense of $25.3 million, or 6.93% of income (loss) from operations before income taxes and equity in earnings of operating joint venture, in the first nine months of 2024, compared to an income tax benefit of $(8.3) million, or (18.34)%, in the first nine months of 2023. The Company's current and prior effective tax rates differed from the U.S. statutory tax rate of 21% primarily due to non-taxable investment income and tax credits.

Inflation Reduction Act. On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), (House of Representatives, 5376). One of the most significant provisions of the Inflation Reduction Act is a 15% corporate alternative minimum tax (CAMT) based on the Company’s GAAP income, with certain adjustments. This provision, which is applicable only to companies with average applicable financial statement income in excess of $1 billion for any three-year period ending in 2022 or later, is effective in taxable years beginning after December 31, 2022. The impact of the book-income alternative minimum tax, if any, will vary from year to year based on the relationship of the Company’s GAAP income to the Company’s taxable income. Any tax paid pursuant to this provision is available as a tax credit in future years when the Company’s tax rate exceeds the 15% minimum tax threshold. The Company is subject to CAMT for 2024 which may or may not result in a CAMT cash tax liability and will have no impact to the full year effective tax rate.

67

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

13.    EQUITY

Accumulated Other Comprehensive Income (Loss)

AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss). The balance of and changes in each component of AOCI as of and for the nine months ended September 30, 2024 and 2023, are as follows:

	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Interest Rate Remeasurement of Future Policy Benefits		Gain (Loss) from Changes in Non-Performance Risk on Market Risk Benefits		Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2023	$	(18,085)	$	(927,778)	$	71,195	$	843,748	$	(30,920)
Change in OCI before reclassifications	1,578		620,926		(21,655)		(133,611)		467,238
Amounts reclassified from AOCI	0		26,605		0		0		26,605
Income tax benefit (expense)	(228)		(135,768)		4,557		28,058		(103,381)
Balance, September 30, 2024	$	(16,735)	$	(416,015)	$	54,097	$	738,195	$	359,542

	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Interest Rate Remeasurement of Future Policy Benefits		Gain (Loss) from Changes in Non-Performance Risk on Market Risk Benefits		Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2022	$	(20,007)	$	(1,474,475)	$	119,368	$	1,365,049	$	(10,065)
Change in OCI before reclassifications	431		(482,272)		73,321		(497,289)		(905,809)
Amounts reclassified from AOCI	0		(17,746)		0		0		(17,746)
Income tax benefit (expense)	(51)		105,037		(15,396)		104,431		194,021
Balance, September 30, 2023	$	(19,627)	$	(1,869,456)	$	177,293	$	972,191	$	(739,599)

(1)Includes cash flow hedges of $2 million and $12 million as of September 30, 2024 and December 31, 2023, respectively, and $94 million and $139 million as of September 30, 2023 and December 31, 2022, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(in thousands)
Amounts reclassified from AOCI(1)(2):
Net unrealized investment gains (losses):
Cash flow hedges - Currency/Interest rate(3)	$	(19,880)	$	29,156	$	15,856	$	34,900
Net unrealized investment gains (losses) on available-for-sale securities	(26,993)		(8,931)		(42,461)		(17,154)
Total net unrealized investment gains (losses)(4)	(46,873)		20,225		(26,605)		17,746
Total reclassifications for the period	$	(46,873)	$	20,225	$	(26,605)	$	17,746

(1)All amounts are shown before tax.

(2)Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3)See Note 4 for additional information on cash flow hedges.

(4)See table below for additional information on unrealized investment gains (losses), including the impact on future policy benefits, policyholders’ account balances and other liabilities.

68

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains (losses) on available-for-sale fixed maturity securities and certain other invested assets and other assets are included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from OCI those items that are included as part of “Net income (loss)” for a period that had been part of OCI in earlier periods. The amounts for the periods indicated below, split between amounts related to net unrealized investment gains (losses) on available-for-sale fixed maturity securities on which an allowance for credit losses has been recognized, and all other net unrealized investment gains (losses), are as follows:

	Net Unrealized Investment Gains (Losses) on Available-for-Sale Fixed Maturity Securities on Which an Allowance for Credit Losses has been Recognized		Net Unrealized Gains (Losses) on All Other Investments(1)		Other Costs(2)		Future Policy Benefits, Policyholders' Account Balances and Other Liabilities(3)		Income Tax Benefit (Expense)		Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in thousands)
Balance, December 31, 2023	$	1,987	$	(1,404,180)	$	(801,351)	$	1,029,098	$	246,668	$	(927,778)
Net investment gains (losses) on investments arising during the period	(9,819)		661,777		0		0		(136,708)		515,250
Reclassification adjustment for (gains) losses included in net income	(3)		26,608		0		0		(5,579)		21,026
Reclassification due to allowance for credit losses recorded during the period	(26)		26		0		0		0		0
Impact of net unrealized investment (gains) losses	0		0		455,507		(486,539)		6,519		(24,513)
Balance, September 30, 2024	$	(7,861)	$	(715,769)	$	(345,844)	$	542,559	$	110,900	$	(416,015)

(1)Includes cash flow hedges. See Note 4 for information on cash flow hedges.

(2)"Other costs" primarily includes reinsurance recoverables and DRL.

(3)"Other liabilities" primarily includes reinsurance payables.

Noncontrolling interests

For certain subsidiaries, the Company owns a controlling interest that is less than 100% ownership of the subsidiary but must consolidate 100% of the subsidiary’s financial statements in accordance with U.S. GAAP. Noncontrolling interests represent the portion of equity ownership in a consolidated subsidiary that is not attributable to the Company.

14.    RELATED PARTY TRANSACTIONS

The Company has extensive transactions and relationships with Prudential Insurance and other affiliates. Although we seek to ensure that these transactions and relationships are fair and reasonable, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties.

Expense Charges and Allocations

The majority of the Company’s expenses are allocations or charges from Prudential Insurance or other affiliates. These expenses can be grouped into general and administrative expenses and agency distribution expenses.

69

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Company’s general and administrative expenses are charged to the Company using allocation methodologies based on business production processes. Management believes that the methodology is reasonable and reflects costs incurred by Prudential Insurance to process transactions on behalf of the Company. The Company operates under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space are provided by Prudential Insurance. The Company reviews its allocation methodology periodically which it may adjust accordingly. General and administrative expenses include allocations of stock compensation expenses related to a stock-based awards program and a deferred compensation program issued by Prudential Financial. The expense charged to the Company for the stock-based awards program was $0.2 million for both the three months ended September 30, 2024 and 2023, and $0.8 million and $0.7 million for the nine months ended September 30, 2024 and 2023, respectively. The expense charged to the Company for the deferred compensation program was $0.8 million and $1.0 million for the three months ended September 30, 2024 and 2023, respectively, and $4.9 million and $4.4 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company is charged for its share of employee benefit expenses. These expenses include costs for funded and non-funded, non-contributory defined benefit pension plans. Some of these benefits are based on final earnings and length of service while others are based on an account balance, which takes into consideration age, service and earnings during a career. The Company’s share of net expense for the pension plans was $3 million for both the three months ended September 30, 2024 and 2023, and $8 million and $10 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company is also charged for its share of the costs associated with welfare plans issued by Prudential Insurance. These expenses include costs related to medical, dental, life insurance and disability. The Company's share of net expense for the welfare plans was $4 million for both the three months ended September 30, 2024 and 2023, and $13 million and $11 million for the nine months ended September 30, 2024 and 2023, respectively.

Prudential Insurance sponsors voluntary savings plans for its employee 401(k) plans. The plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The Company’s expense for its share of the voluntary savings plan was $2 million for both the three months ended September 30, 2024 and 2023, and $6 million for both the nine months ended September 30, 2024 and September 30, 2023.

The Company is charged distribution expenses from Prudential’s proprietary nationwide sales organization, “Prudential Advisors” through a transfer pricing agreement, which is intended to reflect a market-based pricing arrangement. Prudential Advisors distributes Prudential life insurance, annuities, and investment products with proprietary and non-proprietary product options.

The Company pays commissions and certain other fees to Prudential Annuities Distributors, Inc. (“PAD”) in consideration for PAD’s marketing and underwriting of the Company’s annuity products. Commissions and fees are paid by PAD to broker-dealers who sell the Company’s annuity products. Commissions and fees paid by the Company to PAD were $208 million and $153 million for the three months ended September 30, 2024 and 2023, respectively, and $597 million and $440 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company is charged for its share of corporate expenses incurred by Prudential Financial to benefit its businesses, such as advertising, executive oversight, external affairs and philanthropic activity. The Company’s share of corporate expenses was $30 million and $31 million for the three months ended September 30, 2024 and 2023, respectively, and $98 million and $104 million for the nine months ended September 30, 2024 and 2023, respectively.

Corporate-Owned Life Insurance

The Company has sold five Corporate-Owned Life Insurance (“COLI”) policies to Prudential Insurance, and one to Prudential Financial. The cash surrender value included in separate accounts for these COLI policies was $4,637 million and $4,156 million at September 30, 2024 and December 31, 2023, respectively. Fees related to these COLI policies were $14 million and $13 million for the three months ended September 30, 2024 and 2023, respectively, and $41 million and $38 million for the nine months ended September 30, 2024 and 2023, respectively. The Company reinsures the risk associated with these COLI policies to an affiliate reinsurer as part of a broader program related to variable insurance policies.

70

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

In May 2023, the Company funded a policy loan from the Prudential Financial COLI policy noted above in an amount of $900 million to an affiliated irrevocable trust, commonly referred to as a “rabbi trust”, which Prudential Financial created to support certain non-qualified retirement plans. The outstanding balance of the policy loan with the rabbi trust was $897 million and $898 million as of September 30, 2024 and December 31, 2023, respectively. Interest income related to the policy loan was $11 million and $10 million for the three months ended September 30, 2024 and 2023, respectively, and $32 million and $15 million for the nine months ended September 30, 2024 and 2023, respectively.

Affiliated Investment Management Expenses

In accordance with an agreement with PGIM, Inc. ("PGIM"), the Company pays investment management expenses to PGIM who acts as investment manager to certain Company general account and separate account assets. Investment management expenses paid to PGIM related to this agreement were $18 million and $14 million for the three months ended September 30, 2024 and 2023, respectively, and $50 million and $39 million for the nine months ended September 30, 2024 and 2023, respectively. These expenses are recorded as “Net investment income” in the Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss).

Derivative Trades

In its ordinary course of business, the Company enters into OTC derivative contracts with an affiliate, PGF. For these OTC derivative contracts, PGF has a substantially equal and offsetting position with an external counterparty. See Note 4 for additional information.

The interest income to the Company from PGF related to affiliated cash collateral was $126 million and $132 million for the three months ended September 30, 2024 and 2023, respectively, and $381 million and $363 million for the nine months ended September 30, 2024 and 2023, respectively, and are included in "Other income (loss)".

Joint Ventures

The Company has made investments in joint ventures with certain subsidiaries of Prudential Financial. "Other invested assets" includes $1,029 million and $754 million of investments in joint ventures as of September 30, 2024 and December 31, 2023, respectively. "Net investment income" related to these ventures includes gains (losses) of $17 million and $6 million for the three months ended September 30, 2024 and 2023, respectively, and $36 million and $2 million for the nine months ended September 30, 2024 and 2023, respectively.

Affiliated Asset Administration Fee Income

The Company has a revenue sharing agreement with AST Investment Services, Inc. ("ASTISI") and PGIM Investments LLC ("PGIM Investments") whereby the Company receives fee income based on policyholders' separate account balances invested in the Advanced Series Trust. Income received from ASTISI and PGIM Investments related to this agreement was $68 million and $69 million for the three months ended September 30, 2024 and 2023, respectively, and $204 million and $208 million for the nine months ended September 30, 2024 and 2023, respectively. These revenues are recorded as “Asset administration fees” in the Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company has a revenue sharing agreement with PGIM Investments, whereby the Company receives fee income based on policyholders' separate account balances invested in The Prudential Series Fund. Income received from PGIM Investments related to this agreement was $12 million and $10 million for the three months ended September 30, 2024 and 2023, respectively, and $34 million and $28 million for the nine months ended September 30, 2024 and 2023, respectively. These revenues are recorded as “Asset administration fees” in the Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss).

71

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Affiliated Notes Receivable

Affiliated notes receivable included in “Receivables from parent and affiliates” at September 30, 2024 and December 31, 2023 is as follows:

	Maturity Dates			Interest Rates				September 30, 2024		December 31, 2023
								(in thousands)
U.S. dollar fixed rate notes	2025	-	2036	0.00%	-	14.85	%	$	491,146	$	147,984
Total notes receivable - affiliated(1)								$	491,146	$	147,984

(1)All notes receivable may be called for prepayment prior to the respective maturity dates under specified circumstances.

The affiliated notes receivable shown above are classified as available-for-sale securities and other trading assets carried at fair value. The Company monitors the internal and external credit ratings of these loans and loan performance. The Company also considers any guarantees made by Prudential Insurance for loans due from affiliates.

Accrued interest receivable related to these loans was $6 million and $1 million at September 30, 2024 and December 31, 2023, respectively, and is included in “Other assets”. Revenues related to these loans were $1 million for both the three months ended September 30, 2024 and 2023, and $2 million for both the nine months ended September 30, 2024 and 2023, and are included in “Other income (loss)”.

Affiliated Commercial Mortgage Loan

The affiliated commercial mortgage loan included in "Commercial mortgage and other loans" at September 30, 2024 and December 31, 2023 were as follows:

	Maturity Date	Interest Rate		September 30, 2024		December 31, 2023
				(in thousands)
Affiliated Commercial Mortgage Loan	2025	9.67	%	$	70,148	$	71,038

The commercial mortgage loan shown above is carried at unpaid principal balance, net of unamortized deferred loan origination fees and expenses, and net of an allowance for losses. The Company reviews the performance and credit quality of the commercial mortgage loan on an on-going basis.

Accrued interest receivable related to the loan was $0.5 million at both September 30, 2024 and December 31, 2023, and is included in "Accrued investment income". Revenues were $1 million and $2 million for the three months ended September 30, 2024 and 2023, respectively, and $5 million for both the nine months ended September 30, 2024 and 2023, and are included in "Net investment income".

Affiliated Asset Transfers

The Company participates in affiliated asset trades with parent and sister companies. Book and market value differences for trades with a parent and sister are recognized within "Additional paid-in capital" (“APIC”) and "Realized investment gains (losses), net", respectively. The table below shows affiliated asset trades for the nine months ended September 30, 2024 and for the year ended December 31, 2023.

Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		APIC, Net of Tax Increase/(Decrease)		Realized Investment Gain (Loss)
				(in thousands)
Prudential Insurance	January 2023	Purchase	Fixed Maturities	$	48,329	$	50,372	$	1,614	$	0
Prudential Insurance	March 2023	Purchase	Fixed Maturities	$	7,175	$	7,500	$	256	$	0
PURC	April 2023	Purchase	Fixed Maturities	$	102,804	$	102,804	$	0	$	0

72

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Term Re	June 2023	Purchase	Fixed Maturities	$	115,573	$	115,573	$	0	$	0
Prudential Insurance	June 2023	Purchase	Fixed Maturities	$	4,298	$	4,443	$	114	$	0
Prudential Insurance	June 2023	Purchase	Fixed Maturities	$	4,394	$	4,494	$	80	$	0
Prudential Insurance	June 2023	Purchase	Fixed Maturities	$	19,453	$	19,203	$	(198)	$	0
Prudential Insurance	June 2023	Purchase	Fixed Maturities	$	14,452	$	15,086	$	502	$	0
Prudential Insurance	September 2023	Purchase	Fixed Maturities	$	15,880	$	15,801	$	(62)	$	0
PURC	December 2023	Sale	Commercial Mortgage and Other Loans	$	762	$	754	$	0	$	8
PAR U	January 2024	Transfer in	Fixed Maturities	$	1,598,161	$	1,598,161	$	0	$	0
PAR U	January 2024	Transfer in	Fixed Maturities	$	778,745	$	778,745	$	0	$	0
PURC	January 2024	Transfer in	Fixed Maturities	$	2,155,560	$	2,155,560	$	0	$	0
GUL Re	January 2024	Transfer in	Fixed Maturities	$	1,685,582	$	1,685,582	$	0	$	0
GUL Re	January 2024	Transfer in	Fixed Maturities	$	4,976	$	4,976	$	0	$	0
PURE	January 2024	Transfer out	Fixed Maturities	$	1,598,161	$	1,598,161	$	0	$	0
PURE	January 2024	Transfer out	Fixed Maturities	$	778,745	$	778,745	$	0	$	0
PURE	January 2024	Transfer out	Fixed Maturities	$	2,155,560	$	2,155,560	$	0	$	0
PURE	January 2024	Transfer out	Fixed Maturities	$	1,685,582	$	1,685,582	$	0	$	0
PURE	January 2024	Transfer out	Fixed Maturities	$	4,976	$	4,976	$	0	$	0
Ironbound	January 2024	Purchase	Other Invested Assets	$	60,414	$	60,414	$	0	$	0
Windhill CLO 1, Ltd.	February 2024	Sale	Fixed Maturities	$	18,428	$	18,858	$	0	$	(430)
Windhill CLO 2, Ltd.	February 2024	Sale	Fixed Maturities	$	19,652	$	20,057	$	0	$	(405)
PAR Term	February 2024	Purchase	Fixed Maturities	$	43,084	$	43,084	$	0	$	0
Windhill CLO 1, Ltd.	March 2024	Sale	Fixed Maturities	$	10,148	$	10,387	$	0	$	(239)
Windhill CLO 2, Ltd.	March 2024	Sale	Fixed Maturities	$	14,763	$	15,091	$	0	$	(328)
Prudential Insurance	March 2024	Purchase	Fixed Maturities	$	198,804	$	206,285	$	5,910	$	0
PAR U	March 2024	Transfer in	Other Invested Assets	$	188,500	$	188,500	$	0	$	0
PURE	March 2024	Transfer out	Other Invested Assets	$	188,500	$	188,500	$	0	$	0
Windhill CLO 1, Ltd.	April 2024	Sale	Fixed Maturities	$	2,261	$	2,300	$	0	$	(39)
Windhill CLO 2, Ltd.	May 2024	Sale	Fixed Maturities	$	14,034	$	14,415	$	0	$	(381)

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PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Windhill CLO 1, Ltd.	June 2024	Sale	Fixed Maturities	$	2,045	$	2,100	$	0	$	(55)
Windhill CLO 2, Ltd.	June 2024	Sale	Fixed Maturities	$	23,342	$	23,743	$	0	$	(401)
PAR U	June 2024	Transfer in	Other Invested Assets	$	326	$	326	$	0	$	0
PURE	June 2024	Transfer out	Other Invested Assets	$	326	$	326	$	0	$	0
PAR U	June 2024	Purchase	Commercial Mortgage and Other Loans	$	12,555	$	12,555	$	0	$	0
Windhill CLO 2, Ltd.	July 2024	Sale	Fixed Maturities	$	53,462	$	54,628	$	0	$	(1,166)
Windhill CLO 2, Ltd.	July 2024	Sale	Fixed Maturities	$	6,579	$	6,695	$	0	$	(116)
Windhill CLO 1, Ltd.	July 2024	Sale	Fixed Maturities	$	2,136	$	2,200	$	0	$	(64)
PAR U	July 2024	Purchase	Fixed Maturities	$	17,402	$	17,402	$	0	$	0
Prudential Insurance	July 2024	Purchase	Fixed Maturities	$	22,655	$	23,433	$	614	$	0
PAR U	July 2024	Purchase	Fixed Maturities	$	1,239	$	1,239	$	0	$	0
PAR U	July 2024	Purchase	Derivatives	$	2,975	$	2,975	$	0	$	0
Windhill CLO 2, Ltd.	August 2024	Sale	Fixed Maturities	$	21,929	$	22,500	$	0	$	(571)
Windhill CLO 1, Ltd.	August 2024	Sale	Fixed Maturities	$	13,650	$	14,100	$	0	$	(450)
PAR U	August 2024	Purchase	Fixed Maturities	$	46,742	$	46,742	$	0	$	0
PAR U	August 2024	Purchase	Fixed Maturities	$	4,793	$	4,793	$	0	$	0
Prudential Insurance	August 2024	Purchase	Fixed Maturities	$	35,872	$	35,085	$	(621)	$	0
Windhill CLO 2, Ltd.	September 2024	Sale	Fixed Maturities	$	57,613	$	57,613	$	0	$	0
Windhill CLO 2, Ltd.	September 2024	Sale	Fixed Maturities	$	24,575	$	24,911	$	0	$	(336)
Prudential Insurance	September 2024	Purchase	Fixed Maturities	$	44,773	$	43,632	$	(901)	$	0

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PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Debt Agreements

The Company is authorized to borrow funds up to $7 billion from affiliates to meet its capital and other funding needs. The following table provides the breakout of the Company's short-term debt. There is no long-term debt to affiliates as of September 30, 2024 and December 31, 2023.

Affiliate	Date Issued	Amount of Notes - September 30, 2024		Amount of Notes - December 31, 2023		Interest Rate			Date of Maturity
		(in thousands)
Prudential Insurance	8/13/2021	$	0	$	94,953		3.95	%		6/20/2024
Prudential Insurance	8/13/2021	0		37,981			3.95	%		6/20/2024
Prudential Insurance	8/13/2021	0		47,477			3.95	%		6/20/2024
Total Loans Payable to Affiliates(1)		$	0	$	180,411

(1) Includes $180 million of loans reclassified as current portion of long-term debt as of December 31, 2023.

The total interest expense to the Company related to affiliated loans and cash collateral with PGF was $13 million and $5 million for the three months ended September 30, 2024 and 2023, respectively, and $24 million and $10 million for the nine months ended September 30, 2024 and 2023, respectively.

All debt outstanding as of December 31, 2023 is that of Pruco Life.

Contributed Capital and Dividends

In February and December 2023, the Company received capital contributions in the amount of $405 million and $7 million, respectively, from Prudential Insurance.

In June 2024, there was a $550 million return of capital to Prudential Insurance. In June, September, and December 2023, there was a $300 million, $650 million and $450 million return of capital, respectively, to Prudential Insurance.

Through September 2024 and December 2023, the Company did not pay any dividends to Prudential Insurance.

Reinsurance with Affiliates

As discussed in Note 11, the Company participates in reinsurance transactions with certain affiliates.

15.    COMMITMENTS AND CONTINGENT LIABILITIES

Commitments

The Company has made commitments to fund commercial mortgage and agricultural property loans. As of September 30, 2024 and December 31, 2023, the outstanding balances on these commitments were $480 million and $270 million, respectively. These amounts include unfunded commitments that are not unconditionally cancellable. For related credit exposure, there was an allowance for credit losses of $0.2 million and $0.3 million as of September 30, 2024 and December 31, 2023, respectively. There was a change in allowance of $0.0 million and $0.1 million for the three and nine months ended September 30, 2024, respectively and $0.1 million and $0.0 million for the three and nine months ended September 30, 2023, respectively. The Company also made commitments to purchase or fund investments, mostly fund investments and private fixed maturities, some of which are contingent upon events or circumstances not under the Company’s control, including those at the discretion of the Company’s counterparties. The Company anticipates a portion of these commitments will ultimately be funded from its separate accounts. As of September 30, 2024 and December 31, 2023, $1,137 million and $1,182 million, respectively, of these commitments were outstanding. These amounts include unfunded commitments that are not unconditionally cancellable. There were no related charges for credit losses for either the three or nine months ended September 30, 2024 or 2023.

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PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Guarantees

In July 2017, Pruco Life formed a joint venture with CT Corp to provide life insurance solutions in Indonesia. Pruco Life owns a 49% interest in the joint venture and has entered into a shareholders agreement with CT Corp that sets out their respective rights and obligations with respect to the joint venture. Among other things, the shareholders agreement obligates Pruco Life and CT Corp to provide capital to the joint venture, as necessary to comply with applicable law or to maintain a specified minimum amount of capital in the joint venture. This obligation is not limited to a maximum amount. Pruco Life does not expect to make any payments on this guarantee and is not carrying any liabilities associated with the guarantee.

Since 2001, Pruco Life entered into an arrangement with Prudential of Taiwan. In June 2021, PIIH completed the sale of Prudential of Taiwan. As a result of the sale, Pruco Life has a financial guarantee to stand ready to perform in an event that both Prudential of Taiwan and the Buyer default and fail to perform their obligations to make payments to the policyholders. Pruco Life has a liability of $32 million as of both September 30, 2024 and December 31, 2023, which represents the fair value of the guarantee and is amortized in revenue over a period which approximates the life of the underlying insurance in force. Since this obligation is not subject to limitations, it is not possible to determine the maximum potential amount due under this guarantee.

Guarantees of Asset Values

	September 30, 2024		December 31, 2023
	(in thousands)
Guaranteed value of third-parties' assets	$	1,213,038	$	311,302
Fair value of collateral supporting these assets	$	1,098,558	$	287,621
Asset (liability) associated with guarantee, carried at fair value	$	(454)	$	1

Certain contracts underwritten by Pruco Life include guarantees related to financial assets owned by the guaranteed party. These contracts are accounted for as derivatives and carried at fair value. The collateral supporting these guarantees is not reflected on the Unaudited Interim Consolidated Statements of Financial Position.

Contingent Liabilities

On an ongoing basis, the Company and its regulators review its operations including, but not limited to, sales and other customer interface procedures and practices, and procedures for meeting obligations to its customers and other parties. These reviews may result in the modification or enhancement of processes or the imposition of other action plans, including concerning management oversight, sales and other customer interface procedures and practices, and the timing or computation of payments to customers and other parties. In certain cases, if appropriate, the Company may offer customers or other parties remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements.

It is possible that the results of operations or the cash flows of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flows for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

76

PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its business. Pending legal and regulatory actions include proceedings specific to the Company and proceedings generally applicable to business practices in the industry in which it operates. The Company is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company’s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if material, is disclosed. The Company estimates that as of September 30, 2024, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is less than $100 million. This estimate is not an indication of expected loss, if any, or the Company's maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

The following discussion of litigation and regulatory matters provides an update of those matters discussed in Note 16 to the Company's Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Individual Annuities and Individual Life

California Advocates for Nursing Home Reform v. The Prudential Insurance Company of America and Pruco Life Insurance Company, et al.

In February 2024, defendants removed the action from California state court to the United States District Court for the Northern District of California.

Regulatory

Variable Products

The Company has received regulatory inquiries and requests for information from state and federal regulators, including subpoenas from the U.S. Securities and Exchange Commission (the “SEC”) concerning the appropriateness of variable product sales and replacement activity. The Company is cooperating with regulators and may become subject to additional regulatory inquiries and other actions related to this matter.

In September 2024, the SEC notified the Company that the SEC has concluded its investigation and is not recommending an enforcement action.

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PRUCO LIFE INSURANCE COMPANY    

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Summary

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flows in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flows for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial statements. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) addresses the consolidated financial condition of Pruco Life Insurance Company, or the “Company,” as of September 30, 2024, compared with December 31, 2023, and its consolidated results of operations for the three and nine months ended September 30, 2024 and 2023. You should read the following analysis of our consolidated financial condition and results of operations in conjunction with the MD&A, the "Risk Factors" section, and the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as well as the statements under “Forward-Looking Statements” and the Unaudited Interim Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Overview

The Company sells variable annuities, indexed variable annuities, fixed annuities, universal life insurance, variable life insurance and term life insurance primarily through affiliated and unaffiliated distributors in the United States.

Effective January 2024, the Company entered into an agreement with Somerset Reinsurance Ltd. ("Somerset Re") to coinsure a closed block of guaranteed universal life (“GUL”) policies to Prudential Universal Reinsurance Entity Company ("PURE"), a wholly-owned subsidiary of The Prudential Insurance Company of America ("Prudential Insurance"), with retrocession by PURE of such liabilities on a modified coinsurance basis, to Somerset Re. This transaction is effective as of January 1, 2024, whereby, the Company recaptured all risks associated with the subject GUL policies from Prudential Arizona Reinsurance Universal Company ("PAR U"), Prudential Universal Reinsurance Company ("PURC") and Gibraltar Universal Life Reinsurance Company ("GUL Re") and subsequently established yearly renewable term ("YRT") reinsurance for the subject GUL business with Prudential Insurance. See Note 11 to the Unaudited Interim Consolidated Financial Statements for additional information.

In August 2024, the Company entered into an agreement with Wilton Re to reinsure certain guaranteed universal life policies. The transaction is structured on an indemnity coinsurance basis and is subject to regulatory approvals and customary closing conditions.

In May 2023, the Company entered into an agreement with AuguStar Life Insurance Company (formerly known as The Ohio National Life Insurance Company), an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $10 billion of account values of Prudential Defined Income (“PDI”) traditional variable annuity contracts with guaranteed living and death benefits. The transaction was completed on June 30, 2023 with an effective date of April 1, 2023. See Note 11 to the Unaudited Interim Consolidated Financial Statements for additional information.

Impact of Changes in the Interest Rate Environment

As a global financial services company, market interest rates are a key driver of our liquidity and capital positions, cash flows, results of operations and financial position. Changes in interest rates can affect these in several ways, including favorable or adverse impacts to:

•investment-related activity, including: investment income returns, net investment spread results,

new money rates, mortgage loan prepayments and bond redemptions;

•the valuation of fixed income investments and derivative instruments;

•collateral posting requirements, hedging costs and other risk mitigation activities;

•customer account values and assets under management, including their impacts on fee-related income;

•insurance reserve levels, including market risk benefits ("MRBs"), and market experience true-ups;

•policyholder behavior, including surrender or withdrawal activity; and

•product offerings, design features, crediting rates and sales mix.

For additional information regarding interest rate risks, see “Risk Factors—Market Risk” included in our Annual Report on Form 10-K for the year ended December 31, 2023.

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Revenues and Expenses

The Company earns revenues principally from insurance premiums, mortality and expense fees, asset administration fees from insurance and investment products, and from net investment income on the investment of general account and other funds. The Company receives premiums primarily from the sale of individual life insurance and annuity products. The Company earns mortality and expense fees, and asset administration fees, primarily from the sale and servicing of universal life insurance and separate account products including variable life insurance and variable annuities. The Company’s operating expenses principally consist of insurance benefits provided and reserves established for anticipated future insurance benefits, general business expenses, reinsurance premiums, commissions and other costs of selling and servicing the various products sold and interest credited on general account liabilities.

Accounting Policies & Pronouncements

Application of Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America ("U.S. GAAP") requires the application of accounting policies that often involve a significant degree of judgment. Management, on an ongoing basis, reviews the estimates and assumptions used in the preparation of the Company's financial statements. If management determines that modifications to assumptions and estimates are appropriate given current facts and circumstances, the Company’s results of operations and financial position as reported in the Unaudited Interim Consolidated Financial Statements could change significantly.

Management believes the accounting policies relating to the following areas are most dependent on the application of estimates and assumptions and require management’s most difficult, subjective, or complex judgments:

•Insurance liabilities;

•Valuation of investments including derivatives, measurement of allowance for credit losses, and recognition of other-than-temporary impairments (“OTTI”);

•Reinsurance recoverables;

•Taxes on income; and

•Reserves for contingencies, including reserves for losses in connection with unresolved legal matters

Market Performance - Equity and Interest Rate Assumptions

The liability for future policy benefits for certain of our universal life type products includes quarterly adjustments for the impact of changes to our estimate of future rates of returns on investments to reflect actual fund performance and market conditions. A portion of the returns on investments for our variable life contracts are dependent upon the total rate of return on assets held in separate account investment options. This rate of return influences the fees we earn and expected claims to be paid on variable life contracts, as well as other sources of profit. Returns that are higher than our expectations for a given period produce higher than expected account balances, which increase the future fees we expect to earn on variable life contracts and decrease expected claims to be paid on variable life contracts. The opposite occurs when returns are lower than our expectations.

The weighted average rate of return assumptions used in developing estimated market returns consider many factors specific to each product type, including asset durations, asset allocations and other factors. With regard to equity market assumptions, the near-term future rate of return assumption used in evaluating liabilities for future policy benefits for certain of our products, primarily our domestic variable life insurance products, is generally updated each quarter and is derived using a reversion to the mean approach, a common industry practice. Under this approach, we consider historical equity returns and adjust projected equity returns over an initial future period of five years (the “near-term”) so that equity returns converge to the long-term expected rate of return. If the near-term projected future rate of return is greater than our near-term maximum future rate of return of 15.0%, we use our maximum future rate of return. If the near-term projected future rate of return is lower than our near-term minimum future rate of return of 0%, we use our minimum future rate of return. As of September 30, 2024, our variable life insurance businesses assume an 8.0% long-term equity expected rate of return and a 2.7% near-term mean reversion equity expected rate of return.

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With regard to interest rate assumptions used in evaluating liabilities for future policy benefits for certain of our products, we generally update the long-term and near-term future rates used to project fixed income returns annually and quarterly, respectively. As a result of our 2024 annual reviews and update of assumptions and other refinements, we increased our long-term expectation of the 10-year U.S. Treasury rate by 25 basis points and now grade to a rate of 3.50% over ten years. As part of our quarterly market experience updates, we update our near-term projections of interest rates to reflect changes in current rates.

For further discussion of impacts that could result from changes in these key estimates and assumptions, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Accounting Policies and Pronouncements—Application of Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023.

Adoption of New Accounting Pronouncements

See Note 2 to the Unaudited Interim Consolidated Financial Statements for accounting pronouncements issued but not yet adopted and newly adopted accounting pronouncements.

Changes in Financial Position

Total assets increased $22.3 billion from $213.3 billion at December 31, 2023 to $235.6 billion at September 30, 2024. Significant components were:

•Total investments increased $10.8 billion driven by new sales of general account annuity products;

•Reinsurance recoverables increased $4.6 billion primarily driven by the reinsurance of the Company's guaranteed universal life block to PURE; and

•Separate account assets increased $3.6 billion primarily driven by favorable equity market performance, partially offset by net outflows.

Total liabilities increased $21.9 billion from $208.8 billion at December 31, 2023 to $230.7 billion at September 30, 2024. Significant components were:

•Policyholders' account balances increased $12.7 billion primarily driven by incremental indexed product sales;

•Other liabilities increased $4.5 billion primarily driven by the additional reinsurance of the Company's guaranteed universal life mortality risk ceded to Prudential Insurance and deferred gains associated with the reinsurance of the Company's guaranteed universal life block to PURE; and

•Separate account liabilities increased $3.6 billion corresponding to the increase in separate account assets, as discussed above.

Total equity increased $0.4 primarily driven by $0.4 billion in unrealized gains on investments due to declining rates and changes to direct NPR spreads and net income of $0.3 billion, partially offset by $0.5 billion of returns of capital.

Results of Operations

Income (loss) from Operations before Income Taxes

Three Months Comparison

Income (loss) from operations before income taxes increased $496 million from a net loss of $549 million for the three months ended September 30, 2023 to a net loss of $53 million for the three months ended September 30, 2024 primarily driven by:

•Higher Other income (loss) mainly due to trading gains in the current quarter compared to trading losses in the prior year quarter reflecting changes in interest rates; and

•Higher Net investment income due to higher market rates and net business growth driven by incremental indexed product sales.

Partially offset by:

•Higher Interest credited to policyholders’ account balances due to growth in variable indexed annuities.

81

Nine Months Comparison

Income (loss) from operations before income taxes increased $320 million from income of $45 million for the nine months ended September 30, 2023 to income of $365 million for the nine months ended September 30, 2024. The impact from our annual reviews and update of assumptions and other refinements was a net gain of $1,060 million. Excluding the comparative impact of our annual reviews and update of assumptions and other refinements, income (loss) from operations decreased $740 million primarily driven by:

•Higher Policyholders' benefits driven by the reinsurance recapture of the Company's guaranteed universal life insurance policies.

Partially offset by:

•Higher Policy charges and fee income driven by the reinsurance recapture of the Company's guaranteed universal life insurance policies.

Revenues, Benefits and Expenses

Three Months Comparison

Revenues increased $625 million from $170 million for the three months ended September 30, 2023 to $795 million for the three months ended September 30, 2024 primarily driven by:

•Higher Other income (loss) mainly due to trading gains in the current quarter compared to trading losses in the prior year quarter reflecting changes in interest rates; and

•Higher Net investment income due to higher market rates and net business growth driven by incremental indexed product sales.

Partially offset by:

•Lower Realized investments gains (losses), net driven by changes in interest rates.

Benefits and expenses increased $129 million from $719 million for the three months ended September 30, 2023 to $848 million for the three months ended September 30, 2024 primarily driven by:

•Higher Interest credited to policyholders’ account balances due to growth in variable indexed annuities.

Nine Months Comparison

Revenues increased $4,331 million from $2,169 million for the nine months ended September 30, 2023 to $6,500 million for the nine months ended September 30, 2024. This includes a favorable comparative increase of $1,023 million from our annual reviews and update of assumptions and other refinements. Excluding the comparative impact of our annual review and update of assumptions and other refinements, as mentioned above, revenues increased $3,308 million primarily driven by the items mentioned above in Income (loss) from operations before income taxes.

Benefits and expenses increased $4,012 million from $2,123 million for the nine months ended September 30, 2023 to $6,135 million for the nine months ended September 30, 2024. This includes a favorable comparative decrease of $37 million from our annual reviews and update of assumptions and other refinements. Excluding the comparative impact of our annual reviews and update of assumptions and other refinements, as mentioned above, benefits and expenses increased $4,048 million primarily driven by the items mentioned above in Income (loss) from operations before income taxes.

Risks and Risk Mitigants:

Fixed Annuity Risks and Risk Mitigants. The primary risk exposure of these fixed annuity products relates to investment risks we bear for providing customers a minimum guaranteed interest rate or an index-linked interest rate required to be credited to the customer’s account value, which include interest rate fluctuations and/or sustained periods of low interest rates, and credit risk related to the underlying investments. We manage these risk exposures primarily through our investment strategies and product design features, which include credit rate resetting subject to the minimum guaranteed interest rate, as well as surrender charges applied during the early years of the contract that help to provide protection for premature withdrawals. In addition, a portion of our fixed annuity products has a market value adjustment provision that affords protection of lapse in the case of rising interest rates. We also manage these risk exposures through external reinsurance for certain of our fixed annuity products.

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Indexed Variable Annuity Risks and Risk Mitigants. The primary risk exposure of these indexed variable annuity products relates to the investment risks we bear in order to credit to the customer’s account balance the required crediting rate based on the performance of the elected indices at the end of each term. We manage this risk primarily through our investment strategies including derivatives and product design features, which include credit rate resetting subject to contractual minimums as well as surrender charges applied during the early years of the contract that help to provide protection for premature withdrawals. In addition, our indexed variable annuity strategies have an interim value provision that provides protection from lapse in the case of rising interest rates.

Variable Annuity Risks and Risk Mitigants. The primary risk exposures of our variable annuity contracts relate to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including capital markets assumptions such as equity market returns, interest rates and market volatility, along with actuarial assumptions such as contractholder mortality, the timing and amount of annuitization and withdrawals, and contract lapses. For these risk exposures, achievement of our expected returns is subject to the risk that actual experience will differ from the assumptions used in the original pricing of these products. Prudential Financial manages our exposure to certain risks driven by fluctuations in capital markets primarily through a combination of i) Product Design Features, and ii) our Asset Liability Management Strategy ("ALM"), as discussed below. The Company also manages these risk exposures through external reinsurance for certain of our variable annuity products. For additional information regarding our external reinsurance agreements, see Note 1 of the Consolidated Financial Statements. Sales of traditional variable annuities with guaranteed living benefit riders were discontinued as of December 31, 2020, and, in April 2022, the sale of a portion of our in force traditional variable annuity block was completed, as discussed in Note 1.

Product Design Features:

A portion of the variable annuity contracts that we offer include an asset transfer feature. This feature is implemented at the contract level, and transfers assets between certain variable investment sub-accounts selected by the annuity contractholder and, depending on the benefit feature, a fixed-rate account in the general account or a bond fund sub-account within the separate account. The objective of the asset transfer feature is to reduce our exposure to equity market risk and market volatility. The asset transfer feature associated with highest daily living benefit products uses a designated bond fund sub-account within the separate account. The transfers are based on a static mathematical formula used with the particular benefit which considers a number of factors, including, but not limited to, the impact of investment performance on the contractholder’s total account value. Other product design features we utilize include, among others, asset allocation restrictions, minimum issuance age requirements and certain limitations on the amount of purchase payments, as well as a required minimum allocation to our general account for certain of our products. In addition, there is diversity in our fee arrangements, as certain fees are primarily based on the benefit guarantee amount, the contractholder account value and/or premiums, which helps preserve certain revenue streams when market fluctuations cause account values to decline.

Asset Liability Management Strategy (including fixed income instruments and derivatives):

We employ an ALM strategy that utilizes a combination of both traditional fixed income instruments and derivatives to meet expected liabilities associated with our annuity guarantees. The MRB liability that we hedge consists of expected living and death benefit claims under various market conditions, which are managed using fixed income instruments, derivatives, or a combination thereof. For our Prudential Defined Income variable annuity, we utilize fixed income instruments to meet expected liabilities. For the portion of our ALM strategy executed with derivatives, we enter into a range of exchange-traded and over-the-counter (“OTC”) equity, interest rate and credit derivatives, including, but not limited to: equity and treasury futures; total return, credit default and interest rate swaps; and options including equity options, swaptions, and floors and caps. The intent of this strategy is to more efficiently manage the capital and liquidity associated with these products while continuing to mitigate fluctuations in net income due to movements in capital markets. To achieve this, we periodically review and recalibrate the ALM strategy by optimizing the mix of derivatives and fixed income instruments to achieve expected outcomes.

Under our ALM strategy, we expect differences in the U.S. GAAP net income impact between the changes in value of the fixed income instruments (either designated as available-for-sale or designated as trading) and derivatives as compared to the changes in the MRB liability these assets support. These differences can be primarily attributed to two distinct areas:

•Different accounting treatment between liabilities and assets supporting those liabilities. Under U.S. GAAP, changes in the fair value of the derivative instruments and fixed income instruments designated as trading, and MRB, excluding the changes in the Company’s NPR spreads, are immediately reflected in net income, while changes in the fair value of fixed income instruments that are designated as available-for-sale are recorded as unrealized gains (losses) in other comprehensive income.

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•General hedge results. For the derivative portion of the ALM strategy, the net hedging impact (the extent to which the changes in value of the hedging instruments offset the change in value of the portion of the MRB we are hedging) may be impacted by a number of factors, including: cash flow timing differences between our hedging instruments and the corresponding portion of the MRB we are hedging, basis differences attributable to actual underlying contractholder funds to be hedged versus hedgeable indices, rebalancing costs related to dynamic rebalancing of hedging instruments as markets move, certain elements of the MRB that may not be hedged (including certain actuarial assumptions), and implied and realized market volatility on the hedge positions relative to the portion of the MRB we seek to hedge.

Income Taxes

For information regarding income taxes, see Note 12 to the Unaudited Interim Consolidated Financial Statements.

Liquidity and Capital Resources

Overview

Liquidity refers to the ability to generate sufficient cash resources to meet the payment obligations of the Company. Capital refers to the long-term financial resources available to support the operations of our business, fund business growth, and provide a cushion to withstand adverse circumstances. Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of our business, general economic conditions, our ability to borrow from affiliates and our access to the capital markets through affiliates as described herein.

Effective and prudent liquidity and capital management is a priority across the organization. Management monitors the liquidity of the Company on a daily basis and projects borrowing and capital needs over a multi-year time horizon. We use a Risk Appetite Framework ("RAF") to ensure that all risks taken by the Company align with our capacity and willingness to take those risks. The RAF provides a dynamic assessment of capital and liquidity stress impacts, including scenarios similar to, and more severe than, those occurring due to COVID-19, and is intended to ensure that sufficient resources are available to absorb those impacts. We believe that our capital and liquidity resources are sufficient to satisfy the capital and liquidity requirements of the Company.

Our businesses are subject to comprehensive regulation and supervision by domestic and international regulators. These regulations currently include requirements (many of which are the subject of ongoing rule-making) relating to capital and liquidity management. For information on these regulatory initiatives and their potential impact on us, see “Business—Regulation" and “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Capital

We manage the Company to regulatory capital levels consistent with our "AA" ratings targets. We utilize the risk-based capital (“RBC”) ratio as a primary measure of capital adequacy. RBC is calculated based on statutory financial statements and risk formulas consistent with the practices of the National Association of Insurance Commissioners ("NAIC"). RBC considers, among other things, risks related to the type and quality of the invested assets, insurance-related risks associated with an insurer’s products and liabilities, interest rate risks, and general business risks. RBC ratio calculations are intended to assist insurance regulators in measuring an insurer’s solvency and ability to pay future claims. The reporting of RBC measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities, but is available to the public. The Company’s capital levels substantially exceed the minimum level required by applicable insurance regulations. Our regulatory capital levels may be affected in the future by changes to the applicable regulations, proposals for which are currently under consideration by both domestic and international insurance regulators.

The regulatory capital level of the Company can be materially impacted by interest rate and equity market fluctuations, changes in the values of derivatives, the level of impairments recorded, and credit quality migration of the investment portfolio, among other items. In addition, the reinsurance of business or the recapture of business subject to reinsurance arrangements due to defaults by, or credit quality migration affecting, the reinsurers or for other reasons could negatively impact regulatory capital levels. The Company’s regulatory capital level is also affected by statutory accounting rules, which are subject to change by each applicable insurance regulator.

Captive Reinsurance Companies:

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital—Affiliated Captive Reinsurance Companies” included in our Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of our use of captive reinsurance companies.

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Liquidity

Our liquidity is managed to ensure stable, reliable and cost-effective sources of cash flows to meet all of our obligations. Liquidity is provided by a variety of sources, as described more fully below, including portfolios of liquid assets. Our investment portfolios are integral to the overall liquidity of the Company. We use a projection process for cash flows from operations to ensure sufficient liquidity to meet projected cash outflows, including claims. The impact of Prudential Funding, LLC’s ("Prudential Funding"), a wholly-owned subsidiary of Prudential Insurance, financing capacity on liquidity (as described below) is considered in the internal liquidity measures of the Company.

Liquidity is measured against internally-developed benchmarks that take into account the characteristics of both the asset portfolio and the liabilities that they support. We consider attributes of the various categories of liquid assets (for example, type of asset and credit quality) in calculating internal liquidity measures to evaluate our liquidity under various stress scenarios, including company-specific and market-wide events. We continue to believe that cash generated by ongoing operations and the liquidity profile of our assets provide sufficient liquidity under reasonably foreseeable stress scenarios.

The principal sources of the Company’s liquidity are premiums and certain annuity considerations, investment and fee income, investment maturities, sales of investments and internal borrowings. The principal uses of that liquidity include benefits, claims, and payments to policyholders and contractholders in connection with surrenders, withdrawals and net policy loan activity. Other uses of liquidity include commissions, general and administrative expenses, purchases of investments, the payment of dividends and returns of capital to the parent company, hedging and reinsurance activity and payments in connection with financing activities.

In managing liquidity, we consider the risk of policyholder and contractholder withdrawals of funds earlier than our assumptions when selecting assets to support these contractual obligations. We use surrender charges and other contract provisions to mitigate the extent, timing and profitability impact of withdrawals of funds by customers.

Liquid Assets

Liquid assets include cash and cash equivalents, short-term investments, U.S. Treasury fixed maturities, and fixed maturities that are not designated as held-to-maturity and public equity securities. As of September 30, 2024 and December 31, 2023, the Company had liquid assets of $42.9 billion and $32.3 billion, respectively. The portion of liquid assets comprised of cash and cash equivalents and short-term investments was $3.9 billion and $2.5 billion as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, $32.2 billion, or 92%, of the fixed maturity investments in the Company's general account portfolios, were rated high or highest quality based on NAIC or equivalent rating.

Prudential Funding, LLC

Prudential Financial and Prudential Funding borrow funds in the capital markets primarily through the direct issuance of commercial paper. The borrowings serve as an additional source of financing to meet our working capital needs. Prudential Funding operates under a support agreement with Prudential Insurance whereby Prudential Insurance has agreed to maintain Prudential Funding’s positive tangible net worth at all times.

Hedging activities associated with Annuities

For the portion of the risk management strategy executed through hedging, we enter into a range of exchange-traded, cleared and other OTC equity and interest rate derivatives in order to hedge certain capital market risks related to more severe market conditions. This portion of our ALM strategy requires access to liquidity to meet payment obligations relating to these derivatives, such as payments for periodic settlements, purchases, maturities and terminations. These liquidity needs can vary materially due to, among other items, changes in interest rates, equity markets, mortality and policyholder behavior.

The hedging portion of our ALM strategy may also result in derivative-related collateral postings to (when we are in a net pay position) or from (when we are in a net receive position) counterparties. The net collateral position depends on changes in interest rates and equity markets related to the amount of the exposures hedged. Depending on market conditions, the collateral posting requirements can result in material liquidity needs when we are in a net post position.

Term and Universal Life Reserve Financing

The Company uses captive reinsurance subsidiaries to finance the portion of the statutory reserves required to be held under Regulation XXX and Guideline AXXX that is considered to be non-economic. The financing arrangements involve the reinsurance of term and universal life business to our affiliated captive reinsurers and the issuance of surplus notes by those affiliated captives that are treated as capital for statutory purposes. These surplus notes are subordinated to policyholder obligations, and the payment of principal and interest on the surplus notes can only be made with prior insurance regulatory approval.

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As of September 30, 2024 the affiliated captive reinsurance companies have entered into agreements with external counterparties providing for the issuance of up to an aggregate of $11,250 million of surplus notes by our affiliated captive reinsurers in return for the receipt of credit-linked notes (“Credit-Linked Note Structures”), of which $8,780 million of surplus notes was outstanding, as compared to an aggregate issuance capacity of $15,700 million, of which $13,820 million was outstanding as of December 31, 2023. Under the agreements, the affiliated captive receives in exchange for the surplus notes one or more credit-linked notes issued by a special-purpose affiliate of the Company with an aggregate principal amount equal to the surplus notes outstanding. The affiliated captive holds the credit-linked notes as assets supporting Regulation XXX or Guideline AXXX non-economic reserves, as applicable.

As of September 30, 2024, our affiliated captive reinsurance companies had outstanding an aggregate of $2,600 million of debt issued for the purpose of financing Regulation XXX and Guideline AXXX non-economic reserves, of which approximately $700 million relates to Regulation XXX reserves and approximately $1,900 million relates to Guideline AXXX reserves. In addition, as of September 30, 2024, for purposes of financing Guideline AXXX reserves, one of our affiliated captives had approximately $3,982 million of surplus notes outstanding that were issued to affiliates.

The Company has introduced updated versions of its individual life products in conjunction with the requirement to adopt principle-based reserving by January 1, 2020. These updated products are currently priced to support the principle-based statutory reserve level without the need for reserve financing.

Item 4. Controls and Procedures

In order to ensure that the information we must disclose in our filings with the SEC is recorded, processed, summarized, and reported on a timely basis, the Company’s management, including our Chief Executive Officer and Chief Financial Officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Securities Exchange Act of 1934, as amended (“Exchange Act”) Rule 15d-15(e), as of September 30, 2024. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, our disclosure controls and procedures were not effective due to the identification of the material weakness, as reported in the Company’s Quarterly Report on Form 10-Q/A for the quarterly period ended March 31, 2024, filed with the Securities and Exchange Commission on August 16, 2024. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on this definition, management has concluded that the material weakness reported previously continued to exist in the Company’s internal control over financial reporting as of September 30, 2024.

Material Weakness in Internal Control over Financial Reporting

As previously reported, the Company did not design and maintain effective controls over the completeness, accuracy, and timeliness of the review of the manual calculations and related adjustments for the Policyholder Account Balance liability for variable annuity products. This material weakness continued to exist as of September 30, 2024.

Remediation Status of Reported Material Weakness

Management has taken steps to remediate the material weakness including (i) updating the valuation model to substantially reduce the need for the manual adjustment and (ii) reviewing the end-to-end process with respect to manual calculations and related adjustments with enhancements to communication, documentation and review thresholds. The material weakness cannot be considered remediated until after the applicable controls operate for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.

Changes in Internal Control Over Financial Reporting

As described above under Remediation Status of Reported Material Weakness, there were changes in the Company’s internal control over financial reporting, as defined in Exchange Act Rule 15d-15(f), occurred during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

See Note 15 to the Unaudited Interim Consolidated Financial Statements under “—Litigation and Regulatory Matters” for a description of certain pending litigation and regulatory matters affecting us, and certain risks to our business presented by such matters, which is incorporated herein by reference.

Item 1A. Risk Factors

You should carefully consider the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. These risks could materially affect our business, results of operations or financial condition or cause our actual results to differ materially from those expected or those expressed in any forward-looking statements made by, or on behalf of, the Company. These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Forward-Looking Statements” and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.

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Item 6. Exhibits

EXHIBIT INDEX

31.1 Section 302 Certification of the Chief Executive Officer

31.2 Section 302 Certification of the Chief Financial Officer

32.1 Section 906 Certification of the Chief Executive Officer

32.2 Section 906 Certification of the Chief Financial Officer

101.INS - XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH - XBRL Taxonomy Extension Schema Document.

101.CAL - XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB - XBRL Taxonomy Extension Label Linkbase Document

101.PRE - XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF - XBRL Taxonomy Extension Definition Linkbase Document

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pruco Life Insurance Company
By:	/s/ Elizabeth Dietrich
Name:	Elizabeth Dietrich
	Vice President, Chief Financial Officer and Chief Accounting Officer
	(Authorized Signatory and Principal Financial Officer)

Date: November 8, 2024

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