Variable Annuity and Insurance Guarantees

9 Months Ended

Sep. 30, 2020

Variable Annuity and Insurance Guarantees [Text Block]

The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (“GMDB”) provisions. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. The Company previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions.

Certain UL policies offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges.

The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities:


Variable Annuity Guarantees by Benefit Type (1)	September 30, 2020							December 31, 2019
	Total Contract Value		Contract Value in Separate Accounts		Net Amount at Risk		Weighted Average Attained Age	Total Contract Value		Contract Value in Separate Accounts		Net Amount at Risk		Weighted Average Attained Age
	(in millions, except age)
GMDB:
Return of premium	$	62,475	$	60,537	$	16	68	$	62,909	$	60,967	$	5	67
Five/six-year reset	7,700		4,966		13		68	7,983		5,263		7		67
One-year ratchet	5,722		5,389		27		71	5,935		5,600		7		70
Five-year ratchet	1,350		1,295		2		67	1,396		1,340		—		66
Other	1,183		1,164		76		73	1,192		1,174		65		73
Total — GMDB	$	78,430	$	73,351	$	134	68	$	79,415	$	74,344	$	84	67

GGU death benefit	$	1,100	$	1,044	$	132	71	$	1,115	$	1,063	$	133	71

GMIB	$	172	$	158	$	10	71	$	186	$	172	$	6	70

GMWB:
GMWB	$	1,871	$	1,866	$	1	74	$	1,999	$	1,993	$	1	73
GMWB for life	46,837		46,762		391		68	46,799		46,691		272		68
Total — GMWB	$	48,708	$	48,628	$	392	68	$	48,798	$	48,684	$	273	68

GMAB	$	2,274	$	2,273	$	1	61	$	2,528	$	2,524	$	—	60

(1) Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table.

The net amount at risk for GMDB, GGU and GMAB is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB is defined as the greater of the present value of the minimum guaranteed annuity payments less the current contract value or zero. The net amount at risk for GMWB is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero.

The following table provides information related to insurance guarantees for which the Company has established additional liabilities:


	September 30, 2020			December 31, 2019
	Net Amount at Risk		Weighted Average Attained Age	Net Amount at Risk		Weighted Average Attained Age
	(in millions, except age)
UL secondary guarantees	$	6,600	67	$	6,550	67

The net amount at risk for UL secondary guarantees is defined as the current guaranteed death benefit amount in excess of the current policyholder account balance.

Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees were as follows:


	GMDB & GGU		GMIB		GMWB (1)		GMAB (1)		UL
	(in millions)
Balance at January 1, 2019	$	19	$	8	$	875	$	(19)	$	659
Incurred claims	—		(1)		1,245		—		110
Paid claims	(4)		—		—		—		(34)
Balance at September 30, 2019	$	15	$	7	$	2,120	$	(19)	$	735

Balance at January 1, 2020	$	16	$	7	$	1,462	$	(39)	$	758
Incurred claims	10		1		2,219		63		172
Paid claims	(6)		(1)		—		—		(34)
Balance at September 30, 2020	$	20	$	7	$	3,681	$	24	$	896

(1) The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims.

The liabilities for guaranteed benefits are supported by general account assets.

The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts providing guaranteed benefits:


	September 30, 2020		December 31, 2019
	(in millions)
Mutual funds:
Equity	$	42,327	$	44,739
Bond	24,723		23,374
Other	6,521		6,471
Total mutual funds	$	73,571	$	74,584