Variable Annuity and Insurance Guarantees

12 Months Ended

Dec. 31, 2022

Variable Annuity and Insurance Guarantees

Most of the variable annuity contracts issued by the Company contain one or more GMDB or GGU provisions. The Company discontinued most new sales of GMWB and GMAB by the end of 2021 and new sales were completely discontinued as of mid-2022. The Company also previously offered contracts containing GMIB provisions. See Note 2 and Note 11 for additional information regarding the Company’s variable annuity guarantees.

The GMDB and GGU provisions provide a specified minimum return upon death of the contractholder. The death benefit payable is the greater of (i) the contract value less any purchase payment credits subject to recapture less a pro-rata portion of any rider fees, or (ii) the GMDB provisions specified in the contract. The Company has the following primary GMDB provisions:

•Return of premium — provides purchase payments minus adjusted partial surrenders.

•Reset — provides that the value resets to the account value every sixth contract anniversary minus adjusted partial surrenders. This provision was often provided in combination with the return of premium provision and is no longer offered.

•Ratchet — provides that the value ratchets up to the maximum account value at specified anniversary intervals, plus subsequent purchase payments less adjusted partial surrenders.

The variable annuity contracts with GMWB riders typically have account values that are based on an underlying portfolio of mutual funds, the values of which fluctuate based on fund performance. At contract issue, the guaranteed amount is equal to the amount deposited but the guarantee may be increased annually to the account value (a “step-up”) in the case of favorable market performance or by a benefit credit if the contract includes this provision.

The Company has GMWB riders in force, which contain one or more of the following provisions:

•Withdrawals at a specified rate per year until the amount withdrawn is equal to the guaranteed amount.

•Withdrawals at a specified rate per year for the life of the contractholder (“GMWB for life”).

•Withdrawals at a specified rate per year for joint contractholders while either is alive.

•Withdrawals based on performance of the contract.

•Withdrawals based on the age withdrawals begin.

•Credits are applied annually for a specified number of years to increase the guaranteed amount as long as withdrawals have not been taken.

Variable annuity contractholders age 79 or younger at contract issue could obtain a principal-back guarantee by purchasing the optional GMAB rider for an additional charge. The GMAB rider guarantees that, regardless of market performance at the end of the 10-year waiting period, the contract value will be no less than the original investment or a specified percentage of the highest anniversary value, adjusted for withdrawals. If the contract value is less than the guarantee at the end of the 10-year period, a lump sum will be added to the contract value to make the contract value equal to the guarantee value.

Certain UL policies 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)	December 31, 2022							December 31, 2021
	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	$	53,608	$	51,993	$	886	69	$	70,020	$	68,145	$	6	69
Five/six-year reset	6,776		4,165		178		69	8,309		5,612		6		68
One-year ratchet	4,782		4,486		784		72	6,177		5,858		13		71
Five-year ratchet	1,096		1,048		70		68	1,438		1,386		1		68
Other	996		982		244		75	1,302		1,286		38		74
Total — GMDB	$	67,258	$	62,674	$	2,162	69	$	87,246	$	82,287	$	64	69

GGU death benefit	$	1,016	$	961	$	140	72	$	1,260	$	1,198	$	184	72

GMIB	$	134	$	121	$	13	72	$	184	$	170	$	4	71

GMWB:
GMWB	$	1,386	$	1,382	$	25	75	$	1,900	$	1,895	$	1	75
GMWB for life	39,720		39,717		3,099		69	52,387		52,334		187		69
Total — GMWB	$	41,106	$	41,099	$	3,124	69	$	54,287	$	54,229	$	188	69

GMAB	$	1,388	$	1,388	$	126	62	$	2,005	$	2,005	$	—	62

(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:


	December 31, 2022			December 31, 2021
	Net Amount at Risk		Weighted Average Attained Age	Net Amount at Risk		Weighted Average Attained Age
	(in millions, except age)
UL secondary guarantees	$	6,456	69	$	6,564	68
Structured variable annuity GMDB	$	446	64	$	3	63

The net amount at risk for UL secondary guarantees and structured variable annuity GMDB 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, 2020	$	16	$	7	$	1,462	$	(39)	$	758
Incurred claims	15		—		1,587		40		209
Paid claims	(7)		(1)		—		—		(51)
Balance at December 31, 2020	24		6		3,049		1		916
Incurred claims	17		—		(713)		(24)		140
Paid claims	(5)		(1)		—		—		(36)
Balance at December 31, 2021	36		5		2,336		(23)		1,020
Incurred claims	36		1		(483)		58		127
Paid claims	(22)		—		—		—		(51)
Balance at December 31, 2022	$	50	$	6	$	1,853	$	35	$	1,096

(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:


	December 31,
	2022		2021
	(in millions)
Mutual funds:
Equity	$	36,800	$	49,183
Bond	19,946		24,998
Other	5,947		8,316
Total mutual funds	$	62,693	$	82,497

No gains or losses were recognized on assets transferred to separate accounts for the years ended December 31, 2022, 2021 and 2020.