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 June 30, 2022

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 No. 333-65423

————————————————

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

(Exact name of registrant as specified in its charter)

Arizona	86-0222062
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
525 Washington Boulevard, Jersey City, New Jersey	07310
(Address of principal executive offices)	(Zip Code)

(212) 554-1234

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

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 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 definition of “accelerated filer,” “large 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. o

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 August 8, 2022, 2,500,000 shares of the registrant’s $1.00 par value Common Stock were outstanding, all of which were owned indirectly by Equitable Holdings, Inc.

REDUCED DISCLOSURE FORMAT

Equitable Financial Life Insurance Company of America meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.

1

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Balance Sheets, June 30, 2022 (Unaudited) and December 31, 2021	4
	Statements of Income (Loss), Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	5
	Statements of Comprehensive Income (Loss), Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	6
	Statements of Equity, Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	7
	Statements of Cash Flows, Six Months Ended June 30, 2022 and 2021 (Unaudited)	8
	Notes to Financial Statements (Unaudited):
	Note 1 - Organization	9
	Note 2 - Significant Accounting Policies	9
	Note 3 - Investments	11
	Note 4 - Derivatives	16
	Note 5 - Insurance Liabilities	20
	Note 6 - Fair Value Disclosures	23
	Note 7 - Income Taxes	33
	Note 8 - Related Party Transactions	33
	Note 9 - Equity	33
	Note 10 - Commitments and Contingent Liabilities	33
	Note 11 - Unpaid Claim and Claim Expenses	34
	Note 12 - Revision of Prior Period Financial Statements	35
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	42
Signatures		48

1

NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION

Certain of the statements included or incorporated by reference in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “intends,” “seeks,” “aims,” “plans,” “assumes,” “estimates,” “projects,” “should,” “would,” “could,” “may,” “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 Equitable Financial Life Insurance Company of America (“Equitable America”)and its consolidated subsidiaries. “We,” “us” and “our” refer to Equitable America and its consolidated subsidiaries, unless the context refers only to Equitable America as a corporate entity. There can be no assurance that future developments affecting Equitable Financial will be those anticipated by management. Forward-looking statements include, without limitation, all matters that are not historical facts.

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: (i) conditions in the financial markets and economy, including the impact of COVID-19 and related economic conditions, equity market declines and volatility, interest rate fluctuations and changes in liquidity and, access to and cost of capital; (ii) operational factors, remediation of our material weakness, indebtedness, protection of confidential customer information or proprietary business information, operational failures, our service providers, and catastrophic events, such as the outbreak of pandemic diseases including COVID-19; (iii) credit, counterparties and investments, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties and affiliates and economic downturns, defaults and other events adversely affecting our investments; (iv) our reinsurance and hedging programs; (v) our products, structure and product distribution, including variable annuity guaranteed benefits features within certain of our products, variations in statutory capital requirements, financial strength and claims-paying ratings and key product distribution relationships; (vi) estimates, assumptions and valuations, including risk management policies and procedures, potential inadequacy of reserves and experience differing from pricing expectations or reserves, amortization of deferred acquisition costs and financial models; and (vii) legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation and tax reform.

Forward-looking statements should be read in conjunction with the other cautionary statements, risks, uncertainties and other factors identified in Equitable America’s Annual Report on Form 10-K for the year ended December 31, 2021, as amended or supplemented in our subsequently filed Quarterly Reports on Form 10-Q, including in the section entitled “Risk Factors,” and elsewhere in this Quarterly Report on Form 10-Q. You should read this Form 10-Q completely and with the understanding that actual future results may be materially different from expectations. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

Other risks, uncertainties and factors, including those discussed under “Risk Factors”, in our Annual Report on Form 10-K could cause our actual results to differ materially from those projected in any forward-looking statements we make. Readers should read carefully the factors described in “Risk Factors” in our Annual Report on Form 10-K to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements.

Throughout this Quarterly Report on Form 10-Q we use certain defined terms and abbreviations, which are summarized in the “Glossary” and “Acronyms” sections.

2

Part I FINANCIAL INFORMATION

Item 1. Financial Statements

3

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Balance Sheets

June 30, 2022 (Unaudited) and December 31, 2021

	June 30, 2022		December 31, 2021
	(in millions, except share data)
ASSETS
Investments:
Fixed maturities available-for-sale, at fair value (amortized cost of $2,611 and $2,444) (allowance for credit losses of $0 and $0 )	$	2,318	$	2,572
Mortgage loans on real estate (net of allowance for credit losses of $0 and $0)	17		17
Policy loans	246		238
Other equity investments	19		23
Other invested assets	20		19
Total investments	2,620		2,869
Cash and cash equivalents	33		127
Deferred policy acquisition costs	818		637
Amounts due from reinsurers (allowance for credit losses of $0 and $0)	1,101		1,136
Current and deferred income taxes	94		15
Other assets	55		57
Separate Accounts assets	2,985		3,394
Total Assets	$	7,706	$	8,235
LIABILITIES
Policyholders’ account balances	$	3,486	$	3,504
Future policy benefits and other policyholders' liabilities	592		470
Amounts due to reinsurers	111		117
Other liabilities	141		42
Separate Accounts liabilities	2,985		3,394
Total Liabilities	$	7,315	$	7,527
Commitments and contingent liabilities (Note 10)
EQUITY
Common stock, $1.00 par value; 2,500,000 shares authorized, issued and outstanding	$	3	$	3
Additional paid-in capital	681		679
Accumulated deficit	(92)		(60)
Accumulated other comprehensive income (loss)	(201)		86
Total Equity	391		708
Total Liabilities and Equity	$	7,706	$	8,235

See Notes to Financial Statements (Unaudited).

4

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Statements of Income (Loss)

Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
REVENUES
Policy charges and fee income	$	77	$	78	$	146	$	144
Premiums	59		38		108		76
Net derivative gains (losses)	3		(3)		—		(3)
Net investment income (loss)	21		20		41		44
Investment gains (losses), net	(2)		—		(3)		—
Investment management and service fees	6		1		11		2
Other income	1		5		1		6
Total revenues	165		139		304		269
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits	81		54		156		109
Interest credited to policyholders’ account balances	23		25		42		40
Compensation and benefits	9		8		20		18
Commissions	26		17		42		34
Amortization of deferred policy acquisition costs	16		31		35		43
Other operating costs and expenses	22		22		43		42
Total benefits and other deductions	177		157		338		286
Income (loss) from continuing operations, before income taxes	(12)		(18)		(34)		(17)
Income tax (expense) benefit	(1)		4		2		4
Net income (loss)	$	(13)	$	(14)	$	(32)	$	(13)

See Notes to Financial Statements (Unaudited).

5

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Statements of Comprehensive Income (Loss)

Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$	(13)	$	(14)	$	(32)	$	(13)
Other comprehensive income (loss), net of income taxes:
Change in unrealized gains (losses), net of adjustments (1)	(137)		37		(287)		(36)
Other comprehensive income (loss), net of income taxes	(137)		37		(287)		(36)
Comprehensive income (loss)	$	(150)	$	23	$	(319)	$	(49)

_____________

(1)See Note 9 of the Notes to these Financial Statements for details of change in unrealized gains (losses), net of adjustments.

See Notes to Financial Statements (Unaudited).

6

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Statements of Equity

For the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)

	Three Months Ended June 30,
	Equitable Financial Life Insurance Company of America Equity
	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total		Non-controlling Interest		Total Equity
	(in millions)
April 1, 2022	$	3	$	680	$	(79)	$	(64)	$	540	$	—	$	540
Net income (loss)	—		—		(13)		—		(13)		—		(13)
Other comprehensive income (loss)	—		—		—		(137)		(137)		—		(137)
Other	—		1		—		—		1		—		1
June 30, 2022	$	3	$	681	$	(92)	$	(201)	$	391	$	—	$	391

April 1, 2021	$	3	$	693	$	(46)	$	65	$	715	$	—	$	715
Dividend of AB Units to parent	—		(64)		—		—		(64)		—		(64)
Net income (loss)	—		—		(14)		—		(14)		—		(14)
Other comprehensive income (loss)	—		—		—		37		37		—		37
Other	—		(1)		—		—		(1)		—		(1)
June 30, 2021	$	3	$	628	$	(60)	$	102	$	673	$	—	$	673

	Six Months Ended June 30,
	Equitable Financial Life Insurance Company of America Equity
	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total		Non-controlling Interest		Total Equity
	(in millions)
January 1, 2022	$	3	$	679	$	(60)	$	86	$	708	$	—	$	708
Net income (loss)	—		—		(32)		—		(32)		—		(32)
Other comprehensive income (loss)	—		—		—		(287)		(287)		—		(287)
Other	—		2		—		—		2		—		2
June 30, 2022	$	3	$	681	$	(92)	$	(201)	$	391	$	—	$	391

January 1, 2021	$	3	$	692	$	(47)	$	138	$	786	$	—	$	786
Dividend of AB Units to parent	—		(64)		—		—		(64)		—		(64)
Net income (loss)	—		—		(13)		—		(13)		—		(13)
Other comprehensive income (loss)	—		—		—		(36)		(36)		—		(36)
Other	—		—		—		—		—		—		—
June 30, 2021	$	3	$	628	$	(60)	$	102	$	673	$	—	$	673

See Notes to Financial Statements (Unaudited).

7

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Statements of Cash Flows

Six Months Ended June 30, 2022 and 2021 (Unaudited)

	Six Months Ended June 30,
	2022		2021
	(in millions)
Cash flows from operating activities:
Net income (loss)	$	(32)	$	(13)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Interest credited to policyholders’ account balances	42		40
Policy charges and fee income	(146)		(144)
Net derivative (gains) losses	—		3
Dividend from AB Units	—		5
Equity in (income) loss from AB	—		(3)
Investment (gains) losses, net	3		—
Realized and unrealized (gains) losses on trading securities	—		1
Non-cash long-term incentive compensation expense	2		(3)
Amortization and depreciation	37		44
Changes in:
Reinsurance recoverable	1		(58)
Capitalization of deferred policy acquisition costs	(52)		(52)
Future policy benefits	4		12
Current and deferred income taxes	(2)		26
Other, net	104		(2)
Net cash provided by (used in) operating activities	$	(39)	$	(144)
Cash flows from investing activities:
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	$	120	$	77
Short-term investments	(1)		—
Other	1		—
Payment for the purchase/origination of:
Fixed maturities, available-for-sale	(289)		(295)
Other	(2)		1
Cash settlements related to derivative instruments, net	(97)		45
Other, net	(8)		(5)
Net cash provided by (used in) investing activities	$	(276)	$	(177)
Cash flows from financing activities:
Policyholders’ account balances:
Deposits	$	357	$	308
Withdrawals	(44)		(41)
Transfer (to) from Separate Accounts	(93)		(27)
Change in collateralized pledged liabilities	(3)		—
Shareholder dividend paid	—		—
Cash contribution from parent company	—		—
Other, net	4		2
Net cash provided by (used in) financing activities	$	221	$	242
Change in cash and cash equivalents	(94)		(79)
Cash and cash equivalents, beginning of year	127		161
Cash and cash equivalents, end of year	$	33	$	82

See Notes to Financial Statements (Unaudited).

8

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited)

1)    ORGANIZATION

Equitable America’s primary business is providing annuity, life insurance and employee benefit products to both individuals and businesses. The Company is an indirect, wholly-owned subsidiary of Holdings. Equitable America is a stock life insurance company organized under the laws of Arizona.

2)    SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited interim financial statements (the “financial statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to the Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”).

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 financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021

The terms “second quarter 2022” and ”second quarter 2021” refer to the three months ended June 30, 2022 and 2021, respectively. The terms “first six months of 2022” and “first six months of 2021” refer to the six months ended June 30, 2022 and 2021, respectively.

Certain prior year amounts have been reclassified to conform to the current year’s presentation.

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“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 June 30, 2022, and as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material.

9

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Future Adoption of New Accounting Pronouncements

Description	Effective Date and Method of Adoption	Effect on the Financial Statement or Other Significant Matters
ASU 2018-12: Financial Services - Insurance (Topic 944); ASU 2020-11: Financial Services - Insurance (Topic 944): Effective Date and Early Application
This ASU provides targeted improvements to existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance entity. The ASU primarily impacts four key areas, including: 1. Measurement of the liability for future policy benefits for traditional and limited payment contracts. The ASU requires companies to review, and if necessary, update cash flow assumptions at least annually for non-participating traditional and limited-payment insurance contracts. The ASU also prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts. 2. Measurement of MRBs. MRBs, as defined under the ASU, will encompass certain GMxB features associated with variable annuity products and other general account annuities with other than nominal market risk. 3. Amortization of deferred acquisition costs. The ASU simplifies the amortization of deferred acquisition costs and other balances amortized in proportion to premiums, gross profits, or gross margins, requiring such balances to be amortized on a constant level basis over the expected term of the contracts.  4. Expanded footnote disclosures. The ASU requires additional disclosures including information about significant inputs, judgements, assumptions and methods used in measurement.	In November 2020, the FASB issued ASU 2020-11 which deferred the effective date of the amendments in ASU 2018-12 for all insurance entities. ASU 2018-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is allowed. For the liability for future policyholder benefits for traditional and limited payment contracts, companies can elect one of two adoption methods. Companies can either elect a modified retrospective transition method applied to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or a full retrospective transition method using actual historical experience information as of contract inception. The same adoption method must be used for deferred policy acquisition costs. For MRBs, the ASU should be applied retrospectively as of the beginning of the earliest period presented.	The Company continues to progress with implementation efforts and the evaluation of the impact that adoption of this guidance will have on the Company’s financial statements. Due to its extensive nature, the adoption of the ASU is expected to have a significant impact on the Company’s financial statements, as well as systems, processes and controls. Effective January 1, 2023, the new guidance will be adopted using the modified retrospective approach, except for MRBs which will use the full retrospective approach. The Company has created a governance framework and implementation plan to ensure timely adoption of the guidance. In preparation for implementation, the Company continues to refine key accounting policy decisions, modernize processes and update internal controls. These changes include modifications of actuarial valuation systems, data sourcing, analytical procedures and reporting processes. The impact on total equity of applying this ASU is estimated to be a decrease to total equity as of June 30, 2022. The impact on total equity is mostly driven by the DAC and URR updates to amortize DAC and URR on a constant level basis, remove amortization associated with unrealized gains or losses, and excluding future deferrals in the calculation of the DAC and URR balances.

Recognition of Investment Management and Service Fees

Reported as investment management and service fees in the Company’s statements of income (loss) are administrative fees earned by the Company related to administrative services provided to EIMG and EIM related to the establishment and maintenance of the Separate Accounts, shareholder servicing, customer support, and other similar services. Accordingly, these administrative service base fees are recorded over time as services are performed and entitle the Company to variable consideration. Base fees, generally calculated as a percentage of AUM, are recognized as revenue at month-end when the transaction price no longer is variable and the value of the consideration is determined. These fees are not subject to claw back and there is minimal probability that a significant reversal of the revenue recorded will occur.

Assumption Updates and Model Changes

The Company conducts its annual review of its assumptions and models during the third quarter of each year. The annual review encompasses assumptions underlying the valuation of unearned revenue liabilities, embedded derivatives for our insurance business, liabilities for future policyholder benefits, DAC and DSI assets.

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

However, the Company updates its assumptions as needed in the event it becomes aware of economic conditions or events that could require a change in assumptions that it believes may have a significant impact to the carrying value of product liabilities and assets and consequently materially impact its earnings in the period of the change. There were no material assumption updates or model changes in the first and second quarters of 2022 or 2021.

Revision of Previously Issued Financial Statements

The Company identified an error in its previously issued financial statements specifically related to the preparation of the statement of cash flows. The impact of the errors to prior periods financial statements was not considered to be material. In order to correctly present the Statement of Cash Flows, management will revise the financial statements to correct the Statement of Cash Flows the next time such financial statements are filed. See Note 12 to the Notes to Financial Statements for details of the revision.

3)    INVESTMENTS

Fixed Maturities AFS

The components of fair value and amortized cost for fixed maturities classified as AFS on the balance sheets excludes accrued interest receivable because the Company elected to present accrued interest receivable within other assets. Accrued interest receivable on AFS fixed maturities as of June 30, 2022 and December 31, 2021 was $22 million and $20 million. There was no accrued interest written off for AFS fixed maturities for the three and six months ended June 30, 2022 and 2021.

The following tables provide information relating to the Company’s fixed maturities classified as AFS.

AFS Fixed Maturities by Classification

	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
June 30, 2022:
Fixed Maturities:
Corporate (1)	$	2,426	$	—	$	1	$	272	$	2,155
U.S. Treasury, government and agency	14		—		—		—		14
States and political subdivisions	35		—		—		5		30
Foreign governments	—		—		—		—		—
Asset-backed (2)	55		—		—		5		50
Commercial mortgage-backed	81		—		—		12		69
Total at June 30, 2022	$	2,611	$	—	$	1	$	294	$	2,318
December 31, 2021:
Fixed Maturities:
Corporate (1)	$	2,237	$	—	$	135	$	10	$	2,362
U.S. Treasury, government and agency	66		—		1		1		66
States and political subdivisions	31		—		3		—		34
Asset-backed (2)	30		—		—		—		30
Commercial mortgage-backed	80		—		—		—		80
Total at December 31, 2021	$	2,444	$	—	$	139	$	11	$	2,572

______________

(1)Corporate fixed maturities include both public and private issues.

(2)Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities. and other asset types.

11

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

The contractual maturities of AFS fixed maturities as of June 30, 2022 are shown in the table below. Bonds not due at a single maturity date have been included in the table in the final year of maturity. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Contractual Maturities of AFS Fixed Maturities

	Amortized Cost (Less Allowance for Credit Losses)		Fair Value
	(in millions)
June 30, 2022:
Contractual maturities:
Due in one year or less	$	33	$	33
Due in years two through five	594		584
Due in years six through ten	907		817
Due after ten years	942		764
Subtotal	2,476		2,198
Asset-backed	54		51
Commercial mortgage-backed	81		69
Total at June 30, 2022	$	2,611	$	2,318

The following table shows proceeds from sales, gross gains (losses) from sales and allowance for credit losses for AFS fixed maturities for the three and six months ended June 30, 2022 and 2021:

Proceeds from Sales, Gross Gains (Losses) from Sales and Allowance for Credit Losses for AFS Fixed Maturities

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Proceeds from sales	$	39	$	11	$	62	$	29
Gross gains on sales	$	—	$	—	$	—	$	—
Gross losses on sales	$	3	$	—	$	4	$	—
Net change in Allowance for Credit losses	$	—	$	—	$	—	$	—

The following table sets forth the amount of credit loss impairments on AFS fixed maturities held by the Company at the dates indicated and the corresponding changes in such amounts.

AFS Fixed Maturities - Credit Loss Impairments

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Balance, beginning of period	$	2	$	2	$	2	$	2
Previously recognized impairments on securities that matured, paid, prepaid or sold	(2)		—		(2)		—
Recognized impairments on securities impaired to fair value this period (1)	—		—		—		—
Credit losses recognized this period on securities for which credit losses were not previously recognized	—		—		—
Additional credit losses this period on securities previously impaired	—		—		—		—
Increases due to passage of time on previously recorded credit losses	—		—		—		—

12

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Accretion of previously recognized impairments due to increases in expected cash flows (for OTTI securities 2019 and prior)	—		—		—		—
Balance at June 30,	$	—	$	2	$	—	$	2

______________

(1)Represents circumstances where the Company determined in the current period that it intends to sell the security, or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

The tables that follow below present a roll-forward of net unrealized investment gains (losses) recognized in AOCI.

Net Unrealized Gains (Losses) on AFS Fixed Maturities

	Net Unrealized Gains (Losses) on Investments		DAC		Policyholders’ Liabilities		Deferred Income Tax Asset (Liability)		AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, April 1, 2022	$	(93)	$	40	$	(26)	$	16	$	(63)
Net investment gains (losses) arising during the period	(202)		—		—		—		(202)
Reclassification adjustment:
Included in net income (loss)	2		—		—		—		2
Other	—		—		—		—		—
Impact of net unrealized investment gains (losses)	—		79		(54)		37		62
Net unrealized investment gains (losses) excluding credit losses	(293)		119		(80)		53		(201)
Net unrealized investment gains (losses) with credit losses	—		—		—		—		—
Balance, June 30, 2022	$	(293)	$	119	$	(80)	$	53	$	(201)
Balance, April 1, 2021	$	107	$	(52)	$	26	$	(18)	$	63
Net investment gains (losses) arising during the period	64		—		—		—		64
Reclassification adjustment:	—		—		—		—		—
Excluded from net income (loss)	—		—		—		—		—
Other (1)	—		—		—		—		—
Impact of net unrealized investment gains (losses)			(30)		13		(9)		(26)
Net unrealized investment gains (losses) excluding credit losses	171		(82)		39		(27)		101
Net unrealized investment gains (losses) with credit losses	—		—		—		—		—
Balance, June 30, 2021	$	171	$	(82)	$	39	$	(27)	$	101

	Net Unrealized Gains (Losses) on Investments		DAC		Policyholders’ Liabilities		Deferred Income Tax Asset (Liability)		AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, January 1, 2022	$	128	$	(46)	$	28	$	(24)	$	86
Net investment gains (losses) arising during the period	(424)		—		—		—		(424)

13

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

	Net Unrealized Gains (Losses) on Investments		DAC		Policyholders’ Liabilities		Deferred Income Tax Asset (Liability)		AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Reclassification adjustment:
Included in net income (loss)	3		—		—		—		3
Other	—		—		—		—		—
Impact of net unrealized investment gains (losses)	—		165		(108)		77		134
Net unrealized investment gains (losses) excluding credit losses	(293)		119		(80)		53		(201)
Net unrealized investment gains (losses) with credit losses	—		—		—		—		—
Balance, June 30, 2022	$	(293)	$	119	$	(80)	$	53	$	(201)
Balance, January 1, 2021	$	248	$	(111)	$	37	$	(38)	$	136
Net investment gains (losses) arising during the period	(74)		—		—		—		(74)
Reclassification adjustment:
Excluded from net income (loss)	—		—		—		—		—
Other (1)	(3)		—		—		—		(3)
Impact of net unrealized investment gains (losses)	—		29		2		11		42
Net unrealized investment gains (losses) excluding credit losses	171		(82)		39		(27)		101
Net unrealized investment gains (losses) with credit losses	—		—		—		—		—
Balance, June 30, 2021	$	171	$	(82)	$	39	$	(27)	$	101

______________

(1) Effective January 1, 2021, certain preferred stock have been reclassified to other equity investments.

The following tables disclose the fair values and gross unrealized losses of the 783 issues as of June 30, 2022 and the 119 issues as of December 31, 2021 that are not deemed to have credit losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for the specified periods at the dates indicated:

AFS Fixed Maturities in an Unrealized Loss Position for Which No Allowance Is Recorded

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
June 30, 2022:
Fixed Maturities:
Corporate	$	1,906	$	239	$	91	$	33	$	1,997	$	272
U.S. Treasury, government and agency	9		—		—		—		9		—
States and political subdivisions	29		5		—		—		29		5
Asset-backed	48		5		—		—		48		5
Commercial mortgage-backed	69		12		—		—		69		12
Total at June 30, 2022	$	2,061	$	261	$	91	$	33	$	2,152	$	294

14

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
December 31, 2021:
Fixed Maturities:
Corporate	$	243	$	4	$	111	$	6	$	354	$	10
U.S. Treasury, government and agency	45		1		2		—		47		1
States and political subdivisions	—		—		—		—		—		—
Asset-backed	—		—		—		—		—		—
Commercial mortgage-backed	—		—		—		—		—		—
Total at December 31, 2021	$	288	$	5	$	113	$	6	$	401	$	11

The Company’s investments in fixed maturities do not include concentrations of credit risk of any single issuer greater than 10% of the equity of the Company, other than securities of the U.S. government, U.S. government agencies, and certain securities guaranteed by the U.S. government. The Company maintains a diversified portfolio of corporate securities across industries and issuers and does not have exposure to any single issuer in excess of 1.1% of total corporate securities. The largest exposures to a single issuer of corporate securities held as of June 30, 2022 and December 31, 2021 were $25 million and $27 million, respectively, representing 6.3% and 3.8% of the equity of the Company.

Corporate high yield securities, consisting primarily of public high yield bonds, are classified as other than investment grade by the various rating agencies, i.e., a rating below Baa3/BBB- or the NAIC designation of 3 (medium investment grade), 4 or 5 (below investment grade) or 6 (in or near default). As of June 30, 2022 and December 31, 2021, respectively, approximately $4 million and $10 million, or 0.2% and 0.4%, of the $2.6 billion and $2.4 billion aggregate amortized cost of fixed maturities held by the Company were considered to be other than investment grade. These securities had no gross unrealized losses as of June 30, 2022 and December 31, 2021.

As of June 30, 2022 and December 31, 2021, respectively, the $33 million and $6 million of gross unrealized losses of twelve months or more were concentrated in corporate securities. In accordance with the policy described in Note 2 of the Notes to these Financial Statements, the Company concluded that an allowance for credit losses for these securities was not warranted at either June 30, 2022 or December 31, 2021. As of June 30, 2022 and December 31, 2021, the Company did not intend to sell the securities nor will it likely be required to dispose of the securities before the anticipated recovery of their remaining amortized cost basis.

Based on the Company’s evaluation both qualitatively and quantitatively of the drivers of the decline in fair value of fixed maturity securities as of June 30, 2022, the Company determined that the unrealized loss was primarily due to increases in interest rates, credit spreads and changes in credit ratings.

Mortgage Loans on Real Estate

The Company held two commercial mortgage loans with a carrying value of $17 million at June 30, 2022 and December 31, 2021. The loans were issued prior to 2017 for apartment complex properties located in the Mid-Atlantic region. The loans were current as of June 30, 2022 and December 31, 2021 with LTV ratios between 0%-50% and DSC ratios greater than 2.0x.

Accrued interest receivable as of June 30, 2022 and December 31, 2021 was $0 million and no accrued interest was written off for the three and six months ended June 30, 2022 and 2021. The allowance for credit losses was $0 million as of June 30, 2022 and 2021, with a change of $0 million for the periods ended.

As of June 30, 2022 and 2021, the Company had no loans for which foreclosure was probable included within the individually assessed mortgage loans, and accordingly had no associated allowance for credit losses.

Equity Securities

The table below presents a breakdown of unrealized and realized gains and (losses) on equity securities during the three and six months ended June 30, 2022 and 2021.

15

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Unrealized and Realized Gains (Losses) from Equity Securities

	Three Months Ended June 30				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Net investment gains (losses) recognized during the period on securities held at the end of the period	$	(1)	$	—	$	(3)	$	2
Net investment gains (losses) recognized on securities sold during the period	—		—		—		—
Unrealized and realized gains (losses) on equity securities	$	(1)	$	—	$	(3)	$	2

4)    DERIVATIVES

The Company uses derivatives as part of its overall asset/liability risk management primarily to reduce exposures to equity market and interest rate risks. Derivative hedging strategies are designed to reduce these risks from an economic perspective and are all executed within the framework of a “Derivative Use Plan” approved by applicable states’ insurance law. The Company does not designate any derivatives as hedge accounting. Operation of these hedging programs is based on models involving numerous estimates and assumptions, including, among others, mortality, lapse, surrender and withdrawal rates, election rates, fund performance, market volatility and interest rates. A wide range of derivative contracts can be used in these hedging programs, including exchange traded equity and interest rate futures contracts as well as equity options. The derivative contracts are collectively managed in an effort to reduce the economic impact of unfavorable changes in guaranteed benefits’ exposures attributable to movements in capital markets.

Derivatives Utilized to Hedge Exposure to Variable Annuities with Guarantee Features

The Company has issued and continues to offer variable annuity products with GMxB features. The risk associated with the GMDB feature is that under-performance of the financial markets could result in GMDB benefits, in the event of death, being higher than what accumulated policyholders’ account balances would support. The risk associated with the GMIB feature is that under-performance of the financial markets could result in the present value of GMIB, in the event of annuitization, being higher than what accumulated policyholders’ account balances would support, taking into account the relationship between current annuity purchase rates and the GMIB guaranteed annuity purchase rates. The risk associated with products that have a GMxB derivative features liability is that under-performance of the financial markets could result in the GMxB derivative features’ benefits being higher than what accumulated policyholders’ account balances would support.

For GMxB features, the Company retains certain risks including basis, credit spread and some volatility risk and risk associated with actual experience versus expected actuarial assumptions for mortality, lapse and surrender, withdrawal and policyholder election rates, among other things. The derivative contracts are managed to correlate with changes in the value of the GMxB features that result from financial markets movements. A portion of exposure to realized equity volatility is hedged using equity options and variance swaps and a portion of exposure to credit risk is hedged using total return swaps on fixed income indices.

Derivatives Utilized to Hedge Crediting Rate Exposure on MSO and IUL Products/Investment Options

The Company hedges crediting rates in the MSO that are in the variable life insurance products and IUL insurance products. These products permit the contract owner to participate in the performance of an index, ETF or commodity price movement up to a cap for a set period of time. They also contain a protection feature, in which the Company will absorb, up to a certain percentage, the loss of value in an index, ETF or commodity price, which varies by product segment.

In order to support the returns associated with these features, the Company enters into derivative contracts whose payouts, in combination with fixed income investments, emulate those of the index, ETF or commodity price, subject to caps and buffers, thereby substantially reducing any exposure to market-related earnings volatility.

The tables below present quantitative disclosures about the Company’s derivative instruments, including those embedded in other contracts required to be accounted for as derivative instruments:

The following table presents the gross notional amount and estimated fair value of the Company’s derivatives:

16

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Derivative Instruments by Category

	June 30, 2022						December 31, 2021
			Fair Value						Fair Value
	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
	(in millions)
Derivatives: (1)
Equity contracts:
Futures	$	219	$	—	$	—	$	295	$	—	$	—
Options	52		1		2		59		8		5
Interest rate contracts:
Futures	137		—		—		120		—		—
Other contracts:
Margin	—		17		—		—		18		—
Collateral	—		1		—		—		—		3
Total:	408		19		2		474		26		8
Embedded derivatives:
GMxB derivative features liability (2)	—		—		(9)		—		—		—
MSO and IUL indexed features (3)	—		—		34		—		—		132
Total embedded derivatives	—		—		25		—		—		132
Total derivative instruments	$	408	$	19	$	27	$	474	$	26	$	140

______________

(1)Reported in other invested assets in the balance sheets.

(2)Reported in future policy benefits and other policyholders’ liabilities in the balance sheets.

(3)Reported in policyholders’ account balances in the balance sheets.

The following table presents the effects of derivative instruments on the statements of income and comprehensive income (loss).

17

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(in millions)
Derivatives:
Equity contracts:
Futures	$	(64)	$	(73)
Swaps	—		—
Options	(3)		(3)
Interest rate contracts:
Futures	(12)		(24)
Swaps	—		—
Swaptions	—		—
Credit contracts:
Credit default swaps	—		—
Currency contracts:
Currency swaps	—		—
Currency forwards	—		—
Other contracts:
Margin	—		—
Collateral	—		—
Total:	(79)		(100)
Embedded Derivatives:
GMxB derivative features liability	4		10
MSO and IUL indexed features	78		90
Total Embedded Derivatives	82		100
Total Derivatives instruments (1)	$	3	$	—

18

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
	(in millions)
Derivatives:
Equity contracts:
Futures	$	21	$	38
Swaps	—		—
Options	1		2
Interest rate contracts:
Futures	—		—
Swaps	—		—
Swaptions	—		—
Credit contracts:
Credit default swaps	—		—
Currency contracts:
Currency swaps	—		—
Currency forwards	—		—
Other contracts:
Margin	—		—
Collateral	—		—
Total:	22		40
GMxB derivative features liability	—		—
MSO and IUL indexed features	(25)		(43)
Total Embedded Derivatives	(25)		(43)
Total Derivatives instruments (1)	$	(3)	(3)

________

(1)Reported in net derivative gains (losses) in the statements of income (loss).

Equity-Based and Treasury Futures Contracts Margin

All outstanding equity-based futures contracts as of June 30, 2022 and December 31, 2021 are exchange-traded and net settled daily in cash. As of June 30, 2022 and December 31, 2021, respectively, the Company had open exchange-traded futures positions on: (i) the S&P 500, Nasdaq, Russell 2000 and Emerging Market indices, having initial margin requirements of $12 million and $14 million and (ii) the 2-year, 5-year and 10-year U.S. Treasury Notes on U.S. Treasury bonds and ultra-long bonds, having initial margin requirements of $5 million and $3 million.

Collateral Arrangements

The Company generally has executed a CSA under the ISDA Master Agreement it maintains with each of its OTC derivative counterparties that requires both posting and accepting collateral either in the form of cash or high-quality securities, such as U.S. Treasury securities, U.S. government and government agency securities and investment grade corporate bonds. The Company nets the fair value of all derivative financial instruments with counterparties for which an ISDA Master Agreement and related CSA have been executed. As of June 30, 2022 and December 31, 2021, respectively, the Company held $0 million and $3 million in cash and securities collateral delivered by trade counterparties, representing the fair value of the related derivative agreements. The Company is exposed to losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. The Company manages 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.

19

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position. In addition, certain of the Company’s derivative agreements contain credit-risk related contingent features; if the credit rating of one of the parties to the derivative agreement is to fall below a certain level, the party with positive fair value could request termination at the then fair value or demand immediate full collateralization from the party whose credit rating fell and is in a net liability position.

As of June 30, 2022, there were no net liability derivative positions with counterparties with credit risk-related contingent features whose credit rating has fallen. All derivatives have been appropriately collateralized by the Company or the counterparty in accordance with the terms of the derivative agreements.

The following tables presents information about the Company’s offsetting of financial assets and liabilities and derivative instruments as of June 30, 2022 and December 31, 2021:

Offsetting of Financial Assets and Liabilities and Derivative Instruments

As of June 30, 2022

	Gross Amount Recognized		Gross Amount Offset in the Balance Sheets		Net Amount Presented in the Balance Sheets		Gross Amount not Offset in the Balance Sheets (1)		Net Amount
	(in millions)
Assets:
Derivative assets	$	19	$	2	$	17	$	—	$	17
Other financial assets	3		—		3		—		3
Other invested assets	$	22	$	2	$	20	$	—	$	20
Liabilities:
Derivative liabilities	$	2	$	2	$	—	$	—	$	—
Other financial liabilities	141		—		141		—		141
Other liabilities	$	143	$	2	$	141	$	—	$	141

______________

(1)Financial instruments sent (held).

As of December 31, 2021

	Gross Amount Recognized		Gross Amount Offset in the Balance Sheets		Net Amount Presented in the Balance Sheets		Gross Amount not Offset in the Balance Sheets (1)		Net Amount
	(in millions)
Assets:
Derivative assets	$	26	$	8	$	18	$	—	$	18
Other financial assets	1		—		1		—		1
Other invested assets	$	27	$	8	$	19	$	—	$	19
Liabilities:
Derivative liabilities	$	8	$	8	$	—	$	—	$	—
Other financial liabilities	42		—		42		—		42
Other liabilities	$	50	$	8	$	42	$	—	$	42

______________

(1)Financial instruments sent (held).

5)    INSURANCE LIABILITIES

Variable Annuity Contracts – GMDB and GMIB Features

The Company has certain variable annuity contracts with GMDB and GMIB features in-force that guarantee one of the following:

20

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

•Return of Premium: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals);

•Ratchet: the benefit is the greatest of current account value, premiums paid (adjusted for withdrawals), or the highest account value on any anniversary up to contractually specified ages (adjusted for withdrawals);

•Roll-Up: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals) accumulated at contractually specified interest rates up to specified ages; or

•Combo: the benefit is the greater of the ratchet benefit or the roll-up benefit, which may include an annual reset.

Liabilities for Variable Annuity Contracts with GMDB and GMIB Features without NLG Rider Feature

The change in the liabilities for variable annuity contracts with GMDB and GMIB features and without a NLG feature are summarized in the tables below. The amounts for the direct contracts (before reinsurance ceded) and assumed contracts are reflected in the balance sheets in future policy benefits and other policyholders’ liabilities. The amounts for the ceded contracts are reflected in the balance sheets in amounts due from reinsurers.

Change in Liability for Variable Annuity Contracts with GMDB and GMIB Features and No NLG Feature

Three and Six Months Ended June 30, 2022 and 2021

	GMDB				GMIB
	Direct		Ceded		Direct		Ceded
	(in millions)
Balance, April 1, 2022	$	5	$	(5)	$	2	$	(1)
Paid guarantee benefits	—		—		—		—
Other changes in reserve	1		(1)		—		—
Balance, June 30, 2022	$	6	$	(6)	$	2	$	(1)
Balance, April 1, 2021	$	3	$	(3)	$	—	$	—
Paid guarantee benefits	—		—		—		—
Other changes in reserve	(1)		1		1		(1)
Balance, June 30, 2021	$	2	$	(2)	$	1	$	(1)

	GMDB				GMIB
	Direct		Ceded		Direct		Ceded
	(in millions)
Balance, January 1, 2022	$	5	$	(5)	$	1	$	(1)
Paid guarantee benefits	—		—		—		—
Other changes in reserve	1		(1)		1		—
Balance, June 30, 2022	$	6	$	(6)	$	2	$	(1)
Balance, January 1, 2021	$	4	$	(4)	$	1	$	(1)
Paid guarantee benefits	—		—		—		—
Other changes in reserve	(2)		2		—		—
Balance, June 30, 2021	$	2	$	(2)	$	1	$	(1)

Liabilities for Embedded and Freestanding Insurance Related Derivatives

The liability for the GMxB derivative features and the liability for MSO and IUL indexed features are considered embedded or freestanding insurance derivatives and are reported at fair value. For the fair value of the assets and liabilities associated with these embedded or freestanding insurance derivatives, see Note 6 of the Notes to these Financial Statements.

Account Values and Net Amount at Risk

21

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Account Values and NAR for direct variable annuity contracts in force with GMDB and GMIB features as of June 30, 2022 are presented in the following tables by guarantee type. For contracts with the GMDB feature, the NAR in the event of death is the amount by which the GMDB feature exceeds the related Account Values. For contracts with the GMIB feature, the NAR in the event of annuitization is the amount by which the present value of the GMIB benefits exceed the related Account Values, taking into account the relationship between current annuity purchase rates and the GMIB guaranteed annuity purchase rates. Since variable annuity contracts with GMDB features may also offer GMIB guarantees in the same contract, the GMDB and GMIB amounts listed are not mutually exclusive.

Direct Variable Annuity Contracts with GMDB and GMIB Features

as of June 30, 2022

	Guarantee Type
	Return of Premium			Ratchet			Roll-Up		Combo		Total
	(in millions, except age and interest rate)
Variable annuity contracts with GMDB features
Account Values invested in:
General Account	$	—		$	—		$	—	$	—	$	—
Separate Accounts	290			87			—		—		377
Total Account Values	$	290		$	87		$	—	$	—	$	377
NAR, gross	$	44		$	12		$	—	$	—	$	56
NAR, net of amounts reinsured	$	44		$	12		$	—	$	—	$	56
Average attained age of policyholders (in years)	59.6			62.1			—		—		60.1
Percentage of policyholders over age 70	10.3		%	15.0		%	—%		—%		11.3		%
Range of contractually specified interest rates	N/A			N/A			N/A		T+ 200bps		T+ 200bps
Variable annuity contracts with GMIB features
Account Values invested in:
General Account	$	—		$	—		$	—	$	—	$	—
Separate Accounts	—			—			370		—		370
Total Account Values	$	—		$	—		$	370	$	—	$	370
NAR, gross (1)	$	—		$	—		$	—	$	—	$	—
NAR, net of amounts reinsured (1)	$	—		$	—		$	—	$	—	$	—
Average attained age of policyholders (in years)	N/A			N/A			64.3		—		64.3
Weighted average years remaining until annuitization	N/A			N/A			9.8		—		9.8
Range of contractually specified interest rates	N/A			N/A			T+200bp		N/A		T+ 200bps

____________

(1) Amounts reported for NAR are $0 million as the values are less than $1 million at June 30, 2022.

Separate Accounts Investments by Investment Category Underlying Variable Annuity Contracts with GMDB and GMIB Features

The total Account Values of variable annuity contracts with GMDB and GMIB features include amounts allocated to the guaranteed interest option, which is part of the General Account and variable investment options that invest through Separate Accounts in variable insurance trusts. The following table presents the aggregate fair value of assets, by major investment category, held by Separate Accounts that support variable annuity contracts with GMDB and GMIB features. The investment performance of the assets impacts the related Account Values and, consequently, the NAR associated with the GMDB and GMIB benefits and guarantees. Because the Company’s variable annuity contracts offer both GMDB and GMIB features, GMDB and GMIB amounts are not mutually exclusive.

22

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Investment in Variable Insurance Trust Mutual Funds

	June 30, 2022				December 31, 2021
Mutual Fund Type	GMDB		GMIB		GMDB		GMIB
	(in millions)
Equity	$	33	$	6	$	27	$	5
Fixed income	8		2		6		2
Balanced	334		362		238		263
Other	2		—		1		—
Total	$	377	$	370	$	272	$	270

Hedging Programs for GMDB and GMIB Features

The Company has a program intended to hedge certain risks associated first with the GMDB feature and with the GMIB feature of the Retirement Cornerstone series of variable annuity products.This program utilizes derivative contracts, such as exchange-traded equity and interest rate futures contracts as well as equity options, that collectively are managed in an effort to reduce the economic impact of unfavorable changes in guaranteed benefits’ exposures attributable to movements in the capital markets. At the present time, this program hedges certain economic risks on these products to the extent such risks are not externally reinsured.

These programs do not qualify for hedge accounting treatment. Therefore, gains (losses) on the derivatives contracts used in these programs, including current period changes in fair value, are recognized in net derivative gains (losses) in the period in which they occur, and may contribute to income (loss) volatility.

Variable and Interest-Sensitive Life Insurance Policies - NLG

The NLG feature contained in variable and interest-sensitive life insurance policies keeps them in force in situations where the policy value is not sufficient to cover monthly charges then due. The NLG remains in effect so long as the policy meets a contractually specified premium funding test and certain other requirements.

The change in the NLG liabilities, reflected in future policy benefits and other policyholders’ liabilities in the balance sheets, is summarized in the table below.

	2022						2021
	Direct Liability		Reinsurance Ceded		Net		Direct Liability		Reinsurance Ceded		Net
	(in millions)
Balance, April 1,	$	6	$	(3)	$	3	$	6	$	(3)	$	3
Paid guarantee benefits	—		—		—		—		—		—
Other changes in reserve	1		—		1		—		—		—
Balance, June 30,	$	7	$	(3)	$	4	$	6	$	(3)	$	3
Balance, January 1,	$	6	$	(3)	$	3	$	6	$	(3)	$	3
Paid guarantee benefits	—		—		—		—		—		—
Other changes in reserve	1		—		1		—		—		—
Balance, June 30,	$	7	$	(3)	$	4	$	6	$	(3)	$	3

6)    FAIR VALUE DISCLOSURES

U.S. GAAP establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value, and identifies three levels of inputs that may be used to measure fair value:

23

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Level 1    Unadjusted quoted prices for identical instruments in active markets. Level 1 fair values generally are supported by market transactions that occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2    Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, and inputs to model-derived valuations that are directly observable or can be corroborated by observable market data.

Level 3    Unobservable inputs supported by little or no market activity and often requiring significant management judgment or estimation, such as an entity’s own assumptions about the cash flows or other significant components of value that market participants would use in pricing the asset or liability.

The Company uses unadjusted quoted market prices to measure fair value for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are measured using present value or other valuation techniques. The fair value determinations are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of the timing and amount of expected future cash flows and the credit standing of counterparties. Such adjustments do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair value cannot be substantiated by direct comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument.

Management is responsible for the determination of the value of investments carried at fair value and the supporting methodologies and assumptions. Under the terms of various service agreements, the Company often utilizes independent valuation service providers to gather, analyze, and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual securities. These independent valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of widely accepted valuation models, provide a single fair value measurement for individual securities for which a fair value has been requested. As further described below with respect to specific asset classes, these inputs include, but are not limited to, market prices for recent trades and transactions in comparable securities, benchmark yields, interest rate yield curves, credit spreads, quoted prices for similar securities, and other market-observable information, as applicable. Specific attributes of the security being valued also are considered, including its term, interest rate, credit rating, industry sector, and when applicable, collateral quality and other security- or issuer-specific information. When insufficient market observable information is available upon which to measure fair value, the Company either will request brokers knowledgeable about these securities to provide a non-binding quote or will employ internal valuation models. Fair values received from independent valuation service providers and brokers and those internally modeled or otherwise estimated are assessed for reasonableness.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Fair value measurements are required on a non-recurring basis for certain assets only when an impairment or other events occur. As of June 30, 2022 and December 31, 2021, no assets or liabilities were required to be measured at fair value on a non-recurring basis.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below.

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Fair Value Measurements as of June 30, 2022

	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Investments:
Fixed maturities, AFS:
Corporate (1)	$	—	$	2,139	$	16	$	2,155
U.S. Treasury, government and agency	—		14		—		14
States and political subdivisions	—		30		—		30
Foreign governments	—		—		—		—
Asset-backed (2)	—		50		—		50
Commercial mortgage-backed	—		69		—		69
Total fixed maturities, AFS	—		2,302		16		2,318
Other equity investments	—		19		—		19
Other invested assets:
Options	—		(1)		—		(1)
Total other invested assets	—		(1)		—		(1)
Cash equivalents	26		—		—		26
Separate Accounts assets (3)	2,975		7		—		2,982
Total Assets	$	3,001	$	2,327	$	16	$	5,344
Liabilities:
GMxB derivative features’ liability	$	—	$	—	$	(9)	$	(9)
MSO and IUL indexed features’ liability	—		34		—		34
Total Liabilities	$	—	$	34	$	(9)	$	25

______________

(1)Corporate fixed maturities includes both public and private issues.

(2)Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.

(3)Separate Accounts assets included in the fair value hierarchy exclude investments not fair valued including other assets of $3 million.

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Fair Value Measurements as of December 31, 2021

	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Investments:
Fixed maturities, AFS:
Corporate (1)	$	—	$	2,351	$	11	$	2,362
U.S. Treasury, government and agency	—		66		—		66
States and political subdivisions	—		34		—		34
Asset-backed (2)	—		30		—		30
Commercial mortgage-backed	—		80		—		80
Total fixed maturities, AFS	—		2,561		11		2,572
Other equity investments	—		23		—		23
Other invested assets:
Options	—		3		—		3
Total other invested assets	—		3		—		3
Cash equivalents	107		—		—		107
Separate Accounts assets	3,384		7		—		3,391
Total Assets	$	3,491	$	2,594	$	11	$	6,096
Liabilities:
GMxB derivative features’ liability	$	—	$	—	$	—	$	—
MSO and IUL indexed features’ liability	—		132		—		132
Total Liabilities	$	—	$	132	$	—	$	132

______________

(1)Corporate fixed maturities includes both public and private issues.

(2)Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.

Public Fixed Maturities

The fair values of the Company’s public fixed maturities are generally based on prices obtained from independent valuation service providers and for which the Company maintains a vendor hierarchy by asset type based on historical pricing experience and vendor expertise. Although each security generally is priced by multiple independent valuation service providers, the Company ultimately uses the price received from the independent valuation service provider highest in the vendor hierarchy based on the respective asset type, with limited exception. To validate reasonableness, prices also are internally reviewed by those with relevant expertise through comparison with directly observed recent market trades. Consistent with the fair value hierarchy, public fixed maturities validated in this manner generally are reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs.

Private Fixed Maturities

The fair values of the Company’s private fixed maturities are determined from prices obtained from independent valuation service providers. Prices not obtained from an independent valuation service provider are determined by using a discounted cash flow model or a market comparable company valuation technique. In certain cases, these models use observable inputs with a discount rate based upon the average of spread surveys collected from private market intermediaries who are active in both primary and secondary transactions, taking into account, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. Generally, these securities have been reflected within Level 2. For certain private fixed maturities, the discounted cash flow model or a market comparable company valuation technique may also incorporate unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the asset. To the extent management determines that such unobservable inputs are significant to the fair value measurement of a security, a Level 3 classification generally is made.

26

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Freestanding Derivative Positions

The net fair value of the Company’s freestanding derivative positions as disclosed in Note 4 of the Notes to these Financial Statements are generally based on prices obtained either from independent valuation service providers or derived by applying market inputs from recognized vendors into industry standard pricing models. The majority of these derivative contracts are traded in the OTC derivative market and are classified in Level 2. The fair values of derivative assets and liabilities traded in the OTC market are determined using quantitative models that require use of the contractual terms of the derivative instruments and multiple market inputs, including interest rates, prices, and indices to generate continuous yield or pricing curves, including overnight index swap curves, and volatility factors, which then are applied to value the positions. The predominance of market inputs is actively quoted and can be validated through external sources or reliably interpolated if less observable.

Level Classifications of the Company’s Financial Instruments

Financial Instruments Classified as Level 1

Investments classified as Level 1 primarily include redeemable preferred stock, trading securities, cash equivalents and Separate Accounts assets. Fair value measurements classified as Level 1 include exchange-traded prices of fixed maturities, equity securities and derivative contracts, and net asset values for transacting subscriptions and redemptions of mutual fund shares held by Separate Accounts. Cash equivalents classified as Level 1 include money market accounts, overnight commercial paper and highly liquid debt instruments purchased with an original maturity of three months or less and are carried at cost as a proxy for fair value measurement due to their short-term nature.

Financial Instruments Classified as Level 2

Investments classified as Level 2 are measured at fair value on a recurring basis and primarily include U.S. government and agency securities and certain corporate debt securities, such as public and private fixed maturities. As market quotes generally are not readily available or accessible for these securities, their fair value measures are determined utilizing relevant information generated by market transactions involving comparable securities and often are based on model pricing techniques that effectively discount prospective cash flows to present value using appropriate sector-adjusted credit spreads commensurate with the security’s duration, also taking into consideration issuer-specific credit quality and liquidity.

Observable inputs generally used to measure the fair value of securities classified as Level 2 include benchmark yields, reported secondary trades, issuer spreads, benchmark securities and other reference data. Additional observable inputs are used when available, and as may be appropriate, for certain security types, such as prepayment, default, and collateral information for the purpose of measuring the fair value of mortgage- and asset-backed securities. The Company’s AAA-rated mortgage- and asset-backed securities are classified as Level 2 for which the observability of market inputs to their pricing models is supported by sufficient, albeit more recently contracted, market activity in these sectors.

Certain Company products, such as IUL and the MSO fund available in some life contracts offer investment options which permit the contract owner to participate in the performance of an index, ETF or commodity price. These investment options, which depending on the product and on the index selected can currently have one, three, five or six year terms, provide for participation in the performance of specified indices, ETF or commodity price movement up to a segment-specific declared maximum rate. Under certain conditions that vary by product, e.g., holding these segments for the full term, these segments also shield policyholders from some or all negative investment performance associated with these indices, ETF or commodity prices. These investment options have defined formulaic liability amounts, and the current values of the option component of these segment reserves are accounted for as Level 2 embedded derivatives. The fair values of these embedded derivatives are based on data obtained from independent valuation service providers.

Financial Instruments Classified as Level 3

The Company’s investments classified as Level 3 primarily include corporate debt securities, such as private fixed maturities and asset-backed securities. Determinations to classify fair value measures within Level 3 of the valuation hierarchy generally are based upon the significance of the unobservable factors to the overall fair value measurement. Included in the Level 3 classification are fixed maturities with indicative pricing obtained from brokers that otherwise could not be corroborated to market observable data.

27

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

The Company also issues certain benefits on its variable annuity products that are accounted for as derivatives and are also considered Level 3. The GMIB NLG feature allows the policyholder to receive guaranteed minimum lifetime annuity payments based on predetermined annuity purchase rates applied to the contract’s benefit base if and when the contract account value is depleted and the NLG feature is activated.

The valuations of the GMxB derivative features liability incorporate significant non-observable assumptions related to policyholder behavior, risk margins and and equity projections of Separate Account funds. The credit risk of the Company is considered in determining the fair values of its GMxB derivative features liability positions. Incremental adjustment to the U.S. Treasury curve for non-performance risk is made to the fair values of the liabilities and GMIB NLG feature to reflect the claims-paying ratings of the Company. Equity and fixed income volatilities were modeled to reflect current market volatilities. Due to the unique, long duration of the GMIB NLG feature, adjustments were made to the equity volatilities to remove the illiquidity bias associated with the longer tenors and risk margins were applied to the non-capital markets inputs to the GMIB NLG valuations.

Lapse rates are adjusted at the contract level based on a comparison of the actuarial calculated guaranteed values and the current policyholder account value, which include other factors such as considering surrender charges. Generally, lapse rates are assumed to be lower in periods when a surrender charge applies. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in the money contracts are less likely to lapse. For valuing the embedded derivative, lapse rates vary throughout the period over which cash flows are projected.

Transfers of Financial Instruments Between Levels 2 and 3

During the six months ended June 30, 2022, there were $5 million AFS fixed maturities transferred out of Level 3 and into Level 2 or AFS fixed maturities transferred out of Level 2 and into Level 3. These transfers in the aggregate represent approximately 1.3% of total equity as of June 30, 2022.

During the six months ended June 30, 2021, there were no fixed maturities transferred from Level 2 into the Level 3 classification.

The tables below present reconciliations for all Level 3 assets and liabilities and changes in unrealized gains (losses) for the three and six months ended June 30, 2022 and 2021, respectively.

Level 3 Instruments - Fair Value Measurements

	Corporate		GMxB Derivative Features Liability
	(in millions)
Balance, April 1, 2022	$	11	$	5
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income	—		—
Net derivative gains (losses) (1)	—		4
Total realized and unrealized gains (losses)	—		4
Other comprehensive income (loss)	—		—
Purchases	11		—
Sales	(1)		—
Transfers into Level 3 (1)	—		—
Transfers out of Level 3 (1)	(5)		—
Balance, June 30, 2022	$	16	$	9
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period	$	—	$	4

28

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

	Corporate		GMxB Derivative Features Liability
	(in millions)
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period.	$	—	$	—
Balance, April 1, 2021	$	13	$	—
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income	—		—
Net derivative gains (losses) (1)	—		—
Total realized and unrealized gains (losses)	—		—
Other comprehensive income (loss)	—		—
Purchases	—		—
Sales	(2)		—
Transfers into Level 3 (1)	—		—
Transfers out of Level 3 (1)	—		—
Balance, June 30, 2021	$	11	$	—
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period	$	—	$	—
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period	$	—	$	—

29

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

	Corporate		GMxB Derivative Features Liability
	(in millions)
Balance, January 1, 2022	$	11	$	—
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income	—
Net derivative gains (losses) (1)	—		10
Total realized and unrealized gains (losses)	—		10
Other comprehensive income (loss)	(1)		—
Purchases	12		(1)
Sales	(1)		—
Transfers into Level 3 (1)	—		—
Transfers out of Level 3 (1)	(5)		—
Balance, June 30, 2022	$	16	$	9
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period	$	—	$	10
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period.	$	(1)	$	—
Balance, January 1, 2021	$	14	$	—
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income	—		—
Net derivative gains (losses) (1)	—		—
Total realized and unrealized gains (losses)	—		—
Other comprehensive income (loss)	—		—
Purchases	—		—
Sales	(3)		—
Transfers into Level 3 (1)	—		—
Transfers out of Level 3 (1)	—		—
Balance, June 30, 2021	$	11	$	—
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period	$	—	$	—
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period	$	—	$	—

____________

(1)Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.

Quantitative and Qualitative Information about Level 3 Fair Value Measurements

The following tables disclose quantitative information about Level 3 fair value measurements by category for assets and liabilities as of June 30, 2022 and December 31, 2021, respectively.

Quantitative Information about Level 3 Fair Value Measurements as of June 30, 2022

	Fair Value	Valuation Technique	Significant Unobservable Input	Range	Weighted Average
	(in millions)
Assets:
Investments:
Fixed maturities, AFS:

30

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

	Fair Value		Valuation Technique	Significant Unobservable Input	Range	Weighted Average
	(in millions)
Corporate	$	4	Matrix pricing  model	Spread over Benchmark	2 bps - 2 bps	2 bps
Liabilities:
GMxB Derivative Features Liability	$	(9)	Discounted cash flow	Non-performance risk Lapse rates Withdrawal rates Annuitization rates Mortality Rates (1): Ages 0 - 40 Ages 41 - 60 Ages 61 - 115	0	0

    Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2021

	Fair Value		Valuation Technique	Significant Unobservable Input	Range	Weighted Average
	(in millions)
Assets:
Investments:
Fixed maturities, AFS:
Corporate	$	9	Matrix pricing model	Spread over benchmark	70 bps - 145 bps	104 bps

Level 3 Financial Instruments for which Quantitative Inputs are Not Available

Certain Privately Placed Debt Securities with Limited Trading Activity

Excluded from the tables above as of June 30, 2022 and December 31, 2021, respectively, are approximately $12 million and $2 million of Level 3 fair value measurements of investments for which the underlying quantitative inputs are not developed by the Company and are not readily available. These investments primarily consist of certain privately placed debt securities with limited trading activity, and their fair values generally reflect unadjusted prices obtained from independent valuation service providers and indicative, non-binding quotes obtained from third-party broker-dealers recognized as market participants. Significant increases or decreases in the fair value amounts received from these pricing sources may result in the Company’s reporting significantly higher or lower fair value measurements for these Level 3 investments.

•The fair value of private placement securities is determined by application of a matrix pricing model or a market comparable company value technique. The significant unobservable input to the matrix pricing model valuation technique is the spread over the industry-specific benchmark yield curve. Generally, an increase or decrease in spreads would lead to directionally inverse movement in the fair value measurements of these securities. The significant unobservable input to the market comparable company valuation technique is the discount rate. Generally, a significant increase (decrease) in the discount rate would result in significantly lower (higher) fair value measurements of these securities.

GMxB Derivative Features Liability

Significant unobservable inputs with respect to the fair value measurement of the Level 3 liabilities identified in the table above are developed using Company data.

Fair value measurement of the GMIB liabilities includes dynamic lapse and GMIB utilization assumptions whereby projected contractual lapses and GMIB utilization reflect the projected net amount of risks of the contract. As the net amount of risk of a contract increases, the assumed lapse rate decreases and the GMIB utilization increases. Increases in volatility would increase the asset and liabilities.

The significant unobservable inputs used in the fair value measurement of the Company’s GMIB NLG liability are lapse rates, withdrawal rates, GMIB utilization rates, adjustment for non-performance risk and NLG forfeiture

31

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

rates. NLG forfeiture rates are caused by excess withdrawals above the annual GMIB accrual rate that cause the NLG to expire. Significant decreases in lapse rates, NLG forfeiture rates, adjustment for non-performance risk and GMIB utilization rates would tend to increase the GMIB NLG liability, while decreases in withdrawal rates and volatility rates would tend to decrease the GMIB NLG liability.

Carrying Value of Financial Instruments Not Otherwise Disclosed in Note 3 and Note 4 of the Notes to these Financial Statements

The carrying values and fair values as of June 30, 2022 and December 31, 2021 for financial instruments not otherwise disclosed in Note 3 and Note 4 of the Notes to these Financial Statements are presented in the table below.

Carrying Values and Fair Values for Financial Instruments Not Otherwise Disclosed

	Carrying Value		Fair Value
			Level 1		Level 2		Level 3		Total
	(in millions)
June 30, 2022:
Mortgage loans on real estate	$	17	$	—	$	—	$	16	$	16
Policy loans	$	246	$	—	$	—	$	289	$	289
Policyholders’ liabilities: Investment contracts	$	119	$	—	$	—	$	113	$	113
December 31, 2021:
Mortgage loans on real estate	$	17	$	—	$	—	$	18	$	18
Policy loans	$	238	$	—	$	—	$	292	$	292
Policyholders’ liabilities: Investment contracts	$	120	$	—	$	—	$	124	$	124

Mortgage Loans on Real Estate

Fair values for commercial mortgage loans on real estate are measured by discounting future contractual cash flows to be received on the mortgage loan using interest rates at which loans with similar characteristics and credit quality would be made. The discount rate is derived based on the appropriate U.S. Treasury rate with a like term to the remaining term of the loan to which a spread reflective of the risk premium associated with the specific loan is added. Fair values for mortgage loans anticipated to be foreclosed and problem mortgage loans are limited to the fair value of the underlying collateral, if lower.

Policy Loans

The fair value of policy loans is calculated by discounting expected cash flows based upon the U.S. Treasury yield curve and historical loan repayment patterns.

Policyholder Liabilities - Investment Contracts and Separate Accounts Liabilities

The fair values for deferred annuities and certain annuities, which are included in policyholders’ account balances and liabilities for investment contracts with fund investments in Separate Accounts are estimated using projected cash flows discounted at rates reflecting current market rates. Significant unobservable inputs reflected in the cash flows include lapse rates and withdrawal rates. Incremental adjustments may be made to the fair value to reflect non-performance risk. Certain other products such as the Company’s association plans contracts, supplementary contracts not involving life contingencies, Access Accounts and Escrow Shield Plus product reserves are held at book value.

Financial Instruments Exempt from Fair Value Disclosure or Otherwise Not Required to be Disclosed

Exempt from Fair Value Disclosure Requirements

Certain financial instruments are exempt from the requirements for fair value disclosure, such as insurance liabilities other than financial guarantees and investment contracts and pension and other postretirement obligations.

32

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

7)    INCOME TAXES

Income tax expense for the three and six months ended June 30, 2022 and 2021 was computed using an estimated annual effective tax rate (“ETR”), with discrete items recognized in the period in which they occur. The estimated ETR is revised, as necessary, at the end of successive interim reporting periods.

8)    RELATED PARTY TRANSACTIONS

The Company did not enter into any new significant transactions with related parties during the three and six months ended June 30, 2022.

9)    EQUITY

AOCI represents cumulative gains (losses) on items that are not reflected in net income (loss). The balances as of June 30, 2022 and December 31, 2021 follow:

	June 30,		December 31,
	2022		2021
	(in millions)
Unrealized gains (losses) on investments	$	(201)	$	86
Accumulated other comprehensive income (loss)	$	(201)	$	86

The components of OCI, net of taxes for the three and six months ended June 30, 2022 and 2021, follow:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Change in net unrealized gains (losses) on investments:
Net unrealized gains (losses) arising during the period	$	(159)	$	50	$	(335)	$	(59)
(Gains) losses reclassified into net income (loss) during the period (1)	2		—		3		(2)
Net unrealized gains (losses) on investments	(157)		50		(332)		(61)
Adjustments for policyholders’ liabilities, DAC, insurance liability loss recognition and other	20		(13)		45		25
Other comprehensive income (loss), net of adjustments (net of deferred income tax expense (benefit) of $(37), $(30), $(77), and $((10))	(137)		37		(287)		(36)
Other comprehensive income (loss)	$	(137)	$	37	$	(287)	$	(36)

____________

(1)See “Reclassification adjustments” in Note 3 of the Notes to these Financial Statements. Reclassification amounts presented net of income tax expense (benefit) of $(1) million, $0 million, $(1) million and $1 million for the three and six months ended June 30, 2022 and 2021, respectively.

Investment gains and losses reclassified from AOCI to net income (loss) primarily consist of realized gains (losses) on sales and credit losses of AFS securities and are included in total investment gains (losses), net on the statements of income (loss). Amounts presented in the table above are net of tax.

10)    COMMITMENTS AND CONTINGENT LIABILITIES

Litigation

Litigation, regulatory and other loss contingencies arise in the ordinary course of the Company’s activities. The Company is a defendant in litigation matters arising from the conduct of its business. In some of these matters, claimants seek to recover very large or indeterminate amounts, including compensatory, punitive, treble and exemplary damages. Modern pleading practice permits considerable variation in the assertion of monetary damages and other relief. Claimants are not always required to specify the monetary damages they seek, or they may be required only to state an amount sufficient to meet a court’s jurisdictional requirements. Moreover, some jurisdictions allow claimants to allege monetary damages that far exceed any reasonably possible verdict. The variability in pleading requirements and past experience demonstrates that the monetary and other relief that may be requested in a lawsuit or claim often bears little relevance to the merits or potential value of a claim.

33

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

The outcome of a litigation or regulatory matter is difficult to predict, and the amount or range of potential losses associated with these or other loss contingencies requires significant management judgment. It is not possible to predict the ultimate outcome or to provide reasonably possible losses or ranges of losses for all pending regulatory matters, litigation and other loss contingencies. While it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company’s financial position, based on information currently known, management believes that neither the outcome of pending litigation and regulatory matters, nor potential liabilities associated with other loss contingencies, are likely to have such an effect. However, given the large and indeterminate amounts sought in certain litigation and the inherent unpredictability of all such matters, it is possible that an adverse outcome in certain of the Company’s litigation or regulatory matters, or liabilities arising from other loss contingencies, could, from time to time, have a material adverse effect upon the Company’s results of operations or cash flows in a particular quarterly or annual period.

For some matters, the Company is able to estimate a range of loss. For such matters in which a loss is probable, an accrual has been made. For matters where the Company believes a loss is reasonably possible, but not probable, no accrual is required. For matters for which an accrual has been made, but there remains a reasonably possible range of loss in excess of the amounts accrued or for matters where no accrual is required, the Company develops an estimate of the unaccrued amounts of the reasonably possible range of losses. As of June 30, 2022, the Company estimates the aggregate range of reasonably possible losses, in excess of any amounts accrued for these matters as of such date, to be up to approximately $5 million.

For other matters, the Company is currently not able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from plaintiffs and other parties, investigation of factual allegations, rulings by a court on motions or appeals, analysis by experts and the progress of settlement discussions. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation and regulatory contingencies and updates the Company’s accruals, disclosures and reasonably possible losses or ranges of loss based on such reviews.

Guarantees and Other Commitments

The Company has no outstanding commitments under existing mortgage loans or mortgage loan commitment agreements at June 30, 2022.

11) UNPAID CLAIM AND CLAIM EXPENSES

The liability for unpaid claims and claim expenses as of June 30, 2022 and 2021 is as follows:

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

Liability for Unpaid Claims and Claim Expenses

	June 30,
	2022		2021
	(in millions)
Gross Balance at January 1,	$	78	$	41
Less Reinsurance	23		15
Net Balance at January 1,	$	55	$	26
Incurred Claims (net) Related to:
Current Period	$	88	$	63
Prior Period	9		2
Total Incurred	$	97	$	65
Paid Claims (net) Related to:
Current Period	$	49	$	39
Prior Period	27		16
Total Paid	$	76	$	55
Net balance at June 31,	$	76	$	35
Add Reinsurance	29		18
Gross Balance at June 31,	$	105	$	53

12) REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company identified an error in its statement of cash flows for the years ended December 31, 2021 and 2020, respectively. Specifically, the Company incorrectly classified certain deposits and withdrawals of policyholders’ account balances as operating net cash inflows rather than financing net cash inflows. Management assessed the materiality of this error within previously issued financial statements based upon SEC Staff Accounting Bulletin Number 99, Materiality, which is since codified in Accounting Standards Codification ("ASC") 250, Accounting Changes and Error Corrections. As a result of this evaluation, management concluded the impact of the error to previously issued financial statements was not considered to be material. However, in order to correctly present the Statement of Cash Flows, management has elected to revise the impacted financial statements the next time such financial statements are filed which will be in connection with the filing of the Company’s Form 10-K for the year ended December 31, 2022.

There was no impact to the Company’s Balance Sheets, Statements of Income (loss), Statements of Comprehensive Income (loss) or Statements of Equity for any previous period.

The following tables present line items of such previously issued financial statements that are impacted by the error. For these line items, the tables detail the amounts as previously reported, the impact upon those line items due to the correction, and the amounts which will be presented in the Company’s Form 10-K for the year ended December 31, 2022.

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

	December 31, 2021						December 31, 2020
	As Reported		Adjustment		As Revised		As Reported		Adjustment		As Revised
	(in millions)
Statement of Cash Flows:
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Reinsurance recoverable	19		(135)		(116)		19		(144)		(125)
Net cash provided by (used in) operating activities	$	(250)	$	(135)	$	(385)	$	(205)	$	(144)	$	(349)
Cash flows from financing activities:
Policyholders’ account balances:
Deposits	$	776	$	(140)	$	636	$	712	$	(134)	$	578
Withdrawals	(364)		276		(88)		(357)		279		(78)
Net cash provided by (used in) financing activities	$	415	$	135	$	550	$	667	$	144	$	811

36

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA

Notes to Financial Statements (Unaudited), Continued

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 is presented pursuant to General Instruction (H)(2)(a) of Form 10-Q. The management’s narrative that follows should be read in conjunction with the financial statements and the related Notes to Financial Statements included elsewhere herein, with the information provided under “Note Regarding Forward-looking Statements and Information” included elsewhere herein and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) in Part II, Item 7 and “Risk Factors” in Part I, Item 1A included in Equitable America’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”). The management’s narrative that follows represents a discussion and analysis of Equitable America’s financial condition and results of operations and not the financial condition and results of operations of Equitable Holdings, Inc. (“Holdings”).

Executive Summary

Overview

We are an indirect, wholly-owned subsidiary of Holdings. Our primary business is to provide life insurance and employee benefit products to individuals and small and medium-sized businesses. We are licensed to sell our products in 49 states (not including New York), the District of Columbia and Puerto Rico.

COVID-19 Impact

We continue to closely monitor COVID-19 developments and the impact on our business, operations and investment portfolio. The pandemic’s impact on us depends on future developments that are highly uncertain, including the scope and duration of the pandemic and any recovery period, the emergence and spread of COVID-19 variants, the availability, adoption and efficacy of COVID-19 treatments and vaccines, and future actions taken by governmental authorities, central banks and other parties in response to COVID-19. It is not possible to predict or estimate the longer-term effects of the COVID-19 pandemic, on the economy and on our business, results of operations, and financial condition, including the impact on our investment portfolio or the need for us to revisit or revise targets previously provided to the markets and/or aspects of our business model. For additional information regarding the actual and potential impacts of the COVID-19 pandemic and action we have taken to mitigate certain impacts,, see “Risk Factors—Risks Relating to Conditions in the Financial Markets and Economy—The coronavirus (COVID-19) pandemic”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary—COVID-19 Impact” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—General Account Investment Portfolio” in the 2021 Form 10-K.

Revenues

Our revenues come from three principal sources:

•fee income derived from our products

•premiums from our traditional life insurance, annuity, and employee benefits products; and

•investment income from our General Account investment portfolio.

Our fee income varies directly in relation to the amount of the underlying AV or benefit base of our life insurance and annuity products which are influenced by changes in economic conditions, primarily equity market returns, as well as net flows. Our premium income is driven by the growth in new policies written and covered lives, and the persistency of our in-force policies, which are influenced by a combination of factors, including our efforts to attract and retain customers and market conditions that influence demand for our products. Our investment income is driven by the yield on our General Account investment portfolio and is impacted by the prevailing level of interest rates as we reinvest cash associated with maturing investments and net flows to the portfolio.

Benefits and Other Deductions

Our primary expenses are:

•policyholders’ benefits and interest credited to policyholders’ account balances;

•sales commissions and compensation paid to intermediaries and advisors that distribute our products and services; and

•compensation and benefits provided to Equitable Financial’s employees and other operating expenses.

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Policyholders’ benefits are driven primarily by mortality, morbidity, customer withdrawals and benefits which change in response to changes in capital market conditions. In addition, some of our policyholders’ benefits are directly tied to the AV and benefit base of our variable annuity products. Interest credited to policyholders varies in relation to the amount of the underlying AV or benefit base. Sales commissions and compensation paid to intermediaries and advisors vary in relation to premium and fee income generated from these sources, whereas compensation and benefits to Equitable Financial’s employees are more constant and impacted by market wages and decline with increases in efficiency. Our ability to manage these expenses across various economic cycles and products is critical to the profitability of our company.

Significant Factors Impacting Our Results

The following significant factors have impacted, and may in the future impact, our financial condition, results of operations or cash flows.

Impact of Hedging on Results

We have offered and continue to offer variable annuity and life insurance products. The future claims exposure on these features is sensitive to movements in the equity markets and interest rates. Accordingly, we have implemented hedging programs designed to mitigate the economic exposure to us from these features due to equity market and interest rate movements. Changes in the values of the derivatives associated with these programs due to equity market and interest rate movements are recognized in the periods in which they occur while corresponding changes in offsetting liabilities not measured at fair value, are recognized over time. This results in net income volatility.

Effect of Assumption Updates on Operating Results

Our actuaries oversee the valuation of the product liabilities and assets and review the underlying inputs and assumptions. We comprehensively review the actuarial assumptions underlying these valuations and update assumptions during the third quarter of each year. Assumptions are based on a combination of Company experience, industry experience, management actions and expert judgment and reflect our best estimate as of the date of the applicable financial statements. Changes in assumptions can result in a significant change to the carrying value of product liabilities and assets and, consequently, the impact could be material to earnings in the period of the change.

Most of the variable annuity products, variable universal life insurance and universal life insurance products we offer maintain policyholder deposits that are reported as liabilities and classified within either Separate Accounts liabilities or policyholder account balances. Our products and riders also impact liabilities for future policyholder benefits and unearned revenues and assets for DAC and DSI. The valuation of these assets and liabilities (other than deposits) is based on differing accounting methods depending on the product, each of which requires numerous assumptions and considerable judgment. The accounting guidance applied in the valuation of these assets and liabilities includes, but is not limited to, the following: (i) universal life insurance and variable life insurance secondary guarantees for which benefit liabilities are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments; (ii) certain product guarantees for which benefit liabilities are accrued over the life of the contract in proportion to actual and future expected policy assessments; and (iii) certain product guarantees reported as embedded derivatives at fair value.

For further details of our accounting policies and related judgments pertaining to assumption updates, see Note 2 of the Notes to the Financial Statements and “Summary of Critical Accounting Estimates —Liability for Future Policy Benefits” included in the 2021 Form 10-K.

Macroeconomic and Industry Trends

Our business and results of operations are significantly affected by economic conditions and consumer confidence, conditions in the global capital markets and the interest rate environment.

Financial and Economic Environment

A wide variety of factors continue to impact financial and economic conditions. These factors include, among others, volatility in the capital markets, low interest rates, inflationary pressures, economic growth, fuel and energy costs, supply chain disruptions, changes in fiscal or monetary policy and geopolitical tensions. The invasion of Ukraine by Russia and the sanctions and other measures imposed in response to this conflict significantly increased the level of volatility in the financial markets and have increased the level of economic and political uncertainty.

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Stressed conditions, volatility and disruptions in the capital markets, particular markets, or financial asset classes can have an adverse effect on us, in part because we have a large investment portfolio. In addition, our insurance liabilities and derivatives are sensitive to changing market factors, including equity market performance and interest rates. During the second quarter 2022, equity markets continued their decline and interest rates continued to rise, and are anticipated to continue to rise throughout the year based on statements of members of the Board of Governors of the Federal Reserve System. An increase in market volatility could continue to affect our business, including through effects on the yields we earn on invested assets, changes in required reserves and capital and fluctuations in the value of our AUM and AV, from which we derive our fee income. These effects could be exacerbated by uncertainty about future fiscal policy, changes in tax policy, the scope of potential deregulation and levels of global trade.

The potential for increased volatility, coupled with prevailing interest rates remaining below historical averages despite inflationary pressures, could pressure sales and reduce demand for our products as consumers consider purchasing alternative products to meet their objectives. In addition, this environment could make it difficult to consistently develop products that are attractive to customers. Financial performance can be adversely affected by market volatility and equity market declines as fees driven by AV and AUM fluctuate, hedging costs increase and revenues decline due to reduced sales and increased outflows

We monitor the behavior of our customers and other factors, including mortality rates, morbidity rates, annuitization rates and lapse and surrender rates, which change in response to changes in capital market conditions, to ensure that our products and solutions remain attractive and profitable. For additional information on our sensitivity to interest rates and capital market prices, see “Quantitative and Qualitative Disclosures About Market Risk.”

Interest Rate Environment

We believe the interest rate environment will continue to impact our business and financial performance in the future. A prolonged low interest rate environment may subject us to increased hedging costs or an increase in the amount of reserves we are required to hold, lowering our statutory surplus.

Regulatory Developments

We are regulated primarily by the Arizona Department of Insurance and Financial Institutions, with some policies and products also subject to federal regulation. On an ongoing basis, regulators refine capital requirements and introduce new reserving standards. Regulations recently adopted or currently under review can potentially impact our statutory reserve and capital requirements. For additional information on the regulatory developments, see “Business—Regulation” and “Risk Factors—Legal and Regulatory Risks” in the 2021 Form 10-K.

Climate Risks. In March 2022, the SEC released proposed rule changes on climate-related disclosure. The proposed rule changes would require companies to include certain climate-related disclosures including information about climate-related risks that have had or reasonably likely to have a material impact on their business, results of operations, or financial condition, and certain climate-related financial statement metrics in a note to the audited financial statements. Among other things, the required information about climate-related risks also would include disclosure of a company’s greenhouse gas emissions, information about climate-related targets and goals, and if a transition plan, has been adopted as part of climate-related risk management strategy, and requires extensive attestation requirements. If adopted as proposed, the rule changes are expected to result in additional compliance and reporting costs.

Privacy and Security of Customer Information and Cybersecurity Regulation. In March 2022, the SEC released proposed rules enhancing cybersecurity risk and management disclosure requirements for companies. If enacted, the proposed rules would, among other things, require disclosure of any material cybersecurity incident on its Form 8-K within four business days of determining that the incident it has experienced is material. They would also require periodic disclosures of, among other things, (i) details on the company’s cybersecurity policies and procedures, (ii) cybersecurity governance, oversight policies and risk management policies, including the board of directors’ oversight of cybersecurity risks, (iii) the relevant expertise of members of the board of directors with respect to cybersecurity issues and (iv) details of any cybersecurity incident that was previously disclosed on Form 8-K, as well as any undisclosed incidents that were non-material, but have become material in the aggregate.

Results of Operations

The following table summarizes our statements of income (loss) for the six months ended June 30, 2022 and 2021:

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Statement of Income (Loss)

	Six Months Ended June 30,
	2022		2021
	(in millions)
REVENUES
Policy charges and fee income	$	146	$	144
Premiums	108		76
Net derivative gains (losses)	—		(3)
Net investment income (loss)	41		44
Investment gains (losses), net	(3)		—
Investment management and service fees	11		2
Other income	1		6
Total revenues	304		269
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits	156		109
Interest credited to policyholders’ account balances	42		40
Compensation and benefits	20		18
Commissions	42		34
Amortization of deferred policy acquisition costs	35		43
Other operating costs and expenses	43		42
Total benefits and other deductions	338		286
Income (loss) from continuing operations, before income taxes	(34)		(17)
Income tax (expense) benefit	2		4
Net income (loss)	$	(32)	$	(13)

The following discussion compares the results for the six months ended June 30, 2022 to the six months ended June 30, 2021.

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Net Income (Loss) Attributable to Equitable America

Net loss attributable to Equitable America increased by $19 million, to a net loss of $32 million for the six months ended June 30, 2022 from a net loss of $13 million for the six months ended June 30, 2021, primarily driven by the following notable items:

Unfavorable items included:

•Policyholders’ benefits increased by $47 million mainly due to growth of the employee benefits business and equity market depreciation in the first half of 2022 compared to equity market appreciation during the first half of 2021.

•Commissions increased by $8 million mainly due to increased sales related to business growth.

•Net investment income decreased by $3 million mainly due to lower alternatives investment income and lower prepayments.

•Net investment gains decreased by $3 million primarily due to to reduce duration during the first half of 2022.

These were partially offset by the following favorable items:

•Fee-type revenue increased by $38 million mainly due to business growth, primarily driven by an increase in employee benefits premiums.

•Amortization of deferred policy acquisition costs decreased by $8 million mainly due to one-time adjustment during first half of 2021 .

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Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in our financial statements included elsewhere herein. For a discussion of our significant accounting policies, see Note 2 to the Company’s financial statements included in our 2021 Form 10-K. The most critical estimates include those used in determining:

•liabilities for future policy benefits;

•accounting for reinsurance;

•capitalization and amortization of DAC;

•estimated fair values of investments in the absence of quoted market values and investment impairments;

•estimated fair values of freestanding derivatives and the recognition and estimated fair value of embedded derivatives requiring bifurcation;

•measurement of income taxes and the valuation of deferred tax assets; and

•liabilities for litigation and regulatory matters.

In applying our accounting policies, we make subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries while others are specific to our business and operations. Actual results could differ from these estimates.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the quantitative and qualitative disclosures about market risk described in the Annual Report on Form 10-K for the year ended December 31, 2021 in "Quantitative and Qualitative Disclosures About Market Risk".

Item 4.     Controls and Procedures

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2022, the Company’s disclosure controls and procedures were effective.

During the first quarter 2022, we implemented a new accounting and financial reporting system, including the general ledger. We have modified our existing controls infrastructure, as well as added other processes and internal controls, to adapt to our new general ledger. There are no other changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during the six months ended June 30, 2022, 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

For information regarding certain legal proceedings pending against us, see Note 11 of the Notes to the Financial Statements (unaudited) in this Form 10-Q. Also see “Risk Factors—Legal and Regulatory Risks—Legal and regulatory actions” included in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 1A. Risk Factors

You should carefully consider the risks described in the “Risk Factors” section included in our Annual Report on Form 10-K for the year ended December 31, 2021. Risks to which we are subject also include, but are not limited to, the factors mentioned under “Note Regarding Forward-Looking Statements and Information” above and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3.     Defaults Upon Senior Securities

Not applicable.

Item 4.    Mine Safety Disclosures

Not applicable.

Item 5.     Other Information

None.

Item 6.     Exhibits     

INDEX TO EXHIBITS

Number		Description
31.1	#	Section 302 Certification made by the registrant’s Chief Executive Officer
31.2	#	Section 302 Certification made by the registrant’s Chief Financial Officer
32.1	#	Section 906 Certification made by the registrant’s Chief Executive Officer
32.2	#	Section 906 Certification made by the registrant’s 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		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibits 101).

______________

#    Filed herewith.

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GLOSSARY

Selected Financial Terms

Account Value (“AV”)	Generally equals the aggregate policy account value of our retirement and protection products. General Account AV refers to account balances in investment options that are backed by the General Account while Separate Accounts AV refers to Separate Accounts investment assets.
Alternative investments	Investments in real estate and real estate joint ventures and other limited partnerships.
Annualized Premium	100% of first year recurring premiums (up to target) and 10% of excess first year premiums or first year premiums from single premium products.
Assets under management (“AUM”)	Investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB, (ii) the assets in our GAIA portfolio and (iii) the Separate Account assets of our retirement and protection businesses. Total AUM reflects exclusions between segments to avoid double counting.
Combined RBC Ratio	Calculated as the overall aggregate RBC ratio for the Company’s insurance subsidiaries including capital held for its life insurance and variable annuity liabilities and non-variable annuity insurance liabilities.
Conditional tail expectation (“CTE”)	Calculated as the average amount of total assets required to satisfy obligations over the life of the contract or policy in the worst x% of scenarios. Represented as CTE (100 less x). Example: CTE95 represents the worst five percent of scenarios.
Deferred policy acquisition cost (“DAC”)	Represents the incremental costs related directly to the successful acquisition of new and certain renewal insurance policies and annuity contracts and which have been deferred on the balance sheet as an asset.
Deferred sales inducements (“DSI”)	Represent amounts that are credited to a policyholder’s account balance that are higher than the expected crediting rates on similar contracts without such an inducement and that are an incentive to purchase a contract and also meet the accounting criteria to be deferred as an asset that is amortized over the life of the contract.
Dividends Received Deduction (“DRD”)	A tax deduction under U.S. federal income tax law received by a corporation on the dividends it receives from other corporations in which it has an ownership stake.
Fee-Type Revenue	Revenue from fees and related items, including policy charges and fee income, premiums, investment management and service fees, and other income.
Gross Premiums	First year premium and deposits and Renewal premium and deposits.

Invested assets	Includes fixed maturity securities, equity securities, mortgage loans, policy loans, alternative investments and short-term investments.
P&C	Property and casualty.
Premium and deposits	Amounts a policyholder agrees to pay for an insurance policy or annuity contract that may be paid in one or a series of payments as defined by the terms of the policy or contract.
Protection Solutions Reserves	Equals the aggregate value of Policyholders’ account balances and Future policy benefits for policies in our Protection Solutions segment.
Reinsurance	Insurance policies purchased by insurers to limit the total loss they would experience from an insurance claim.
Renewal premium and deposits	Premiums and deposits after the first twelve months of the policy or contract.
Risk-based capital (“RBC”)	Rules to determine insurance company statutory capital requirements. It is based on rules published by the National Association of Insurance Commissioners (“NAIC”).
Total adjusted capital (“TAC”)	Primarily consists of capital and surplus, and the asset valuation reserve.

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Value of business acquired (“VOBA”)	Present value of estimated future gross profits from in-force policies of acquired businesses.
Product Terms
401(k)	A tax-deferred retirement savings plan sponsored by an employer. 401(k) refers to the section of the Internal Revenue Code of 1986, as amended (the “Code”) pursuant to which these plans are established.
403(b)	A tax-deferred retirement savings plan available to certain employees of public schools and certain tax-exempt organizations. 403(b) refers to the section of the Code pursuant to which these plans are established.
457(b)	A deferred compensation plan that is available to governmental and certain non-governmental employers. 457(b) refers to the section of the Code pursuant to which these plans are established.
Accumulation phase	The phase of a variable annuity contract during which assets accumulate based on the policyholder’s lump sum or periodic deposits and reinvested interest, capital gains and dividends that are generally tax-deferred.
Affluent	Refers to individuals with $250,000 to $999,999 of investable assets.
Annuitant	The person who receives annuity payments or the person whose life expectancy determines the amount of variable annuity payments upon annuitization of an annuity to be paid for life.
Annuitization	The process of converting an annuity investment into a series of periodic income payments, generally for life.

Benefit base	A notional amount (not actual cash value) used to calculate the owner’s guaranteed benefits within an annuity contract. The death benefit and living benefit within the same contract may not have the same benefit base.
Cash surrender value	The amount an insurance company pays (minus any surrender charge) to the policyholder when the contract or policy is voluntarily terminated prematurely.
Deferred annuity	An annuity purchased with premiums paid either over a period of years or as a lump sum, for which savings accumulate prior to annuitization or surrender, and upon annuitization, such savings are exchanged for either a future lump sum or periodic payments for a specified length of time or for a lifetime.
Dollar-for-dollar withdrawal	A method of calculating the reduction of a variable annuity benefit base after a withdrawal in which the benefit is reduced by one dollar for every dollar withdrawn.
Fixed annuity	An annuity that guarantees a set annual rate of return with interest at rates we determine, subject to specified minimums. Credited interest rates are guaranteed not to change for certain limited periods of time.
Fixed Rate GMxB	Guarantees on our individual variable annuity products that are based on a rate that is fixed at issue.
Floating Rate GMxB	Guarantees on our individual variable annuity products that are based on a rate that varies with a specified index rate, subject to a cap and floor.
Future policy benefits	Future policy benefits for the annuities business are comprised mainly of liabilities for life-contingent income annuities, and liabilities for the variable annuity guaranteed minimum benefits accounted for as insurance. Future policy benefits for the life business are comprised mainly of liabilities for traditional life and certain liabilities for universal and variable life insurance contracts (other than the Policyholders’ account balance).
General Account Investment Portfolio	The invested assets held in the General Account.
General Account	The assets held in the general accounts of our insurance companies as well as assets held in our separate accounts on which we bear the investment risk.

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GMxB	A general reference to all forms of variable annuity guaranteed benefits, including guaranteed minimum living benefits, or GMLBs (such as GMIBs, GMWBs and GMABs), and guaranteed minimum death benefits, or GMDBs (inclusive of return of premium death benefit guarantees).
Guaranteed income benefit (“GIB”)	An optional benefit which provides the policyholder with a guaranteed lifetime annuity based on predetermined annuity purchase rates applied to a GIB benefit base, with annuitization automatically triggered if and when the contract AV falls to zero.

Guaranteed minimum accumulation benefits (“GMAB”)	An optional benefit (available for an additional cost) which entitles an annuitant to a minimum payment, typically in lump-sum, after a set period of time, typically referred to as the accumulation period. The minimum payment is based on the benefit base, which could be greater than the underlying AV.
Guaranteed minimum death benefits (“GMDB”)	An optional benefit (available for an additional cost) that guarantees an annuitant’s beneficiaries are entitled to a minimum payment based on the benefit base, which could be greater than the underlying AV, upon the death of the annuitant.
Guaranteed minimum income benefits (“GMIB”)	An optional benefit (available for an additional cost) where an annuitant is entitled to annuitize the policy and receive a minimum payment stream based on the benefit base, which could be greater than the underlying AV.
Guaranteed minimum living benefits (“GMLB”)	A reference to all forms of guaranteed minimum living benefits, including GMIBs, GMWBs and GMABs (does not include GMDBs).
Guaranteed minimum withdrawal benefits (“GMWB”)	An optional benefit (available for an additional cost) where an annuitant is entitled to withdraw a maximum amount of their benefit base each year, for which cumulative payments to the annuitant could be greater than the underlying AV.
Guaranteed Universal Life (“GUL”)	A universal life insurance offering with a lifetime no lapse guarantee rider, otherwise known as a guaranteed UL policy. With a GUL policy, the premiums are guaranteed to last the life of the policy.
Guaranteed withdrawal benefit for life (“GWBL”)	An optional benefit (available for an additional cost) where an annuitant is entitled to withdraw a maximum amount of their benefit base each year, for the duration of the policyholder’s life, regardless of account performance.
High net worth	Refers to individuals with $1,000,000 or more of investable assets.
Index-linked annuities	An annuity that provides for asset accumulation and asset distribution needs with an ability to share in the upside from certain financial markets such as equity indices, or an interest rate benchmark. With an index-linked annuity, the policyholder’s AV can grow or decline due to various external financial market indices performance.
Indexed Universal Life (“IUL”)	A permanent life insurance offering built on a universal life insurance framework that uses an equity-linked approach for generating policy investment returns.
Living benefits	Optional benefits (available at an additional cost) that guarantee that the policyholder will get back at least his original investment when the money is withdrawn.
Mortality and expense risk fee (“M&E fee”)	A fee charged by insurance companies to compensate for the risk they take by issuing life insurance and variable annuity contracts.

Net flows

Net change in customer account balances in a period including, but not limited to, gross premiums, surrenders, withdrawals and benefits. It excludes investment performance, interest credited to customer accounts and policy charges.

Policyholder account balances

Annuities. Policyholder account balances are held for fixed deferred annuities, the fixed account portion of variable annuities and non-life contingent income annuities. Interest is credited to the policyholder’s account at interest rates we determine which are influenced by current market rates, subject to specified minimums. Life Insurance Policies. Policyholder account balances are held for retained asset accounts, universal life policies and the fixed account of universal variable life insurance policies. Interest is credited to the policyholder’s account at interest rates we determine which are influenced by current market rates, subject to specified minimums.

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Return of premium (“ROP”) death benefit	This death benefit pays the greater of the account value at the time of a claim following the owner’s death or the total contributions to the contract (subject to adjustment for withdrawals). The charge for this benefit is usually included in the M&E fee that is deducted daily from the net assets in each variable investment option. We also refer to this death benefit as the Return of Principal death benefit.
Rider	An optional feature or benefit that a policyholder can purchase at an additional cost.
Roll-up rate	The guaranteed percentage that the benefit base increases by each year.
Separate Account	Refers to the separate account investment assets of our insurance subsidiaries excluding the assets held in those separate accounts on which we bear the investment risk.
Surrender charge	A fee paid by a contract owner for the early withdrawal of an amount that exceeds a specific percentage or for cancellation of the contract within a specified amount of time after purchase.

Surrender rate	Represents annualized surrenders and withdrawals as a percentage of average AV.
Universal life (“UL”) products	Life insurance products that provide a death benefit in return for payment of specified annual policy charges that are generally related to specific costs, which may change over time. To the extent that the policyholder chooses to pay more than the charges required in any given year to keep the policy in-force, the excess premium will be placed into the AV of the policy and credited with a stated interest rate on a monthly basis.
Variable annuity	A type of annuity that offers guaranteed periodic payments for a defined period of time or for life and gives purchasers the ability to invest in various markets though the underlying investment options, which may result in potentially higher, but variable, returns.
Variable Universal Life (“VUL”)	Universal life products where the excess amount paid over policy charges can be directed by the policyholder into a variety of Separate Account investment options. In the Separate Account investment options, the policyholder bears the entire risk and returns of the investment results.
Whole Life (“WL”)	A life insurance policy that is guaranteed to remain in-force for the policyholder’s lifetime, provided the required premiums are paid.

ACRONYMS

•“AB” or “AllianceBernstein” means AB Holding and ABLP.

•“AB Holding” means AllianceBernstein Holding L.P., a Delaware limited partnership.

•“AB Holding Units” means units representing assignments of beneficial ownership of limited partnership interests in AB Holding.

•“ABLP” means AllianceBernstein L.P., a Delaware limited partnership and the operating partnership for the AB business.

•“AFS” means available-for-sale

•“AGL” means AXA Global Life

•“AOCI” means accumulated other comprehensive income

•“ASC” means Accounting Standards Codification

•“ASU” means Accounting Standards Update

•“AUM” means assets under management

•“AV” means Account Value

•“AVR” means asset valuation reserve

•“AXA” means AXA S.A., a société anonyme organized under the laws of France, and formerly our controlling stockholder.

•“AXA Financial” means AXA Financial, Inc., a Delaware corporation and a former wholly-owned direct subsidiary of Holdings. On October 1, 2018, AXA Financial merged with and into Holdings, with Holdings assuming the obligations of AXA Financial.

•“AXA RSUs” means AXA restricted stock units

•“BPs” means basis points

•“CARES Act” means Coronavirus Aid, Relief, and Economic Security Act

•“CDS” means credit default swaps

•“CDSC” means contingent deferred sales commissions

•“CEA” means Commodity Exchange Act

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•“CECL” means current expected credit losses

•“CFTC” means U.S. Commodity Futures Trading Commission

•“COLI” means corporate owned life insurance

•“Company” means Equitable Financial Life Insurance Company of America (“Equitable America”), a direct wholly-owned subsidiary of Holdings.

•“CS Life” means Corporate Solutions Life Reinsurance Company, a Delaware corporation and a wholly-owned direct subsidiary of Holdings.

•“CS Life RE” means CS Life RE Company, an Arizona corporation and a wholly-owned indirect subsidiary of Holdings.

•“CSA” means credit support annex

•“CTE” means conditional tail expectation

•“DAC” means deferred policy acquisition costs

•“DCO” means designated clearing organization

•“DI” means disability income

•“Dodd-Frank Act” means Dodd-Frank Wall Street Reform and Consumer Protection Act

•“DOL” means U.S. Department of Labor

•“DSC” means debt service coverage

•“DSI” means deferred sales inducement

•“EAFE” means European, Australasia, and Far East

•“EFS” means Equitable Financial Services, LLC, a Delaware corporation and a wholly-owned direct subsidiary of Holdings.

•“EIM” means Equitable Investment Management Group, LLC, a Delaware limited liability company and a wholly-owned indirect subsidiary of Holdings.

•“Equitable Advisors” means Equitable Advisors, LLC, a Delaware limited liability company, our retail broker/dealer for our retirement and protection businesses and a wholly-owned indirect subsidiary of Holdings.

•“Equitable America” means Equitable Financial Life Insurance Company of America (f/k/a MONY Life Insurance Company of America), an Arizona corporation and a wholly-owned indirect subsidiary of Holdings.

•“Equitable Distributors” means Equitable Distributors, LLC, a Delaware limited liability company, our wholesale broker/dealer for our retirement and protection businesses and a wholly-owned indirect subsidiary of Holdings.

•“Equitable Financial QP” means Equitable Retirement Plan

•“Equitable Financial” means Equitable Financial Life Insurance Company, a New York corporation, a life insurance company and a wholly-owned subsidiary of EFS.

•“Equitable Network” means Equitable Network, LLC, a Delaware limited liability company and wholly-owned indirect subsidiary of Holdings and its subsidiary, Equitable Network of Puerto Rico, Inc.

•“EQ Premier VIP Trust” means EQ Premier VIP Trust, a series trust that is a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), as an open-end management investment company.

•“EQAT” means EQ Advisors Trust, a series trust that is a Delaware statutory trust and is registered under the Investment Company Act as an open-end management investment company.

•“EQ AZ Life Re” means EQ AZ Life Re Company, an Arizona corporation and a wholly-owned indirect subsidiary of Holdings.

•“ERISA” means Employee Retirement Income Security Act of 1974

•“ETF” means exchange traded funds

•“Exchange Act” means Securities Exchange Act of 1934, as amended

•“FASB” means Financial Accounting Standards Board

•“FDIC” means Federal Deposit Insurance Corporation

•“FHLB” means Federal Home Loan Bank

•“FINRA” means Financial Industry Regulatory Authority, Inc.

•“FIO” means Federal Insurance Office

•“FSOC” means Financial Stability Oversight Council

•The “General Partner” means AllianceBernstein Corporation, a Delaware corporation and the general partner of AB Holding and ABLP.

•“GIO” means guaranteed interest option

•“Holdings” means Equitable Holdings, Inc.

•“Investment Advisers Act” means Investment Advisers Act of 1940, as amended

•“IPO” means initial public offering

•“IRS” means Internal Revenue Service

•“ISDA Master Agreement” means International Swaps and Derivatives Association Master Agreement

•“IUL” means indexed universal life

•“IUS” means Investments Under Surveillance

•“K-12 education market” means individuals in the kindergarten, primary and secondary education market

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•“LGD” means loss given default

•“LIBOR” means London Interbank Offered Rate

•“LTV” means loan-to-value

•“Manual” means Accounting Practices and Procedures Manual as established by the NAIC

•“MD&A” means Management’s Discussion and Analysis of Financial Condition and Results of Operations

•“MRBs” means market risk benefits

•“MSO” means Market Stabilizer Option

•“NAIC” means National Association of Insurance Commissioners

•“NAR” means net amount at risk

•“NAV” means net asset value

•“NFA” means National Futures Association

•“NLG” means no-lapse guarantee

•“NYDFS” means New York State Department of Financial Services

•“OCI” means other comprehensive income

•“OTC” means over-the-counter

•“PD” means probability of default

•“Performance Share Plan” means AXA International Performance Shares Plan

•“PFBL” means profits followed by losses

•“R&P” means retirement and protection

•“RBG” means the Retirement Benefits Group, a specialized division of Equitable Advisors

•“REIT” means real estate investment trusts

•“RoU” means right of use

•“RSUs” means restricted stock units

•“RTM” means reversion to the mean

•“SAP” means statutory accounting principles

•“SCB LLC” means Sanford C. Bernstein & Co., LLC, a registered investment adviser and broker-dealer.

•“SCS” means Structured Capital Strategies

•“SEC” means U.S. Securities and Exchange Commission

•“SIO” means structured investment option

•“SPE” means special purpose entity

•“Stock Option Plan” means AXA Stock Option Plan for AXA Financial Employees and Associates

•“TCJA” or “Tax Reform Act” means the Tax Cuts and Jobs Act, enacted on December 22, 2017

•“TDRs” means troubled debt restructurings

•“TIPS” means treasury inflation-protected securities

•“U.S. GAAP” means accounting principles generally accepted in the United States of America

•“UL” means universal life

•“ULSG” means universal life products with secondary guarantee

•“URR” means unearned revenue reserve

•“VIAC” means Venerable Insurance and Annuity Company

•“VIE” means variable interest entity

•“VISL” means variable interest-sensitive life

•“VOE” means voting interest entity

•“VUL” means variable universal life

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Equitable Financial Life Insurance Company of America has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 9, 2022	/s/ Robin M. Raju
	Name: Robin M. Raju
	Title: Chief Financial Officer              (Principal Financial Officer)
Date: August 9, 2022	/s/ William Eckert
	Name: William Eckert
	Title: Chief Accounting Officer              (Principal Accounting Officer)

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