EQUITY

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

EQUITY

EQUITY

AOCI represents cumulative gains (losses) on items that are not reflected in net income (loss). The balances were as follows:

	December 31, 2023		December 31, 2022
	(in millions)
Unrealized gains (losses) on investments	$	(51)	$	(382)
Market risk benefits - instrument-specific credit risk component	(649)		1
Liability or future policy benefits - current discount rate component	6		—
Accumulated other comprehensive income (loss)	$	(694)	$	(381)

The components of OCI, net of taxes were as follows:

	Year Ended December 31,
	2023		2022		2021
	(in millions)
Change in net unrealized gains (losses) on investments:
Net unrealized gains (losses) arising during the period (1)	$	192	$	(495)	$	(90)
(Gains) losses reclassified into net income (loss) during the period (2)	4		6		(3)
Net unrealized gains (losses) on investments	196		(489)		(93)
Adjustments for policyholders’ liabilities, insurance liability loss recognition and other	—		9		(2)
Change in unrealized gains (losses), net of adjustments (net of deferred income tax expense (benefit) of $33, $(25) and $(25))	196		(480)		(95)
Change in LFPB discount rate and MRB credit risk
Change in market risk benefits - instrument-specific credit risk (net of deferred income tax expense (benefit) of $(137), $0 and $0)	(513)		1		—
Changes in liability for future policy benefits - current discount rate (net of deferred income tax expense (benefit) of $1, $0, and $0)	4		—		—
Other comprehensive income (loss), net of income taxes	(313)		(479)		(95)
Cumulative effect of adoption of ASU 2018-02, Long Duration Targeted Improvements (net of deferred income tax expense (benefit) of $0, $0 and $15)	—		—		57
Other comprehensive income (loss)	$	(313)	$	(479)	$	(38)

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(1)For 2022, unrealized gains (losses) arising during the period is presented net of a valuation allowance of $81 million established during the fourth quarter of 2022. The Company established the valuation allowance against its deferred tax assets related to unrealized capital losses in the available for sale securities portfolio. As of December 31, 2023, a valuation allowance of $5 million remains against the portion of the deferred tax asset that is still not more-likely-than-not to be realized. See Note 13 of the Notes to these Consolidated Financial Statements for details on the valuation allowance.

(2)See “Reclassification adjustment” in Note 3 of the Notes to these Consolidated Financial Statements. Reclassification amounts presented net of income tax expense (benefit) of $(1) million, $(1) million, $1 million and for the years ended December 31, 2023, 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 consolidated statements of income (loss). Amounts presented in the table above are net of tax.