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LIABILITIES FOR FUTURE POLICYHOLDER BENEFITS
 3 Months Ended
Mar. 31, 2024
Insurance [Abstract]  
LIABILITIES FOR FUTURE POLICYHOLDER BENEFITS LIABILITIES FOR FUTURE POLICYHOLDER BENEFITS
The following tables reconcile the net liability for future policy benefits and liability of death benefits to the liability for future policy benefits in the consolidated balance sheets:
March 31, 2024December 31, 2023
(in millions)
Reconciliation
Payout - Legacy$447 $340 
UL (1)347 344 
Other (2)371 365 
Subtotal1,165 1,049 
Other policy funds (3)
636 604 
Grand total$1,801 $1,653 
______________
(1)Represents the SOP NLG Rider on UL contracts assumed from Equitable Financial.
(2)Primarily future policy benefits related to Protective Life & Annuity and Employee Benefits.
(3)Includes $439 million of URL of which $436 million is covered in Note 5 of the Notes to these Consolidated Financial Statements.
The following tables summarize balances and changes in the liability for future policy benefits for nonparticipating traditional and limited pay contracts.
The payout annuities result from annuitization of current contracts. Inflows are the liquidation of the account values not premiums:
Three Months Ended March 31,
Payout-Legacy
20242023
(Dollars in millions)
Present Value of Expected Future Policy Benefits
Balance, beginning of period$340 $— 
Beginning balance of original discount rate333 — 
Effect of changes in cash flow assumptions— — 
Effect of actual variances from expected experience— — 
Adjusted beginning of period balance333 — 
Issuances119 — 
Interest accrual4 — 
Benefits payments(8)— 
Ending balance at original discount rate448 — 
Effect of changes in discount rate assumptions(1)— 
Balance, end of period$447 $— 
Net liability for future policy benefits$447 $— 
Less: Reinsurance recoverable— — 
Net liability for future policy benefits, after reinsurance recoverable$447 $— 
Weighted-average duration of liability for future policyholder benefits (years)7.7— 
The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses related to nonparticipating traditional and limited payment contracts:
March 31, 2024December 31, 2023
(in millions)
Payout-Legacy
Expected future benefit payments and expenses (undiscounted)$686 $508 
Expected future gross premiums (undiscounted)— — 
Expected future benefit payments and expenses (discounted)447 340 
Expected future gross premiums (discounted)— — 
The following table provides the revenue, interest and weighted average interest rates, related to the additional insurance liabilities :
Three Months Ended March 31,
2024202320242023
Gross PremiumInterest Accretion
(in millions)
Revenue and Interest Accretion
Payout - Legacy (1)$27 $— $6 $— 
Total$27 $— $6 $— 
______________
(1)Gross premium reflected is the liquidation of Account Value at time of annuitization.
The following table provides the weighted average interest rates for the liability for future policy benefits:
March 31, 2024December 31, 2023
Weighted Average Interest Rate
Payout-Legacy
Interest accretion rate5.1 %5.3 %
Current discount rate5.2 %5.0 %
The following table provides the balance, changes in and the weighted average durations of the additional insurance liabilities:
Three Months Ended March 31,
20242023
UL (1)Universal Life (2)
(Dollars in millions)
Balance, beginning of period$344 $58 
Beginning balance before AOCI adjustments344 66 
Effect of changes in interest rate and cash flow assumptions and model changes— — 
Effect of actual variances from expected experience(1)(1)
Adjusted beginning of period balance343 65 
Issuances
— — 
Interest accrual4 1 
Net assessments collected4 2 
Benefit payments(4)— 
Ending balance before shadow reserve adjustments347 68 
Effect of shadow reserve adjustment— (6)
Balance, end of period$347 $62 
Net liability for additional liability$347 $62 
Effect of reserve adjustment recorded in AOCI— — 
Net liability for additional liability, after reinsurance recoverable$347 $62 
Weighted-average duration of additional liability - death benefit (years)17.532.3
______________
(1)The 2024 additional insurance liabilities represent the SOP NLG Rider on UL contracts assumed from Equitable Financial.
(2)The 2023 additional insurance liabilities represent the SOP LTC Rider on all Universal Life contracts inclusive of VL and UL sold by the Company. Subsequent to the Reinsurance Treaty described further in Note 16 of the Notes to these Consolidated Financial Statements, these are no longer material and are not disclosed separately.
The following tables provide the revenue, interest and weighted average interest rates, related to the additional insurance liabilities:
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
AssessmentsInterest AccretionAssessmentsInterest Accretion
(in millions)
Revenue and Interest Accretion
UL (1)$124 $4 $5 $— 
Total$124 $4 $5 $— 
_____________
(1)The 2023 additional insurance liabilities represent the SOP NLG Rider on UL contracts assumed from Equitable Financial.
Three Months Ended March 31,
20242023
Universal Life
Weighted Average Interest Rate
UL4.5 %5.5 %
 Interest accretion rate
4.5 %5.5 %
INSURANCE STATUTORY FINANCIAL INFORMATION
Prescribed and Permitted Accounting Practices
As of March 31, 2024, the following two prescribed and permitted practices resulted in surplus that is different from the statutory surplus that would have been reported had NAIC statutory accounting practices been applied.
During 2022, Equitable Life Financial Insurance Company of America received approval from the Arizona Department of Insurance and Financial Institutions pursuant to A.R.S. 20-515 for Separate Account No. 68A (“SA 68A”) for our Structured Capital Strategies product, Separate Account No. 69A (“SA 69A”) for our EQUI-VEST
product Structured Investment Option and Separate Account No. 71A (“SA 71A”) for our Investment Edge Structured Investment Option, to permit us to use book value as the accounting basis of these three non-insulated Separate Accounts instead of fair value in accordance with the NAIC Accounting and Practices and Procedures Manual to align with how we manage and measure our overall general account asset portfolio. The impact of the application is an decrease of approximately $72 million in statutory surplus as of March 31, 2024.
The Arizona Department of Insurance and Financial Institutions granted to Equitable America a permitted practice to deviate from SSAP No. 108 by applying special accounting treatment for specific derivatives hedging variable annuity benefits subject to fluctuations as a result of interest rate sensitivities. The permitted practice expands on SSAP No. 108 hedge accounting to include equity risks for the full scope of Variable Annuity (VA) contracts (i.e., not just the rider guarantees but for the VA total contract). The permitted practice allows Equitable America to adopt SSAP 108 retroactively from October 1, 2023 and applies to both directly held VA hedges as well as VA hedges in the Equitable America funds withheld asset that resulted from the Reinsurance Treaty. In the calculation of the amount of excess VA equity and interest rate derivative hedging gains/losses to defer (including Net Investment Income on our Equity Total Return Swaps), the permitted practice allows us to compare our total equity and interest derivatives gains and losses to 100% of our target liability change. Any hedge gain or loss deferrals will follow SSAP No. 108 amortization rules (i.e. 10-year straight line).
The impact of applying this revised permitted practice relative to SSAP 108 was an increase of approximately $942 million in statutory special surplus funds as of March 31, 2024.