REINSURANCE

3 Months Ended

Mar. 31, 2024

The Company assumes and cedes reinsurance with other insurance companies. The Company evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Ceded reinsurance does not relieve the originating insurer of liability.

The following table summarizes the effect of reinsurance:


	Three Months Ended March 31,
	2024	2023
		(in millions)
Direct charges and fee income		$	106	$	85
Reinsurance assumed - Equitable Financial		327		—
Reinsurance ceded		(29)		(24)
Policy charges and fee income		$	404	$	61

Direct premiums		$	101	$	85
Reinsurance assumed - Equitable Financial		45		—
Reinsurance ceded		(14)		(16)
Premiums		$	132	$	69

Direct policyholders’ benefits		$	136	$	100
Reinsurance assumed - Equitable Financial		186		—
Reinsurance ceded		(31)		(21)
Policyholders’ benefits		$	291	$	79

Direct interest credited to policyholders’ account balances		$	116	$	31
Reinsurance assumed - Equitable Financial		154		—
Reinsurance ceded		(8)		(8)
Interest credited to policyholders’ account balances		$	262	$	23

Ceded Reinsurance

In 2013, the Company entered into the Reinsurance Agreement with Protective to reinsure an in-force book of life insurance and annuity policies written prior to 2004. In addition to the Reinsurance Agreement, the Company entered into a long-term administrative services agreement with Protective whereby Protective will provide all administrative and other services with respect to the reinsured business.

For business not reinsured with Protective, the Company generally reinsures its variable life and interest-sensitive life insurance policies on an excess of retention basis. The Company generally retains up to a maximum of $4 million of mortality risk on single-life policies and up to a maximum of $6 million of mortality risk on second-to die policies. For amounts applied for in excess of those limits, reinsurance is ceded to Equitable Financial up to a combined maximum of $20 million of risk on single-life policies and up to a maximum of $25 million on second-to die policies. For amounts issued in excess of these limits, reinsurance is typically obtained from unaffiliated third parties. These reinsurance arrangements obligate the reinsurers to pay a portion of any death claim in excess of the amount the Company retains in exchange for an agreed-upon premium.

Equitable America had a quota share arrangement with AXA Global Re (formerly AXA Cessions), assuming a percentage of excess Life/Disability/A&H business. The contract is now closed to new business.

Beginning in 2015, group short and long-term disability is being reinsured with Group Reinsurance Plus (GRP) via a quota share arrangement.

Assumed Reinsurance

On May 17, 2023, Equitable Financial entered into a reinsurance agreement with Equitable America, effective April 1, 2023. Pursuant to the Reinsurance Treaty, virtually all of Equitable Financial’s net retained General Account liabilities, including all of its net retained liabilities relating to the living benefit and death riders related to (i) its variable annuity contracts issued outside the State of New York prior to October 1, 2022 (and with respect to its EQUI-VEST variable annuity contracts, issued outside the State of New York prior to February 1, 2023) and (ii) certain universal life insurance policies issued outside the State of New York prior to October 1, 2022, were reinsured

to Equitable America on a coinsurance funds withheld basis. In addition, all of the Separate Accounts liabilities relating to such variable annuity contracts were reinsured to Equitable America on a modified coinsurance basis. Equitable America’s obligations under the Reinsurance Treaty are secured through Equitable Financial’s retention of certain assets supporting the reinsured liabilities.

There is a diverse pool of assets supporting the funds withheld and NI modco arrangement with Equitable Financial. The following table summarizes the composition of the pool of assets:



	March 31, 2024
	Carrying Value		Fair Value
	(in millions)
Fixed maturities	$	23,765	$	23,765
Mortgage loans on real estate	8,291		7,270
Policy loans	253		254
Other equity investments	231		231
Other invested assets (1)	9,811		9,811
Total assets supporting funds withheld	$	42,351	$	41,331

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(1)Other invested assets includes derivatives and cash and cash equivalents.