N-VPFS 1 nvpfsazsepacctbapril2022.htm ALLIANZ VAR ACCT B N-VPFS 4-5-22












ALLIANZ LIFE VARIABLE ACCOUNT B

of

ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA


Financial Statements

December 31, 2021


(With Report of Independent Registered Public Accounting Firm Thereon)














Report of Independent Registered Public Accounting Firm

To the Board of Directors of Allianz Life Insurance Company of North America and the Contract Owners
of Allianz Life Variable Account B

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities of each of the subaccounts of Allianz Life Variable Account B indicated in the table below (other than BlackRock Global Allocation V.I. Fund, BNY Mellon VIF Appreciation Portfolio, Fidelity VIP FundsManager 50% Portfolio, Fidelity VIP FundsManager 60% Portfolio, Franklin Allocation VIP Fund, Franklin Income VIP Fund, Franklin Mutual Shares VIP Fund, Franklin Strategic Income VIP Fund, PIMCO VIT All Asset Portfolio, PIMCO VIT Dynamic Bond Portfolio, PIMCO VIT Global Bond Opportunities Portfolio (Unhedged), PIMCO VIT Global Managed Asset Allocation Portfolio, Templeton Growth VIP Fund, RCM Dynamic Multi‑Asset Plus VIT Fund, AZL Morgan Stanley Global Real Estate Fund Class 1 and AZL Morgan Stanley Global Real Estate Fund Class 2 which do not present a statement of assets and liabilities) as of December 31, 2021, and the related statements of operations and of changes in net assets for each of the periods indicated in the table below, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the subaccounts of Allianz Life Variable Account B (other than BlackRock Global Allocation V.I. Fund, BNY Mellon VIF Appreciation Portfolio, Fidelity VIP FundsManager 50% Portfolio, Fidelity VIP FundsManager 60% Portfolio, Franklin Allocation VIP Fund, Franklin Income VIP Fund, Franklin Mutual Shares VIP Fund, Franklin Strategic Income VIP Fund, PIMCO VIT All Asset Portfolio, PIMCO VIT Dynamic Bond Portfolio, PIMCO VIT Global Bond Opportunities Portfolio (Unhedged), PIMCO VIT Global Managed Asset Allocation Portfolio, Templeton Growth VIP Fund, RCM Dynamic Multi‑Asset Plus VIT Fund, AZL Morgan Stanley Global Real Estate Fund Class 1 and AZL Morgan Stanley Global Real Estate Fund Class 2 which do not present a statement of assets and liabilities) as of December 31, 2021, and the results of each of their operations and the changes in each of their net assets for the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.









Subaccounts of Allianz Life Variable Account B
AZL Balanced Index Strategy Fund(1)
AZL MVP Growth Index Strategy Fund(1)
Franklin Rising Dividends VIP Fund(1)
AZL DFA Five-Year Global Fixed Income Fund(1)
AZL MVP Moderate Index Strategy Fund(1)
Franklin U.S. Government Securities VIP Fund(1)
AZL DFA Multi-Strategy Fund(1)
AZL MVP T. Rowe Price Capital Appreciation Plus Fund(1)
Invesco Oppenheimer V.I. International Growth Fund(1)
AZL Enhanced Bond Index Fund(1)
AZL Russell 1000 Growth Index Fund Class 1(1)
Invesco V.I. American Value Fund(1)
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 1(2)
AZL Russell 1000 Growth Index Fund Class 2(1)
Invesco V.I. Balanced-Risk Allocation Fund(1)
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 2(1)
AZL Russell 1000 Value Index Fund Class 1(1)
Invesco V.I. Global Strategic Income Fund(1)
AZL Fidelity Institutional Asset Management Total Bond Fund Class 1(1)
AZL Russell 1000 Value Index Fund Class 2(1)
JPMorgan Insurance Trust Core Bond Portfolio(1)
AZL Fidelity Institutional Asset Management Total Bond Fund Class 2(1)
AZL S&P 500 Index Fund(1)
Lazard Retirement International Equity Portfolio(1)











AZL Gateway Fund(1)
AZL Small Cap Stock Index Fund Class 1(1)
Lazard Retirement U.S. Small-Mid Cap Equity Portfolio(1)
AZL Government Money Market Fund(1)
AZL Small Cap Stock Index Fund Class 2(1)
MFS International Intrinsic Value Portfolio(1)
AZL International Index Fund Class 1(1)
AZL T. Rowe Price Capital Appreciation Fund(1)
MFS VIT Total Return Bond Portfolio(1)
AZL International Index Fund Class 2(1)
BlackRock Equity Dividend V.I. Fund(1)
MFS VIT Utilities Portfolio(1)
AZL MetWest Total Return Bond Fund(1)
ClearBridge Variable Aggressive Growth Portfolio(1)
PIMCO VIT Balanced Allocation Portfolio(1)
AZL Mid Cap Index Fund Class 1(1)
Columbia Variable Portfolio – Seligman Global Technology Fund(1)
PIMCO VIT CommodityRealReturn Strategy Portfolio(1)
AZL Mid Cap Index Fund Class 2(1)
Davis VA Financial Portfolio(1)
PIMCO VIT Emerging Markets Bond Portfolio(1)
AZL Moderate Index Strategy Fund(1)
Davis VA Real Estate Portfolio(1)
PIMCO VIT Global Core Bond (Hedged) Portfolio(1)
AZL MSCI Emerging Markets Equity Index Class 1(1)
Delaware Ivy VIP Asset Strategy Portfolio(1)
PIMCO VIT High Yield Portfolio(1)
AZL MSCI Emerging Markets Equity Index Class 2(1)
Delaware Ivy VIP Energy Portfolio(1)
PIMCO VIT Long-Term U.S. Government Portfolio(1)
AZL MSCI Global Equity Index Fund Class 1(2)
Delaware Ivy VIP Growth Portfolio(1)
PIMCO VIT Low Duration Portfolio(1)
AZL MSCI Global Equity Index Fund Class 2(1)
Delaware Ivy VIP Mid Cap Growth Portfolio(1)
PIMCO VIT Real Return Portfolio(1)
AZL MVP Balanced Index Strategy Fund(1)
Delaware Ivy VIP Natural Resources Portfolio(1)
PIMCO VIT StocksPLUS Global Portfolio(1)
AZL MVP DFA Multi-Strategy Fund(1)
Delaware Ivy VIP Science and Technology Portfolio(1)
PIMCO VIT Total Return Portfolio(1)
AZL MVP Fidelity Institutional Asset Management Multi-Strategy Fund(1)
Eaton Vance VT Floating-Rate Income Fund(1)
T. Rowe Price Blue Chip Growth Portfolio(1)
AZL MVP Fusion Balanced Fund(1)
Fidelity VIP Emerging Markets Portfolio(1)
T. Rowe Price Equity Income Portfolio(1)
AZL MVP Fusion Conservative Fund(1)
Fidelity VIP Mid Cap Portfolio(1)
T. Rowe Price Health Sciences Portfolio(1)











AZL MVP Fusion Moderate Fund(1)
Fidelity VIP Strategic Income Portfolio(1)
Templeton Global Bond VIP Fund(1)
AZL MVP Global Balanced Index Strategy Fund(1)
Franklin Multi-Asset Dynamic Multi-Strategy VIT Fund(1)
BlackRock Global Allocation V.I. Fund(3) (4)
BNY Mellon VIF Appreciation Portfolio(3) (4)
Fidelity VIP FundsManager 50% Portfolio(3) (4)
Fidelity VIP FundsManager 60% Portfolio(3) (4)
Franklin Allocation VIP Fund(3) (4)
Franklin Income VIP Fund(3) (4)
Franklin Mutual Shares VIP Fund(3) (4)
Franklin Strategic Income VIP Fund(3) (4)
PIMCO VIT All Asset Portfolio(3) (4)
PIMCO VIT Dynamic Bond Portfolio(3) (4)
PIMCO VIT Global Bond Opportunities Portfolio (Unhedged)(3) (4)
PIMCO VIT Global Managed Asset Allocation Portfolio(3) (4)
Templeton Growth VIP Fund(3) (4)
RCM Dynamic Multi-Asset Plus VIT Fund(6)
AZL Morgan Stanley Global Real Estate Fund Class 1(5)
AZL Morgan Stanley Global Real Estate Fund Class 2(5)

1.Statement of operations for the year ended December 31, 2021 and statement of changes in net assets for the years ended December 31, 2021 and 2020
2.Statement of operations and statement of changes in net assets for the period June 18, 2021 (commencement of operations) through December 31, 2021
3.Statement of operations for the period January 1, 2021 to June 18, 2021 (date of liquidation)
4.Statement of changes in net assets for the period January 1, 2021 to June 18, 2021 (date of liquidation) and for the year ended December 31, 2020
5.Statement of changes in net assets for the period January 1, 2020 to August 21, 2020 (date of liquidation)
6.Statement of changes in net assets for the period January 1, 2020 to April 24, 2020 (date of liquidation)

Basis for Opinions

These financial statements are the responsibility of Allianz Life Insurance Company of North America management. Our responsibility is to express an opinion on the financial statements of each of the subaccounts of Allianz Life Variable Account B based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to each of the subaccounts of Allianz Life Variable Account B in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of investments owned as of December 31, 2021 by correspondence with the investee mutual funds. We believe that our audits provide a reasonable basis for our opinions.



/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 4, 2022

We have served as the auditor of one or more of the subaccounts of Allianz Life Variable Account B of Allianz Life Insurance Company of North America since 2019.



ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Assets and Liabilities
December 31, 2021
(In thousands)

















AZL Balanced Index Strategy Fund AZL DFA Five-Year Global Fixed Income Fund AZL DFA Multi-Strategy Fund AZL Enhanced Bond Index Fund AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 1
 Assets:




    Investments at Net Asset Value $ 416,054 
$ 13,004 
$ 852,829 
$ 24,727 
$ 105,623 
         Total Assets 416,054 
13,004 
852,829 
24,727 
105,623 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 416,054 
13,004 
852,829 
24,727 
105,623 






 Net Assets:




    Contracts in Accumulation Period 416,009 
13,004 
852,579 
24,727 
104,868 
    Contracts in Annuity Payment Period 45 
— 
250 
— 
755 
         Total Net Assets $ 416,054 
$ 13,004 
$ 852,829 
$ 24,727 
$ 105,623 






           Investment Shares 23,166 
1,370 
55,235 
2,214 
10,265 
           Investments at Cost $ 358,919 
$ 13,515 
$ 777,700 
$ 24,833 
$ 102,935 





















AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 2 AZL Fidelity Institutional Asset Management Total Bond Fund Class 1 AZL Fidelity Institutional Asset Management Total Bond Fund Class 2 AZL Gateway Fund AZL Government Money Market Fund
 Assets:




    Investments at Net Asset Value $ 1,371,510 
$ 19,155 
$ 148,293 
$ 68,296 
$ 511,547 
         Total Assets 1,371,510 
19,155 
148,293 
68,296 
511,547 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 1,371,510 
19,155 
148,293 
68,296 
511,547 






 Net Assets:




    Contracts in Accumulation Period 1,370,933 
18,996 
148,230 
68,296 
510,284 
    Contracts in Annuity Payment Period 577 
159 
63 
— 
1,263 
         Total Net Assets $ 1,371,510 
$ 19,155 
$ 148,293 
$ 68,296 
$ 511,547 






           Investment Shares 86,750 
1,865 
13,990 
4,234 
511,547 
           Investments at Cost $ 1,274,555 
$ 18,784 
$ 146,135 
$ 53,105 
$ 511,547 
See accompanying notes to financial statements
Page 5 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Assets and Liabilities
December 31, 2021
(In thousands)

















AZL International Index Fund Class 1 AZL International Index Fund Class 2 AZL MetWest Total Return Bond Fund AZL Mid Cap Index Fund Class 1 AZL Mid Cap Index Fund Class 2
 Assets:




    Investments at Net Asset Value $ 93,430 
$ 385,078 
$ 28,583 
$ 53,632 
$ 402,133 
         Total Assets 93,430 
385,078 
28,583 
53,632 
402,133 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 93,430 
385,078 
28,583 
53,632 
402,133 






 Net Assets:




    Contracts in Accumulation Period 93,086 
384,447 
28,583 
53,447 
401,933 
    Contracts in Annuity Payment Period 344 
631 
— 
185 
200 
         Total Net Assets $ 93,430 
$ 385,078 
$ 28,583 
$ 53,632 
$ 402,133 






           Investment Shares 7,363 
20,299 
2,833 
6,060 
14,235 
           Investments at Cost $ 75,200 
$ 301,468 
$ 29,834 
$ 54,830 
$ 292,105 





















AZL Moderate Index Strategy Fund AZL MSCI Emerging Markets Equity Index Class 1 AZL MSCI Emerging Markets Equity Index Class 2 AZL MSCI Global Equity Index Fund Class 1 AZL MSCI Global Equity Index Fund Class 2
 Assets:




    Investments at Net Asset Value $ 1,806,915 
$ 14,226 
$ 87,487 
$ 50,201 
$ 160,173 
         Total Assets 1,806,915 
14,226 
87,487 
50,201 
160,173 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 1,806,915 
14,226 
87,487 
50,201 
160,173 






 Net Assets:




    Contracts in Accumulation Period 1,806,242 
14,195 
87,443 
49,720 
160,146 
    Contracts in Annuity Payment Period 673 
31 
44 
481 
27 
         Total Net Assets $ 1,806,915 
$ 14,226 
$ 87,487 
$ 50,201 
$ 160,173 






           Investment Shares 115,606 
1,792 
11,005 
4,813 
9,523 
           Investments at Cost $ 1,690,495 
$ 9,624 
$ 78,573 
$ 48,060 
$ 149,952 
See accompanying notes to financial statements
Page 6 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Assets and Liabilities
December 31, 2021
(In thousands)

















AZL MVP Balanced Index Strategy Fund AZL MVP DFA Multi-Strategy Fund AZL MVP Fidelity Institutional Asset Management Multi-Strategy Fund AZL MVP Fusion Balanced Fund AZL MVP Fusion Conservative Fund
 Assets:




    Investments at Net Asset Value $ 281,749 
$ 89,961 
$ 211,749 
$ 713,997 
$ 206,207 
         Total Assets 281,749 
89,961 
211,749 
713,997 
206,207 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 281,749 
89,961 
211,749 
713,997 
206,207 






 Net Assets:




    Contracts in Accumulation Period 281,749 
89,961 
211,749 
713,508 
206,187 
    Contracts in Annuity Payment Period — 
— 
— 
489 
20 
         Total Net Assets $ 281,749 
$ 89,961 
$ 211,749 
$ 713,997 
$ 206,207 






           Investment Shares 19,593 
7,368 
15,627 
60,766 
16,683 
           Investments at Cost $ 250,221 
$ 81,007 
$ 186,061 
$ 682,020 
$ 198,245 





















AZL MVP Fusion Moderate Fund AZL MVP Global Balanced Index Strategy Fund AZL MVP Growth Index Strategy Fund AZL MVP Moderate Index Strategy Fund AZL MVP T. Rowe Price Capital Appreciation Plus Fund
 Assets:




    Investments at Net Asset Value $ 1,642,253 
$ 605,711 
$ 2,291,937 
$ 458,639 
$ 1,280,437 
         Total Assets 1,642,253 
605,711 
2,291,937 
458,639 
1,280,437 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 1,642,253 
605,711 
2,291,937 
458,639 
1,280,437 






 Net Assets:




    Contracts in Accumulation Period 1,641,758 
605,711 
2,290,902 
458,639 
1,280,437 
    Contracts in Annuity Payment Period 495 
— 
1,035 
— 
— 
         Total Net Assets $ 1,642,253 
$ 605,711 
$ 2,291,937 
$ 458,639 
$ 1,280,437 






           Investment Shares 137,542 
49,205 
137,571 
29,590 
84,629 
           Investments at Cost $ 1,507,117 
$ 564,418 
$ 1,935,732 
$ 399,942 
$ 1,019,915 
See accompanying notes to financial statements
Page 7 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Assets and Liabilities
December 31, 2021
(In thousands)

















AZL Russell 1000 Growth Index Fund Class 1 AZL Russell 1000 Growth Index Fund Class 2 AZL Russell 1000 Value Index Fund Class 1 AZL Russell 1000 Value Index Fund Class 2 AZL S&P 500 Index Fund
 Assets:




    Investments at Net Asset Value $ 74,879 
$ 680,974 
$ 201,593 
$ 641,646 
$ 958,977 
         Total Assets 74,879 
680,974 
201,593 
641,646 
958,977 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 74,879 
680,974 
201,593 
641,646 
958,977 






 Net Assets:




    Contracts in Accumulation Period 74,615 
680,145 
200,454 
640,953 
957,960 
    Contracts in Annuity Payment Period 264 
829 
1,139 
693 
1,017 
         Total Net Assets $ 74,879 
$ 680,974 
$ 201,593 
$ 641,646 
$ 958,977 






           Investment Shares 4,869 
28,904 
18,360 
41,993 
39,264 
           Investments at Cost $ 54,137 
$ 437,746 
$ 180,816 
$ 547,972 
$ 587,791 





















AZL Small Cap Stock Index Fund Class 1 AZL Small Cap Stock Index Fund Class 2 AZL T. Rowe Price Capital Appreciation Fund BlackRock Equity Dividend V.I. Fund ClearBridge Variable Aggressive Growth Portfolio
 Assets:




    Investments at Net Asset Value $ 45,248 
$ 459,022 
$ 642,013 
$ 1,380 
$ 1,055 
         Total Assets 45,248 
459,022 
642,013 
1,380 
1,055 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 45,248 
459,022 
642,013 
1,380 
1,055 






 Net Assets:




    Contracts in Accumulation Period 45,067 
458,608 
641,613 
1,380 
1,055 
    Contracts in Annuity Payment Period 181 
414 
400 
— 
— 
         Total Net Assets $ 45,248 
$ 459,022 
$ 642,013 
$ 1,380 
$ 1,055 






           Investment Shares 3,851 
27,372 
29,262 
114 
45 
           Investments at Cost $ 37,933 
$ 340,027 
$ 505,303 
$ 1,274 
$ 1,216 
See accompanying notes to financial statements
Page 8 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Assets and Liabilities
December 31, 2021
(In thousands)

















Columbia Variable Portfolio – Seligman Global Technology Fund Davis VA Financial Portfolio Davis VA Real Estate Portfolio Delaware Ivy VIP Asset Strategy Portfolio Delaware Ivy VIP Energy Portfolio
 Assets:




    Investments at Net Asset Value $ 1,488 
$ 41,160 
$ 270 
$ 1,073 
$ 51 
         Total Assets 1,488 
41,160 
270 
1,073 
51 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 1,488 
41,160 
270 
1,073 
51 






 Net Assets:




    Contracts in Accumulation Period 1,452 
41,155 
270 
1,073 
51 
    Contracts in Annuity Payment Period 36 
5 
— 
— 
— 
         Total Net Assets $ 1,488 
$ 41,160 
$ 270 
$ 1,073 
$ 51 






           Investment Shares 38 
2,946 
14 
105 
15 
           Investments at Cost $ 794 
$ 36,268 
$ 169 
$ 1,131 
$ 90 





















Delaware Ivy VIP Growth Portfolio Delaware Ivy VIP Mid Cap Growth Portfolio Delaware Ivy VIP Natural Resources Portfolio Delaware Ivy VIP Science and Technology Portfolio Eaton Vance VT Floating-Rate Income Fund
 Assets:




    Investments at Net Asset Value $ 594 
$ 968 
$ 80 
$ 1,020 
$ 1,159 
         Total Assets 594 
968 
80 
1,020 
1,159 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 594 
968 
80 
1,020 
1,159 






 Net Assets:




    Contracts in Accumulation Period 594 
968 
80 
1,020 
1,159 
    Contracts in Annuity Payment Period — 
— 
— 
— 
— 
         Total Net Assets $ 594 
$ 968 
$ 80 
$ 1,020 
$ 1,159 






           Investment Shares 40 
54 
19 
35 
127 
           Investments at Cost $ 441 
$ 671 
$ 80 
$ 965 
$ 1,173 
See accompanying notes to financial statements
Page 9 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Assets and Liabilities
December 31, 2021
(In thousands)

















Fidelity VIP Emerging Markets Portfolio Fidelity VIP Mid Cap Portfolio Fidelity VIP Strategic Income Portfolio Franklin Multi-Asset Dynamic Multi-Strategy VIT Fund Franklin Rising Dividends VIP Fund
 Assets:




    Investments at Net Asset Value $ 2,199 
$ 610 
$ 2,017 
$ 67 
$ 240,532 
         Total Assets 2,199 
610 
2,017 
67 
240,532 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 2,199 
610 
2,017 
67 
240,532 






 Net Assets:




    Contracts in Accumulation Period 2,199 
610 
2,017 
67 
239,726 
    Contracts in Annuity Payment Period — 
— 
— 
— 
806 
         Total Net Assets $ 2,199 
$ 610 
$ 2,017 
$ 67 
$ 240,532 






           Investment Shares 175 
15 
174 
5 
6,681 
           Investments at Cost $ 2,060 
$ 526 
$ 1,997 
$ 61 
$ 144,030 





















Franklin U.S. Government Securities VIP Fund Invesco Oppenheimer V.I. International Growth Fund Invesco V.I. American Value Fund Invesco V.I. Balanced-Risk Allocation Fund Invesco V.I. Global Strategic Income Fund
 Assets:




    Investments at Net Asset Value $ 157,809 
$ 1,477 
$ 376 
$ 396 
$ 1,840 
         Total Assets 157,809 
1,477 
376 
396 
1,840 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 157,809 
1,477 
376 
396 
1,840 






 Net Assets:




    Contracts in Accumulation Period 157,295 
1,477 
376 
396 
1,832 
    Contracts in Annuity Payment Period 514 
— 
— 
— 
8 
         Total Net Assets $ 157,809 
$ 1,477 
$ 376 
$ 396 
$ 1,840 






           Investment Shares 13,578 
483 
19 
38 
414 
           Investments at Cost $ 170,370 
$ 1,289 
$ 303 
$ 425 
$ 2,104 
See accompanying notes to financial statements
Page 10 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Assets and Liabilities
December 31, 2021
(In thousands)

















JPMorgan Insurance Trust Core Bond Portfolio Lazard Retirement International Equity Portfolio Lazard Retirement U.S. Small-Mid Cap Equity Portfolio MFS International Intrinsic Value Portfolio MFS VIT Total Return Bond Portfolio
 Assets:




    Investments at Net Asset Value $ 18,191 
$ 273 
$ 349 
$ 2,463 
$ 30,750 
         Total Assets 18,191 
273 
349 
2,463 
30,750 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 18,191 
273 
349 
2,463 
30,750 






 Net Assets:




    Contracts in Accumulation Period 18,191 
273 
349 
2,463 
30,735 
    Contracts in Annuity Payment Period — 
— 
— 
— 
15 
         Total Net Assets $ 18,191 
$ 273 
$ 349 
$ 2,463 
$ 30,750 






           Investment Shares 1,629 
25 
18 
67 
2,300 
           Investments at Cost $ 18,037 
$ 298 
$ 257 
$ 1,612 
$ 30,413 





















MFS VIT Utilities Portfolio PIMCO VIT Balanced Allocation Portfolio PIMCO VIT CommodityRealReturn Strategy Portfolio PIMCO VIT Emerging Markets Bond Portfolio PIMCO VIT Global Core Bond (Hedged) Portfolio
 Assets:




    Investments at Net Asset Value $ 93 
$ 198,686 
$ 39,437 
$ 72,587 
$ 113,863 
         Total Assets 93 
198,686 
39,437 
72,587 
113,863 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 93 
198,686 
39,437 
72,587 
113,863 






 Net Assets:




    Contracts in Accumulation Period 93 
198,594 
39,431 
72,466 
113,768 
    Contracts in Annuity Payment Period — 
92 
6 
121 
95 
         Total Net Assets $ 93 
$ 198,686 
$ 39,437 
$ 72,587 
$ 113,863 






           Investment Shares 2 
19,049 
5,095 
5,798 
11,812 
           Investments at Cost $ 80 
$ 187,153 
$ 48,569 
$ 75,909 
$ 114,814 
See accompanying notes to financial statements
Page 11 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Assets and Liabilities
December 31, 2021
(In thousands)

















PIMCO VIT High Yield Portfolio PIMCO VIT Long-Term U.S. Government Portfolio PIMCO VIT Low Duration Portfolio PIMCO VIT Real Return Portfolio PIMCO VIT StocksPLUS Global Portfolio
 Assets:




    Investments at Net Asset Value $ 420,245 
$ 4,225 
$ 6,294 
$ 236,784 
$ 232,366 
         Total Assets 420,245 
4,225 
6,294 
236,784 
232,366 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 420,245 
4,225 
6,294 
236,784 
232,366 






 Net Assets:




    Contracts in Accumulation Period 419,996 
4,225 
6,294 
236,682 
232,083 
    Contracts in Annuity Payment Period 249 
— 
— 
102 
283 
         Total Net Assets $ 420,245 
$ 4,225 
$ 6,294 
$ 236,784 
$ 232,366 






           Investment Shares 52,928 
376 
615 
16,925 
24,283 
           Investments at Cost $ 412,981 
$ 5,010 
$ 6,341 
$ 223,764 
$ 215,406 





















PIMCO VIT Total Return Portfolio T. Rowe Price Blue Chip Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price Health Sciences Portfolio Templeton Global Bond VIP Fund
 Assets:




    Investments at Net Asset Value $ 828,615 
$ 4,737 
$ 1,389 
$ 1,051 
$ 396,914 
         Total Assets 828,615 
4,737 
1,389 
1,051 
396,914 






 Liabilities:




         Total Liabilities — 
— 
— 
— 
— 
 Net Assets: 828,615 
4,737 
1,389 
1,051 
396,914 






 Net Assets:




    Contracts in Accumulation Period 828,224 
4,737 
1,389 
1,051 
396,727 
    Contracts in Annuity Payment Period 391 
— 
— 
— 
187 
         Total Net Assets $ 828,615 
$ 4,737 
$ 1,389 
$ 1,051 
$ 396,914 






           Investment Shares 77,009 
94 
46 
17 
30,193 
           Investments at Cost $ 850,751 
$ 3,400 
$ 1,296 
$ 694 
$ 509,557 




See accompanying notes to financial statements
Page 12 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Assets and Liabilities
December 31, 2021
(In thousands)





Total All Funds
 Assets:
    Investments at Net Asset Value $ 21,166,821 
         Total Assets 21,166,821 


 Liabilities:
         Total Liabilities — 
 Net Assets: 21,166,821 


 Net Assets:
    Contracts in Accumulation Period 21,151,207 
    Contracts in Annuity Payment Period 15,614 
         Total Net Assets $ 21,166,821 


           Investment Shares 1,930,029 
           Investments at Cost $ 18,602,351 









See accompanying notes to financial statements
Page 13 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














AZL Balanced Index Strategy Fund AZL DFA Five-Year Global Fixed Income Fund AZL DFA Multi-Strategy Fund AZL Enhanced Bond Index Fund





 Investment Income:



    Dividends Reinvested in Fund Shares $ 7,468 
$ — 
$ 13,303 
$ 193 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 7,935 
248 
16,162 
374 
         Investment Income (Loss), Net (467)
(248)
(2,859)
(181)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 19,827 
— 
42,304 
641 
    Realized Gains (Losses) on Sales of Investments, Net 9,932 
(187)
14,563 
113 
         Realized Gains (Losses) on Investments, Net 29,759 
(187)
56,867 
754 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 1,683 
(35)
42,253 
(1,454)
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 31,442 
(222)
99,120 
(700)
         Net Increase (Decrease) in Net Assets From Operations $ 30,975 
$ (470)
$ 96,261 
$ (881)

















AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 1 AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 2 AZL Fidelity Institutional Asset Management Total Bond Fund Class 1 AZL Fidelity Institutional Asset Management Total Bond Fund Class 2





 Investment Income:



    Dividends Reinvested in Fund Shares $ 847 
$ 7,262 
$ 573 
$ 3,865 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 811 
15,558 
286 
2,815 
         Investment Income (Loss), Net 36 
(8,296)
287 
1,050 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 2,258 
19,360 
392 
2,907 
    Realized Gains (Losses) on Sales of Investments, Net 159 
11,367 
110 
1,418 
         Realized Gains (Losses) on Investments, Net 2,417 
30,727 
502 
4,325 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 2,687 
57,593 
(965)
(7,770)
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 5,104 
88,320 
(463)
(3,445)
         Net Increase (Decrease) in Net Assets From Operations $ 5,140 
$ 80,024 
$ (176)
$ (2,395)
See accompanying notes to financial statements
Page 14 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














AZL Gateway Fund AZL Government Money Market Fund AZL International Index Fund Class 1 AZL International Index Fund Class 2





 Investment Income:



    Dividends Reinvested in Fund Shares $ 440 
$ 5 
$ 2,428 
$ 5,955 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 1,236 
5,820 
1,570 
8,307 
         Investment Income (Loss), Net (796)
(5,815)
858 
(2,352)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds — 
— 
— 
— 
    Realized Gains (Losses) on Sales of Investments, Net 2,661 
1 
2,373 
18,977 
         Realized Gains (Losses) on Investments, Net 2,661 
1 
2,373 
18,977 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 4,139 
(1)
5,122 
16,309 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 6,800 
— 
7,495 
35,286 
         Net Increase (Decrease) in Net Assets From Operations $ 6,004 
$ (5,815)
$ 8,353 
$ 32,934 

















AZL MetWest Total Return Bond Fund AZL Mid Cap Index Fund Class 1 AZL Mid Cap Index Fund Class 2 AZL Moderate Index Strategy Fund





 Investment Income:



    Dividends Reinvested in Fund Shares $ 431 
$ 1,369 
$ 2,847 
$ 10,811 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 478 
765 
8,473 
23,928 
         Investment Income (Loss), Net (47)
604 
(5,626)
(13,117)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 1,527 
6,372 
17,219 
20,980 
    Realized Gains (Losses) on Sales of Investments, Net 137 
137 
32,584 
12,308 
         Realized Gains (Losses) on Investments, Net 1,664 
6,509 
49,803 
33,288 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments (2,556)
3,263 
37,735 
87,130 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments (892)
9,772 
87,538 
120,418 
         Net Increase (Decrease) in Net Assets From Operations $ (939)
$ 10,376 
$ 81,912 
$ 107,301 
See accompanying notes to financial statements
Page 15 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














AZL MSCI Emerging Markets Equity Index Class 1 AZL MSCI Emerging Markets Equity Index Class 2 AZL MSCI Global Equity Index Fund Class 1 AZL MSCI Global Equity Index Fund Class 2





 Investment Income:



    Dividends Reinvested in Fund Shares $ 245 
$ 1,251 
$ 591 
$ 1,219 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 229 
2,063 
384 
1,788 
         Investment Income (Loss), Net 16 
(812)
207 
(569)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 267 
1,637 
1,898 
3,916 
    Realized Gains (Losses) on Sales of Investments, Net 660 
3,780 
138 
1,200 
         Realized Gains (Losses) on Investments, Net 927 
5,417 
2,036 
5,116 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments (1,684)
(9,740)
2,140 
9,299 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments (757)
(4,323)
4,176 
14,415 
         Net Increase (Decrease) in Net Assets From Operations $ (741)
$ (5,135)
$ 4,383 
$ 13,846 

















AZL MVP Balanced Index Strategy Fund AZL MVP DFA Multi-Strategy Fund AZL MVP Fidelity Institutional Asset Management Multi-Strategy Fund AZL MVP Fusion Balanced Fund





 Investment Income:



    Dividends Reinvested in Fund Shares $ 5,021 
$ 1,168 
$ 5,499 
$ 16,284 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 4,116 
1,262 
3,207 
13,457 
         Investment Income (Loss), Net 905 
(94)
2,292 
2,827 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 14,525 
5,298 
7,629 
— 
    Realized Gains (Losses) on Sales of Investments, Net 6,021 
1,807 
4,795 
3,706 
         Realized Gains (Losses) on Investments, Net 20,546 
7,105 
12,424 
3,706 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 1,526 
2,733 
5,340 
45,511 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 22,072 
9,838 
17,764 
49,217 
         Net Increase (Decrease) in Net Assets From Operations $ 22,977 
$ 9,744 
$ 20,056 
$ 52,044 
See accompanying notes to financial statements
Page 16 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














AZL MVP Fusion Conservative Fund AZL MVP Fusion Moderate Fund AZL MVP Global Balanced Index Strategy Fund AZL MVP Growth Index Strategy Fund





 Investment Income:



    Dividends Reinvested in Fund Shares $ 5,006 
$ 34,571 
$ 9,139 
$ 39,240 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 3,656 
29,843 
9,028 
38,685 
         Investment Income (Loss), Net 1,350 
4,728 
111 
555 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds — 
— 
35,817 
168,795 
    Realized Gains (Losses) on Sales of Investments, Net 1,809 
15,929 
7,186 
64,897 
         Realized Gains (Losses) on Investments, Net 1,809 
15,929 
43,003 
233,692 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 6,142 
127,429 
(3,795)
76,228 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 7,951 
143,358 
39,208 
309,920 
         Net Increase (Decrease) in Net Assets From Operations $ 9,301 
$ 148,086 
$ 39,319 
$ 310,475 

















AZL MVP Moderate Index Strategy Fund AZL MVP T. Rowe Price Capital Appreciation Plus Fund AZL Russell 1000 Growth Index Fund Class 1 AZL Russell 1000 Growth Index Fund Class 2





 Investment Income:



    Dividends Reinvested in Fund Shares $ 8,424 
$ 44,211 
$ 487 
$ 1,702 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 6,778 
18,461 
1,019 
13,664 
         Investment Income (Loss), Net 1,646 
25,750 
(532)
(11,962)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 31,545 
57,407 
11,844 
76,539 
    Realized Gains (Losses) on Sales of Investments, Net 11,202 
33,848 
2,597 
65,621 
         Realized Gains (Losses) on Investments, Net 42,747 
91,255 
14,441 
142,160 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 3,714 
61,169 
2,023 
17,074 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 46,461 
152,424 
16,464 
159,234 
         Net Increase (Decrease) in Net Assets From Operations $ 48,107 
$ 178,174 
$ 15,932 
$ 147,272 
See accompanying notes to financial statements
Page 17 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














AZL Russell 1000 Value Index Fund Class 1 AZL Russell 1000 Value Index Fund Class 2 AZL S&P 500 Index Fund AZL Small Cap Stock Index Fund Class 1





 Investment Income:



    Dividends Reinvested in Fund Shares $ 3,694 
$ 7,511 
$ 9,561 
$ 535 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 2,628 
10,714 
18,502 
869 
         Investment Income (Loss), Net 1,066 
(3,203)
(8,941)
(334)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 752 
1,761 
49,437 
1,589 
    Realized Gains (Losses) on Sales of Investments, Net 1,307 
14,563 
81,134 
1,109 
         Realized Gains (Losses) on Investments, Net 2,059 
16,324 
130,571 
2,698 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 30,233 
85,171 
93,557 
7,363 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 32,292 
101,495 
224,128 
10,061 
         Net Increase (Decrease) in Net Assets From Operations $ 33,358 
$ 98,292 
$ 215,187 
$ 9,727 

















AZL Small Cap Stock Index Fund Class 2 AZL T. Rowe Price Capital Appreciation Fund BlackRock Equity Dividend V.I. Fund BlackRock Global Allocation V.I. Fund




 (A)
 Investment Income:



    Dividends Reinvested in Fund Shares $ 2,961 
$ 6,107 
$ 18 
$ — 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 9,804 
13,643 
4 
9,429 
         Investment Income (Loss), Net (6,843)
(7,536)
14 
(9,429)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 11,564 
71,049 
169 
— 
    Realized Gains (Losses) on Sales of Investments, Net 28,379 
36,209 
50 
205,716 
         Realized Gains (Losses) on Investments, Net 39,943 
107,258 
219 
205,716 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 66,830 
(7,285)
3 
(149,660)
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 106,773 
99,973 
222 
56,056 
         Net Increase (Decrease) in Net Assets From Operations $ 99,930 
$ 92,437 
$ 236 
$ 46,627 
See accompanying notes to financial statements
Page 18 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














BNY Mellon VIF Appreciation Portfolio ClearBridge Variable Aggressive Growth Portfolio Columbia Variable Portfolio – Seligman Global Technology Fund Davis VA Financial Portfolio

 (A)


 Investment Income:



    Dividends Reinvested in Fund Shares $ — 
$ 2 
$ 6 
$ 565 





 Expenses:



    Mortality and Expense Risk and Administrative Charges — 
4 
26 
921 
         Investment Income (Loss), Net — 
(2)
(20)
(356)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 6 
309 
139 
3,094 
    Realized Gains (Losses) on Sales of Investments, Net 7 
42 
217 
1,797 
         Realized Gains (Losses) on Investments, Net 13 
351 
356 
4,891 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments (7)
(223)
135 
5,841 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 6 
128 
491 
10,732 
         Net Increase (Decrease) in Net Assets From Operations $ 6 
$ 126 
$ 471 
$ 10,376 

















Davis VA Real Estate Portfolio Delaware Ivy VIP Asset Strategy Portfolio Delaware Ivy VIP Energy Portfolio Delaware Ivy VIP Growth Portfolio





 Investment Income:



    Dividends Reinvested in Fund Shares $ 3 
$ 17 
$ 1 
$ — 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 4 
3 
— 
2 
         Investment Income (Loss), Net (1)
14 
1 
(2)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds — 
108 
— 
51 
    Realized Gains (Losses) on Sales of Investments, Net 5 
— 
(7)
14 
         Realized Gains (Losses) on Investments, Net 5 
108 
(7)
65 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 75 
(23)
24 
80 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 80 
85 
17 
145 
         Net Increase (Decrease) in Net Assets From Operations $ 79 
$ 99 
$ 18 
$ 143 
See accompanying notes to financial statements
Page 19 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














Delaware Ivy VIP Mid Cap Growth Portfolio Delaware Ivy VIP Natural Resources Portfolio Delaware Ivy VIP Science and Technology Portfolio Eaton Vance VT Floating-Rate Income Fund





 Investment Income:



    Dividends Reinvested in Fund Shares $ — 
$ 1 
$ — 
$ 35 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 3 
— 
3 
4 
         Investment Income (Loss), Net (3)
1 
(3)
31 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 108 
— 
291 
— 
    Realized Gains (Losses) on Sales of Investments, Net 29 
(3)
76 
(4)
         Realized Gains (Losses) on Investments, Net 137 
(3)
367 
(4)
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 3 
19 
(216)
12 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 140 
16 
151 
8 
         Net Increase (Decrease) in Net Assets From Operations $ 137 
$ 17 
$ 148 
$ 39 

















Fidelity VIP Emerging Markets Portfolio Fidelity VIP FundsManager 50% Portfolio Fidelity VIP FundsManager 60% Portfolio Fidelity VIP Mid Cap Portfolio


 (A)  (A)
 Investment Income:



    Dividends Reinvested in Fund Shares $ 46 
$ 57 
$ 239 
$ 2 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 12 
171 
712 
2 
         Investment Income (Loss), Net 34 
(114)
(473)
— 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 344 
334 
1,231 
95 
    Realized Gains (Losses) on Sales of Investments, Net 437 
3,529 
7,627 
52 
         Realized Gains (Losses) on Investments, Net 781 
3,863 
8,858 
147 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments (876)
(2,906)
(4,092)
(2)
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments (95)
957 
4,766 
145 
         Net Increase (Decrease) in Net Assets From Operations $ (61)
$ 843 
$ 4,293 
$ 145 
See accompanying notes to financial statements
Page 20 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














Fidelity VIP Strategic Income Portfolio Franklin Allocation VIP Fund Franklin Income VIP Fund Franklin Multi-Asset Dynamic Multi-Strategy VIT Fund


 (A)  (A)
 Investment Income:



    Dividends Reinvested in Fund Shares $ 50 
$ 1,602 
$ 44,085 
$ 2 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 6 
986 
7,486 
— 
         Investment Income (Loss), Net 44 
616 
36,599 
2 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 33 
— 
— 
— 
    Realized Gains (Losses) on Sales of Investments, Net 23 
(10,107)
46,499 
— 
         Realized Gains (Losses) on Investments, Net 56 
(10,107)
46,499 
— 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments (25)
13,452 
(3,661)
6 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 31 
3,345 
42,838 
6 
         Net Increase (Decrease) in Net Assets From Operations $ 75 
$ 3,961 
$ 79,437 
$ 8 

















Franklin Mutual Shares VIP Fund Franklin Rising Dividends VIP Fund Franklin Strategic Income VIP Fund Franklin U.S. Government Securities VIP Fund

 (A)
 (A)
 Investment Income:



    Dividends Reinvested in Fund Shares $ — 
$ 2,147 
$ 23 
$ 4,232 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 2,838 
4,007 
1 
2,987 
         Investment Income (Loss), Net (2,838)
(1,860)
22 
1,245 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds — 
7,313 
— 
— 
    Realized Gains (Losses) on Sales of Investments, Net 35,412 
11,374 
(73)
(1,716)
         Realized Gains (Losses) on Investments, Net 35,412 
18,687 
(73)
(1,716)
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 7,189 
33,672 
59 
(5,582)
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 42,601 
52,359 
(14)
(7,298)
         Net Increase (Decrease) in Net Assets From Operations $ 39,763 
$ 50,499 
$ 8 
$ (6,053)
See accompanying notes to financial statements
Page 21 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














Invesco Oppenheimer V.I. International Growth Fund Invesco V.I. American Value Fund Invesco V.I. Balanced-Risk Allocation Fund Invesco V.I. Global Strategic Income Fund





 Investment Income:



    Dividends Reinvested in Fund Shares $ — 
$ 1 
$ 12 
$ 90 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 4 
1 
1 
36 
         Investment Income (Loss), Net (4)
— 
11 
54 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 131 
— 
13 
— 
    Realized Gains (Losses) on Sales of Investments, Net 27 
26 
(1)
(25)
         Realized Gains (Losses) on Investments, Net 158 
26 
12 
(25)
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments (14)
69 
13 
(137)
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 144 
95 
25 
(162)
         Net Increase (Decrease) in Net Assets From Operations $ 140 
$ 95 
$ 36 
$ (108)

















JPMorgan Insurance Trust Core Bond Portfolio Lazard Retirement International Equity Portfolio Lazard Retirement U.S. Small-Mid Cap Equity Portfolio MFS International Intrinsic Value Portfolio





 Investment Income:



    Dividends Reinvested in Fund Shares $ 414 
$ 3 
$ — 
$ 4 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 324 
1 
1 
8 
         Investment Income (Loss), Net 90 
2 
(1)
(4)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 338 
3 
1 
72 
    Realized Gains (Losses) on Sales of Investments, Net 291 
(2)
75 
192 
         Realized Gains (Losses) on Investments, Net 629 
1 
76 
264 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments (1,435)
12 
20 
(4)
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments (806)
13 
96 
260 
         Net Increase (Decrease) in Net Assets From Operations $ (716)
$ 15 
$ 95 
$ 256 
See accompanying notes to financial statements
Page 22 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














MFS VIT Total Return Bond Portfolio MFS VIT Utilities Portfolio PIMCO VIT All Asset Portfolio PIMCO VIT Balanced Allocation Portfolio



 (A)
 Investment Income:



    Dividends Reinvested in Fund Shares $ 829 
$ 2 
$ 17,869 
$ 127 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 487 
— 
2,375 
2,245 
         Investment Income (Loss), Net 342 
2 
15,494 
(2,118)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 2 
4 
— 
7,068 
    Realized Gains (Losses) on Sales of Investments, Net 315 
3 
27,895 
1,159 
         Realized Gains (Losses) on Investments, Net 317 
7 
27,895 
8,227 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments (1,544)
5 
(11,871)
5,966 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments (1,227)
12 
16,024 
14,193 
         Net Increase (Decrease) in Net Assets From Operations $ (885)
$ 14 
$ 31,518 
$ 12,075 

















PIMCO VIT CommodityRealReturn Strategy Portfolio PIMCO VIT Dynamic Bond Portfolio PIMCO VIT Emerging Markets Bond Portfolio PIMCO VIT Global Bond Opportunities Portfolio (Unhedged)


 (A)
 (A)
 Investment Income:



    Dividends Reinvested in Fund Shares $ 1,701 
$ 1,184 
$ 3,554 
$ 1,940 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 887 
1,001 
1,467 
419 
         Investment Income (Loss), Net 814 
183 
2,087 
1,521 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds — 
2,410 
— 
689 
    Realized Gains (Losses) on Sales of Investments, Net (3,183)
1,514 
(268)
(4,535)
         Realized Gains (Losses) on Investments, Net (3,183)
3,924 
(268)
(3,846)
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 13,274 
(3,649)
(5,372)
929 
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 10,091 
275 
(5,640)
(2,917)
         Net Increase (Decrease) in Net Assets From Operations $ 10,905 
$ 458 
$ (3,553)
$ (1,396)
See accompanying notes to financial statements
Page 23 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














PIMCO VIT Global Core Bond (Hedged) Portfolio PIMCO VIT Global Managed Asset Allocation Portfolio PIMCO VIT High Yield Portfolio PIMCO VIT Long-Term U.S. Government Portfolio


 (A)

 Investment Income:



    Dividends Reinvested in Fund Shares $ 2,045 
$ 2,634 
$ 19,965 
$ 75 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 1,735 
1,004 
7,286 
72 
         Investment Income (Loss), Net 310 
1,630 
12,679 
3 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 560 
13,801 
— 
918 
    Realized Gains (Losses) on Sales of Investments, Net 252 
1,967 
2,026 
(323)
         Realized Gains (Losses) on Investments, Net 812 
15,768 
2,026 
595 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments (4,189)
(10,970)
(5,975)
(966)
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments (3,377)
4,798 
(3,949)
(371)
         Net Increase (Decrease) in Net Assets From Operations $ (3,067)
$ 6,428 
$ 8,730 
$ (368)

















PIMCO VIT Low Duration Portfolio PIMCO VIT Real Return Portfolio PIMCO VIT StocksPLUS Global Portfolio PIMCO VIT Total Return Portfolio





 Investment Income:



    Dividends Reinvested in Fund Shares $ 34 
$ 12,304 
$ 213 
$ 14,970 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 19 
4,313 
4,786 
14,127 
         Investment Income (Loss), Net 15 
7,991 
(4,573)
843 
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds — 
— 
23,290 
32,394 
    Realized Gains (Losses) on Sales of Investments, Net 4 
2,672 
2,611 
(495)
         Realized Gains (Losses) on Investments, Net 4 
2,672 
25,901 
31,899 
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments (97)
(1,485)
15,719 
(56,981)
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments (93)
1,187 
41,620 
(25,082)
         Net Increase (Decrease) in Net Assets From Operations $ (78)
$ 9,178 
$ 37,047 
$ (24,239)
See accompanying notes to financial statements
Page 24 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Operations
For the year or period ended December 31, 2021
(In thousands)














T. Rowe Price Blue Chip Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price Health Sciences Portfolio Templeton Global Bond VIP Fund





 Investment Income:



    Dividends Reinvested in Fund Shares $ — 
$ 18 
$ — 
$ — 





 Expenses:



    Mortality and Expense Risk and Administrative Charges 14 
4 
3 
6,941 
         Investment Income (Loss), Net (14)
14 
(3)
(6,941)
    Realized Gains (Losses) and Unrealized



      Appreciation (Depreciation) on Investments:



    Realized Capital Gain Distributions on Funds 519 
97 
67 
— 
    Realized Gains (Losses) on Sales of Investments, Net 212 
23 
54 
(20,408)
         Realized Gains (Losses) on Investments, Net 731 
120 
121 
(20,408)
    Net Change in Unrealized Appreciation



      (Depreciation) on Investments 3 
89 
3 
(1,947)
         Total Realized Gains (Losses) & Changes in



           Appreciation (Depreciation) on Investments 734 
209 
124 
(22,355)
         Net Increase (Decrease) in Net Assets From Operations $ 720 
$ 223 
$ 121 
$ (29,296)











Templeton Growth VIP Fund Total All Funds

 (A)
 Investment Income:

    Dividends Reinvested in Fund Shares $ 2,357 
$ 397,702 



 Expenses:

    Mortality and Expense Risk and Administrative Charges 1,843 
379,581 
         Investment Income (Loss), Net 514 
18,121 
    Realized Gains (Losses) and Unrealized

      Appreciation (Depreciation) on Investments:

    Realized Capital Gain Distributions on Funds — 
783,058 
    Realized Gains (Losses) on Sales of Investments, Net 527 
808,151 
         Realized Gains (Losses) on Investments, Net 527 
1,591,209 
    Net Change in Unrealized Appreciation

      (Depreciation) on Investments 9,144 
698,018 
         Total Realized Gains (Losses) & Changes in

           Appreciation (Depreciation) on Investments 9,671 
2,289,227 
         Net Increase (Decrease) in Net Assets From Operations $ 10,185 
$ 2,307,348 






(A) Fund terminated in 2021 . See Footnote 1 for further details.
See accompanying notes to financial statements
Page 25 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














AZL Balanced Index Strategy Fund AZL DFA Five-Year Global Fixed Income Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (467)
$ 69 
$ (248)
$ 106 
       Realized Gains (Losses) on Investments, Net 29,759 
17,380 
(187)
(195)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 1,683 
17,613 
(35)
(107)
                Net Increase (Decrease) in Net Assets From Operations 30,975 
35,062 
(470)
(196)
 Contract Transactions-All Products



    Purchase Payments 124 
226 
8 
129 
    Transfers Between Funds or (to) from General Account 35,266 
14,285 
2,283 
2,711 
    Surrenders and Terminations (36,538)
(29,346)
(4,614)
(1,368)
    Rescissions (2)
(1)
— 
— 
    Bonus (Recapture) 2 
2 
— 
1 
    Contract Maintenance Charge (60)
(66)
(2)
(2)
    Rider charge (2,414)
(2,297)
(81)
(75)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (3,622)
(17,197)
(2,406)
1,396 
             Increase (Decrease) in Net Assets 27,353 
17,865 
(2,876)
1,200 
 Net Assets at Beginning of Period 388,701 
370,836 
15,880 
14,680 
 Net Assets at End of Period $ 416,054 
$ 388,701 
$ 13,004 
$ 15,880 
 Changes in Units



      Issued 1,861 
878 
229 
290 
      Redeemed (2,047)
(1,929)
(486)
(147)
      Net Increase (Decrease) (186)
(1,051)
(257)
143 
















AZL DFA Multi-Strategy Fund AZL Enhanced Bond Index Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (2,859)
$ 10,107 
$ (181)
$ 250 
       Realized Gains (Losses) on Investments, Net 56,867 
40,900 
754 
668 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 42,253 
12,995 
(1,454)
740 
                Net Increase (Decrease) in Net Assets From Operations 96,261 
64,002 
(881)
1,658 
 Contract Transactions-All Products



    Purchase Payments 1,199 
978 
58 
123 
    Transfers Between Funds or (to) from General Account (9,336)
(23,319)
3,602 
3,737 
    Surrenders and Terminations (78,766)
(71,757)
(3,829)
(5,858)
    Rescissions — 
(22)
— 
— 
    Bonus (Recapture) 26 
13 
— 
— 
    Contract Maintenance Charge (119)
(142)
(4)
(4)
    Rider charge (9,420)
(9,728)
(300)
(347)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (96,416)
(103,977)
(473)
(2,349)
             Increase (Decrease) in Net Assets (155)
(39,975)
(1,354)
(691)
 Net Assets at Beginning of Period 852,984 
892,959 
26,081 
26,772 
 Net Assets at End of Period $ 852,829 
$ 852,984 
$ 24,727 
$ 26,081 
 Changes in Units



      Issued 55 
55 
297 
322 
      Redeemed (4,455)
(5,838)
(337)
(505)
      Net Increase (Decrease) (4,400)
(5,783)
(40)
(183)
See accompanying notes to financial statements
Page 26 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 1 AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 2

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 36 
$ — 
$ (8,296)
$ 1,895 
       Realized Gains (Losses) on Investments, Net 2,417 
— 
30,727 
12,089 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 2,687 
— 
57,593 
14,815 
                Net Increase (Decrease) in Net Assets From Operations 5,140 
— 
80,024 
28,799 
 Contract Transactions-All Products



    Purchase Payments 2,386 
— 
1,476 
611 
    Transfers Between Funds or (to) from General Account 105,538 
— 
1,099,433 
5,702 
    Surrenders and Terminations (7,428)
— 
(90,072)
(22,591)
    Rescissions — 
— 
(2)
(3)
    Bonus (Recapture) — 
— 
9 
4 
    Contract Maintenance Charge (13)
— 
(151)
(62)
    Rider charge — 
— 
(9,214)
(3,792)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions 100,483 
— 
1,001,479 
(20,131)
             Increase (Decrease) in Net Assets 105,623 
— 
1,081,503 
8,668 
 Net Assets at Beginning of Period — 
— 
290,007 
281,339 
 Net Assets at End of Period $ 105,623 
$ — 
$ 1,371,510 
$ 290,007 
 Changes in Units



      Issued 10,795 
— 
57,296 
321 
      Redeemed (824)
— 
(4,989)
(1,577)
      Net Increase (Decrease) 9,971 
— 
52,307 
(1,256)
















AZL Fidelity Institutional Asset Management Total Bond Fund Class 1 AZL Fidelity Institutional Asset Management Total Bond Fund Class 2

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 287 
$ 441 
$ 1,050 
$ 2,183 
       Realized Gains (Losses) on Investments, Net 502 
84 
4,325 
1,966 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (965)
895 
(7,770)
5,913 
                Net Increase (Decrease) in Net Assets From Operations (176)
1,420 
(2,395)
10,062 
 Contract Transactions-All Products



    Purchase Payments 124 
8 
144 
177 
    Transfers Between Funds or (to) from General Account 782 
365 
16,223 
10,413 
    Surrenders and Terminations (1,896)
(2,002)
(21,896)
(24,022)
    Rescissions — 
— 
(2)
— 
    Bonus (Recapture) — 
— 
2 
3 
    Contract Maintenance Charge (6)
(7)
(33)
(38)
    Rider charge — 
— 
(1,009)
(1,109)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (996)
(1,636)
(6,571)
(14,576)
             Increase (Decrease) in Net Assets (1,172)
(216)
(8,966)
(4,514)
 Net Assets at Beginning of Period 20,327 
20,543 
157,259 
161,773 
 Net Assets at End of Period $ 19,155 
$ 20,327 
$ 148,293 
$ 157,259 
 Changes in Units



      Issued 89 
37 
1,422 
924 
      Redeemed (194)
(209)
(2,031)
(2,263)
      Net Increase (Decrease) (105)
(172)
(609)
(1,339)
See accompanying notes to financial statements
Page 27 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














AZL Gateway Fund AZL Government Money Market Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (796)
$ (503)
$ (5,815)
$ (5,682)
       Realized Gains (Losses) on Investments, Net 2,661 
1,898 
1 
— 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 4,139 
2,125 
(1)
— 
                Net Increase (Decrease) in Net Assets From Operations 6,004 
3,520 
(5,815)
(5,682)
 Contract Transactions-All Products



    Purchase Payments 127 
130 
1,695,892 
1,298,367 
    Transfers Between Funds or (to) from General Account 1,713 
4,583 
(1,540,034)
(913,556)
    Surrenders and Terminations (7,189)
(8,469)
(197,501)
(244,015)
    Rescissions (1)
(1)
(22,782)
(13,145)
    Bonus (Recapture) — 
6 
4 
92 
    Contract Maintenance Charge (10)
(12)
(123)
(137)
    Rider charge (653)
(650)
(3,399)
(3,265)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (6,013)
(4,413)
(67,943)
124,341 
             Increase (Decrease) in Net Assets (9)
(893)
(73,758)
118,659 
 Net Assets at Beginning of Period 68,305 
69,198 
585,305 
466,646 
 Net Assets at End of Period $ 68,296 
$ 68,305 
$ 511,547 
$ 585,305 
 Changes in Units



      Issued 127 
376 
133,718 
103,153 
      Redeemed (560)
(734)
(140,535)
(93,058)
      Net Increase (Decrease) (433)
(358)
(6,817)
10,095 
















AZL International Index Fund Class 1 AZL International Index Fund Class 2

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 858 
$ 2,896 
$ (2,352)
$ 4,033 
       Realized Gains (Losses) on Investments, Net 2,373 
560 
18,977 
2,708 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 5,122 
864 
16,309 
10,012 
                Net Increase (Decrease) in Net Assets From Operations 8,353 
4,320 
32,934 
16,753 
 Contract Transactions-All Products



    Purchase Payments 54 
27 
381 
441 
    Transfers Between Funds or (to) from General Account (1,381)
(2,522)
(7,928)
(4,903)
    Surrenders and Terminations (8,758)
(7,379)
(50,450)
(43,870)
    Rescissions — 
— 
(2)
(5)
    Bonus (Recapture) — 
— 
— 
1 
    Contract Maintenance Charge (30)
(33)
(64)
(81)
    Rider charge — 
— 
(375)
(523)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (10,115)
(9,907)
(58,438)
(48,940)
             Increase (Decrease) in Net Assets (1,762)
(5,587)
(25,504)
(32,187)
 Net Assets at Beginning of Period 95,192 
100,779 
410,582 
442,769 
 Net Assets at End of Period $ 93,430 
$ 95,192 
$ 385,078 
$ 410,582 
 Changes in Units



      Issued 4 
2 
101 
156 
      Redeemed (721)
(870)
(4,247)
(4,333)
      Net Increase (Decrease) (717)
(868)
(4,146)
(4,177)
See accompanying notes to financial statements
Page 28 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














AZL MetWest Total Return Bond Fund AZL Mid Cap Index Fund Class 1

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (47)
$ 397 
$ 604 
$ 1,006 
       Realized Gains (Losses) on Investments, Net 1,664 
1,395 
6,509 
2,059 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (2,556)
249 
3,263 
2,165 
                Net Increase (Decrease) in Net Assets From Operations (939)
2,041 
10,376 
5,230 
 Contract Transactions-All Products



    Purchase Payments 6 
50 
59 
142 
    Transfers Between Funds or (to) from General Account 1,235 
12,278 
(621)
(589)
    Surrenders and Terminations (6,386)
(7,346)
(4,025)
(3,287)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
1 
— 
— 
    Contract Maintenance Charge (4)
(4)
(13)
(14)
    Rider charge (336)
(378)
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (5,485)
4,601 
(4,600)
(3,748)
             Increase (Decrease) in Net Assets (6,424)
6,642 
5,776 
1,482 
 Net Assets at Beginning of Period 35,007 
28,365 
47,856 
46,374 
 Net Assets at End of Period $ 28,583 
$ 35,007 
$ 53,632 
$ 47,856 
 Changes in Units



      Issued 109 
1,111 
35 
58 
      Redeemed (605)
(697)
(367)
(428)
      Net Increase (Decrease) (496)
414 
(332)
(370)
















AZL Mid Cap Index Fund Class 2 AZL Moderate Index Strategy Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (5,626)
$ (3,079)
$ (13,117)
$ (14)
       Realized Gains (Losses) on Investments, Net 49,803 
9,420 
33,288 
14,843 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 37,735 
37,047 
87,130 
39,449 
                Net Increase (Decrease) in Net Assets From Operations 81,912 
43,388 
107,301 
54,278 
 Contract Transactions-All Products



    Purchase Payments 313 
502 
1,262 
821 
    Transfers Between Funds or (to) from General Account (38,515)
(24,291)
1,255,040 
(5,064)
    Surrenders and Terminations (57,025)
(48,967)
(120,736)
(46,501)
    Rescissions (1)
(5)
(2)
(2)
    Bonus (Recapture) 10 
3 
8 
5 
    Contract Maintenance Charge (62)
(77)
(192)
(104)
    Rider charge (620)
(842)
(12,299)
(4,903)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (95,900)
(73,677)
1,123,081 
(55,748)
             Increase (Decrease) in Net Assets (13,988)
(30,289)
1,230,382 
(1,470)
 Net Assets at Beginning of Period 416,121 
446,410 
576,533 
578,003 
 Net Assets at End of Period $ 402,133 
$ 416,121 
$ 1,806,915 
$ 576,533 
 Changes in Units



      Issued 17 
37 
50,814 
50 
      Redeemed (3,420)
(3,412)
(5,341)
(2,788)
      Net Increase (Decrease) (3,403)
(3,375)
45,473 
(2,738)
See accompanying notes to financial statements
Page 29 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














AZL Morgan Stanley Global Real Estate Fund Class 1 AZL Morgan Stanley Global Real Estate Fund Class 2

2021 2020 (B) 2021 2020 (B)
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ — 
$ 772 
$ — 
$ 2,624 
       Realized Gains (Losses) on Investments, Net — 
(6,872)
— 
(23,004)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments — 
1,107 
— 
(679)
                Net Increase (Decrease) in Net Assets From Operations — 
(4,993)
— 
(21,059)
 Contract Transactions-All Products



    Purchase Payments — 
— 
— 
19 
    Transfers Between Funds or (to) from General Account — 
(13,332)
— 
(56,618)
    Surrenders and Terminations — 
(936)
— 
(5,150)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
(4)
— 
(11)
    Rider charge — 
— 
— 
(11)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions — 
(14,272)
— 
(61,771)
             Increase (Decrease) in Net Assets — 
(19,265)
— 
(82,830)
 Net Assets at Beginning of Period — 
19,265 
— 
82,830 
 Net Assets at End of Period $ — 
$ — 
$ — 
$ — 
 Changes in Units



      Issued — 
— 
— 
2 
      Redeemed — 
(1,662)
— 
(6,505)
      Net Increase (Decrease) — 
(1,662)
— 
(6,503)
















AZL MSCI Emerging Markets Equity Index Class 1 AZL MSCI Emerging Markets Equity Index Class 2

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 16 
$ 321 
$ (812)
$ 1,120 
       Realized Gains (Losses) on Investments, Net 927 
1,237 
5,417 
3,364 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (1,684)
420 
(9,740)
7,610 
                Net Increase (Decrease) in Net Assets From Operations (741)
1,978 
(5,135)
12,094 
 Contract Transactions-All Products



    Purchase Payments 16 
28 
53 
37 
    Transfers Between Funds or (to) from General Account (99)
(849)
912 
(4,250)
    Surrenders and Terminations (1,390)
(1,484)
(11,223)
(9,953)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge (7)
(7)
(17)
(22)
    Rider charge — 
— 
(39)
(53)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (1,480)
(2,312)
(10,314)
(14,241)
             Increase (Decrease) in Net Assets (2,221)
(334)
(15,449)
(2,147)
 Net Assets at Beginning of Period 16,447 
16,781 
102,936 
105,083 
 Net Assets at End of Period $ 14,226 
$ 16,447 
$ 87,487 
$ 102,936 
 Changes in Units



      Issued 15 
25 
99 
3 
      Redeemed (131)
(267)
(843)
(1,301)
      Net Increase (Decrease) (116)
(242)
(744)
(1,298)

See accompanying notes to financial statements
Page 30 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














AZL MSCI Global Equity Index Fund Class 1 AZL MSCI Global Equity Index Fund Class 2

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 207 
$ — 
$ (569)
$ (18)
       Realized Gains (Losses) on Investments, Net 2,036 
— 
5,116 
172 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 2,140 
— 
9,299 
297 
                Net Increase (Decrease) in Net Assets From Operations 4,383 
— 
13,846 
451 
 Contract Transactions-All Products



    Purchase Payments 1,998 
— 
26 
— 
    Transfers Between Funds or (to) from General Account 46,401 
— 
153,117 
(517)
    Surrenders and Terminations (2,573)
— 
(11,234)
(835)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge (8)
— 
(19)
(1)
    Rider charge — 
— 
(94)
(19)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions 45,818 
— 
141,796 
(1,372)
             Increase (Decrease) in Net Assets 50,201 
— 
155,642 
(921)
 Net Assets at Beginning of Period — 
— 
4,531 
5,452 
 Net Assets at End of Period $ 50,201 
$ — 
$ 160,173 
$ 4,531 
 Changes in Units



      Issued 4,843 
— 
7,386 
— 
      Redeemed (285)
— 
(517)
(80)
      Net Increase (Decrease) 4,558 
— 
6,869 
(80)
















AZL MVP Balanced Index Strategy Fund AZL MVP DFA Multi-Strategy Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 905 
$ 1,373 
$ (94)
$ 1,162 
       Realized Gains (Losses) on Investments, Net 20,546 
9,848 
7,105 
3,731 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 1,526 
(688)
2,733 
(3,460)
                Net Increase (Decrease) in Net Assets From Operations 22,977 
10,533 
9,744 
1,433 
 Contract Transactions-All Products



    Purchase Payments 4,393 
4,456 
311 
626 
    Transfers Between Funds or (to) from General Account 9,131 
3,605 
6,389 
(2,177)
    Surrenders and Terminations (29,376)
(25,725)
(6,293)
(3,741)
    Rescissions (4)
(56)
(3)
(2)
    Bonus (Recapture) 7 
11 
2 
10 
    Contract Maintenance Charge (49)
(56)
(11)
(12)
    Rider charge (3,564)
(3,657)
(1,260)
(1,243)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (19,462)
(21,422)
(865)
(6,539)
             Increase (Decrease) in Net Assets 3,515 
(10,889)
8,879 
(5,106)
 Net Assets at Beginning of Period 278,234 
289,123 
81,082 
86,188 
 Net Assets at End of Period $ 281,749 
$ 278,234 
$ 89,961 
$ 81,082 
 Changes in Units



      Issued 791 
472 
504 
59 
      Redeemed (1,943)
(1,974)
(574)
(644)
      Net Increase (Decrease) (1,152)
(1,502)
(70)
(585)
See accompanying notes to financial statements
Page 31 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














AZL MVP Fidelity Institutional Asset Management Multi-Strategy Fund AZL MVP Fusion Balanced Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 2,292 
$ 2,675 
$ 2,827 
$ 4,172 
       Realized Gains (Losses) on Investments, Net 12,424 
1,370 
3,706 
13,619 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 5,340 
7,071 
45,511 
(8,926)
                Net Increase (Decrease) in Net Assets From Operations 20,056 
11,116 
52,044 
8,865 
 Contract Transactions-All Products



    Purchase Payments 453 
862 
1,594 
889 
    Transfers Between Funds or (to) from General Account (2,260)
(2,006)
(3,922)
(17,836)
    Surrenders and Terminations (25,283)
(16,685)
(80,378)
(73,894)
    Rescissions (2)
— 
(16)
(12)
    Bonus (Recapture) 5 
8 
17 
5 
    Contract Maintenance Charge (38)
(45)
(158)
(184)
    Rider charge (2,943)
(3,102)
(7,064)
(7,529)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (30,068)
(20,968)
(89,927)
(98,561)
             Increase (Decrease) in Net Assets (10,012)
(9,852)
(37,883)
(89,696)
 Net Assets at Beginning of Period 221,761 
231,613 
751,880 
841,576 
 Net Assets at End of Period $ 211,749 
$ 221,761 
$ 713,997 
$ 751,880 
 Changes in Units



      Issued 29 
64 
91 
57 
      Redeemed (1,980)
(1,637)
(5,291)
(6,458)
      Net Increase (Decrease) (1,951)
(1,573)
(5,200)
(6,401)
















AZL MVP Fusion Conservative Fund AZL MVP Fusion Moderate Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 1,350 
$ 1,199 
$ 4,728 
$ 6,406 
       Realized Gains (Losses) on Investments, Net 1,809 
4,100 
15,929 
44,469 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 6,142 
1,190 
127,429 
(16,371)
                Net Increase (Decrease) in Net Assets From Operations 9,301 
6,489 
148,086 
34,504 
 Contract Transactions-All Products



    Purchase Payments 180 
577 
3,206 
5,010 
    Transfers Between Funds or (to) from General Account 5,816 
7,056 
(18,413)
(14,295)
    Surrenders and Terminations (24,653)
(21,420)
(159,463)
(131,102)
    Rescissions — 
(16)
(12)
(143)
    Bonus (Recapture) 1 
12 
34 
74 
    Contract Maintenance Charge (41)
(47)
(331)
(389)
    Rider charge (2,567)
(2,656)
(19,558)
(20,206)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (21,264)
(16,494)
(194,537)
(161,051)
             Increase (Decrease) in Net Assets (11,963)
(10,005)
(46,451)
(126,547)
 Net Assets at Beginning of Period 218,170 
228,175 
1,688,704 
1,815,251 
 Net Assets at End of Period $ 206,207 
$ 218,170 
$ 1,642,253 
$ 1,688,704 
 Changes in Units



      Issued 397 
559 
178 
324 
      Redeemed (1,720)
(1,657)
(11,152)
(10,817)
      Net Increase (Decrease) (1,323)
(1,098)
(10,974)
(10,493)
See accompanying notes to financial statements
Page 32 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














AZL MVP Global Balanced Index Strategy Fund AZL MVP Growth Index Strategy Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 111 
$ 47,003 
$ 555 
$ 3,765 
       Realized Gains (Losses) on Investments, Net 43,003 
25,568 
233,692 
113,034 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (3,795)
(37,738)
76,228 
(62,172)
                Net Increase (Decrease) in Net Assets From Operations 39,319 
34,833 
310,475 
54,627 
 Contract Transactions-All Products



    Purchase Payments 1,307 
2,104 
8,420 
10,476 
    Transfers Between Funds or (to) from General Account 4,667 
(21,643)
(21,406)
(3,343)
    Surrenders and Terminations (58,948)
(47,879)
(236,585)
(175,008)
    Rescissions (3)
(10)
(74)
(94)
    Bonus (Recapture) 16 
15 
33 
69 
    Contract Maintenance Charge (103)
(123)
(324)
(381)
    Rider charge (8,917)
(9,432)
(22,685)
(23,161)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (61,981)
(76,968)
(272,621)
(191,442)
             Increase (Decrease) in Net Assets (22,662)
(42,135)
37,854 
(136,815)
 Net Assets at Beginning of Period 628,373 
670,508 
2,254,083 
2,390,898 
 Net Assets at End of Period $ 605,711 
$ 628,373 
$ 2,291,937 
$ 2,254,083 
 Changes in Units



      Issued 402 
156 
412 
623 
      Redeemed (4,485)
(5,909)
(14,527)
(12,319)
      Net Increase (Decrease) (4,083)
(5,753)
(14,115)
(11,696)
















AZL MVP Moderate Index Strategy Fund AZL MVP T. Rowe Price Capital Appreciation Plus Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 1,646 
$ 1,839 
$ 25,750 
$ 14,906 
       Realized Gains (Losses) on Investments, Net 42,747 
19,515 
91,255 
52,206 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 3,714 
1,339 
61,169 
3,467 
                Net Increase (Decrease) in Net Assets From Operations 48,107 
22,693 
178,174 
70,579 
 Contract Transactions-All Products



    Purchase Payments 1,085 
5,179 
3,725 
7,533 
    Transfers Between Funds or (to) from General Account (3,895)
5,710 
30,668 
46,303 
    Surrenders and Terminations (48,090)
(31,718)
(106,098)
(67,127)
    Rescissions (2)
(1)
(7)
(43)
    Bonus (Recapture) 13 
20 
22 
51 
    Contract Maintenance Charge (67)
(79)
(140)
(157)
    Rider charge (6,286)
(6,441)
(18,200)
(17,249)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (57,242)
(27,330)
(90,030)
(30,689)
             Increase (Decrease) in Net Assets (9,135)
(4,637)
88,144 
39,890 
 Net Assets at Beginning of Period 467,774 
472,411 
1,192,293 
1,152,403 
 Net Assets at End of Period $ 458,639 
$ 467,774 
$ 1,280,437 
$ 1,192,293 
 Changes in Units



      Issued 57 
777 
2,017 
3,438 
      Redeemed (3,096)
(2,343)
(6,960)
(5,517)
      Net Increase (Decrease) (3,039)
(1,566)
(4,943)
(2,079)
See accompanying notes to financial statements
Page 33 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














AZL Russell 1000 Growth Index Fund Class 1 AZL Russell 1000 Growth Index Fund Class 2

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (532)
$ (174)
$ (11,962)
$ (8,768)
       Realized Gains (Losses) on Investments, Net 14,441 
5,532 
142,160 
66,239 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 2,023 
13,098 
17,074 
128,022 
                Net Increase (Decrease) in Net Assets From Operations 15,932 
18,456 
147,272 
185,493 
 Contract Transactions-All Products



    Purchase Payments 176 
183 
912 
682 
    Transfers Between Funds or (to) from General Account (1,109)
(1,141)
(44,262)
(63,531)
    Surrenders and Terminations (5,942)
(5,181)
(93,098)
(68,671)
    Rescissions — 
— 
(2)
(5)
    Bonus (Recapture) — 
— 
14 
14 
    Contract Maintenance Charge (15)
(17)
(95)
(114)
    Rider charge — 
— 
(595)
(820)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (6,890)
(6,156)
(137,126)
(132,445)
             Increase (Decrease) in Net Assets 9,042 
12,300 
10,146 
53,048 
 Net Assets at Beginning of Period 65,837 
53,537 
670,828 
617,780 
 Net Assets at End of Period $ 74,879 
$ 65,837 
$ 680,974 
$ 670,828 
 Changes in Units



      Issued 80 
111 
43 
40 
      Redeemed (413)
(502)
(3,215)
(4,306)
      Net Increase (Decrease) (333)
(391)
(3,172)
(4,266)
















AZL Russell 1000 Value Index Fund Class 1 AZL Russell 1000 Value Index Fund Class 2

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 1,066 
$ 1,830 
$ (3,203)
$ 34 
       Realized Gains (Losses) on Investments, Net 2,059 
4,788 
16,324 
7,503 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 30,233 
(8,039)
85,171 
(13,518)
                Net Increase (Decrease) in Net Assets From Operations 33,358 
(1,421)
98,292 
(5,981)
 Contract Transactions-All Products



    Purchase Payments 2,661 
200 
866 
514 
    Transfers Between Funds or (to) from General Account 50,554 
(4,104)
228,247 
(8,831)
    Surrenders and Terminations (17,239)
(12,540)
(68,850)
(40,638)
    Rescissions — 
— 
(1)
— 
    Bonus (Recapture) — 
— 
2 
3 
    Contract Maintenance Charge (42)
(41)
(100)
(79)
    Rider charge — 
— 
(436)
(442)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions 35,934 
(16,485)
159,728 
(49,473)
             Increase (Decrease) in Net Assets 69,292 
(17,906)
258,020 
(55,454)
 Net Assets at Beginning of Period 132,301 
150,207 
383,626 
439,080 
 Net Assets at End of Period $ 201,593 
$ 132,301 
$ 641,646 
$ 383,626 
 Changes in Units



      Issued 5,003 
196 
10,058 
96 
      Redeemed (1,564)
(1,805)
(3,029)
(2,766)
      Net Increase (Decrease) 3,439 
(1,609)
7,029 
(2,670)
See accompanying notes to financial statements
Page 34 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














AZL S&P 500 Index Fund AZL Small Cap Stock Index Fund Class 1

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (8,941)
$ (2,210)
$ (334)
$ 11 
       Realized Gains (Losses) on Investments, Net 130,571 
79,539 
2,698 
1,386 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 93,557 
37,081 
7,363 
1,365 
                Net Increase (Decrease) in Net Assets From Operations 215,187 
114,410 
9,727 
2,762 
 Contract Transactions-All Products



    Purchase Payments 945 
1,067 
41 
13 
    Transfers Between Funds or (to) from General Account (52,971)
24,311 
(1,470)
(966)
    Surrenders and Terminations (114,702)
(91,834)
(5,089)
(3,023)
    Rescissions (1)
(6)
— 
— 
    Bonus (Recapture) 16 
13 
— 
— 
    Contract Maintenance Charge (139)
(151)
(9)
(9)
    Rider charge (816)
(1,061)
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (167,668)
(67,661)
(6,527)
(3,985)
             Increase (Decrease) in Net Assets 47,519 
46,749 
3,200 
(1,223)
 Net Assets at Beginning of Period 911,458 
864,709 
42,048 
43,271 
 Net Assets at End of Period $ 958,977 
$ 911,458 
$ 45,248 
$ 42,048 
 Changes in Units



      Issued 42 
1,003 
9 
12 
      Redeemed (6,270)
(4,487)
(397)
(373)
      Net Increase (Decrease) (6,228)
(3,484)
(388)
(361)
















AZL Small Cap Stock Index Fund Class 2 AZL T. Rowe Price Capital Appreciation Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (6,843)
$ (3,657)
$ (7,536)
$ (4,041)
       Realized Gains (Losses) on Investments, Net 39,943 
6,585 
107,258 
65,461 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 66,830 
28,801 
(7,285)
14,813 
                Net Increase (Decrease) in Net Assets From Operations 99,930 
31,729 
92,437 
76,233 
 Contract Transactions-All Products



    Purchase Payments 380 
499 
786 
753 
    Transfers Between Funds or (to) from General Account (28,647)
(5,096)
15,425 
10,996 
    Surrenders and Terminations (55,933)
(42,807)
(76,807)
(57,003)
    Rescissions — 
— 
— 
(20)
    Bonus (Recapture) 6 
8 
15 
4 
    Contract Maintenance Charge (66)
(74)
(86)
(98)
    Rider charge (160)
(193)
(282)
(411)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (84,420)
(47,663)
(60,949)
(45,779)
             Increase (Decrease) in Net Assets 15,510 
(15,934)
31,488 
30,454 
 Net Assets at Beginning of Period 443,512 
459,446 
610,525 
580,071 
 Net Assets at End of Period $ 459,022 
$ 443,512 
$ 642,013 
$ 610,525 
 Changes in Units



      Issued 18 
34 
733 
509 
      Redeemed (3,257)
(2,489)
(2,875)
(2,586)
      Net Increase (Decrease) (3,239)
(2,455)
(2,142)
(2,077)

See accompanying notes to financial statements
Page 35 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














BlackRock Equity Dividend V.I. Fund BlackRock Global Allocation V.I. Fund

2021 2020 2021 (A) 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 14 
$ 22 
$ (9,429)
$ (6,311)
       Realized Gains (Losses) on Investments, Net 219 
49 
205,716 
75,701 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 3 
14 
(149,660)
110,754 
                Net Increase (Decrease) in Net Assets From Operations 236 
85 
46,627 
180,144 
 Contract Transactions-All Products



    Purchase Payments — 
— 
411 
937 
    Transfers Between Funds or (to) from General Account 147 
93 
(1,119,602)
(78,215)
    Surrenders and Terminations (173)
(448)
(49,049)
(88,186)
    Rescissions — 
— 
— 
(41)
    Bonus (Recapture) — 
— 
2 
6 
    Contract Maintenance Charge — 
— 
(99)
(229)
    Rider charge — 
— 
(5,965)
(13,572)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (26)
(355)
(1,174,302)
(179,300)
             Increase (Decrease) in Net Assets 210 
(270)
(1,127,675)
844 
 Net Assets at Beginning of Period 1,170 
1,440 
1,127,675 
1,126,831 
 Net Assets at End of Period $ 1,380 
$ 1,170 
$ — 
$ 1,127,675 
 Changes in Units



      Issued 5 
9 
24 
68 
      Redeemed (5)
(22)
(70,644)
(13,045)
      Net Increase (Decrease) — 
(13)
(70,620)
(12,977)
















BNY Mellon VIF Appreciation Portfolio ClearBridge Variable Aggressive Growth Portfolio

2021 (A) 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ — 
$ — 
$ (2)
$ 4 
       Realized Gains (Losses) on Investments, Net 13 
4 
351 
115 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (7)
7 
(223)
77 
                Net Increase (Decrease) in Net Assets From Operations 6 
11 
126 
196 
 Contract Transactions-All Products



    Purchase Payments — 
— 
— 
— 
    Transfers Between Funds or (to) from General Account (68)
— 
(11)
— 
    Surrenders and Terminations — 
1 
(335)
(91)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
— 
— 
    Rider charge — 
— 
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (68)
1 
(346)
(91)
             Increase (Decrease) in Net Assets (62)
12 
(220)
105 
 Net Assets at Beginning of Period 62 
50 
1,275 
1,170 
 Net Assets at End of Period $ — 
$ 62 
$ 1,055 
$ 1,275 
 Changes in Units



      Issued — 
— 
— 
— 
      Redeemed (2)
— 
(10)
(3)
      Net Increase (Decrease) (2)
— 
(10)
(3)
See accompanying notes to financial statements
Page 36 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














Columbia Variable Portfolio – Seligman Global Technology Fund Davis VA Financial Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (20)
$ (20)
$ (356)
$ (242)
       Realized Gains (Losses) on Investments, Net 356 
125 
4,891 
575 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 135 
345 
5,841 
(4,229)
                Net Increase (Decrease) in Net Assets From Operations 471 
450 
10,376 
(3,896)
 Contract Transactions-All Products



    Purchase Payments — 
— 
5 
— 
    Transfers Between Funds or (to) from General Account — 
— 
(3,361)
(197)
    Surrenders and Terminations (429)
(148)
(5,151)
(3,663)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
(6)
(7)
    Rider charge — 
— 
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (429)
(148)
(8,513)
(3,867)
             Increase (Decrease) in Net Assets 42 
302 
1,863 
(7,763)
 Net Assets at Beginning of Period 1,446 
1,144 
39,297 
47,060 
 Net Assets at End of Period $ 1,488 
$ 1,446 
$ 41,160 
$ 39,297 
 Changes in Units



      Issued — 
— 
— 
12 
      Redeemed (9)
(5)
(314)
(181)
      Net Increase (Decrease) (9)
(5)
(314)
(169)
















Davis VA Real Estate Portfolio Delaware Ivy VIP Asset Strategy Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (1)
$ 1 
$ 14 
$ 15 
       Realized Gains (Losses) on Investments, Net 5 
8 
108 
10 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 75 
(32)
(23)
89 
                Net Increase (Decrease) in Net Assets From Operations 79 
(23)
99 
114 
 Contract Transactions-All Products



    Purchase Payments — 
— 
— 
— 
    Transfers Between Funds or (to) from General Account — 
— 
— 
(14)
    Surrenders and Terminations (15)
(37)
(2)
(2)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
— 
— 
    Rider charge — 
— 
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (15)
(37)
(2)
(16)
             Increase (Decrease) in Net Assets 64 
(60)
97 
98 
 Net Assets at Beginning of Period 206 
266 
976 
878 
 Net Assets at End of Period $ 270 
$ 206 
$ 1,073 
$ 976 
 Changes in Units



      Issued — 
— 
— 
— 
      Redeemed (1)
(1)
— 
(1)
      Net Increase (Decrease) (1)
(1)
— 
(1)
See accompanying notes to financial statements
Page 37 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














Delaware Ivy VIP Energy Portfolio Delaware Ivy VIP Growth Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 1 
$ 1 
$ (2)
$ (1)
       Realized Gains (Losses) on Investments, Net (7)
(62)
65 
63 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 24 
8 
80 
61 
                Net Increase (Decrease) in Net Assets From Operations 18 
(53)
143 
123 
 Contract Transactions-All Products



    Purchase Payments — 
— 
— 
— 
    Transfers Between Funds or (to) from General Account — 
(5)
(10)
— 
    Surrenders and Terminations (10)
(27)
(45)
(15)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
— 
— 
    Rider charge — 
— 
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (10)
(32)
(55)
(15)
             Increase (Decrease) in Net Assets 8 
(85)
88 
108 
 Net Assets at Beginning of Period 43 
128 
506 
398 
 Net Assets at End of Period $ 51 
$ 43 
$ 594 
$ 506 
 Changes in Units



      Issued — 
— 
— 
— 
      Redeemed (1)
(7)
— 
— 
      Net Increase (Decrease) (1)
(7)
— 
— 
















Delaware Ivy VIP Mid Cap Growth Portfolio Delaware Ivy VIP Natural Resources Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (3)
$ (2)
$ 1 
$ 1 
       Realized Gains (Losses) on Investments, Net 137 
85 
(3)
(2)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 3 
197 
19 
(4)
                Net Increase (Decrease) in Net Assets From Operations 137 
280 
17 
(5)
 Contract Transactions-All Products



    Purchase Payments — 
— 
— 
— 
    Transfers Between Funds or (to) from General Account (23)
(89)
17 
4 
    Surrenders and Terminations (35)
— 
(13)
— 
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
— 
— 
    Rider charge — 
— 
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (58)
(89)
4 
4 
             Increase (Decrease) in Net Assets 79 
191 
21 
(1)
 Net Assets at Beginning of Period 889 
698 
59 
60 
 Net Assets at End of Period $ 968 
$ 889 
$ 80 
$ 59 
 Changes in Units



      Issued — 
1 
2 
1 
      Redeemed — 
(3)
(1)
(1)
      Net Increase (Decrease) — 
(2)
1 
— 
See accompanying notes to financial statements
Page 38 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














Delaware IVY VIP Science and Technology Portfolio Eaton Vance VT Floating-Rate Income Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (3)
$ (3)
$ 31 
$ 40 
       Realized Gains (Losses) on Investments, Net 367 
234 
(4)
(78)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (216)
49 
12 
(6)
                Net Increase (Decrease) in Net Assets From Operations 148 
280 
39 
(44)
 Contract Transactions-All Products



    Purchase Payments — 
— 
— 
4 
    Transfers Between Funds or (to) from General Account (129)
(124)
63 
(302)
    Surrenders and Terminations (45)
(413)
(91)
(288)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
— 
— 
    Rider charge — 
— 
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (174)
(537)
(28)
(586)
             Increase (Decrease) in Net Assets (26)
(257)
11 
(630)
 Net Assets at Beginning of Period 1,046 
1,303 
1,148 
1,778 
 Net Assets at End of Period $ 1,020 
$ 1,046 
$ 1,159 
$ 1,148 
 Changes in Units



      Issued — 
— 
4 
— 
      Redeemed (1)
(2)
(6)
(37)
      Net Increase (Decrease) (1)
(2)
(2)
(37)
















Fidelity VIP Emerging Markets Portfolio Fidelity VIP FundsManager 50% Portfolio

2021 2020 2021 (A) 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 34 
$ 16 
$ (114)
$ (160)
       Realized Gains (Losses) on Investments, Net 781 
595 
3,863 
640 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (876)
258 
(2,906)
1,822 
                Net Increase (Decrease) in Net Assets From Operations (61)
869 
843 
2,302 
 Contract Transactions-All Products



    Purchase Payments — 
7 
6 
26 
    Transfers Between Funds or (to) from General Account (2,004)
(1,593)
(21,073)
(1,201)
    Surrenders and Terminations (299)
(155)
(1,002)
(1,975)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
1 
    Contract Maintenance Charge — 
— 
(2)
(4)
    Rider charge — 
— 
(110)
(254)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (2,303)
(1,741)
(22,181)
(3,407)
             Increase (Decrease) in Net Assets (2,364)
(872)
(21,338)
(1,105)
 Net Assets at Beginning of Period 4,563 
5,435 
21,338 
22,443 
 Net Assets at End of Period $ 2,199 
$ 4,563 
$ — 
$ 21,338 
 Changes in Units



      Issued — 
1 
— 
2 
      Redeemed (132)
(147)
(1,184)
(212)
      Net Increase (Decrease) (132)
(146)
(1,184)
(210)
See accompanying notes to financial statements
Page 39 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














Fidelity VIP FundsManager 60% Portfolio Fidelity VIP Mid Cap Portfolio

2021 (A) 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (473)
$ (763)
$ — 
$ 1 
       Realized Gains (Losses) on Investments, Net 8,858 
992 
147 
(3)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (4,092)
9,242 
(2)
99 
                Net Increase (Decrease) in Net Assets From Operations 4,293 
9,471 
145 
97 
 Contract Transactions-All Products



    Purchase Payments 26 
29 
— 
— 
    Transfers Between Funds or (to) from General Account (82,696)
(3,089)
19 
32 
    Surrenders and Terminations (4,956)
(6,658)
(165)
— 
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge (6)
(14)
— 
— 
    Rider charge (356)
(812)
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (87,988)
(10,544)
(146)
32 
             Increase (Decrease) in Net Assets (83,695)
(1,073)
(1)
129 
 Net Assets at Beginning of Period 83,695 
84,768 
611 
482 
 Net Assets at End of Period $ — 
$ 83,695 
$ 610 
$ 611 
 Changes in Units



      Issued 1 
2 
— 
1 
      Redeemed (4,748)
(673)
(2)
— 
      Net Increase (Decrease) (4,747)
(671)
(2)
1 
















Fidelity VIP Strategic Income Portfolio Franklin Allocation VIP Fund

2021 2020 2021 (A) 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 44 
$ 56 
$ 616 
$ (731)
       Realized Gains (Losses) on Investments, Net 56 
9 
(10,107)
19,702 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (25)
38 
13,452 
(11,856)
                Net Increase (Decrease) in Net Assets From Operations 75 
103 
3,961 
7,115 
 Contract Transactions-All Products



    Purchase Payments — 
6 
11 
20 
    Transfers Between Funds or (to) from General Account 240 
253 
(91,353)
(2,593)
    Surrenders and Terminations (374)
(110)
(3,921)
(7,402)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
(8)
(20)
    Rider charge — 
— 
(8)
(18)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (134)
149 
(95,279)
(10,013)
             Increase (Decrease) in Net Assets (59)
252 
(91,318)
(2,898)
 Net Assets at Beginning of Period 2,076 
1,824 
91,318 
94,216 
 Net Assets at End of Period $ 2,017 
$ 2,076 
$ — 
$ 91,318 
 Changes in Units



      Issued 10 
10 
1 
2 
      Redeemed (15)
(5)
(7,005)
(878)
      Net Increase (Decrease) (5)
5 
(7,004)
(876)
See accompanying notes to financial statements
Page 40 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














Franklin Income VIP Fund Franklin Multi-Asset Dynamic Multi-Strategy VIT Fund

2021 (A) 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 36,599 
$ 38,579 
$ 2 
$ 1 
       Realized Gains (Losses) on Investments, Net 46,499 
(10,084)
— 
(1)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (3,661)
(47,157)
6 
(13)
                Net Increase (Decrease) in Net Assets From Operations 79,437 
(18,662)
8 
(13)
 Contract Transactions-All Products



    Purchase Payments 594 
1,323 
— 
14 
    Transfers Between Funds or (to) from General Account (963,274)
(20,468)
— 
(155)
    Surrenders and Terminations (51,218)
(81,957)
(3)
(12)
    Rescissions (3)
(7)
— 
— 
    Bonus (Recapture) 5 
8 
— 
— 
    Contract Maintenance Charge (93)
(216)
— 
— 
    Rider charge (3,452)
(7,747)
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (1,017,441)
(109,064)
(3)
(153)
             Increase (Decrease) in Net Assets (938,004)
(127,726)
5 
(166)
 Net Assets at Beginning of Period 938,004 
1,065,730 
62 
228 
 Net Assets at End of Period $ — 
$ 938,004 
$ 67 
$ 62 
 Changes in Units



      Issued 32 
85 
— 
1 
      Redeemed (14,427)
(1,856)
— 
(12)
      Net Increase (Decrease) (14,395)
(1,771)
— 
(11)
















Franklin Mutual Shares VIP Fund Franklin Rising Dividends VIP Fund

2021 (A) 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (2,838)
$ 2,433 
$ (1,860)
$ (822)
       Realized Gains (Losses) on Investments, Net 35,412 
(2,413)
18,687 
14,951 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 7,189 
(27,657)
33,672 
11,482 
                Net Increase (Decrease) in Net Assets From Operations 39,763 
(27,637)
50,499 
25,611 
 Contract Transactions-All Products



    Purchase Payments 249 
315 
170 
104 
    Transfers Between Funds or (to) from General Account (316,435)
(5,063)
(3,939)
(6,080)
    Surrenders and Terminations (20,024)
(31,340)
(24,874)
(20,227)
    Rescissions — 
(2)
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge (33)
(79)
(44)
(48)
    Rider charge (107)
(280)
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (336,350)
(36,449)
(28,687)
(26,251)
             Increase (Decrease) in Net Assets (296,587)
(64,086)
21,812 
(640)
 Net Assets at Beginning of Period 296,587 
360,673 
218,720 
219,360 
 Net Assets at End of Period $ — 
$ 296,587 
$ 240,532 
$ 218,720 
 Changes in Units



      Issued 49 
121 
46 
47 
      Redeemed (11,076)
(1,470)
(367)
(451)
      Net Increase (Decrease) (11,027)
(1,349)
(321)
(404)
See accompanying notes to financial statements
Page 41 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














Franklin Strategic Income VIP Fund Franklin U.S. Government Securities VIP Fund

2021 (A) 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 22 
$ 33 
$ 1,245 
$ 3,207 
       Realized Gains (Losses) on Investments, Net (73)
(5)
(1,716)
(1,224)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 59 
(6)
(5,582)
2,056 
                Net Increase (Decrease) in Net Assets From Operations 8 
22 
(6,053)
4,039 
 Contract Transactions-All Products



    Purchase Payments — 
— 
166 
147 
    Transfers Between Funds or (to) from General Account (709)
— 
6,322 
430 
    Surrenders and Terminations — 
(45)
(21,759)
(23,974)
    Rescissions — 
— 
— 
(3)
    Bonus (Recapture) — 
— 
2 
— 
    Contract Maintenance Charge — 
— 
(56)
(64)
    Rider charge — 
— 
(932)
(1,041)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (709)
(45)
(16,257)
(24,505)
             Increase (Decrease) in Net Assets (701)
(23)
(22,310)
(20,466)
 Net Assets at Beginning of Period 701 
724 
180,119 
200,585 
 Net Assets at End of Period $ — 
$ 701 
$ 157,809 
$ 180,119 
 Changes in Units



      Issued — 
— 
261 
14 
      Redeemed (26)
(1)
(862)
(928)
      Net Increase (Decrease) (26)
(1)
(601)
(914)
















Invesco Oppenheimer V.I. International Growth Fund Invesco V.I. American Value Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (4)
$ 2 
$ — 
$ 1 
       Realized Gains (Losses) on Investments, Net 158 
14 
26 
(168)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (14)
142 
69 
29 
                Net Increase (Decrease) in Net Assets From Operations 140 
158 
95 
(138)
 Contract Transactions-All Products



    Purchase Payments — 
— 
— 
— 
    Transfers Between Funds or (to) from General Account 81 
33 
(103)
(210)
    Surrenders and Terminations (80)
(136)
(38)
(10)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
— 
— 
    Rider charge — 
— 
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions 1 
(103)
(141)
(220)
             Increase (Decrease) in Net Assets 141 
55 
(46)
(358)
 Net Assets at Beginning of Period 1,336 
1,281 
422 
780 
 Net Assets at End of Period $ 1,477 
$ 1,336 
$ 376 
$ 422 
 Changes in Units



      Issued 2 
— 
— 
— 
      Redeemed (1)
(6)
(3)
(9)
      Net Increase (Decrease) 1 
(6)
(3)
(9)
See accompanying notes to financial statements
Page 42 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














Invesco V.I. Balanced-Risk Allocation Fund Invesco V.I. Global Strategic Income Fund

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 11 
$ 27 
$ 54 
$ 82 
       Realized Gains (Losses) on Investments, Net 12 
15 
(25)
(82)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 13 
(8)
(137)
15 
                Net Increase (Decrease) in Net Assets From Operations 36 
34 
(108)
15 
 Contract Transactions-All Products



    Purchase Payments — 
— 
5 
— 
    Transfers Between Funds or (to) from General Account 1 
3 
(16)
64 
    Surrenders and Terminations (35)
(25)
(207)
(214)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
(1)
(1)
    Rider charge — 
— 
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (34)
(22)
(219)
(151)
             Increase (Decrease) in Net Assets 2 
12 
(327)
(136)
 Net Assets at Beginning of Period 394 
382 
2,167 
2,303 
 Net Assets at End of Period $ 396 
$ 394 
$ 1,840 
$ 2,167 
 Changes in Units



      Issued — 
— 
— 
2 
      Redeemed (1)
(1)
(8)
(9)
      Net Increase (Decrease) (1)
(1)
(8)
(7)
















JPMorgan Insurance Trust Core Bond Portfolio Lazard Retirement International Equity Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 90 
$ 86 
$ 2 
$ 4 
       Realized Gains (Losses) on Investments, Net 629 
282 
1 
7 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (1,435)
1,029 
12 
10 
                Net Increase (Decrease) in Net Assets From Operations (716)
1,397 
15 
21 
 Contract Transactions-All Products



    Purchase Payments 174 
85 
— 
7 
    Transfers Between Funds or (to) from General Account 2,109 
4,286 
(22)
— 
    Surrenders and Terminations (8,516)
(2,200)
(3)
(5)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
2 
— 
— 
    Contract Maintenance Charge (3)
(3)
— 
— 
    Rider charge (242)
(262)
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (6,478)
1,908 
(25)
2 
             Increase (Decrease) in Net Assets (7,194)
3,305 
(10)
23 
 Net Assets at Beginning of Period 25,385 
22,080 
283 
260 
 Net Assets at End of Period $ 18,191 
$ 25,385 
$ 273 
$ 283 
 Changes in Units



      Issued 158 
307 
— 
— 
      Redeemed (607)
(162)
(1)
— 
      Net Increase (Decrease) (449)
145 
(1)
— 
See accompanying notes to financial statements
Page 43 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














Lazard Retirement U.S. Small-Mid Cap Equity Portfolio MFS International Intrinsic Value Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (1)
$ (6)
$ (4)
$ 11 
       Realized Gains (Losses) on Investments, Net 76 
(304)
264 
118 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 20 
21 
(4)
307 
                Net Increase (Decrease) in Net Assets From Operations 95 
(289)
256 
436 
 Contract Transactions-All Products



    Purchase Payments — 
— 
— 
— 
    Transfers Between Funds or (to) from General Account (3)
(2,730)
(104)
(141)
    Surrenders and Terminations (279)
(305)
(287)
(73)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
— 
— 
    Rider charge — 
— 
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (282)
(3,035)
(391)
(214)
             Increase (Decrease) in Net Assets (187)
(3,324)
(135)
222 
 Net Assets at Beginning of Period 536 
3,860 
2,598 
2,376 
 Net Assets at End of Period $ 349 
$ 536 
$ 2,463 
$ 2,598 
 Changes in Units



      Issued — 
— 
— 
— 
      Redeemed (4)
(63)
(14)
(10)
      Net Increase (Decrease) (4)
(63)
(14)
(10)
















MFS VIT Total Return Bond Portfolio MFS VIT Utilities Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 342 
$ 634 
$ 2 
$ 5 
       Realized Gains (Losses) on Investments, Net 317 
356 
7 
(1)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (1,544)
1,197 
5 
(21)
                Net Increase (Decrease) in Net Assets From Operations (885)
2,187 
14 
(17)
 Contract Transactions-All Products



    Purchase Payments 195 
183 
— 
— 
    Transfers Between Funds or (to) from General Account 2,384 
6,149 
(27)
(180)
    Surrenders and Terminations (7,003)
(6,786)
(1)
(127)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
2 
— 
— 
    Contract Maintenance Charge (4)
(5)
— 
— 
    Rider charge (335)
(369)
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (4,763)
(826)
(28)
(307)
             Increase (Decrease) in Net Assets (5,648)
1,361 
(14)
(324)
 Net Assets at Beginning of Period 36,398 
35,037 
107 
431 
 Net Assets at End of Period $ 30,750 
$ 36,398 
$ 93 
$ 107 
 Changes in Units



      Issued 131 
319 
— 
— 
      Redeemed (369)
(362)
(1)
(8)
      Net Increase (Decrease) (238)
(43)
(1)
(8)
See accompanying notes to financial statements
Page 44 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














PIMCO VIT All Asset Portfolio PIMCO VIT Balanced Allocation Portfolio

2021 (A) 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 15,494 
$ 8,946 
$ (2,118)
$ (358)
       Realized Gains (Losses) on Investments, Net 27,895 
(2,757)
8,227 
5,399 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (11,871)
9,125 
5,966 
1,455 
                Net Increase (Decrease) in Net Assets From Operations 31,518 
15,314 
12,075 
6,496 
 Contract Transactions-All Products



    Purchase Payments 159 
307 
314 
154 
    Transfers Between Funds or (to) from General Account (303,671)
(6,425)
126,626 
(2,812)
    Surrenders and Terminations (15,349)
(25,294)
(14,087)
(6,377)
    Rescissions — 
(4)
(2)
— 
    Bonus (Recapture) 3 
6 
3 
2 
    Contract Maintenance Charge (35)
(73)
(28)
(17)
    Rider charge (1,450)
(3,204)
(2,034)
(1,010)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (320,343)
(34,687)
110,792 
(10,060)
             Increase (Decrease) in Net Assets (288,825)
(19,373)
122,867 
(3,564)
 Net Assets at Beginning of Period 288,825 
308,198 
75,819 
79,383 
 Net Assets at End of Period $ — 
$ 288,825 
$ 198,686 
$ 75,819 
 Changes in Units



      Issued 10 
23 
9,491 
13 
      Redeemed (15,547)
(2,055)
(1,191)
(862)
      Net Increase (Decrease) (15,537)
(2,032)
8,300 
(849)
















PIMCO VIT CommodityRealReturn Strategy Portfolio PIMCO VIT Dynamic Bond Portfolio

2021 2020 2021 (A) 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 814 
$ 1,518 
$ 183 
$ 1,948 
       Realized Gains (Losses) on Investments, Net (3,183)
(7,826)
3,924 
(434)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 13,274 
5,972 
(3,649)
2,606 
                Net Increase (Decrease) in Net Assets From Operations 10,905 
(336)
458 
4,120 
 Contract Transactions-All Products



    Purchase Payments 11 
15 
(26)
87 
    Transfers Between Funds or (to) from General Account (5,249)
1,328 
(132,048)
543 
    Surrenders and Terminations (4,651)
(4,052)
(13,315)
(29,515)
    Rescissions — 
— 
— 
(87)
    Bonus (Recapture) — 
— 
(2)
1 
    Contract Maintenance Charge (9)
(11)
(15)
(35)
    Rider charge (27)
(33)
(720)
(1,839)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (9,925)
(2,753)
(146,126)
(30,845)
             Increase (Decrease) in Net Assets 980 
(3,089)
(145,668)
(26,725)
 Net Assets at Beginning of Period 38,457 
41,546 
145,668 
172,393 
 Net Assets at End of Period $ 39,437 
$ 38,457 
$ — 
$ 145,668 
 Changes in Units



      Issued 3 
360 
1 
24 
      Redeemed (1,552)
(862)
(12,953)
(2,871)
      Net Increase (Decrease) (1,549)
(502)
(12,952)
(2,847)
See accompanying notes to financial statements
Page 45 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














PIMCO VIT Emerging Markets Bond Portfolio PIMCO VIT Global Bond Opportunities Portfolio (Unhedged)

2021 2020 2021 (A) 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 2,087 
$ 2,385 
$ 1,521 
$ 256 
       Realized Gains (Losses) on Investments, Net (268)
(599)
(3,846)
(1,392)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (5,372)
2,105 
929 
4,555 
                Net Increase (Decrease) in Net Assets From Operations (3,553)
3,891 
(1,396)
3,419 
 Contract Transactions-All Products



    Purchase Payments 147 
25 
10 
12 
    Transfers Between Funds or (to) from General Account 5,642 
2,547 
(42,645)
(214)
    Surrenders and Terminations (15,144)
(14,715)
(3,620)
(6,691)
    Rescissions (2)
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge (20)
(23)
(7)
(14)
    Rider charge (687)
(787)
(120)
(295)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (10,064)
(12,953)
(46,382)
(7,202)
             Increase (Decrease) in Net Assets (13,617)
(9,062)
(47,778)
(3,783)
 Net Assets at Beginning of Period 86,204 
95,266 
47,778 
51,561 
 Net Assets at End of Period $ 72,587 
$ 86,204 
$ — 
$ 47,778 
 Changes in Units



      Issued 300 
138 
1 
2 
      Redeemed (802)
(807)
(3,541)
(578)
      Net Increase (Decrease) (502)
(669)
(3,540)
(576)
















PIMCO VIT Global Core Bond (Hedged) Portfolio PIMCO VIT Global Managed Asset Allocation Portfolio

2021 2020 2021 (A) 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 310 
$ 3,656 
$ 1,630 
$ 7,899 
       Realized Gains (Losses) on Investments, Net 812 
547 
15,768 
2,376 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (4,189)
630 
(10,970)
7,089 
                Net Increase (Decrease) in Net Assets From Operations (3,067)
4,833 
6,428 
17,364 
 Contract Transactions-All Products



    Purchase Payments 216 
143 
22 
260 
    Transfers Between Funds or (to) from General Account 57,138 
3,800 
(129,619)
(6,836)
    Surrenders and Terminations (18,874)
(14,137)
(6,697)
(10,988)
    Rescissions (4)
— 
— 
— 
    Bonus (Recapture) 4 
4 
— 
2 
    Contract Maintenance Charge (24)
(21)
(15)
(34)
    Rider charge (998)
(965)
(933)
(2,115)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions 37,458 
(11,176)
(137,242)
(19,711)
             Increase (Decrease) in Net Assets 34,391 
(6,343)
(130,814)
(2,347)
 Net Assets at Beginning of Period 79,472 
85,815 
130,814 
133,161 
 Net Assets at End of Period $ 113,863 
$ 79,472 
$ — 
$ 130,814 
 Changes in Units



      Issued 5,637 
366 
1 
20 
      Redeemed (1,898)
(1,448)
(8,932)
(1,539)
      Net Increase (Decrease) 3,739 
(1,082)
(8,931)
(1,519)
See accompanying notes to financial statements
Page 46 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














PIMCO VIT High Yield Portfolio PIMCO VIT Long-Term U.S. Government Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 12,679 
$ 15,991 
$ 3 
$ 12 
       Realized Gains (Losses) on Investments, Net 2,026 
(2,487)
595 
1,242 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (5,975)
3,021 
(966)
94 
                Net Increase (Decrease) in Net Assets From Operations 8,730 
16,525 
(368)
1,348 
 Contract Transactions-All Products



    Purchase Payments 348 
400 
48 
11 
    Transfers Between Funds or (to) from General Account 20,984 
(5,264)
251 
1,987 
    Surrenders and Terminations (86,615)
(84,993)
(1,085)
(3,017)
    Rescissions — 
(102)
— 
— 
    Bonus (Recapture) 4 
8 
3 
1 
    Contract Maintenance Charge (99)
(122)
(1)
(1)
    Rider charge (4,496)
(5,291)
(28)
(36)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (69,874)
(95,364)
(812)
(1,055)
             Increase (Decrease) in Net Assets (61,144)
(78,839)
(1,180)
293 
 Net Assets at Beginning of Period 481,389 
560,228 
5,405 
5,112 
 Net Assets at End of Period $ 420,245 
$ 481,389 
$ 4,225 
$ 5,405 
 Changes in Units



      Issued 843 
21 
7 
68 
      Redeemed (3,585)
(4,059)
(35)
(86)
      Net Increase (Decrease) (2,742)
(4,038)
(28)
(18)
















PIMCO VIT Low Duration Portfolio PIMCO VIT Real Return Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 15 
$ 100 
$ 7,991 
$ (841)
       Realized Gains (Losses) on Investments, Net 4 
154 
2,672 
(28)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (97)
6 
(1,485)
25,435 
                Net Increase (Decrease) in Net Assets From Operations (78)
260 
9,178 
24,566 
 Contract Transactions-All Products



    Purchase Payments — 
14 
211 
223 
    Transfers Between Funds or (to) from General Account 245 
(1,351)
7,417 
(6,690)
    Surrenders and Terminations (541)
(916)
(39,276)
(38,427)
    Rescissions — 
— 
(2)
(33)
    Bonus (Recapture) — 
— 
2 
3 
    Contract Maintenance Charge — 
— 
(62)
(77)
    Rider charge — 
— 
(2,246)
(2,540)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (296)
(2,253)
(33,956)
(47,541)
             Increase (Decrease) in Net Assets (374)
(1,993)
(24,778)
(22,975)
 Net Assets at Beginning of Period 6,668 
8,661 
261,562 
284,537 
 Net Assets at End of Period $ 6,294 
$ 6,668 
$ 236,784 
$ 261,562 
 Changes in Units



      Issued 12 
1 
476 
21 
      Redeemed (27)
(113)
(2,495)
(3,105)
      Net Increase (Decrease) (15)
(112)
(2,019)
(3,084)
See accompanying notes to financial statements
Page 47 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














PIMCO VIT StocksPLUS Global Portfolio PIMCO VIT Total Return Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (4,573)
$ (1,935)
$ 843 
$ 3,228 
       Realized Gains (Losses) on Investments, Net 25,901 
11,545 
31,899 
13,997 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 15,719 
10,772 
(56,981)
35,502 
                Net Increase (Decrease) in Net Assets From Operations 37,047 
20,382 
(24,239)
52,727 
 Contract Transactions-All Products



    Purchase Payments 325 
123 
1,078 
1,189 
    Transfers Between Funds or (to) from General Account (8,740)
(11,262)
190,629 
38,345 
    Surrenders and Terminations (27,217)
(22,337)
(131,972)
(121,155)
    Rescissions — 
— 
(4)
(43)
    Bonus (Recapture) 3 
— 
10 
6 
    Contract Maintenance Charge (44)
(53)
(191)
(209)
    Rider charge (44)
(78)
(6,992)
(6,977)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (35,717)
(33,607)
52,558 
(88,844)
             Increase (Decrease) in Net Assets 1,330 
(13,225)
28,319 
(36,117)
 Net Assets at Beginning of Period 231,036 
244,261 
800,296 
836,413 
 Net Assets at End of Period $ 232,366 
$ 231,036 
$ 828,615 
$ 800,296 
 Changes in Units



      Issued 55 
57 
8,625 
1,753 
      Redeemed (2,087)
(2,516)
(6,398)
(5,942)
      Net Increase (Decrease) (2,032)
(2,459)
2,227 
(4,189)
















RCM Dynamic Multi-Asset Plus VIT Portfolio T. Rowe Price Blue Chip Growth Portfolio

2021 2020 (B) 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ — 
$ (73)
$ (14)
$ (11)
       Realized Gains (Losses) on Investments, Net — 
(1,508)
731 
906 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments — 
(645)
3 
(169)
                Net Increase (Decrease) in Net Assets From Operations — 
(2,226)
720 
726 
 Contract Transactions-All Products



    Purchase Payments — 
105 
— 
32 
    Transfers Between Funds or (to) from General Account — 
(17,213)
(77)
(2,095)
    Surrenders and Terminations — 
(365)
(136)
(246)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
1 
— 
— 
    Contract Maintenance Charge — 
(1)
— 
— 
    Rider charge — 
(94)
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions — 
(17,567)
(213)
(2,309)
             Increase (Decrease) in Net Assets — 
(19,793)
507 
(1,583)
 Net Assets at Beginning of Period — 
19,793 
4,230 
5,813 
 Net Assets at End of Period $ — 
$ — 
$ 4,737 
$ 4,230 
 Changes in Units



      Issued — 
10 
— 
1 
      Redeemed — 
(1,777)
(2)
(54)
      Net Increase (Decrease) — 
(1,767)
(2)
(53)
See accompanying notes to financial statements
Page 48 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)














T. Rowe Price Equity Income Portfolio T. Rowe Price Health Sciences Portfolio

2021 2020 2021 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ 14 
$ 18 
$ (3)
$ (3)
       Realized Gains (Losses) on Investments, Net 120 
(86)
121 
190 
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments 89 
25 
3 
58 
                Net Increase (Decrease) in Net Assets From Operations 223 
(43)
121 
245 
 Contract Transactions-All Products



    Purchase Payments — 
— 
— 
— 
    Transfers Between Funds or (to) from General Account 287 
(225)
(2)
(80)
    Surrenders and Terminations (38)
(135)
(72)
(355)
    Rescissions — 
— 
— 
— 
    Bonus (Recapture) — 
— 
— 
— 
    Contract Maintenance Charge — 
— 
— 
— 
    Rider charge — 
— 
— 
— 
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions 249 
(360)
(74)
(435)
             Increase (Decrease) in Net Assets 472 
(403)
47 
(190)
 Net Assets at Beginning of Period 917 
1,320 
1,004 
1,194 
 Net Assets at End of Period $ 1,389 
$ 917 
$ 1,051 
$ 1,004 
 Changes in Units



      Issued 7 
— 
— 
— 
      Redeemed (1)
(13)
(1)
(4)
      Net Increase (Decrease) 6 
(13)
(1)
(4)
















Templeton Global Bond VIP Fund Templeton Growth VIP Fund

2021 2020 2021 (A) 2020
 Increase (Decrease) in Net Assets:



    Operations:



       Investment Income (Loss), Net $ (6,941)
$ 32,950 
$ 514 
$ 2,230 
       Realized Gains (Losses) on Investments, Net (20,408)
(19,516)
527 
(13,434)
       Net Change in Unrealized Appreciation



         (Depreciation) on Investments (1,947)
(49,628)
9,144 
15,280 
                Net Increase (Decrease) in Net Assets From Operations (29,296)
(36,194)
10,185 
4,076 
 Contract Transactions-All Products



    Purchase Payments 290 
348 
97 
223 
    Transfers Between Funds or (to) from General Account 48,109 
32,524 
(203,727)
(7,953)
    Surrenders and Terminations (80,880)
(83,330)
(13,844)
(21,961)
    Rescissions (2)
(21)
— 
(19)
    Bonus (Recapture) 3 
2 
(2)
— 
    Contract Maintenance Charge (118)
(143)
(27)
(64)
    Rider charge (4,721)
(5,546)
(80)
(225)
       Net Increase (Decrease) in Net Assets Resulting



         From Contract Transactions (37,319)
(56,166)
(217,583)
(29,999)
             Increase (Decrease) in Net Assets (66,615)
(92,360)
(207,398)
(25,923)
 Net Assets at Beginning of Period 463,529 
555,889 
207,398 
233,321 
 Net Assets at End of Period $ 396,914 
$ 463,529 
$ — 
$ 207,398 
 Changes in Units



      Issued 1,198 
777 
43 
123 
      Redeemed (2,095)
(2,048)
(7,793)
(1,312)
      Net Increase (Decrease) (897)
(1,271)
(7,750)
(1,189)
See accompanying notes to financial statements
Page 49 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statements of Changes in Net Assets
For the years or periods ended December 31, 2021 and 2020
(In thousands)








Total All Funds

2021 2020
 Increase (Decrease) in Net Assets:

    Operations:

       Investment Income (Loss), Net $ 18,121 
$ 200,566 
       Realized Gains (Losses) on Investments, Net 1,591,209 
691,677 
       Net Change in Unrealized Appreciation

         (Depreciation) on Investments 698,018 
360,512 
                Net Increase (Decrease) in Net Assets From Operations 2,307,348 
1,252,755 
 Contract Transactions-All Products

    Purchase Payments 1,742,409 
1,351,317 
    Transfers Between Funds or (to) from General Account (1,665,856)
(1,141,172)
    Surrenders and Terminations (2,610,206)
(2,267,191)
    Rescissions (22,940)
(13,954)
    Bonus (Recapture) 304 
503 
    Contract Maintenance Charge (3,801)
(4,472)
    Rider charge (172,669)
(180,985)
       Net Increase (Decrease) in Net Assets Resulting

         From Contract Transactions (2,732,759)
(2,255,954)
             Increase (Decrease) in Net Assets (425,411)
(1,003,199)
 Net Assets at Beginning of Period 21,592,232 
22,595,431 
 Net Assets at End of Period $ 21,166,821 
$ 21,592,232 
 Changes in Units

      Issued 317,612 
121,113 
      Redeemed (428,465)
(249,814)
      Net Increase (Decrease) (110,853)
(128,701)







(A) Fund terminated in 2021 . See Footnote 1 for further details.
(B) Fund terminated in 2020 . See Footnote 1 for further details.
See accompanying notes to financial statements
Page 50 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021


(1) Organization
Allianz Life Variable Account B (Variable Account) is a segregated investment account of Allianz Life Insurance Company of North America (Allianz Life) and is registered with the Securities and Exchange Commission as a unit investment trust pursuant to the provisions of the Investment Company Act of 1940 (1940 Act), as amended. Allianz Life applies the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) guidance of Topic 946, Financial Services - Investment Companies. The Variable Account was established on May 31, 1985, and commenced operations January 24, 1989. Accordingly, it is an accounting entity wherein all segregated account transactions are reflected.
The Variable Account's assets are the property of Allianz Life and are held for the benefit of the owners and other persons entitled to payments under variable annuity contracts issued through the Variable Account and underwritten by Allianz Life. The assets of the Variable Account are equal to the reserves and other liabilities of the Variable Account. These assets are not chargeable with liabilities that arise from any other business Allianz Life may conduct. Allianz Life products offered under the Variable Account are listed below. The only product actively being marketed is Allianz Index Advantage.
•Allianz Alterity
•Allianz Charter
•Allianz Connections
•Allianz Custom Income
•Allianz Dimensions
•Allianz Elite
•Allianz High Five
•Allianz Index Advantage
•Allianz Retirement Advantage
•Allianz Retirement Pro
•Allianz Rewards
•Allianz Valuemark
•Allianz Vision
The Variable Account's subaccounts are invested, at net asset values, in one or more of the funds (investment options) in accordance with the selection made by the contractholder. The contractholder may have the option to invest in the fixed account or other index options in the General Account, based on the product features. The liabilities of the fixed account are included in the General Account, which is not registered as an investment company under the 1940 Act. Not all funds listed are available for all products. Some funds have been closed to accepting new money. Each multiple-class fund is presented on an aggregate basis, however, when mergers occur, the fund will be presented separately by class, to disclose which class received additional money. The funds and investment advisers are:







Fund
Investment Adviser
AZL Balanced Index Strategy Fund †
Allianz Investment Management, LLC
AZL DFA Five-Year Global Fixed Income Fund *†
Allianz Investment Management, LLC
AZL DFA Multi-Strategy Fund †
Allianz Investment Management, LLC
AZL Enhanced Bond Index Fund *†
Allianz Investment Management, LLC
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 1 †
Allianz Investment Management, LLC
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 2 *†
Allianz Investment Management, LLC
AZL Fidelity Institutional Asset Management Total Bond Fund Class 1 †
Allianz Investment Management, LLC
AZL Fidelity Institutional Asset Management Total Bond Fund Class 2 *†
Allianz Investment Management, LLC
AZL Gateway Fund *†
Allianz Investment Management, LLC
AZL Government Money Market Fund *†
Allianz Investment Management, LLC
AZL International Index Fund Class 1 †
Allianz Investment Management, LLC
AZL International Index Fund Class 2 *†
Allianz Investment Management, LLC
AZL MetWest Total Return Bond Fund *†
Allianz Investment Management, LLC
AZL Mid Cap Index Fund Class 1 †
Allianz Investment Management, LLC
AZL Mid Cap Index Fund Class 2 *†
Allianz Investment Management, LLC
AZL Moderate Index Strategy Fund †
Allianz Investment Management, LLC
Page 51 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021







Fund
Investment Adviser
AZL MSCI Emerging Markets Equity Index Class 1 †
Allianz Investment Management, LLC
AZL MSCI Emerging Markets Equity Index Class 2 *†
Allianz Investment Management, LLC
AZL MSCI Global Equity Index Fund Class 1 †
Allianz Investment Management, LLC
AZL MSCI Global Equity Index Fund Class 2 *†
Allianz Investment Management, LLC
AZL MVP Balanced Index Strategy Fund †
Allianz Investment Management, LLC
AZL MVP DFA Multi-Strategy Fund †
Allianz Investment Management, LLC
AZL MVP Fidelity Institutional Asset Management Multi-Strategy Fund †
Allianz Investment Management, LLC
AZL MVP Fusion Balanced Fund †
Allianz Investment Management, LLC
AZL MVP Fusion Conservative Fund †
Allianz Investment Management, LLC
AZL MVP Fusion Moderate Fund †
Allianz Investment Management, LLC
AZL MVP Global Balanced Index Strategy Fund †
Allianz Investment Management, LLC
AZL MVP Growth Index Strategy Fund †
Allianz Investment Management, LLC
AZL MVP Moderate Index Strategy Fund †
Allianz Investment Management, LLC
AZL MVP T. Rowe Price Capital Appreciation Plus Fund †
Allianz Investment Management, LLC
AZL Russell 1000 Growth Index Fund Class 1 †
Allianz Investment Management, LLC
AZL Russell 1000 Growth Index Fund Class 2 *†
Allianz Investment Management, LLC
AZL Russell 1000 Value Index Fund Class 1 †
Allianz Investment Management, LLC
AZL Russell 1000 Value Index Fund Class 2 *†
Allianz Investment Management, LLC
AZL S&P 500 Index Fund *†
Allianz Investment Management, LLC
AZL Small Cap Stock Index Fund Class 1 †
Allianz Investment Management, LLC
AZL Small Cap Stock Index Fund Class 2 *†
Allianz Investment Management, LLC
AZL T. Rowe Price Capital Appreciation Fund *†
Allianz Investment Management, LLC
BlackRock Equity Dividend V.I. Fund *
BlackRock Advisors, LLC
ClearBridge Variable Aggressive Growth Portfolio
Legg Mason Partners Fund Advisor, LLC
Columbia Variable Portfolio – Seligman Global Technology Fund
Columbia Management Investment Advisors, LLC
Davis VA Financial Portfolio
Davis Selected Advisers, L.P.
Davis VA Real Estate Portfolio
Davis Selected Advisers, L.P.
Delaware Ivy VIP Asset Strategy Portfolio *
Macquarie Asset Management
Delaware Ivy VIP Energy Portfolio *
Macquarie Asset Management
Delaware Ivy VIP Growth Portfolio *
Macquarie Asset Management
Delaware Ivy VIP Mid Cap Growth Portfolio *
Macquarie Asset Management
Delaware Ivy VIP Natural Resources Portfolio *
Macquarie Asset Management
Delaware Ivy VIP Science and Technology Portfolio *
Macquarie Asset Management
Eaton Vance VT Floating-Rate Income Fund *
Morgan Stanley Investment Management
Fidelity VIP Emerging Markets Portfolio
Fidelity Management & Research Company
Fidelity VIP Mid Cap Portfolio
Fidelity Management & Research Company
Fidelity VIP Strategic Income Portfolio
Fidelity Management & Research Company
Franklin Multi-Asset Dynamic Multi-Strategy VIT Fund
Franklin Advisers, Inc.
Franklin Rising Dividends VIP Fund *
Franklin Advisers, Inc.
Franklin U.S. Government Securities VIP Fund *
Franklin Advisers, Inc.
Invesco Oppenheimer V.I. International Growth Fund *
Invesco Advisors, Inc.
Page 52 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021







Fund
Investment Adviser
Invesco V.I. American Value Fund *
Invesco Advisors, Inc.
Invesco V.I. Balanced-Risk Allocation Fund *
Invesco Advisors, Inc.
Invesco V.I. Global Strategic Income Fund
Invesco Advisors, Inc.
JPMorgan Insurance Trust Core Bond Portfolio
J.P. Morgan Investment Management, Inc.
Lazard Retirement International Equity Portfolio *
Lazard Asset Management, LLC
Lazard Retirement U.S. Small-Mid Cap Equity Portfolio *
Lazard Asset Management, LLC
MFS International Intrinsic Value Portfolio *
Massachusetts Financial Services Company
MFS VIT Total Return Bond Portfolio *
Massachusetts Financial Services Company
MFS VIT Utilities Portfolio *
Massachusetts Financial Services Company
PIMCO VIT Balanced Allocation Portfolio †
Pacific Investment Management Company, LLC
PIMCO VIT CommodityRealReturn Strategy Portfolio †
Pacific Investment Management Company, LLC
PIMCO VIT Emerging Markets Bond Portfolio †
Pacific Investment Management Company, LLC
PIMCO VIT Global Core Bond (Hedged) Portfolio †
Pacific Investment Management Company, LLC
PIMCO VIT High Yield Portfolio †
Pacific Investment Management Company, LLC
PIMCO VIT Long-Term U.S. Government Portfolio †
Pacific Investment Management Company, LLC
PIMCO VIT Low Duration Portfolio †
Pacific Investment Management Company, LLC
PIMCO VIT Real Return Portfolio †
Pacific Investment Management Company, LLC
PIMCO VIT StocksPLUS Global Portfolio †
Pacific Investment Management Company, LLC
PIMCO VIT Total Return Portfolio †
Pacific Investment Management Company, LLC
T. Rowe Price Blue Chip Growth Portfolio *
T. Rowe Price Associates, Inc.
T. Rowe Price Equity Income Portfolio *
T. Rowe Price Associates, Inc.
T. Rowe Price Health Sciences Portfolio *
T. Rowe Price Associates, Inc.
Templeton Global Bond VIP Fund *
Franklin Advisors, Inc.






* Fund contains share classes which assess 12b-1 fees.
† The investment adviser of this fund is an affiliate of Allianz Life and is paid an investment management fee by the fund.

Page 53 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021


During the year ended December 31, 2021, the funds listed below changed their name. There were no name changes in 2020.













Prior Fund Name
Current Fund Name
Effective Date
Invesco Oppenheimer V.I. Global Strategic Income Fund
Invesco V.I. Global Strategic Income Fund
April 29, 2021
AZL MVP Fusion Dynamic Balanced Fund
AZL MVP Fusion Balanced Fund
April 29, 2021
AZL MVP Fusion Dynamic Conservative Fund
AZL MVP Fusion Conservative Fund
April 29, 2021
AZL MVP Fusion Dynamic Moderate Fund
AZL MVP Fusion Moderate Fund
April 29, 2021
AZL Fidelity Institutional Asset Management Multi-Strategy Fund
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 1
June 18, 2021
AZL Fidelity Institutional Asset Management Multi-Strategy Fund
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 2
June 18, 2021
AZL MSCI Global Equity Index Fund
AZL MSCI Global Equity Index Fund Class 1
June 18, 2021
AZL MSCI Global Equity Index Fund
AZL MSCI Global Equity Index Fund Class 2
June 18, 2021
Ivy VIP Asset Strategy Portfolio
Delaware Ivy VIP Asset Strategy Portfolio
July 1, 2021
Ivy VIP Energy Portfolio
Delaware Ivy VIP Energy Portfolio
July 1, 2021
Ivy VIP Growth Portfolio
Delaware Ivy VIP Growth Portfolio
July 1, 2021
Ivy VIP Mid Cap Growth Portfolio
Delaware Ivy VIP Mid Cap Growth Portfolio
July 1, 2021
Ivy VIP Natural Resources Portfolio
Delaware Ivy VIP Natural Resources Portfolio
July 1, 2021
Ivy VIP Science and Technology Portfolio
Delaware Ivy VIP Science and Technology Portfolio
July 1, 2021
QS Legg Mason Dynamic Multi-Strategy VIT Portfolio
Franklin Multi-Asset Dynamic Multi-Strategy VIT Fund
August 7, 2021

Page 54 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021


During the years ended December 31, 2021 and 2020, the following funds were closed to new money:









Fund
Date Closed
RCM Dynamic Multi‐Asset Plus VIT Fund
April 24, 2020
AZL Morgan Stanley Global Real Estate Fund Class 1
August 21, 2020
AZL Morgan Stanley Global Real Estate Fund Class 2
August 21, 2020
BlackRock Global Allocation V.I. Fund
June 18, 2021
BNY Mellon VIF Appreciation Portfolio
June 18, 2021
Fidelity VIP FundsManager 50% Portfolio
June 18, 2021
Fidelity VIP FundsManager 60% Portfolio
June 18, 2021
Franklin Allocation VIP Fund
June 18, 2021
Franklin Income VIP Fund
June 18, 2021
Franklin Mutual Shares VIP Fund
June 18, 2021
Franklin Strategic Income VIP Fund
June 18, 2021
PIMCO VIT All Asset Portfolio
June 18, 2021
PIMCO VIT Dynamic Bond Portfolio
June 18, 2021
PIMCO VIT Global Bond Opportunities Portfolio (Unhedged)
June 18, 2021
PIMCO VIT Global Managed Asset Allocation Portfolio
June 18, 2021
Templeton Growth VIP Fund
June 18, 2021

During the year ended December 31, 2021, the following funds were added as available options. No new funds were added in 2020.









Fund
Date Opened
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 1
June 18, 2021
AZL MSCI Global Equity Index Fund Class 1
June 18, 2021

Page 55 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021


During the years ended December 31, 2021 and 2020, the following funds were merged or replaced:















Closed Fund
Receiving Fund
Date Merged
RCM Dynamic Multi‐Asset Plus VIT Fund
AZL MVP Moderate Index Strategy Fund
April 24, 2020
AZL Morgan Stanley Global Real Estate Fund Class 1
AZL S&P 500 Index Fund
August 21, 2020
AZL Morgan Stanley Global Real Estate Fund Class 2
AZL S&P 500 Index Fund
August 21, 2020
BlackRock Global Allocation V.I. Fund
AZL Moderate Index Strategy Fund
June 18, 2021
BNY Mellon VIF Appreciation Portfolio
AZL S&P 500 Index Fund
June 18, 2021
Fidelity VIP FundsManager 50% Portfolio
AZL Balanced Index Strategy Fund
June 18, 2021
Fidelity VIP FundsManager 60% Portfolio
AZL Moderate Index Strategy Fund
June 18, 2021
Franklin Allocation VIP Fund
AZL Moderate Index Strategy Fund
June 18, 2021
Franklin Income VIP Fund
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 1
June 18, 2021
Franklin Income VIP Fund
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 2
June 18, 2021
Franklin Mutual Shares VIP Fund
AZL Russell 1000 Value Index Fund Class 1
June 18, 2021
Franklin Mutual Shares VIP Fund
AZL Russell 1000 Value Index Fund Class 2
June 18, 2021
Franklin Strategic Income VIP Fund
AZL Fidelity Institutional Asset Management Total Bond Fund Class 2
June 18, 2021
PIMCO VIT All Asset Portfolio
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 2
June 18, 2021
PIMCO VIT Dynamic Bond Portfolio
PIMCO VIT Total Return Portfolio
June 18, 2021
PIMCO VIT Global Bond Opportunities Portfolio (Unhedged)
PIMCO VIT Global Core Bond (Hedged) Portfolio
June 18, 2021
PIMCO VIT Global Managed Asset Allocation Portfolio
PIMCO VIT Balanced Allocation Portfolio
June 18, 2021
Templeton Growth VIP Fund
AZL MSCI Global Equity Index Fund Class 1
June 18, 2021
Templeton Growth VIP Fund
AZL MSCI Global Equity Index Fund Class 2
June 18, 2021


Page 56 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021



(2) Significant Accounting Policies
Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Investments

Investment transactions are recorded by the Variable Account on the trade date. Investments of the Variable Account are valued each day the markets are open at fair value using net asset values provided by the investment advisers of the funds after the 4 PM Eastern Standard Time market close.
The Fair Value Measurement Topic of the FASB ASC establishes a fair value hierarchy that prioritizes the inputs used in the valuation techniques to measure fair value.

Level 1 -     Unadjusted quoted prices for identical assets or liabilities in active markets that the Variable Account has the ability to access at the measurement date.

Level 2 –     Valuations derived from techniques that utilize observable inputs, other than quoted prices included in Level 1, which are observable for the asset or liability either directly or indirectly, such as:
(a)    Quoted prices for similar assets or liabilities in active markets.
(b)    Quoted prices for identical or similar assets or liabilities in markets that are not active.
(c)    Inputs other than quoted prices that are observable.
(d)    Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 -    Valuations derived from techniques in which the significant inputs are unobservable. Level 3 fair values reflect the Variable Account’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. As of December 31, 2021, all of the Variable Account’s investments are in funds for which quoted prices are available in an active market which the Variable Account has the ability to access. Therefore, all investments have been categorized as Level 1. The characterization of the underlying securities held by the funds are accounted for on a trade-date basis and are in accordance with the Fair Value Measurements and Disclosures topic of the FASB ASC.

Realized gains on investments include realized gain distributions received from the respective funds and gains on the sale of fund shares as determined by the average cost method. Realized gain distributions are reinvested in the respective funds. Dividend distributions received from the funds are reinvested in additional shares of the funds and are recorded as income to the Variable Account on the ex-dividend date.

The cost of investments sold and the corresponding capital gains and losses are determined on a specific identification basis. Net investment income (loss) and net realized gains (losses) and unrealized appreciation (depreciation) on investments are allocated to the contracts on each valuation date based on each contract's pro rata share of the assets of the fund as of the beginning of the valuation date.

Transfers between subaccounts, including the fixed account (net), include transfers of all or part of the contractholders' interest to or from another eligible subaccount, or from or to the fixed account option of the general account of the Company.

Contracts in Annuity Payment Period

Annuity reserves are computed for currently payable contracts according to the 1983 and 2000 Individual Annuity Mortality Tables using an assumed investment return (AIR) equal to the AIR of the specific contracts, either 3%, 5% or 7%. Charges to annuity reserves for mortality and risk expense are reimbursed to Allianz Life if the reserves required are less than originally estimated. If additional reserves are required, Allianz Life reimburses the Variable Account.

Page 57 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021


(3) Related Party Charges, Expenses and Fees
Under the terms of the contracts, certain charges, expenses and fees are incurred by the contractholders to cover Allianz Life’s expenses in connection with the issuance and administration of the contracts. Following is a summary of these charges, expenses and fees for the period ended December 31, 2021:

Mortality and Expense Risk Charges
Allianz Life assumes mortality and expense risks related to the operations of the Variable Account. These charges range from 0.30% to 3.40% annually during the accumulation phase, or from 1.00% to 2.20% annually during the annuity phase for variable annuity payments. These charges are deducted on a daily basis and assessed against the daily net asset value of each fund. These charges are assessed either through a reduction in subaccount accumulation unit values during the accumulation phase, or a reduction in subaccount annuity unit values during the annuity phase for contractholders that selected variable annuity payments.

Administrative Charges
A charge to cover administrative expenses of the Variable Account may be deducted from the Variable Account, depending on the contract. This annual charge of 0.15% is calculated and assessed daily as a percentage of each fund’s net asset value. This charge is assessed through a reduction in subaccount accumulation unit values during the accumulation phase, or a reduction in subaccount annuity unit values during the annuity phase for contractholders that selected variable annuity payments.

Contract Maintenance Charges
For certain contracts, an annual contract maintenance charge of $30 to $50 may be deducted to cover ongoing administrative expenses. These charges are assessed through the redemption of subaccount accumulation units during the accumulation phase, or a redemption in subaccount annuity unit values during the annuity phase if variable annuity payments are selected or a reduction in fixed annuity payments.

Withdrawal Charges
For certain contracts, a withdrawal charge (sometimes called a contingent deferred sales charge) is imposed as a percentage, with a range of 0.0% to 8.5%, of each purchase payment if the contract is surrendered or a partial withdrawal is taken during the withdrawal charge period. For certain contracts, a commutation fee or withdrawal charge may also apply during the annuity phase if there are liquidations of variable annuity payments under certain annuity options. These commutation and withdrawal charges are imposed as a percentage, with a range of 1.0% to 8.0% of the amount liquidated. These charges are assessed through the redemption of subaccount accumulation units during the accumulation phase, or a redemption in subaccount annuity units during the annuity phase.

Amounts withdrawn from the Index Advantage Income ADV Index Options may be subject to an MVA (Market Value Adjustment), which can be negative. The maximum negative MVA that we can apply on a full withdrawal is -10% of the Contract Value, and on a partial withdrawal it is -10% of the amount withdrawn.

Rider Charges and Fees
For certain contracts, optional benefit riders may be available for an additional charge to the contractholder. The rider charges for Investment Protector, Income Protector and Income Focus are deducted from the contract value. The Maximum Anniversary Value Death Benefit and Income Benefit rider fees are calculated as a percentage of the contract value as of the prior quarterly contract anniversary adjusted for subsequent purchase payments and withdrawals, and are deducted from the contract value. These charges and fees include:

•Investment Protector: 1.05% to 1.35%
•Income Protector: 1.00% to 1.75%
•Income Focus: 1.30%
•Maximum Anniversary Value Death Benefit: 0.20%
•Income Benefit: 0.70%

Page 58 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021


Transfer Fee
A charge for transfers between funds may be imposed at a rate of up to $25 per transfer. These charges are deducted from the contract value.

Other Contract Charges
For certain contracts there are additional fees, as described below.
•Account Fee - ranges from 0.80% to 1.15% and are imposed as a percentage of the account’s guaranteed value and are assessed through the redemption of subaccount accumulation units during the accumulation phase.
•Product Fee - ranges from 0.25% to 1.25% annually and are accrued on a daily basis as a percentage of the prior quarterly contract anniversary contract value adjusted for subsequent purchase payments and withdrawals. The fee is deducted from the contract value during the accumulation phase through the redemption of accumulation units.
•Increased Annuity Payment Benefit charge - ranges from $0.95 to $9.97 per $100 of the basic annuity payment, depending on the annuitant's age and gender. The charge is assessed by a reduction in the annuity payments during the annuity phase.
•Guaranteed Value Protection Benefits charge will not be more than 5% of the contract anniversary value and assessed through the redemption of subaccount accumulation units during the accumulation phase.

Additional details on charges and fees can be found in the respective product prospectus.
(4) Federal Income Taxes
Operations of the Variable Account form a part of Allianz Life, which is taxed as a life insurance company under the Internal Revenue Code (the Code). Under current law, no federal income taxes are payable with respect to the Variable Account. Under the principles set forth in Internal Revenue Service Ruling 81-225 and Section 817(h) of the Code and regulations thereunder, Allianz Life understands that it will be treated as owner of the assets invested in the Variable Account for federal income tax purposes, with the result that earnings and gains, if any, derived from those assets will not be included in an annuitant's gross income until amounts are received pursuant to an annuity.
(5) Purchases and Sales of Investments (In thousands)
The cost of purchases and proceeds from sales of investments for the year or period ended December 31, 2021, are as follows:













 Cost of Purchases
 Proceeds from Sales
AZL Balanced Index Strategy Fund $ 78,434 

$ 62,697 
AZL DFA Five-Year Global Fixed Income Fund 3,905 

6,559 
AZL DFA Multi-Strategy Fund 87,612 

144,583 
AZL Enhanced Bond Index Fund 5,733 

5,746 
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 1 112,309 

9,533 
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 2 1,172,597 

160,054 
AZL Fidelity Institutional Asset Management Total Bond Fund Class 1 2,288 

2,605 
AZL Fidelity Institutional Asset Management Total Bond Fund Class 2 32,621 

35,235 
AZL Gateway Fund 6,476 

13,284 
AZL Government Money Market Fund 1,073,409 

1,147,167 
AZL International Index Fund Class 1 3,240 

12,497 
AZL International Index Fund Class 2 29,059 

89,849 
AZL MetWest Total Return Bond Fund 7,188 

11,193 
AZL Mid Cap Index Fund Class 1 7,930 

5,555 
AZL Mid Cap Index Fund Class 2 38,922 

123,228 
AZL Moderate Index Strategy Fund 1,336,444 

205,500 
AZL MSCI Emerging Markets Equity Index Class 1 542 

1,739 
AZL MSCI Emerging Markets Equity Index Class 2 11,479 

20,968 
AZL MSCI Global Equity Index Fund Class 1 51,837 

3,914 
Page 59 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021











 Cost of Purchases
 Proceeds from Sales
AZL MSCI Global Equity Index Fund Class 2 $ 165,531 

$ 20,386 
AZL MVP Balanced Index Strategy Fund 44,886 

48,918 
AZL MVP DFA Multi-Strategy Fund 18,956 

14,617 
AZL MVP Fidelity Institutional Asset Management Multi-Strategy Fund 16,808 

36,955 
AZL MVP Fusion Balanced Fund 38,257 

125,357 
AZL MVP Fusion Conservative Fund 31,652 

51,566 
AZL MVP Fusion Moderate Fund 71,197 

261,005 
AZL MVP Global Balanced Index Strategy Fund 48,910 

74,964 
AZL MVP Growth Index Strategy Fund 280,304 

383,575 
AZL MVP Moderate Index Strategy Fund 48,752 

72,803 
AZL MVP T. Rowe Price Capital Appreciation Plus Fund 153,055 

159,928 
AZL Russell 1000 Growth Index Fund Class 1 12,619 

8,198 
AZL Russell 1000 Growth Index Fund Class 2 106,329 

178,878 
AZL Russell 1000 Value Index Fund Class 1 61,322 

23,570 
AZL Russell 1000 Value Index Fund Class 2 284,476 

126,190 
AZL S&P 500 Index Fund 97,973 

225,146 
AZL Small Cap Stock Index Fund Class 1 2,330 

7,603 
AZL Small Cap Stock Index Fund Class 2 36,056 

115,755 
AZL T. Rowe Price Capital Appreciation Fund 149,795 

147,232 
BlackRock Equity Dividend V.I. Fund 462 

306 
BlackRock Global Allocation V.I. Fund 10,692 

1,194,424 
BNY Mellon VIF Appreciation Portfolio 7 

69 
ClearBridge Variable Aggressive Growth Portfolio 368 

408 
Columbia Variable Portfolio – Seligman Global Technology Fund 144 

455 
Davis VA Financial Portfolio 5,963 

11,738 
Davis VA Real Estate Portfolio 3 

19 
Delaware Ivy VIP Asset Strategy Portfolio 124 

5 
Delaware Ivy VIP Energy Portfolio 1 

10 
Delaware Ivy VIP Growth Portfolio 57 

63 
Delaware Ivy VIP Mid Cap Growth Portfolio 147 

100 
Delaware Ivy VIP Natural Resources Portfolio 25 

20 
Delaware Ivy VIP Science and Technology Portfolio 347 

233 
Eaton Vance VT Floating-Rate Income Fund 390 

387 
Fidelity VIP Emerging Markets Portfolio 757 

2,683 
Fidelity VIP FundsManager 50% Portfolio 561 

22,523 
Fidelity VIP FundsManager 60% Portfolio 2,804 

90,034 
Fidelity VIP Mid Cap Portfolio 160 

211 
Fidelity VIP Strategic Income Portfolio 489 

546 
Franklin Allocation VIP Fund 5,883 

100,545 
Franklin Income VIP Fund 54,256 

1,035,098 
Franklin Multi-Asset Dynamic Multi-Strategy VIT Fund 2 

3 
Page 60 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021











 Cost of Purchases
 Proceeds from Sales
Franklin Mutual Shares VIP Fund $ 6,123 

$ 345,310 
Franklin Rising Dividends VIP Fund 11,664 

34,899 
Franklin Strategic Income VIP Fund 23 

711 
Franklin U.S. Government Securities VIP Fund 14,573 

29,586 
Invesco Oppenheimer V.I. International Growth Fund 270 

141 
Invesco V.I. American Value Fund 75 

216 
Invesco V.I. Balanced-Risk Allocation Fund 26 

35 
Invesco V.I. Global Strategic Income Fund 201 

367 
JPMorgan Insurance Trust Core Bond Portfolio 5,960 

12,009 
Lazard Retirement International Equity Portfolio 6 

25 
Lazard Retirement U.S. Small-Mid Cap Equity Portfolio 51 

334 
MFS International Intrinsic Value Portfolio 260 

583 
MFS VIT Total Return Bond Portfolio 6,265 

10,684 
MFS VIT Utilities Portfolio 5 

28 
PIMCO VIT All Asset Portfolio 20,620 

325,470 
PIMCO VIT Balanced Allocation Portfolio 137,657 

21,914 
PIMCO VIT CommodityRealReturn Strategy Portfolio 4,787 

13,898 
PIMCO VIT Dynamic Bond Portfolio 7,193 

150,726 
PIMCO VIT Emerging Markets Bond Portfolio 10,167 

18,144 
PIMCO VIT Global Bond Opportunities Portfolio (Unhedged) 5,068 

49,240 
PIMCO VIT Global Core Bond (Hedged) Portfolio 63,218 

24,890 
PIMCO VIT Global Managed Asset Allocation Portfolio 17,781 

139,592 
PIMCO VIT High Yield Portfolio 37,492 

94,686 
PIMCO VIT Long-Term U.S. Government Portfolio 2,390 

2,281 
PIMCO VIT Low Duration Portfolio 512 

792 
PIMCO VIT Real Return Portfolio 24,283 

50,248 
PIMCO VIT StocksPLUS Global Portfolio 32,026 

49,026 
PIMCO VIT Total Return Portfolio 245,263 

159,468 
T. Rowe Price Blue Chip Growth Portfolio 828 

537 
T. Rowe Price Equity Income Portfolio 677 

316 
T. Rowe Price Health Sciences Portfolio 126 

136 
Templeton Global Bond VIP Fund 33,763 

78,022 
Templeton Growth VIP Fund 7,712 

224,781 

Page 61 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021


(6) Financial Highlights
A summary of units outstanding (in thousands), unit values, net assets (in thousands), ratios, and total returns for variable annuity contracts is as follows:









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
AZL Balanced Index Strategy Fund







2021 21,289 
$ 16.59 
to $ 21.58 
$ 416,054 

1.83  % 1.00  % to 3.40  % 6.41  % to 8.79  %
2020 21,475 
$ 15.58 
to $ 19.83 
$ 388,701 

1.98  % 1.00  % to 3.40  % 8.54  % to 10.97  %
2019 22,526 
$ 14.35 
to $ 17.87 
$ 370,836 

2.26  % 1.00  % to 3.40  % 13.38  % to 15.91  %
2018 25,146 
$ 12.65 
to $ 15.42 
$ 360,374 

0.93  % 1.00  % to 3.40  % (7.53) % to (5.46) %
2017 27,352 
$ 13.67 
to $ 16.31 
$ 418,424 

2.22  % 1.00  % to 3.40  % 7.84  % to 10.24  %
AZL DFA Five-Year Global Fixed Income Fund







2021 1,373 
$ 8.74 
to $ 10.61 
$ 13,004 

—  % —  % to 3.40  % (4.47) % to (1.66) %
2020 1,630 
$ 9.15 
to $ 10.79 
$ 15,880 

2.49  % —  % to 3.40  % (2.31) % to 0.57  %
2019 1,487 
$ 9.36 
to $ 10.73 
$ 14,680 

5.90  % —  % to 3.40  % 0.54  % to 3.50  %
2018 1,360 
$ 9.30 
to $ 10.25 
$ 13,192 

0.70  % —  % to 3.40  % (1.79) % to 0.86  %
2017² 351 $ 9.50 
to $ 9.93 
$ 3,447 

—  % —  % to 3.40  % (0.96) % to (0.63) %
AZL DFA Multi-Strategy Fund







2021 37,892 
$ 18.91 
to $ 24.60 
$ 852,829 

1.53  % 1.00  % to 3.40  % 10.06  % to 12.52  %
2020 42,292 
$ 17.17 
to $ 21.86 
$ 852,984 

3.12  % 1.00  % to 3.40  % 6.99  % to 9.38  %
2019 48,075 
$ 16.04 
to $ 19.99 
$ 892,959 

1.05  % 1.00  % to 3.40  % 12.73  % to 15.25  %
2018 54,537 
$ 14.22 
to $ 17.34 
$ 885,699 

1.16  % 1.00  % to 3.40  % (9.02) % to (6.98) %
2017 62,328 
$ 15.63 
to $ 18.64 
$ 1,097,107 

0.76  % 1.00  % to 3.40  % 8.99  % to 11.41  %
AZL Enhanced Bond Index Fund







2021 2,027 
$ 11.39 
to $ 12.67 
$ 24,727 

0.75  % 1.15  % to 2.05  % (3.89) % to (3.06) %
2020 2,067 
$ 11.85 
to $ 13.07 
$ 26,081 

2.36  % 1.15  % to 2.05  % 5.40  % to 6.31  %
2019 2,250 
$ 11.25 
to $ 12.30 
$ 26,772 

2.59  % 1.15  % to 2.05  % 6.23  % to 7.15  %
2018 2,156 
$ 10.59 
to $ 11.48 
$ 24,013 

2.16  % 1.15  % to 2.05  % (2.56) % to (1.72) %
2017 1,986 
$ 10.86 
to $ 11.68 
$ 22,581 

0.87  % 1.15  % to 2.05  % 0.97  % to 1.84  %
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 1

2021³ 9,971 
$ 10.48 
to $ 10.52 
$ 105,623 

0.80  % 1.40  % to 2.20  % 4.78  % to 5.23  %
AZL Fidelity Institutional Asset Management Multi-Strategy Fund Class 2



2021 68,178 
$ 16.69 
to $ 26.30 
$ 1,371,510 

0.81  % 0.30  % to 3.40  % 3.85  % to 11.32  %
2020 15,871 
$ 15.45 
to $ 24.32 
$ 290,007 

2.49  % 0.30  % to 3.40  % 9.72  % to 13.13  %
2019 17,127 
$ 14.07 
to $ 22.13 
$ 281,339 

2.37  % 0.30  % to 3.40  % 13.41  % to 16.92  %
2018 19,593 
$ 12.40 
to $ 19.48 
$ 279,543 

2.24  % 0.30  % to 3.40  % (5.22) % to (2.32) %
2017 22,719 
$ 13.08 
to $ 20.54 
$ 337,012 

—  % 0.30  % to 3.40  % 7.52  % to 10.78  %
AZL Fidelity Institutional Asset Management Total Bond Fund Class 1



2021 1,871 
$ 10.94 
to $ 11.41 
$ 19,155 

2.88  % 1.40  % to 2.20  % (1.60) % to (0.81) %
2020 1,976 
$ 11.12 
to $ 11.50 
$ 20,327 

3.63  % 1.40  % to 2.20  % 6.74  % to 7.60  %
2019 2,148 
$ 10.42 
to $ 10.69 
$ 20,543 

3.36  % 1.40  % to 2.20  % 8.16  % to 9.03  %
2018 2,200 
$ 9.63 
to $ 9.80 
$ 19,278 

3.14  % 1.40  % to 2.20  % (3.17) % to (2.39) %
2017 2,396 
$ 9.95 
to $ 10.04 
$ 21,481 

2.45  % 1.40  % to 2.20  % 2.28  % to 3.10  %
AZL Fidelity Institutional Asset Management Total Bond Fund Class 2




2021 13,090 
$ 9.83 
to $ 13.45 
$ 148,293 

2.51  % —  % to 3.40  % (2.99) % to 0.31  %
2020 13,699 
$ 10.14 
to $ 13.41 
$ 157,259 

3.24  % —  % to 3.40  % 5.25  % to 8.84  %
Page 62 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
2019 15,038 
$ 9.63 
to $ 12.32 
$ 161,773 

2.94  % —  % to 3.40  % 6.65  % to 10.28  %
2018 16,774 
$ 9.03 
to $ 11.17 
$ 166,707 

2.77  % —  % to 3.40  % (4.53) % to (1.25) %
2017 18,913 
$ 9.49 
to $ 11.32 
$ 193,945 

2.32  % —  % to 3.40  % 0.90  % to 4.27  %
AZL Gateway Fund


2021 4,677 
$ 12.12 
to $ 18.04 
$ 68,296 

0.64  % —  % to 3.40  % 7.41  % to 11.13  %
2020 5,110 
$ 11.47 
to $ 16.24 
$ 68,305 

1.06  % —  % to 3.40  % 3.81  % to 7.30  %
2019 5,468 
$ 11.16 
to $ 15.13 
$ 69,198 

0.97  % —  % to 3.40  % 7.23  % to 10.82  %
2018 5,770 
$ 10.39 
to $ 13.65 
$ 67,026 

1.23  % —  % to 3.40  % (7.76) % to (4.65) %
2017 6,358 
$ 11.20 
to $ 14.32 
$ 79,227 

0.99  % —  % to 3.40  % 6.02  % to 9.46  %
AZL Government Money Market Fund








2021 51,168 
$ 6.22 
to $ 13.10 
$ 511,547 

—  % —  % to 3.40  % (3.29) % to —  %
2020 57,985 
$ 6.43 
to $ 13.10 
$ 585,305 

0.18  % —  % to 3.40  % (3.11) % to 0.21  %
2019 47,890 
$ 6.63 
to $ 13.07 
$ 466,646 

1.37  % —  % to 3.40  % (1.90) % to 1.39  %
2018 46,559 
$ 6.76 
to $ 12.89 
$ 430,314 

1.00  % —  % to 3.40  % (2.28) % to 1.01  %
2017 50,262 
$ 6.91 
to $ 12.76 
$ 463,873 

0.04  % —  % to 3.40  % (3.19) % to 0.05  %
AZL International Index Fund Class 1







2021 6,443 
$ 13.69 
to $ 14.85 
$ 93,430 

2.52  % 1.15  % to 2.70  % 7.85  % to 9.53  %
2020 7,160 
$ 12.69 
to $ 13.55 
$ 95,192 

5.00  % 1.15  % to 2.70  % 4.79  % to 6.43  %
2019 8,028 
$ 12.11 
to $ 12.73 
$ 100,779 

3.66  % 1.15  % to 2.70  % 18.43  % to 20.28  %
2018 8,927 
$ 10.23 
to $ 10.59 
$ 93,602 

3.99  % 1.15  % to 2.70  % (16.11) % to (14.79) %
2017 10,154 
$ 12.19 
to $ 12.43 
$ 125,461 

1.31  % 1.15  % to 2.70  % 21.80  % to 23.69  %
AZL International Index Fund Class 2








2021 27,246 
$ 12.57 
to $ 21.57 
$ 385,078 

1.47  % —  % to 3.40  % 6.85  % to 10.55  %
2020 31,392 
$ 11.76 
to $ 19.74 
$ 410,582 

3.13  % —  % to 3.40  % 3.85  % to 7.40  %
2019 35,569 
$ 11.31 
to $ 18.59 
$ 442,769 

2.26  % —  % to 3.40  % 17.44  % to 21.44  %
2018 40,672 
$ 9.63 
to $ 15.49 
$ 426,442 

2.60  % —  % to 3.40  % (16.89) % to (14.04) %
2017 46,614 
$ 11.58 
to $ 18.23 
$ 581,653 

0.90  % —  % to 3.40  % 20.67  % to 24.77  %
AZL MetWest Total Return Bond Fund







2021 2,587 
$ 10.67 
to $ 11.34 
$ 28,583 

1.37  % 1.15  % to 2.05  % (3.28) % to (2.45) %
2020 3,083 
$ 11.03 
to $ 11.62 
$ 35,007 

2.72  % 1.15  % to 2.05  % 6.42  % to 7.34  %
2019 2,669 
$ 10.36 
to $ 10.83 
$ 28,365 

2.53  % 1.15  % to 2.05  % 6.34  % to 7.26  %
2018 2,684 
$ 9.74 
to $ 10.09 
$ 26,688 

1.96  % 1.15  % to 2.05  % (2.20) % to (1.35) %
2017 2,452 
$ 9.96 
to $ 10.23 
$ 24,822 

1.58  % 1.15  % to 2.05  % 1.10  % to 1.97  %
AZL Mid Cap Index Fund Class 1







2021 3,503 
$ 17.94 
to $ 18.75 
$ 53,632 

2.59  % 1.15  % to 2.55  % 21.33  % to 22.36  %
2020 3,835 
$ 14.78 
to $ 15.32 
$ 47,856 

3.95  % 1.15  % to 2.55  % 12.31  % to 13.28  %
2019 4,205 
$ 13.16 
to $ 13.53 
$ 46,374 

3.04  % 1.15  % to 2.55  % 22.74  % to 23.79  %
2018 4,621 
$ 10.72 
to $ 10.98 
$ 41,617 

2.38  % 1.15  % to 2.55  % (12.95) % to (12.03) %
2017 5,029 
$ 12.32 
to $ 12.48 
$ 51,831 

1.00  % 1.15  % to 2.55  % 13.56  % to 14.76  %
AZL Mid Cap Index Fund Class 2








2021 13,526 
$ 26.23 
to $ 48.09 
$ 402,133 

0.68  % —  % to 3.40  % 19.53  % to 23.66  %
2020 16,929 
$ 21.89 
to $ 39.34 
$ 416,121 

1.17  % —  % to 3.40  % 10.75  % to 14.53  %
2019 20,304 
$ 19.72 
to $ 34.75 
$ 446,410 

1.03  % —  % to 3.40  % 21.15  % to 25.28  %
2018 23,184 
$ 16.25 
to $ 28.06 
$ 415,541 

0.88  % —  % to 3.40  % (14.28) % to (11.35) %
2017 27,603 
$ 18.92 
to $ 32.02 
$ 569,909 

0.46  % —  % to 3.40  % 12.05  % to 15.85  %
Page 63 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
AZL Moderate Index Strategy Fund







2021 70,698 
$ 20.07 
to $ 35.97 
$ 1,806,915 

0.86  % —  % to 3.40  % 4.41  % to 11.72  %
2020 25,225 
$ 18.51 
to $ 30.53 
$ 576,533 

1.97  % 0.30  % to 3.40  % 9.11  % to 12.50  %
2019 27,963 
$ 16.96 
to $ 27.14 
$ 578,003 

2.34  % 0.30  % to 3.40  % 15.39  % to 18.97  %
2018 31,485 
$ 14.69 
to $ 22.81 
$ 557,352 

0.96  % 0.30  % to 3.40  % (8.31) % to (5.46) %
2017 36,691 
$ 16.01 
to $ 24.13 
$ 699,846 

2.10  % 0.30  % to 3.40  % 9.58  % to 12.96  %
AZL MSCI Emerging Markets Equity Index Class 1







2021 1,264 
$ 12.99 
to $ 14.61 
$ 14,226 

1.53  % 1.40  % to 2.20  % (5.77) % to (5.02) %
2020 1,380 
$ 13.79 
to $ 15.38 
$ 16,447 

3.65  % 1.40  % to 2.20  % 14.70  % to 15.63  %
2019 1,622 
$ 12.02 
to $ 13.30 
$ 16,781 

1.92  % 1.40  % to 2.20  % 14.99  % to 15.92  %
2018 1,795 
$ 10.45 
to $ 11.48 
$ 16,002 

1.89  % 1.40  % to 2.20  % (17.16) % to (16.49) %
2017 1,986 
$ 12.62 
to $ 13.74 
$ 21,422 

0.55  % 1.40  % to 2.20  % 34.00  % to 35.07  %
AZL MSCI Emerging Markets Equity Index Class 2







2021 7,057 
$ 10.32 
to $ 17.32 
$ 87,487 

1.28  % —  % to 3.40  % (6.99) % to (3.83) %
2020 7,801 
$ 11.05 
to $ 18.01 
$ 102,936 

3.35  % —  % to 3.40  % 13.05  % to 16.92  %
2019 9,099 
$ 9.71 
to $ 15.41 
$ 105,083 

1.64  % —  % to 3.40  % 13.32  % to 17.18  %
2018 10,178 
$ 8.51 
to $ 13.15 
$ 102,415 

1.63  % —  % to 3.40  % (18.26) % to (15.46) %
2017 11,659 
$ 10.34 
to $ 15.55 
$ 142,017 

0.40  % —  % to 3.40  % 32.14  % to 36.63  %
AZL MSCI Global Equity Index Fund Class 1







2021³ 4,558 
$ 10.87 
to $ 10.92 
$ 50,201 

1.19  % 1.40  % to 2.20  % 8.70  % to 9.17  %
AZL MSCI Global Equity Index Fund Class 2







2021 7,085 
$ 19.14 
to $ 28.38 
$ 160,173 

1.35  % 0.30  % to 3.40  % 6.27  % to 20.82  %
2020 216 
$ 19.13 
to $ 23.49 
$ 4,531 

0.80  % 0.30  % to 2.05  % 13.07  % to 15.01  %
2019 296 
$ 16.92 
to $ 20.42 
$ 5,452 

1.48  % 0.30  % to 2.05  % 24.73  % to 26.87  %
2018 437 
$ 13.57 
to $ 16.10 
$ 6,337 

2.12  % 0.30  % to 2.05  % (10.75) % to (9.21) %
2017 420 
$ 15.20 
to $ 17.73 
$ 6,770 

2.14  % 0.30  % to 2.05  % 19.77  % to 21.81  %
AZL MVP Balanced Index Strategy Fund







2021 16,299 
$ 14.53 
to $ 20.00 
$ 281,749 

1.76  % —  % to 3.40  % 6.56  % to 10.02  %
2020 17,451 
$ 13.64 
to $ 18.18 
$ 278,234 

1.98  % —  % to 3.40  % 2.63  % to 5.98  %
2019 18,953 
$ 13.29 
to $ 17.15 
$ 289,123 

2.08  % —  % to 3.40  % 13.23  % to 16.92  %
2018 19,962 
$ 11.73 
to $ 14.67 
$ 264,376 

0.81  % —  % to 3.40  % (7.47) % to (4.44) %
2017 20,095 
$ 12.68 
to $ 15.35 
$ 282,458 

1.87  % —  % to 3.40  % 5.35  % to 11.40  %
AZL MVP DFA Multi-Strategy Fund







2021 6,633 
$ 13.03 
to $ 13.85 
$ 89,961 

1.34  % 1.15  % to 2.05  % 11.43  % to 12.45  %
2020 6,703 
$ 11.69 
to $ 12.31 
$ 81,082 

2.93  % 1.15  % to 2.05  % 1.66  % to 2.59  %
2019 7,288 
$ 11.50 
to $ 12.00 
$ 86,188 

0.93  % 1.15  % to 2.05  % 13.46  % to 14.49  %
2018 7,624 
$ 10.14 
to $ 10.48 
$ 79,000 

0.77  % 1.15  % to 2.05  % (8.14) % to (7.30) %
2017 6,487 
$ 11.04 
to $ 11.31 
$ 72,747 

0.42  % 1.15  % to 2.05  % 10.27  % to 11.27  %
AZL MVP Fidelity Institutional Asset Management Multi-Strategy Fund







2021 13,320 
$ 15.08 
to $ 16.38 
$ 211,749 

2.49  % 1.15  % to 2.05  % 8.87  % to 9.81  %
2020 15,271 
$ 13.85 
to $ 14.92 
$ 221,761 

2.69  % 1.15  % to 2.05  % 5.04  % to 5.94  %
2019 16,844 
$ 13.18 
to $ 14.08 
$ 231,613 

3.95  % 1.15  % to 2.05  % 13.94  % to 14.92  %
2018 18,055 
$ 11.57 
to $ 12.25 
$ 216,696 

3.27  % 1.15  % to 2.05  % (4.08) % to (3.25) %
2017 19,489 
$ 12.06 
to $ 12.66 
$ 242,510 

1.32  % 1.15  % to 2.05  % 8.74  % to 9.67  %
AZL MVP Fusion Balanced Fund







Page 64 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
2021 40,495 
$ 13.82 
to $ 22.80 
$ 713,997 

2.20  % 0.30  % to 3.40  % 5.60  % to 8.87  %
2020 45,695 
$ 13.08 
to $ 20.94 
$ 751,880 

2.39  % 0.30  % to 3.40  % 0.36  % to 3.47  %
2019 52,096 
$ 13.03 
to $ 20.24 
$ 841,576 

2.50  % 0.30  % to 3.40  % 11.95  % to 15.41  %
2018 58,795 
$ 11.63 
to $ 17.53 
$ 836,480 

1.22  % 0.30  % to 3.40  % (8.53) % to (5.69) %
2017 65,536 
$ 12.71 
to $ 18.59 
$ 1,004,139 

1.67  % 0.30  % to 3.40  % 8.54  % to 11.89  %
AZL MVP Fusion Conservative Fund







2021 12,796 
$ 13.12 
to $ 19.16 
$ 206,207 

2.34  % 0.30  % to 3.40  % 2.60  % to 5.84  %
2020 14,119 
$ 13.08 
to $ 18.11 
$ 218,170 

2.27  % 0.30  % to 3.40  % 1.48  % to 4.47  %
2019 15,217 
$ 12.89 
to $ 17.33 
$ 228,175 

2.42  % 0.30  % to 3.40  % 9.96  % to 13.20  %
2018 16,017 
$ 11.72 
to $ 15.31 
$ 214,900 

1.34  % 0.30  % to 3.40  % (6.80) % to (4.04) %
2017 17,254 
$ 12.57 
to $ 15.96 
$ 244,361 

1.80  % 0.30  % to 3.40  % 5.87  % to 8.98  %
AZL MVP Fusion Moderate Fund







2021 90,514 
$ 14.10 
to $ 23.26 
$ 1,642,253 

2.05  % 0.30  % to 3.40  % 7.43  % to 10.76  %
2020 101,488 
$ 13.12 
to $ 21.00 
$ 1,688,704 

2.17  % 0.30  % to 3.40  % 1.08  % to 4.22  %
2019 111,981 
$ 12.97 
to $ 20.15 
$ 1,815,251 

2.51  % 0.30  % to 3.40  % 13.44  % to 16.96  %
2018 123,837 
$ 11.43 
to $ 17.23 
$ 1,742,029 

1.12  % 0.30  % to 3.40  % (9.56) % to (6.74) %
2017 138,054 
$ 12.63 
to $ 18.48 
$ 2,113,272 

1.56  % 0.30  % to 3.40  % 10.24  % to 13.64  %
AZL MVP Global Balanced Index Strategy Fund







2021 38,936 
$ 14.66 
to $ 16.04 
$ 605,711 

1.47  % 1.15  % to 2.05  % 5.86  % to 6.82  %
2020 43,019 
$ 13.85 
to $ 15.02 
$ 628,373 

9.13  % 1.15  % to 2.05  % 5.61  % to 6.58  %
2019 48,772 
$ 13.11 
to $ 14.09 
$ 670,508 

1.72  % 1.15  % to 2.05  % 13.84  % to 14.88  %
2018 53,792 
$ 11.52 
to $ 12.27 
$ 645,646 

1.45  % 1.15  % to 2.05  % (7.70) % to (6.85) %
2017 56,999 
$ 12.48 
to $ 13.17 
$ 736,643 

0.38  % 1.15  % to 2.05  % 9.19  % to 10.18  %
AZL MVP Growth Index Strategy Fund







2021 112,524 
$ 17.26 
to $ 24.11 
$ 2,291,937 

1.70  % —  % to 3.40  % 12.56  % to 16.40  %
2020 126,639 
$ 15.33 
to $ 20.71 
$ 2,254,083 

1.86  % —  % to 3.40  % 1.27  % to 4.73  %
2019 138,335 
$ 15.14 
to $ 19.78 
$ 2,390,898 

2.16  % —  % to 3.40  % 16.55  % to 20.52  %
2018 148,195 
$ 12.99 
to $ 16.41 
$ 2,160,089 

0.82  % —  % to 3.40  % (9.55) % to (6.45) %
2017 149,425 
$ 14.36 
to $ 17.54 
$ 2,365,878 

1.15  % —  % to 3.40  % 7.96  % to 15.96  %
AZL MVP Moderate Index Strategy Fund







2021 23,325 
$ 18.53 
to $ 20.28 
$ 458,639 

1.80  % 1.15  % to 2.05  % 10.18  % to 11.18  %
2020 26,364 
$ 16.82 
to $ 18.24 
$ 467,774 

1.87  % 1.15  % to 2.05  % 4.27  % to 5.23  %
2019 27,930 
$ 16.13 
to $ 17.33 
$ 472,411 

2.13  % 1.15  % to 2.05  % 16.23  % to 17.29  %
2018 29,910 
$ 13.87 
to $ 14.78 
$ 432,622 

0.86  % 1.15  % to 2.05  % (7.19) % to (6.34) %
2017 31,560 
$ 14.95 
to $ 15.78 
$ 488,774 

1.67  % 1.15  % to 2.05  % 10.92  % to 11.93  %
AZL MVP T. Rowe Price Capital Appreciation Plus Fund





2021 67,066 
$ 18.24 
to $ 19.61 
$ 1,280,437 

3.53  % 1.15  % to 2.05  % 14.66  % to 15.71  %
2020 72,009 
$ 15.91 
to $ 16.95 
$ 1,192,293 

2.83  % 1.15  % to 2.05  % 5.82  % to 6.79  %
2019 74,088 
$ 15.03 
to $ 15.87 
$ 1,152,403 

1.84  % 1.15  % to 2.05  % 18.93  % to 20.01  %
2018 73,504 
$ 12.64 
to $ 13.22 
$ 955,798 

0.98  % 1.15  % to 2.05  % (3.68) % to (2.80) %
2017 72,712 
$ 13.12 
to $ 13.60 
$ 975,914 

1.24  % 1.15  % to 2.05  % 11.90  % to 12.92  %
AZL Russell 1000 Growth Index Fund Class 1





2021 3,495 
$ 27.84 
to $ 29.10 
$ 74,879 

0.69  % 1.15  % to 2.55  % 24.37  % to 25.43  %
2020 3,828 
$ 22.38 
to $ 23.20 
$ 65,837 

1.15  % 1.15  % to 2.55  % 36.00  % to 37.17  %
2019 4,219 
$ 16.46 
to $ 16.91 
$ 53,537 

1.39  % 1.15  % to 2.55  % 32.58  % to 33.71  %
Page 65 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
2018 4,695 
$ 12.41 
to $ 12.71 
$ 45,307 

1.58  % 1.15  % to 2.55  % (4.01) % to (2.99) %
2017 5,141 
$ 12.93 
to $ 13.10 
$ 51,623 

0.39  % 1.15  % to 2.55  % 26.39  % to 27.72  %
AZL Russell 1000 Growth Index Fund Class 2





2021 14,314 
$ 39.76 
to $ 66.12 
$ 680,974 

0.25  % —  % to 3.40  % 22.63  % to 26.87  %
2020 17,486 
$ 32.63 
to $ 52.11 
$ 670,828 

0.56  % —  % to 3.40  % 34.01  % to 38.58  %
2019 21,752 
$ 24.35 
to $ 37.61 
$ 617,780 

0.75  % —  % to 3.40  % 30.82  % to 35.28  %
2018 25,179 
$ 18.61 
to $ 27.80 
$ 540,363 

0.89  % —  % to 3.40  % (5.38) % to (2.14) %
2017 30,052 
$ 19.67 
to $ 28.41 
$ 674,397 

0.26  % —  % to 3.40  % 24.65  % to 28.89  %
AZL Russell 1000 Value Index Fund Class 1





2021 14,710 
$ 15.62 
to $ 16.93 
$ 201,593 

2.13  % 1.15  % to 2.70  % 21.23  % to 23.12  %
2020 11,271 
$ 12.88 
to $ 13.75 
$ 132,301 

3.03  % 1.15  % to 2.70  % (0.48) % to 1.08  %
2019 12,877 
$ 12.94 
to $ 13.61 
$ 150,207 

2.93  % 1.15  % to 2.70  % 22.77  % to 24.69  %
2018 14,383 
$ 10.54 
to $ 10.91 
$ 135,319 

2.75  % 1.15  % to 2.70  % (10.95) % to (9.55) %
2017 16,153 
$ 11.84 
to $ 12.06 
$ 169,571 

0.88  % 1.15  % to 2.70  % 10.36  % to 12.08  %
AZL Russell 1000 Value Index Fund Class 2





2021 26,042 
$ 20.67 
to $ 35.05 
$ 641,646 

1.40  % —  % to 3.40  % 20.10  % to 24.25  %
2020 19,013 
$ 17.32 
to $ 28.21 
$ 383,626 

1.99  % —  % to 3.40  % (1.36) % to 2.01  %
2019 21,683 
$ 17.56 
to $ 27.65 
$ 439,080 

1.93  % —  % to 3.40  % 21.72  % to 25.86  %
2018 24,316 
$ 14.43 
to $ 21.97 
$ 398,225 

1.85  % —  % to 3.40  % (11.74) % to (8.72) %
2017 28,948 
$ 16.35 
to $ 24.07 
$ 530,578 

0.66  % —  % to 3.40  % 9.30  % to 13.02  %
AZL S&P 500 Index Fund





2021 32,352 
$ 24.60 
to $ 40.93 
$ 958,977 

1.01  % —  % to 3.40  % 23.90  % to 28.12  %
2020 38,580 
$ 19.68 
to $ 32.04 
$ 911,458 

1.68  % —  % to 3.40  % 11.39  % to 17.15  %
2019 42,064 
$ 17.08 
to $ 27.35 
$ 864,709 

1.52  % 0.30  % to 3.40  % 26.58  % to 30.50  %
2018 48,216 
$ 13.30 
to $ 20.96 
$ 771,527 

1.52  % 0.30  % to 3.40  % (7.99) % to (5.13) %
2017 57,352 
$ 14.26 
to $ 22.09 
$ 985,017 

0.92  % 0.30  % to 3.40  % 17.37  % to 21.00  %
AZL Small Cap Stock Index Fund Class 1







2021 2,633 
$ 17.56 
to $ 19.00 
$ 45,248 

1.16  % 1.15  % to 2.70  % 23.07  % to 24.93  %
2020 3,021 
$ 14.27 
to $ 15.20 
$ 42,048 

1.93  % 1.15  % to 2.70  % 8.07  % to 9.70  %
2019 3,382 
$ 13.21 
to $ 13.86 
$ 43,271 

1.58  % 1.15  % to 2.70  % 19.21  % to 21.02  %
2018 3,788 
$ 11.08 
to $ 11.45 
$ 40,530 

1.39  % 1.15  % to 2.70  % (10.99) % to (9.64) %
2017 4,369 
$ 12.45 
to $ 12.67 
$ 52,401 

0.67  % 1.15  % to 2.70  % 9.99  % to 11.65  %
AZL Small Cap Stock Index Fund Class 2







2021 16,661 
$ 23.15 
to $ 37.58 
$ 459,022 

0.62  % —  % to 3.40  % 21.83  % to 26.04  %
2020 19,900 
$ 18.98 
to $ 29.82 
$ 443,512 

1.12  % —  % to 3.40  % 7.05  % to 10.71  %
2019 22,355 
$ 17.72 
to $ 26.93 
$ 459,446 

0.92  % —  % to 3.40  % 18.17  % to 22.19  %
2018 24,867 
$ 14.99 
to $ 22.04 
$ 425,568 

0.85  % —  % to 3.40  % (11.95) % to (8.93) %
2017 29,215 
$ 17.02 
to $ 24.20 
$ 562,093 

0.48  % —  % to 3.40  % 9.04  % to 12.74  %
AZL T. Rowe Price Capital Appreciation Fund







2021 22,482 
$ 23.55 
to $ 43.14 
$ 642,013 

0.96  % 0.30  % to 3.40  % 14.23  % to 17.77  %
2020 24,624 
$ 20.61 
to $ 36.63 
$ 610,525 

1.38  % 0.30  % to 3.40  % 13.60  % to 17.13  %
2019 26,701 
$ 18.13 
to $ 31.28 
$ 580,071 

2.08  % 0.30  % to 3.40  % 20.28  % to 24.01  %
2018 28,493 
$ 15.07 
to $ 25.22 
$ 508,467 

0.91  % 0.30  % to 3.40  % (2.95) % to 0.07  %
2017 31,456 
$ 15.52 
to $ 25.20 
$ 574,307 

1.33  % 0.30  % to 3.40  % 11.26  % to 14.70  %
BlackRock Equity Dividend V.I. Fund







Page 66 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
2021 45 
$ 30.96 
to $ 30.96 
$ 1,380 

1.31  % 0.30  % to 0.30  % 19.94  % to 19.94  %
2020 45 
$ 25.82 
to $ 25.82 
$ 1,170 

1.92  % 0.30  % to 0.30  % 3.26  % to 3.26  %
2019 58 
$ 25.00 
to $ 25.00 
$ 1,440 

1.73  % 0.30  % to 0.30  % 27.08  % to 27.08  %
2018 70 
$ 19.67 
to $ 19.67 
$ 1,369 

1.87  % 0.30  % to 0.30  % (7.69) % to (7.69) %
2017 49 
$ 21.31 
to $ 21.31 
$ 1,044 

1.51  % 0.30  % to 0.30  % 16.14  % to 16.14  %
ClearBridge Variable Aggressive Growth Portfolio







2021 31 
$ 34.28 
to $ 34.28 
$ 1,055 

0.18  % 0.30  % to 0.30  % 9.71  % to 9.71  %
2020 41 
$ 31.25 
to $ 31.25 
$ 1,275 

0.59  % 0.30  % to 0.30  % 17.38  % to 17.38  %
2019 44 
$ 26.62 
to $ 26.62 
$ 1,170 

0.71  % 0.30  % to 0.30  % 24.37  % to 24.37  %
2018 56 
$ 21.41 
to $ 21.41 
$ 1,200 

0.38  % 0.30  % to 0.30  % (8.84) % to (8.84) %
2017 55 
$ 23.48 
to $ 23.48 
$ 1,282 

0.24  % 0.30  % to 0.30  % 15.64  % to 15.64  %
Columbia Variable Portfolio – Seligman Global Technology Fund







2021 27 
$ 50.75 
to $ 58.53 
$ 1,488 

0.37  % 1.15  % to 2.55  % 36.20  % to 37.09  %
2020 36 
$ 37.26 
to $ 42.69 
$ 1,446 

—  % 1.15  % to 2.55  % 43.21  % to 44.15  %
2019 41 
$ 26.02 
to $ 29.62 
$ 1,144 

—  % 1.15  % to 2.55  % 52.16  % to 53.15  %
2018 47 
$ 17.10 
to $ 19.34 
$ 872 

—  % 1.15  % to 2.55  % (10.02) % to (9.43) %
2017 52 
$ 19.00 
to $ 21.35 
$ 1,060 

—  % 1.15  % to 2.55  % 32.48  % to 33.34  %
Davis VA Financial Portfolio







2021 1,411 
$ 18.27 
to $ 36.58 
$ 41,160 

1.32  % 1.00  % to 3.40  % 26.30  % to 29.05  %
2020 1,725 
$ 14.46 
to $ 28.34 
$ 39,297 

1.50  % 1.00  % to 3.40  % (9.09) % to (7.07) %
2019 1,894 
$ 15.90 
to $ 30.50 
$ 47,060 

1.51  % 1.00  % to 3.40  % 21.71  % to 24.42  %
2018 2,098 
$ 13.06 
to $ 24.51 
$ 42,277 

1.15  % 1.00  % to 3.40  % (13.63) % to (11.70) %
2017 2,478 
$ 15.11 
to $ 27.76 
$ 57,372 

0.73  % 1.00  % to 3.40  % 17.49  % to 20.03  %
Davis VA Real Estate Portfolio





2021 4 
$ 55.52 
to $ 61.96 
$ 270 

1.18  % 1.15  % to 2.55  % 39.31  % to 40.01  %
2020 5 
$ 39.86 
to $ 44.25 
$ 206 

2.00  % 1.15  % to 2.55  % (9.82) % to (9.36) %
2019 6 
$ 44.19 
to $ 48.82 
$ 266 

0.98  % 1.15  % to 2.55  % 23.38  % to 24.00  %
2018 7 
$ 35.82 
to $ 39.38 
$ 260 

2.68  % 1.15  % to 2.55  % (6.62) % to (6.15) %
2017 — 
$ 38.36 
to $ 41.95 
$ — 

1.19  % 1.15  % to 2.55  % 6.22  % to 6.75  %
Delaware Ivy VIP Asset Strategy Portfolio







2021 11 
$ 93.79 
to $ 93.79 
$ 1,073 

1.62  % 0.30  % to 0.30  % 10.11  % to 10.11  %
2020 11 
$ 85.18 
to $ 85.18 
$ 976 

2.10  % 0.30  % to 0.30  % 13.54  % to 13.54  %
2019 12 
$ 75.02 
to $ 75.02 
$ 878 

2.08  % 0.30  % to 0.30  % 21.41  % to 21.41  %
2018 13 
$ 61.79 
to $ 61.79 
$ 830 

1.79  % 0.30  % to 0.30  % (5.72) % to (5.72) %
2017 14 
$ 65.54 
to $ 65.54 
$ 938 

1.43  % 0.30  % to 0.30  % 17.92  % to 17.92  %
Delaware Ivy VIP Energy Portfolio







2021 7 
$ 7.37 
to $ 7.37 
$ 51 

1.38  % 0.30  % to 0.30  % 41.57  % to 41.57  %
2020 8 
$ 5.21 
to $ 5.21 
$ 43 

1.66  % 0.30  % to 0.30  % (37.02) % to (37.02) %
2019 15 
$ 8.27 
to $ 8.27 
$ 128 

—  % 0.30  % to 0.30  % 3.17  % to 3.17  %
2018 37 
$ 8.01 
to $ 8.01 
$ 298 

—  % 0.30  % to 0.30  % (34.33) % to (34.33) %
2017 48 
$ 12.20 
to $ 12.20 
$ 588 

0.94  % 0.30  % to 0.30  % (12.90) % to (12.90) %
Delaware Ivy VIP Growth Portfolio





2021 1 
$ 498.75 
to $ 498.75 
$ 594 

—  % 0.30  % to 0.30  % 29.64  % to 29.64  %
2020 1 
$ 384.73 
to $ 384.73 
$ 506 

—  % 0.30  % to 0.30  % 30.16  % to 30.16  %
2019 1 
$ 295.59 
to $ 295.59 
$ 398 

—  % 0.30  % to 0.30  % 36.18  % to 36.18  %
Page 67 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
2018 2 
$ 217.07 
to $ 217.07 
$ 403 

0.03  % 0.30  % to 0.30  % 1.98  % to 1.98  %
2017 1 
$ 212.86 
to $ 212.86 
$ 312 

0.24  % 0.30  % to 0.30  % 28.95  % to 28.95  %
Delaware Ivy VIP Mid Cap Growth Portfolio







2021 12 
$ 83.94 
to $ 83.94 
$ 968 

—  % 0.30  % to 0.30  % 16.01  % to 16.01  %
2020 12 
$ 72.36 
to $ 72.36 
$ 889 

—  % 0.30  % to 0.30  % 48.55  % to 48.55  %
2019 14 
$ 48.71 
to $ 48.71 
$ 698 

—  % 0.30  % to 0.30  % 37.53  % to 37.53  %
2018 12 
$ 35.42 
to $ 35.42 
$ 410 

—  % 0.30  % to 0.30  % (0.36) % to (0.36) %
2017 16 
$ 35.54 
to $ 35.54 
$ 553 

—  % 0.30  % to 0.30  % 26.52  % to 26.52  %
Delaware Ivy VIP Natural Resources Portfolio







2021 7 
$ 11.86 
to $ 11.86 
$ 80 

1.45  % 0.30  % to 0.30  % 26.30  % to 26.30  %
2020 6 
$ 9.39 
to $ 9.39 
$ 59 

2.48  % 0.30  % to 0.30  % (12.25) % to (12.25) %
2019 6 
$ 10.70 
to $ 10.70 
$ 60 

1.02  % 0.30  % to 0.30  % 9.13  % to 9.13  %
2018 6 
$ 9.80 
to $ 9.80 
$ 61 

0.30  % 0.30  % to 0.30  % (23.46) % to (23.46) %
2017 6 
$ 12.81 
to $ 12.81 
$ 74 

0.12  % 0.30  % to 0.30  % 2.66  % to 2.66  %
Delaware Ivy VIP Science and Technology Portfolio







2021 3 
$ 329.62 
to $ 329.62 
$ 1,020 

—  % 0.30  % to 0.30  % 14.82  % to 14.82  %
2020 4 
$ 287.07 
to $ 287.07 
$ 1,046 

—  % 0.30  % to 0.30  % 34.95  % to 34.95  %
2019 6 
$ 212.72 
to $ 212.72 
$ 1,303 

—  % 0.30  % to 0.30  % 49.04  % to 49.04  %
2018 9 
$ 142.73 
to $ 142.73 
$ 1,257 

—  % 0.30  % to 0.30  % (5.52) % to (5.52) %
2017 9 
$ 151.07 
to $ 151.07 
$ 1,434 

—  % 0.30  % to 0.30  % 31.72  % to 31.72  %
Eaton Vance VT Floating-Rate Income Fund







2021 62 
$ 18.58 
to $ 18.58 
$ 1,159 

2.90  % 0.30  % to 0.30  % 3.32  % to 3.32  %
2020 64 
$ 17.99 
to $ 17.99 
$ 1,148 

3.37  % 0.30  % to 0.30  % 1.69  % to 1.69  %
2019 101 
$ 17.69 
to $ 17.69 
$ 1,778 

4.40  % 0.30  % to 0.30  % 6.77  % to 6.77  %
2018 462 
$ 16.57 
to $ 16.57 
$ 7,662 

3.84  % 0.30  % to 0.30  % (0.38) % to (0.38) %
2017 346 
$ 16.63 
to $ 16.63 
$ 5,748 

3.26  % 0.30  % to 0.30  % 3.12  % to 3.12  %
Fidelity VIP Emerging Markets Portfolio







2021 130 
$ 16.92 
to $ 16.92 
$ 2,199 

1.17  % 0.30  % to 0.30  % (2.70) % to (2.70) %
2020 262 
$ 17.39 
to $ 17.39 
$ 4,563 

0.77  % 0.30  % to 0.30  % 30.48  % to 30.48  %
2019 408 
$ 13.32 
to $ 13.32 
$ 5,435 

1.44  % 0.30  % to 0.30  % 28.81  % to 28.81  %
2018 419 
$ 10.34 
to $ 10.34 
$ 4,333 

0.64  % 0.30  % to 0.30  % (18.41) % to (18.41) %
2017 217 
$ 12.68 
to $ 12.68 
$ 2,755 

0.57  % 0.30  % to 0.30  % 46.61  % to 46.61  %
Fidelity VIP Mid Cap Portfolio







2021 6 
$ 97.12 
to $ 97.12 
$ 610 

0.32  % 0.30  % to 0.30  % 24.93  % to 24.93  %
2020 8 
$ 77.74 
to $ 77.74 
$ 611 

0.42  % 0.30  % to 0.30  % 17.51  % to 17.51  %
2019 7 
$ 66.15 
to $ 66.15 
$ 482 

0.63  % 0.30  % to 0.30  % 22.80  % to 22.80  %
2018 10 
$ 53.87 
to $ 53.87 
$ 515 

0.66  % 0.30  % to 0.30  % (15.03) % to (15.03) %
2017 66 
$ 63.40 
to $ 63.40 
$ 4,154 

0.49  % 0.30  % to 0.30  % 20.18  % to 20.18  %
Fidelity VIP Strategic Income Portfolio







2021 82 
$ 24.56 
to $ 24.56 
$ 2,017 

2.34  % 0.30  % to 0.30  % 3.22  % to 3.22  %
2020 87 
$ 23.79 
to $ 23.79 
$ 2,076 

3.54  % 0.30  % to 0.30  % 6.84  % to 6.84  %
2019 82 
$ 22.27 
to $ 22.27 
$ 1,824 

3.04  % 0.30  % to 0.30  % 10.32  % to 10.32  %
2018 99 
$ 20.19 
to $ 20.19 
$ 2,007 

3.83  % 0.30  % to 0.30  % (3.12) % to (3.12) %
2017 85 
$ 20.83 
to $ 20.83 
$ 1,772 

3.03  % 0.30  % to 0.30  % 7.22  % to 7.22  %
Franklin Multi-Asset Dynamic Multi-Strategy VIT Fund







Page 68 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
2021 4 
$ 15.80 
to $ 15.80 
$ 67 

2.31  % 0.30  % to 0.30  % 12.31  % to 12.31  %
2020 4 
$ 14.07 
to $ 14.07 
$ 62 

1.18  % 0.30  % to 0.30  % (8.59) % to (8.59) %
2019 15 
$ 15.39 
to $ 15.39 
$ 228 

2.10  % 0.30  % to 0.30  % 15.17  % to 15.17  %
2018 15 $ 13.36 
to $ 13.36 
$ 199 

1.70  % 0.30  % to 0.30  % (7.53) % to (7.53) %
2017 5 
$ 14.45 
to $ 14.45 
$ 65 

0.76  % 0.30  % to 0.30  % 13.48  % to 13.48  %
Franklin Rising Dividends VIP Fund







2021 3,043 
$ 86.75 
to $ 188.72 
$ 240,532 

0.94  % 0.30  % to 2.70  % 23.41  % to 26.41  %
2020 3,364 
$ 70.29 
to $ 149.29 
$ 218,720 

1.35  % 0.30  % to 2.70  % 12.87  % to 15.62  %
2019 3,768 
$ 62.28 
to $ 129.12 
$ 219,360 

1.35  % 0.30  % to 2.70  % 25.79  % to 28.84  %
2018 4,167 
$ 49.51 
to $ 100.22 
$ 194,815 

1.35  % 0.30  % to 2.70  % (7.62) % to (5.36) %
2017 4,755 
$ 53.59 
to $ 105.89 
$ 243,653 

1.61  % 0.30  % to 2.70  % 17.35  % to 20.20  %
Franklin U.S. Government Securities VIP Fund







2021 5,955 
$ 15.50 
to $ 46.53 
$ 157,809 

2.50  % —  % to 3.40  % (5.06) % to (1.83) %
2020 6,556 
$ 16.32 
to $ 47.40 
$ 180,119 

3.47  % —  % to 3.40  % 0.40  % to 3.83  %
2019 7,470 
$ 16.26 
to $ 45.65 
$ 200,585 

2.93  % —  % to 3.40  % 1.76  % to 5.23  %
2018 8,497 
$ 15.97 
to $ 43.38 
$ 221,290 

2.78  % —  % to 3.40  % (2.99) % to 0.34  %
2017 9,942 
$ 16.47 
to $ 43.23 
$ 262,563 

2.68  % —  % to 3.40  % (1.99) % to 1.34  %
Invesco Oppenheimer V.I. International Growth Fund







2021 40 
$ 37.30 
to $ 37.30 
$ 1,477 

—  % 0.30  % to 0.30  % 9.79  % to 9.79  %
2020 39 
$ 33.97 
to $ 33.97 
$ 1,336 

0.58  % 0.30  % to 0.30  % 20.68  % to 20.68  %
2019 45 
$ 28.15 
to $ 28.15 
$ 1,281 

0.83  % 0.30  % to 0.30  % 27.57  % to 27.57  %
2018 78 
$ 22.07 
to $ 22.07 
$ 1,724 

0.62  % 0.30  % to 0.30  % (19.79) % to (19.79) %
2017 59 
$ 27.51 
to $ 27.51 
$ 1,632 

1.12  % 0.30  % to 0.30  % 26.07  % to 26.07  %
Invesco V.I. American Value Fund







2021 7 
$ 53.79 
to $ 53.79 
$ 376 

0.24  % 0.30  % to 0.30  % 27.24  % to 27.24  %
2020 10 
$ 42.28 
to $ 42.28 
$ 422 

0.55  % 0.30  % to 0.30  % 0.55  % to 0.55  %
2019 19 
$ 42.04 
to $ 42.04 
$ 780 

0.38  % 0.30  % to 0.30  % 24.34  % to 24.34  %
2018 15 
$ 33.81 
to $ 33.81 
$ 521 

0.19  % 0.30  % to 0.30  % (13.13) % to (13.13) %
2017 13 
$ 38.92 
to $ 38.92 
$ 522 

0.60  % 0.30  % to 0.30  % 9.35  % to 9.35  %
Invesco V.I. Balanced-Risk Allocation Fund





2021 15 
$ 26.64 
to $ 26.64 
$ 396 

2.96  % 0.30  % to 0.30  % 8.93  % to 8.93  %
2020 16 
$ 24.46 
to $ 24.46 
$ 394 

7.83  % 0.30  % to 0.30  % 9.66  % to 9.66  %
2019 17 
$ 22.31 
to $ 22.31 
$ 382 

—  % 0.30  % to 0.30  % 14.54  % to 14.54  %
2018 47 
$ 19.47 
to $ 19.47 
$ 924 

1.30  % 0.30  % to 0.30  % (6.99) % to (6.99) %
2017 48 
$ 20.94 
to $ 20.94 
$ 1,015 

3.75  % 0.30  % to 0.30  % 9.50  % to 9.50  %
Invesco V.I. Global Strategic Income Fund







2021 73 
$ 19.91 
to $ 31.07 
$ 1,840 

4.57  % 1.15  % to 2.70  % (5.99) % to (4.52) %
2020 81 
$ 21.18 
to $ 32.54 
$ 2,167 

5.91  % 1.15  % to 2.70  % 0.64  % to 2.22  %
2019 88 
$ 21.04 
to $ 31.83 
$ 2,303 

3.84  % 1.15  % to 2.70  % 7.85  % to 9.54  %
2018 96 
$ 19.51 
to $ 29.06 
$ 2,288 

4.95  % 1.15  % to 2.70  % (6.96) % to (5.50) %
2017 114 
$ 20.97 
to $ 30.75 
$ 2,903 

2.27  % 1.15  % to 2.70  % 3.45  % to 5.06  %
JPMorgan Insurance Trust Core Bond Portfolio







2021 1,288 
$ 8.96 
to $ 15.39 
$ 18,191 

1.85  % 0.30  % to 2.05  % (3.61) % to (1.96) %
2020 1,737 
$ 9.14 
to $ 15.83 
$ 25,385 

1.83  % 0.30  % to 2.05  % 5.54  % to 7.36  %
2019 1,592 
$ 8.52 
to $ 14.87 
$ 22,080 

2.36  % 0.30  % to 2.05  % 5.73  % to 7.54  %
Page 69 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
2018 1,530 
$ 7.92 
to $ 13.94 
$ 19,933 

2.22  % 0.30  % to 2.05  % (2.21) % to (0.53) %
2017 1,336 
$ 7.96 
to $ 14.14 
$ 17,566 

2.34  % 0.30  % to 2.05  % 1.26  % to 2.99  %
Lazard Retirement International Equity Portfolio







2021 11 
$ 25.49 
to $ 25.49 
$ 273 

0.94  % 0.30  % to 0.30  % 5.52  % to 5.52  %
2020 12 
$ 24.16 
to $ 24.16 
$ 283 

2.24  % 0.30  % to 0.30  % 7.91  % to 7.91  %
2019 12 
$ 22.39 
to $ 22.39 
$ 260 

0.34  % 0.30  % to 0.30  % 20.64  % to 20.64  %
2018 12 
$ 18.56 
to $ 18.56 
$ 224 

1.55  % 0.30  % to 0.30  % (14.17) % to (14.17) %
2017 13 
$ 21.62 
to $ 21.62 
$ 271 

2.33  % 0.30  % to 0.30  % 21.97  % to 21.97  %
Lazard Retirement U.S. Small-Mid Cap Equity Portfolio







2021 5 
$ 68.13 
to $ 68.13 
$ 349 

0.05  % 0.30  % to 0.30  % 19.51  % to 19.51  %
2020 9 
$ 57.01 
to $ 57.01 
$ 536 

0.04  % 0.30  % to 0.30  % 6.47  % to 6.47  %
2019 72 
$ 53.55 
to $ 53.55 
$ 3,860 

—  % 0.30  % to 0.30  % 29.54  % to 29.54  %
2018 71 
$ 41.34 
to $ 41.34 
$ 2,951 

0.02  % 0.30  % to 0.30  % (13.50) % to (13.50) %
2017 92 
$ 47.79 
to $ 47.79 
$ 4,402 

0.40  % 0.30  % to 0.30  % 13.60  % to 13.60  %
MFS International Intrinsic Value Portfolio







2021 89 
$ 27.82 
to $ 27.82 
$ 2,463 

0.14  % 0.30  % to 0.30  % 9.95  % to 9.95  %
2020 103 
$ 25.30 
to $ 25.30 
$ 2,598 

0.77  % 0.30  % to 0.30  % 19.85  % to 19.85  %
2019 113 
$ 21.11 
to $ 21.11 
$ 2,376 

1.50  % 0.30  % to 0.30  % 25.28  % to 25.28  %
2018 121 
$ 16.85 
to $ 16.85 
$ 2,035 

0.94  % 0.30  % to 0.30  % (10.00) % to (10.00) %
2017 119 
$ 18.72 
to $ 18.72 
$ 2,220 

1.31  % 0.30  % to 0.30  % 26.44  % to 26.44  %
MFS VIT Total Return Bond Portfolio







2021 1,551 
$ 17.67 
to $ 25.57 
$ 30,750 

2.47  % 0.30  % to 2.05  % (3.03) % to (1.36) %
2020 1,789 
$ 18.03 
to $ 25.92 
$ 36,398 

3.24  % 0.30  % to 2.05  % 5.97  % to 7.85  %
2019 1,832 
$ 17.02 
to $ 24.03 
$ 35,037 

3.25  % 0.30  % to 2.05  % 7.69  % to 9.59  %
2018 1,787 
$ 15.95 
to $ 21.93 
$ 31,518 

3.12  % 0.30  % to 2.05  % (3.29) % to (1.63) %
2017 1,510 
$ 16.49 
to $ 22.29 
$ 27,388 

3.03  % 0.30  % to 2.05  % 2.13  % to 3.87  %
MFS VIT Utilities Portfolio







2021 2 
$ 45.00 
to $ 45.00 
$ 93 

1.58  % 0.30  % to 0.30  % 13.48  % to 13.48  %
2020 3 
$ 39.66 
to $ 39.66 
$ 107 

2.05  % 0.30  % to 0.30  % 5.30  % to 5.30  %
2019 11 
$ 37.66 
to $ 37.66 
$ 431 

4.87  % 0.30  % to 0.30  % 24.43  % to 24.43  %
2018 3 
$ 30.27 
to $ 30.27 
$ 93 

0.80  % 0.30  % to 0.30  % 0.51  % to 0.51  %
2017 4 
$ 30.11 
to $ 30.11 
$ 124 

3.61  % 0.30  % to 0.30  % 14.15  % to 14.15  %
PIMCO VIT Balanced Allocation Portfolio







2021 14,111 
$ 11.95 
to $ 16.44 
$ 198,686 

0.09  % —  % to 3.40  % 2.50  % to 9.70  %
2020 5,811 
$ 12.40 
to $ 13.41 
$ 75,819 

0.98  % 1.15  % to 2.05  % 8.86  % to 9.85  %
2019 6,660 
$ 11.39 
to $ 12.21 
$ 79,383 

2.15  % 1.15  % to 2.05  % 16.59  % to 17.65  %
2018 7,323 
$ 9.77 
to $ 10.38 
$ 74,432 

1.29  % 1.15  % to 2.05  % (7.51) % to (6.67) %
2017 8,045 
$ 10.56 
to $ 11.12 
$ 87,877 

0.71  % 1.15  % to 2.05  % 12.16  % to 13.18  %
PIMCO VIT CommodityRealReturn Strategy Portfolio







2021 5,630 
$ 5.82 
to $ 10.10 
$ 39,437 

4.15  % —  % to 3.40  % 28.95  % to 33.34  %
2020 7,179 
$ 4.51 
to $ 7.57 
$ 38,457 

6.52  % —  % to 3.40  % (2.00) % to 1.35  %
2019 7,681 
$ 4.60 
to $ 7.47 
$ 41,546 

4.47  % —  % to 3.40  % 7.76  % to 11.43  %
2018 8,058 
$ 4.27 
to $ 6.71 
$ 39,993 

2.09  % —  % to 3.40  % (16.98) % to (14.13) %
2017 9,380 
$ 5.14 
to $ 7.81 
$ 55,600 

11.25  % —  % to 3.40  % (1.20) % to 2.15  %
PIMCO VIT Emerging Markets Bond Portfolio







Page 70 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
2021 3,790 
$ 15.08 
to $ 33.58 
$ 72,587 

4.48  % —  % to 3.40  % (5.78) % to (2.57) %
2020 4,292 
$ 16.00 
to $ 35.00 
$ 86,204 

4.61  % —  % to 3.40  % 3.18  % to 6.70  %
2019 4,961 
$ 15.50 
to $ 33.32 
$ 95,266 

4.44  % —  % to 3.40  % 11.01  % to 14.80  %
2018 6,200 
$ 13.95 
to $ 29.48 
$ 105,980 

4.13  % —  % to 3.40  % (7.89) % to (4.73) %
2017 7,595 
$ 15.14 
to $ 31.43 
$ 139,054 

5.09  % —  % to 3.40  % 6.28  % to 9.89  %
PIMCO VIT Global Core Bond (Hedged) Portfolio







2021 11,150 
$ 8.61 
to $ 12.32 
$ 113,863 

2.00  % —  % to 3.40  % (4.76) % to (0.23) %
2020 7,411 
$ 9.17 
to $ 11.20 
$ 79,472 

6.12  % 1.15  % to 3.40  % 4.70  % to 6.87  %
2019 8,493 
$ 8.76 
to $ 10.48 
$ 85,815 

2.21  % 1.15  % to 3.40  % 4.49  % to 6.66  %
2018 10,384 
$ 8.39 
to $ 9.82 
$ 98,630 

1.68  % 1.15  % to 3.40  % (2.15) % to (0.11) %
2017 10,197 
$ 8.75 
to $ 9.83 
$ 97,634 

1.43  % 1.15  % to 3.40  % 1.32  % to 3.10  %
PIMCO VIT High Yield Portfolio







2021 16,580 
$ 17.05 
to $ 36.63 
$ 420,245 

4.44  % —  % to 3.40  % 0.17  % to 3.63  %
2020 19,322 
$ 17.22 
to $ 35.34 
$ 481,389 

4.85  % —  % to 3.40  % 2.26  % to 5.76  %
2019 23,360 
$ 16.84 
to $ 33.42 
$ 560,228 

4.96  % —  % to 3.40  % 10.97  % to 14.75  %
2018 27,588 
$ 15.17 
to $ 29.12 
$ 586,686 

5.10  % —  % to 3.40  % (5.88) % to (2.65) %
2017 32,146 
$ 16.12 
to $ 29.92 
$ 712,987 

4.88  % —  % to 3.40  % 3.12  % to 6.63  %
PIMCO VIT Long-Term U.S. Government Portfolio







2021 130 
$ 26.67 
to $ 42.47 
$ 4,225 

1.58  % —  % to 2.60  % (6.99) % to (5.07) %
2020 158 
$ 28.68 
to $ 44.73 
$ 5,405 

1.69  % —  % to 2.60  % 14.68  % to 17.06  %
2019 176 
$ 24.75 
to $ 38.21 
$ 5,112 

1.97  % —  % to 2.60  % 10.65  % to 13.00  %
2018 30 
$ 23.04 
to $ 28.61 
$ 774 

2.38  % —  % to 2.60  % (4.56) % to (3.50) %
2017¹ 12 $ 0.03 
to $ 0.03 
$ — 

1.46  % —  % to 2.60  % 4.79  % to 5.25  %
PIMCO VIT Low Duration Portfolio







2021 321 
$ 19.60 
to $ 19.60 
$ 6,294 

0.52  % 0.30  % to 0.30  % (1.22) % to (1.22) %
2020 336 
$ 19.85 
to $ 19.85 
$ 6,668 

1.27  % 0.30  % to 0.30  % 2.68  % to 2.68  %
2019 448 
$ 19.33 
to $ 19.33 
$ 8,661 

2.74  % 0.30  % to 0.30  % 3.72  % to 3.72  %
2018 291 $ 18.63 
to $ 18.63 
$ 5,415 

1.97  % 0.30  % to 0.30  % 0.04  % to 0.04  %
2017 119 
$ 18.63 
to $ 18.63 
$ 2,217 

1.38  % 0.30  % to 0.30  % 1.05  % to 1.05  %
PIMCO VIT Real Return Portfolio







2021 13,984 
$ 12.75 
to $ 25.29 
$ 236,784 

4.93  % —  % to 3.40  % 2.13  % to 5.61  %
2020 16,003 
$ 12.48 
to $ 24.32 
$ 261,562 

1.41  % —  % to 3.40  % 8.08  % to 11.72  %
2019 19,087 
$ 11.55 
to $ 22.11 
$ 284,537 

1.65  % —  % to 3.40  % 4.92  % to 8.45  %
2018 22,224 
$ 11.00 
to $ 20.70 
$ 311,183 

2.49  % —  % to 3.40  % (5.40) % to (2.20) %
2017 26,057 
$ 11.63 
to $ 21.50 
$ 379,635 

2.37  % —  % to 3.40  % 0.30  % to 3.66  %
PIMCO VIT StocksPLUS Global Portfolio







2021 12,684 
$ 8.52 
to $ 23.46 
$ 232,366 

0.09  % 0.30  % to 3.40  % 15.40  % to 18.97  %
2020 14,716 
$ 7.30 
to $ 19.72 
$ 231,036 

1.12  % 0.30  % to 3.40  % 9.30  % to 12.70  %
2019 17,175 
$ 6.60 
to $ 17.50 
$ 244,261 

1.53  % 0.30  % to 3.40  % 23.32  % to 27.14  %
2018 19,341 
$ 5.29 
to $ 13.76 
$ 219,308 

1.52  % 0.30  % to 3.40  % (13.70) % to (11.01) %
2017 22,407 
$ 6.06 
to $ 15.47 
$ 292,155 

3.33  % 0.30  % to 3.40  % 19.01  % to 22.62  %
PIMCO VIT Total Return Portfolio







2021 38,985 
$ 14.16 
to $ 31.44 
$ 828,615 

1.82  % —  % to 3.40  % (4.52) % to (1.27) %
2020 36,758 
$ 14.82 
to $ 31.85 
$ 800,296 

2.13  % —  % to 3.40  % 5.07  % to 8.66  %
2019 40,947 
$ 14.10 
to $ 29.31 
$ 836,413 

3.02  % —  % to 3.40  % 4.80  % to 8.37  %
Page 71 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021









































At December 31
For the years or periods ended December 31

Units Outstanding **** Unit Fair Value lowest to highest Net Assets ****
Investment Income Ratio* Expense Ratio
lowest to highest**		 Total Return
lowest to highest***
2018 46,010 
$ 13.45 
to $ 27.04 
$ 881,868 

2.54  % —  % to 3.40  % (3.82) % to (0.53) %
2017 51,931 
$ 13.97 
to $ 27.19 
$ 1,018,136 

2.02  % —  % to 3.40  % 1.47  % to 4.92  %
T. Rowe Price Blue Chip Growth Portfolio







2021 61 
$ 78.16 
to $ 78.16 
$ 4,737 

—  % 0.30  % to 0.30  % 16.98  % to 16.98  %
2020 63 
$ 66.81 
to $ 66.81 
$ 4,230 

—  % 0.30  % to 0.30  % 33.51  % to 33.51  %
2019 116 
$ 50.04 
to $ 50.04 
$ 5,813 

—  % 0.30  % to 0.30  % 29.19  % to 29.19  %
2018 75 $ 38.74 
to $ 38.74 
$ 2,919 

—  % 0.30  % to 0.30  % 1.34  % to 1.34  %
2017 71 
$ 38.22 
to $ 38.22 
$ 2,695 

—  % 0.30  % to 0.30  % 35.42  % to 35.42  %
T. Rowe Price Equity Income Portfolio







2021 34 
$ 40.44 
to $ 40.44 
$ 1,389 

1.45  % 0.30  % to 0.30  % 24.84  % to 24.84  %
2020 28 
$ 32.40 
to $ 32.40 
$ 917 

2.07  % 0.30  % to 0.30  % 0.65  % to 0.65  %
2019 41 
$ 32.19 
to $ 32.19 
$ 1,320 

1.97  % 0.30  % to 0.30  % 25.67  % to 25.67  %
2018 56 $ 25.61 
to $ 25.61 
$ 1,438 

1.80  % 0.30  % to 0.30  % (9.96) % to (9.96) %
2017 57 
$ 28.45 
to $ 28.45 
$ 1,628 

1.58  % 0.30  % to 0.30  % 15.38  % to 15.38  %
T. Rowe Price Health Sciences Portfolio







2021 8 
$ 132.70 
to $ 132.70 
$ 1,051 

—  % 0.30  % to 0.30  % 12.49  % to 12.49  %
2020 9 
$ 117.96 
to $ 117.96 
$ 1,004 

—  % 0.30  % to 0.30  % 28.88  % to 28.88  %
2019 13 
$ 91.53 
to $ 91.53 
$ 1,194 

—  % 0.30  % to 0.30  % 28.24  % to 28.24  %
2018 16 $ 71.37 
to $ 71.37 
$ 1,113 

—  % 0.30  % to 0.30  % 0.55  % to 0.55  %
2017 17 
$ 70.98 
to $ 70.98 
$ 1,233 

—  % 0.30  % to 0.30  % 26.93  % to 26.93  %
Templeton Global Bond VIP Fund







2021 10,147 
$ 21.55 
to $ 66.26 
$ 396,914 

—  % —  % to 3.40  % (8.17) % to (4.99) %
2020 11,044 
$ 23.85 
to $ 69.74 
$ 463,529 

8.33  % —  % to 3.40  % (8.41) % to (5.28) %
2019 12,315 
$ 26.04 
to $ 73.63 
$ 555,889 

7.08  % —  % to 3.40  % (1.35) % to 2.01  %
2018 13,706 
$ 27.38 
to $ 72.17 
$ 616,889 

—  % —  % to 3.40  % (1.39) % to 1.94  %
2017 16,014 
$ 27.76 
to $ 70.80 
$ 718,124 

—  % —  % to 3.40  % (1.37) % to 1.93  %



 1. Period from May 1, 2017 (fund commencement) to December 31, 2017
 2. Period from October 16, 2017 (fund commencement) to December 31, 2017
 3. Period from June 18, 2021 (fund commencement) to December 31, 2021

* These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying fund, net of management fees assessed by the fund manager, divided by the average daily net assets. These ratios exclude those expenses, such as mortality and expense risk and administrative charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

** These ratios represent the annualized contract expenses of the Variable Account, consisting primarily of mortality and expense risk and administrative charges, for each period indicated, based on the products available to the contractholders. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contractholder accounts through the redemption of units such as the contract maintenance charges and rider charges for the optional benefits, the account fee for the Income Advantage Account, and expenses of the underlying funds are excluded. Mortality and expense risk and administrative charges for all funds in annuitized contracts are excluded from the expense ratio.

*** These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect contract expenses of the Variable Account for products held at the time by contractholders. The total return does not include any expenses assessed through the redemption of units. Inclusion of these expenses in the calculation would result in a reduction in the total return presented. Funds with a date notation, as shown above, indicate the effective date of that fund in the Variable Account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. The total return is presented as a range
Page 72 of 73

ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to the Financial Statements
December 31, 2021


of minimum to maximum values. Based on the product grouping representing the minimum and maximum expense ratio amounts, some individual contract returns are not within the ranges presented and are not annualized.

**** Units Outstanding excludes units for annuitized contracts. Total Net Assets includes the net assets of the annuitized contracts. Total net assets of annuitized contracts at December 31, 2021, 2020, 2019, 2018 and 2017, are $15,614, $10,473, $9,974, $9,248, and $9,476, respectively.
(7) Subsequent Events
No material subsequent events have occurred since December 31, 2021 through April 4, 2022, the date at which the financial statements were issued, that would require adjustment to the financial statements.

As a result of the Russia/Ukraine conflict, economic uncertainties have arisen, which may negatively impact the Variable Account’s net assets. The extent to which the conflict impacts the net assets will depend on future developments, which are highly uncertain and cannot be estimated, including the scope and duration of the conflict and actions taken by governmental authorities and other third parties in response to the conflict.


Page 73 of 73











ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statutory Financial Statements
December 31, 2021 and 2020
(With Report of Independent Auditors Thereon)






Report of Independent Auditors

To the Board of Directors of Allianz Life Insurance Company of North America

Opinions

We have audited the accompanying statutory financial statements of Allianz Life Insurance Company of North America (the "Company"), which comprise the statutory statements of admitted assets, liabilities, and capital and surplus as of December 31, 2021 and 2020, and the related statutory statements of operations, of capital and surplus, and of cash flow for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the "financial statements").

Unmodified Opinion on Statutory Basis of Accounting

In our opinion, the accompanying financial statements present fairly, in all material respects, the admitted assets, liabilities and capital and surplus of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in accordance with the accounting practices prescribed or permitted by the Minnesota Department of Commerce Insurance Division described in Note 2.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles section of our report, the accompanying financial statements do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2021 and 2020, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2021.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 2 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the Minnesota Department of Commerce Insurance Division, which is a basis of accounting other than accounting principles generally accepted in the United States of America.
The effects on the financial statements of the variances between the statutory basis of accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the Minnesota Department of Commerce Insurance Division. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date the financial statements are available to be issued.








1 of 67



Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with US GAAS, we:
a.Exercise professional judgment and maintain professional skepticism throughout the audit.
b.Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
c.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
d.Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
e.Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/PricewaterhouseCoopers LLP

Minneapolis, Minnesota
April 4, 2022








2 of 67



ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus
December 31, 2021 and 2020
(Dollars in millions, except share data)













Admitted Assets 2021
2020
Cash and invested assets:



Bonds
$ 93,817 

99,088 
Stocks
303 

274 
Investment in subsidiaries
1,477 

1,329 
Mortgage loans on real estate
17,154 

15,634 
Real estate
80 

69 
Cash, cash equivalents and short-term investments
3,215 

910 
Policy loans
267 

255 
Derivative assets
2,682 

4,114 
Other invested assets
3,834 

3,556 
Total cash and invested assets
122,829 

125,229 
Investment income due and accrued
947 

1,040 
Current federal and foreign income tax recoverable
— 

200 
Deferred tax asset, net
487 

273 
Other assets
993 

745 
Admitted assets, exclusive of separate account assets
125,256 

127,487 
Separate account assets
48,279 

45,901 
Total admitted assets
$ 173,535 

173,388 











3 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus
December 31, 2021 and 2020
(Dollars in millions, except share data)













Liabilities and Capital and Surplus 2021
2020
Policyholder liabilities:



Life policies and annuity contracts
$ 96,980 

102,549 
Accident and health policies
2,227 

1,912 
Deposit-type contracts
4,577 

4,749 
Life policy and contract claims
8 

8 
Accident and health policy and contract claims
19 

18 
Other policyholder funds
122 

117 
Total policyholder liabilities
103,933 

109,353 
Interest maintenance reserve
267 

18 
General expenses due and accrued
245 

157 
Due from separate accounts
(635)

(294)
Current income taxes payable
482 

35 
Borrowed money
2,001 

1,501 
Asset valuation reserve
1,148 

983 
Derivative liabilities
2,023 

3,262 
Other liabilities
5,087 

4,811 
Liabilities, exclusive of separate account liabilities
114,551 

119,826 
Separate account liabilities
48,279 

45,901 
Total liabilities
162,830 

165,727 
Capital and surplus:



Class A, Series A preferred stock, $1 par value. Authorized, issued, and outstanding, 8,909,195 shares; liquidation preference of $4 and $3 at December 31, 2021 and 2020, respectively
9 

9 
Class A, Series B preferred stock, $1 par value. Authorized, 10,000,000 shares; issued and outstanding, 9,994,289 shares; liquidation preference of $5 and $4 at December 31, 2021 and 2020, respectively
10 

10 
Common stock, $1 par value. Authorized, 40,000,000 shares; issued and outstanding, 20,000,001 shares at December 31, 2021 and 2020, respectively
20 

20 
Additional paid-in capital
3,676 

3,676 
Special surplus funds
(1,437)

(1,844)
Unassigned surplus
8,427 

5,790 
Total capital and surplus
10,705 

7,661 
Total liabilities and capital and surplus
$ 173,535 

173,388 





See accompanying notes to statutory financial statements.













4 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statutory Statements of Operations
Years ended December 31, 2021, 2020, and 2019
(Dollars in millions)





















2021
2020
2019
Income:





Premiums and annuity considerations
$ 14,125 

10,346 

12,805 
Consideration for supplementary contracts
166 

196 

224 
Net investment income
4,866 

4,864 

4,839 
Commissions and expense allowances on reinsurance ceded
1,093 

(38)

338 
Reserve adjustments related to reinsurance ceded
(454)

(7)

(9)
Fees from separate accounts
574 

567 

613 
Other
(32)

694 

(13)
Total income
20,338 

16,622 

18,797 
Benefits and other expenses:





Policyholder benefits
2,076 

1,926 

1,809 
Surrenders
8,800 

8,417 

8,559 
Change in aggregate reserves and deposit funds
4,316 

2,465 

1,034 
Commissions and other agent compensation
1,480 

1,139 

1,284 
General and administrative expenses
715 

600 

594 
Net transfers to separate accounts
2,424 

1,460 

5,254 
Total benefits and other expenses
19,811 

16,007 

18,534 
Income from operations before federal income taxes and net realized capital gain
527 

615 

263 
Income tax expense
1,091 

18 

773 
Net (loss) income from operations before net realized capital gain
(564)

597 

(510)
Net realized capital gain, net of taxes and interest maintenance reserve
1,856 

142 

1,053 
Net income
$ 1,292 

739 

543 







See accompanying notes to statutory financial statements.
















5 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statutory Statements of Capital and Surplus
Years ended December 31, 2021, 2020, and 2019
(Dollars in millions)





















2021
2020
2019
Capital and surplus at beginning of year
$ 7,661 

7,954 

6,576 
Change due to correction of accounting error (Note 3)
40 

— 

— 
Change in reserve on account of change in valuation basis (Note 3)
— 

(1)

— 
Adjusted balance at beginning of year
7,701 

7,953 

6,576 
Net income
1,292 

739 

543 
Change in unrealized capital (loss) gain
(142)

(61)

719 
Change in net deferred income tax
215 

42 

330 
Change in asset valuation reserve
(165)

(88)

(131)
Dividends paid to parent
(900)

(750)

(325)
Change in unamortized gain on reinsurance transactions
2,737 

(162)

248 
Other changes in capital and surplus
(33)

(12)

(6)
Capital and surplus at end of year
$ 10,705 

7,661 

7,954 







See accompanying notes to statutory financial statements.
















6 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Statutory Statements of Cash Flow
Years ended December 31, 2021, 2020, and 2019
(Dollars in millions)





















2021
2020
2019
Cash flow from operating activities:





Revenues:





Premiums and annuity considerations, net
$ 14,291 

10,543 

13,030 
Net investment income
5,069 

4,990 

5,000 
Commissions and expense allowances on reinsurance ceded
385 

36 

86 
Fees from separate accounts
574 

567 

613 
Other
256 

217 

71 
Cash provided by operating activities
20,575 

16,353 

18,800 
Benefits and expenses paid:





Benefit and loss-related payments
19,238 

9,513 

9,469 
Net transfers to separate accounts
2,766 

1,128 

5,534 
Commissions, expenses paid, and aggregate write-ins for deductions
2,119 

1,727 

1,881 
Income tax paid, net
709 

290 

338 
Other
(16)

(6)

67 
Cash used in operating activities
24,816 

12,652 

17,289 
Net cash (used in) provided by operating activities
(4,241)

3,701 

1,511 
Cash flow from investing activities:





Proceeds from investments sold, matured or repaid:





Bonds
30,622 

8,935 

15,892 
Stocks
282 

147 

113 
Mortgage loans
1,806 

1,024 

1,356 
Real estate
3 

— 

— 
Other invested assets
81 

60 

32 
Derivatives
1,213 

861 

1,429 
Miscellaneous proceeds
35 

2 

1,572 
Cash provided by investing activities
34,042 

11,029 

20,394 
Cost of investments acquired:





Bonds
24,350 

10,885 

15,976 
Stocks
292 

230 

145 
Mortgage loans
3,347 

2,482 

2,283 
Real estate
17 

10 

11 
Other invested assets
408 

156 

192 
Miscellaneous applications
78 

485 

812 
Cash used in investing activities
28,492 

14,248 

19,419 
Net increase in policy loans and premium notes
12 

21 

20 
Net cash provided by (used in) investing activities
5,538 

(3,240)

955 
Cash flow from financing and miscellaneous activities:





Change in borrowed money
500 

500 

500 
Payments on deposit-type contracts and other insurance liabilities, net of deposits
(1,264)

(1,290)

(1,333)
Dividends paid to parent
(900)

(750)

(325)
Other cash provided (used)
2,672 

121 

(366)
Net cash provided by (used in) financing and miscellaneous activities
1,008 

(1,419)

(1,524)
Net change in cash, cash equivalents, and short-term investments
2,305 

(958)

942 
Cash, cash equivalents, and short-term investments:





Beginning of year
910 

1,868 

926 
End of year
$ 3,215 

910 

1,868 
See accompanying notes to statutory financial statements.















7 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(1)    Organization and Nature of Operations
Allianz Life Insurance Company of North America (the Company) is a wholly-owned subsidiary of Allianz of America, Inc. (AZOA or parent company), which is a wholly-owned subsidiary of Allianz Europe, B.V. Allianz Europe, B.V. is a wholly-owned subsidiary of Allianz SE. Allianz SE is a European company registered in Munich, Germany, and is the Company’s ultimate parent. The Company has a wholly-owned life insurance company subsidiary, Allianz Life Insurance Company of New York (AZNY). The Company also wholly owns a captive reinsurer, Allianz Life Insurance Company of Missouri (AZMO).
The Company is a life insurance company licensed to sell annuity, group and individual life, and group and individual accident and health policies in the United States, Canada, and several U.S. territories. Based on statutory net premium written, the Company's business is predominately annuity. The annuity business consists of fixed-indexed, variable-indexed, variable, and fixed annuities. The life business consists of both individual and group life. Life business includes products with guaranteed premiums and benefits and consists principally of fixed-indexed universal life policies and closed blocks of universal life policies, term insurance policies, and limited payment contracts. Accident and health business is primarily comprised of closed blocks of long-term care (LTC) insurance. The Company’s primary distribution channels are through independent agents, broker-dealers, banks, and third-party marketing organizations.
After evaluating the Company’s ability to continue as a going concern, management is not aware of any conditions or events which raise substantial doubt concerning the Company’s ability to continue as a going concern as of the date of filing these Statutory Financial Statements.
(2)    Summary of Significant Accounting Policies
(a)    Basis of Presentation
The Statutory Financial Statements have been prepared in accordance with accounting practices prescribed or permitted by the Minnesota Department of Commerce (the Department). The Department recognizes statutory accounting practices prescribed or permitted by the state of Minnesota for determining and reporting the financial condition and results of operations of an insurance company and its solvency under Minnesota insurance law. The state of Minnesota has adopted the National Association of Insurance Commissioners (NAIC) Accounting Practices and Procedures Manual as its prescribed basis of statutory accounting principles (SAP), without significant modification. The Company has no material statutory accounting practices that differ from those of the Department or NAIC SAP. These practices differ in some respects from accounting principles generally accepted in the United States of America (U.S. GAAP). The effects of these differences, while not quantified, are presumed to be material to the Statutory Financial Statements. The more significant of these differences are as follows:
(1)    Acquisition costs, such as commissions and other costs incurred in connection with acquiring new and renewal business, are charged to current operations as incurred. Under U.S. GAAP, acquisition costs that are directly related to the successful acquisition of insurance contracts are capitalized and charged to operations as the corresponding revenues or future profits are recognized.
(2)    Aggregate reserves for life policies and annuity contracts, excluding variable annuities, are based on statutory mortality and interest assumptions without consideration for lapses or withdrawals. Under U.S. GAAP, aggregate reserves consider lapses and withdrawals.
(3)    Certain reinsurance transactions, primarily used for annuity business, are recognized as reinsurance for statutory purposes only.
(4)    Ceded reinsurance recoverable are netted against their related reserves within Policyholder liabilities, Life policies and annuity contracts and Life policy and contract claims, on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. Under U.S. GAAP, these ceded reserves are presented on a gross basis as an asset.








8 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(5)    The Company reinsures a portion of its in-force block of business through several reinsurance agreements. Under NAIC SAP, the after-tax gains associated with these indemnity reinsurance transactions are recorded in Unassigned surplus and recognized through income as future earnings of the books of business emerge. Under U.S. GAAP, the pretax gains associated with such transactions that qualify as reinsurance, are deferred as liabilities and are amortized into operations over the revenue-producing period of the policies.
(6)    Bonds are carried at values prescribed by the NAIC, generally amortized cost, except for those with an NAIC rating of 6, which are reported at the lower of amortized cost or fair value. Under U.S. GAAP, bonds classified as “available-for-sale” are carried at fair value, with unrealized gains and losses recorded in stockholder’s equity.
(7)    Changes in deferred income taxes are recorded directly to Unassigned surplus. Under U.S. GAAP, these items are recorded as an item of income tax benefit or expense in operations. Moreover, under NAIC SAP, a valuation allowance may be recorded against the deferred tax asset (DTA) and admittance testing may result in an additional charge to capital and surplus for nonadmitted portions of DTAs. Under U.S. GAAP, a valuation allowance may be recorded against the DTA and reflected as an expense.
(8)    Investments in subsidiaries are carried at net equity values as prescribed by the NAIC. Changes in equity values are reflected in Unassigned surplus within the Statutory Statements of Capital and Surplus as credits or charges to Unassigned surplus. Under U.S. GAAP, wholly owned subsidiary results are consolidated.
(9)    The Company is required to establish an asset valuation reserve (AVR) liability and an interest maintenance reserve (IMR) liability. The AVR provides for a standardized statutory investment valuation reserve for certain invested assets. Changes in this reserve are recorded as direct charges or credits to Unassigned surplus. The IMR is designed to defer net realized capital gains and losses resulting from changes in the level of prevailing market interest rates and amortize them into income within the Statutory Statements of Operations over the remaining life of the investment sold. The IMR represents the unamortized portion of applicable investment gains and losses as of the balance sheet date. There is no such concept under U.S. GAAP.
(10)    Canadian asset and liability amounts are expressed in Canadian dollars without foreign exchange translation into U.S. dollars. A net foreign currency translation adjustment is recorded within the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus with an offset to Other changes in capital and surplus within the Statutory Statements of Capital and Surplus. Under U.S. GAAP, Canadian assets and liabilities are converted to U.S. dollars, with any translation adjustment recorded to stockholder’s equity.
(11)    Certain assets designated as “nonadmitted assets” are not recognized and are charged directly to Unassigned surplus within the Statutory Statements of Capital and Surplus. These include, but are not limited to, investments in unaudited subsidiary, controlled, and affiliated (SCA) entities, electronic data processing (EDP) software, portions of goodwill, furniture and fixtures, prepaid expenses, receivables outstanding greater than 90 days, and portions of DTAs. There is no such concept under U.S. GAAP.
(12)    A provision is made for amounts ceded to unauthorized reinsurers in excess of collateral in the form of a trust or letter of credit through a direct charge to Unassigned surplus within the Statutory Statements of Capital and Surplus. There is no such requirement under U.S. GAAP.
(13)    Revenues for universal life policies and annuity contracts, excluding deposit-type contracts, are recognized as revenue when received within the Statutory Statements of Operations. Under U.S. GAAP, policy and contract fees charged for the cost of insurance, policy administrative charges, amortization of policy initiation fees, and surrender contract charges are recorded as revenues when earned.








9 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(14)    Benefits for universal life policies and annuity contracts within the Statutory Statements of Operations, excluding deposit-type contracts, consist of payments made to policyholders. Under U.S. GAAP, benefits represent interest credited, and claims and benefits incurred in excess of the policyholder’s contract balance.
(15)    Derivatives are reported at fair value in accordance with SSAP No. 86, Derivatives (SSAP No. 86) and SSAP No. 108, Derivatives Hedging Variable Annuity Guarantees (SSAP No. 108). See additional information in section (k) of this note and note 5. Changes in the fair value of derivatives, except those reported under SSAP No. 108, are recorded as direct adjustments to Unassigned surplus as a component of Change in unrealized capital gains (losses) within the Statutory Statements of Capital and Surplus. For derivatives reported under SSAP No. 108, changes in fair value are recognized as net deferred assets or liabilities within Other assets or Other liabilities, respectively, in the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus, for fluctuations in fair value that do not offset the changes in the hedged item. The deferred asset or liability is amortized over the timeframe required under SSAP No. 108. Under U.S. GAAP, changes in the fair value of derivatives are recorded in derivative income (loss) as part of operating income and the hedged derivatives are carried at fair value. In addition, the effective and ineffective portions of a hedge are accounted for separately.
(16)    Commissions allowed by reinsurers on business ceded are reported as income when received within the Statutory Statements of Operations. Under U.S. GAAP, such commissions are deferred and amortized as a component of deferred acquisition costs to the extent recoverable.    
(17)    The Statutory Financial Statements do not include a statement of comprehensive income as required under U.S. GAAP.
(18)    The Statutory Statements of Cash Flow do not classify cash flows consistent with U.S. GAAP and a reconciliation of net income to net cash provided from operating activities is not provided.
(19)    The calculation of reserves and transfers in the separate account statement requires the use of a Commissioners Annuity Reserve Valuation Method (CARVM) allowance on annuities for NAIC SAP. There is no such requirement under U.S. GAAP.
(20)    Sales inducements and premium bonuses are included in Life policies and annuity contracts in the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus, and are charged to current operations as incurred. Under U.S. GAAP, deferred sales inducements and premium bonuses are similarly reserved; however, the costs are capitalized as assets and charged to operations as future profits are recognized in a manner similar to acquisition costs.
(21)    Negative cash balances are presented as a negative asset within the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. These balances are presented as a liability under U.S. GAAP.
(22)    Embedded derivatives are not separated from the host contract and accounted for separately as a derivative instrument. Under U.S. GAAP, entities must separate the embedded derivative from the host contracts and separately account for those embedded derivatives at fair value.
(23)    For certain annuity products with a market value adjustment feature sold to Minnesota residents (MN MVA) and variable-indexed annuities, the Department requires the Company to maintain a separate asset portfolio to back related reserves. These assets and liabilities are required to be included as part of the Separate account assets and Separate account liabilities presented on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. Under U.S. GAAP, there is no such requirement.








10 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(b)    Permitted and Prescribed Statutory Accounting Practices
The Company is required to file annual statements with insurance regulatory authorities, which are prepared on an accounting basis permitted or prescribed by such authorities. Prescribed statutory accounting practices include state laws, regulations, and general administrative rules, as well as a variety of publications of the NAIC. Permitted statutory accounting practices encompass all accounting practices that are not prescribed; such practices differ from state to state, may differ from company to company within a state, and may change in the future. The Company has no permitted or prescribed practices that differ from NAIC SAP that had an impact on net income or surplus as of December 31, 2021, 2020, and 2019.
The Company’s subsidiary, AZMO, has adopted an accounting practice that is prescribed by the Department of Insurance, Financial Institutions, and Professional Registration of the State of Missouri (the Missouri Department). The effect of the accounting practice allows a letter of credit to be carried as an admitted asset. The balance of the letter of credit asset at December 31, 2021 and 2020 was $110 and $101, respectively. Under NAIC SAP, this letter of credit would not be allowed as an admitted asset.
This prescribed practice does not impact the net income of AZMO and results in increases to surplus of $110 and $101 as of December 31, 2021 and 2020, respectively. The Company’s carrying value of its investment in AZMO per the audited statutory surplus was $371 and $350, and the carrying value of its investment in AZMO would have been $261 and $249 if AZMO had completed Statutory Financial Statements in accordance with the NAIC SAP as of December 31, 2021 and 2020, respectively. AZMO maintains an adequate amount of surplus such that if it had not adopted the prescribed practice, surplus would still exceed the risk-based capital requirements.
(c)    Use of Estimates
The preparation of Statutory Financial Statements in conformity with NAIC SAP requires management to make certain estimates and assumptions that affect reported amounts of admitted assets and liabilities, including reporting or disclosure of contingent assets and liabilities as of December 31, 2021 and 2020, and the reported amounts of revenues and expenses during the reporting period. Future events, including changes in mortality, morbidity, interest rates, capital markets, and asset valuations could cause actual results to differ from the estimates used within the Statutory Financial Statements. Such changes in estimates are recorded in the period they are determined.
(d)    Premiums and Annuity Considerations
Life premiums are recognized as income over the premium paying period of the related policies. Nondeposit-type annuity considerations are recognized as revenue when received. Accident and health premiums are earned ratably over the terms of the related insurance and reinsurance contracts or policies.
(e)    Aggregate Reserves for Life Policies and Annuity Contracts
Reserves are principally calculated as the minimum reserves permitted by the state where the contract is issued for the year in which the contract is issued.
For the Company’s fixed annuity product lines, reserves are calculated using CARVM. The Company uses both issue year and change in fund basis for the calculation method, on a curtate basis, using the maximum allowable interest rate. Deferred fixed-interest and fixed-indexed annuities typically have a two-tier structure to encourage annuitization, or a single-tier structure, which may include a market value adjustment. Either two-tier or single-tier annuities may include bonuses.
For the Company’s variable and variable-indexed annuity product lines, reserves are calculated using VM-21, Requirements for Principle-Based Reserves for Variable Annuities (VM-21), effective January 1, 2020. Variable deferred annuities include a wide range of guaranteed minimum death benefits and living benefits (income, accumulation, and withdrawal).
Reserves for immediate annuities are calculated using current prescribed mortality tables.








11 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

Aggregate reserves for life insurance policies are principally calculated using the Commissioners Reserve Valuation Method (CRVM) or VM-20, Requirements for Principle-Based Reserves for Life Products, depending on the policy's issue date. Additional reserves are held for supplemental benefits and for contracts with secondary guarantees, consistent with prescribed regulations and actuarial guidelines.
The Company performs an annual asset adequacy analysis as required by regulation covering substantially all of its reserves. These tests are not only performed under the required interest rate scenarios, but also under additional stochastically generated interest and equity growth scenarios. Sensitivity tests, including policy lapse, annuitization, maintenance expenses, and investment return, are performed to evaluate potential insufficiencies in reserve adequacy. The results of these tests and analysis resulted in $0 of additional reserves at December 31, 2021 and 2020, respectively.
(f)    Aggregate Reserves for Accident and Health Policies
For accident and health business, reserves consist of active life reserves (mainly reserves for unearned premiums and reserves for contingent benefits on individual LTC business) and claim reserves (the present value of amounts not yet due). Claim reserves represent incurred but unpaid claims under group policies. For the LTC business, the asset adequacy analysis was performed through a gross premium valuation. At December 31, 2021 and 2020, the results of these tests and analysis supported the establishment of additional reserves of $329 and $151, respectively.
(g)    Deposit-type Contracts
Deposit-type contracts represent liabilities to policyholders in a payout status, who have chosen a fixed payout option without life contingencies. The premiums and claims related to deposit-type contracts are not reflected in the Statutory Statements of Operations as they do not have insurance risk. The Company accounts for the contract as a deposit-type contract in the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
(h)    Policy and Contract Claims
Policy and contract claims include the liability for claims reported but not yet paid, claims incurred but not yet reported (IBNR), and claim settlement expenses on the Company’s accident and health business. Actuarial reserve development methods are generally used in the determination of IBNR liabilities. In cases of limited experience or lack of credible claims data, loss ratios are used to determine an appropriate IBNR liability. Claim and IBNR liabilities of a short-term nature are not discounted, but those claim liabilities resulting from disability income or LTC benefits include interest and mortality discounting.
(i)    Reinsurance
The Company assumes and cedes business with other insurers. Reinsurance premium and benefits paid or provided are accounted for in a manner consistent with the basis used in accounting for original policies issued and the terms of the reinsurance contracts. Amounts recoverable from reinsurers represent account balances and unpaid claims covered under reinsurance contracts. Amounts paid or deemed to have been paid for claims covered by reinsurance contracts are recorded as a reinsurance recoverable and are included in Other assets on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
Included in Unassigned surplus is the gain recognized when the Company enters into a coinsurance, modco or yearly renewable term (YRT) agreement on existing business. The gain is deferred and amortized into operations on a basis consistent with how the future earnings emerge on the underlying business.
Reserve adjustments related to reinsurance ceded in the Statutory Statements of Operations include reserve changes received from a reinsurer on modified coinsurance ceded.
(j)    Investments
Investment values are determined in accordance with methods prescribed by the NAIC.
Bonds and Stocks








12 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

The Securities Valuation Office (SVO) of the NAIC evaluates the credit quality of the Company’s bond investments. Bonds rated at “1” (highest quality), “2” (high quality), “3” (medium quality), “4” (low quality), or “5” (lower quality) are reported at cost adjusted for the amortization of premiums, accretion of discounts, and any impairment. Bonds rated at “6” (lowest quality) are carried at the lower of amortized cost or fair value with any adjustments to fair value recorded to Unassigned surplus within the Statutory Statements of Capital and Surplus.
In accordance with its investment policy, the Company invests primarily in high-grade marketable securities. Dividends are accrued on the date declared and interest is accrued as earned. Premiums or discounts on bonds are amortized using the constant-yield method.
Loan-backed securities and structured securities are amortized using anticipated prepayments, in addition to other less significant factors. Prepayment assumptions for loan-backed and structured securities are obtained from various external sources or internal estimates. The Company believes these assumptions are consistent with those a market participant would use. The Company recognizes income using the modified scientific method based on prepayment assumptions and the estimated economic life of the securities. For structured securities, except for collateralized debt obligations (CDOs) and impaired bonds, when actual prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments retrospectively. Any resulting adjustment is included in Net investment income on the Statutory Statements of Operations. For CDOs and impaired bonds, when adjustments are made for anticipated prepayments and other expected changes in future cash flows, the effective yield is recalculated using the prospective method as required by Statement of Statutory Accounting Principles (SSAP) No. 43R – Loan Backed and Structured Securities (SSAP No. 43R).
Hybrid securities are investments structured to have characteristics of both stocks and bonds. The Company records these securities within Bonds on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
Common stocks, other than investments in subsidiaries and Federal Home Loan Bank (FHLB) stock, are carried at fair value. Beginning January 1, 2021, preferred stocks are reported at fair value in accordance with SSAP No. 32, Preferred Stock (SSAP No. 32). Prior to this change, preferred stocks were reported at the lower of book value or fair value. The related unrealized capital gains (losses) are reported in Unassigned surplus, net of federal income taxes within the Statutory Statements of Capital and Surplus. FHLB stock is carried at cost, which approximates fair value.
Gross realized gains and losses are computed based on the average amortized cost of all lots held for a particular CUSIP.
The fair value of bonds, and common and preferred stocks is obtained from third-party pricing sources whenever possible. Management completes its own independent price verification (IPV) process, which ensures security pricing is obtained from a third-party source other than the sources used by the Company's internal and external investment managers. The IPV process supports the reasonableness of price overrides and challenges by the internal and external investment managers and reviews pricing for appropriateness. Results of the IPV process are reviewed by the Company’s Pricing Committee.
The Company reviews its combined investment portfolio, including subsidiaries, in aggregate each quarter to determine if declines in fair value are other than temporary.
For bonds for which the fair value is less than amortized cost, the Company evaluates whether a credit loss exists by considering primarily the following factors: (a) the length of time and extent to which the fair value has been less than the amortized cost of the security; (b) changes in the financial condition, credit rating, and near-term prospects of the issuer; (c) whether the issuer is current on contractually obligated interest and principal payments; (d) changes in the financial condition of the security’s underlying collateral, if any; and (e) the payment structure of the security. For loan-backed securities, the Company must allocate other-than-temporary impairments (OTTI) between interest and noninterest-related declines in fair value. Interest-related impairments are considered other than temporary when the Company has the intent to sell the investment prior










13 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

to recovery of the cost of the investment. The Company maintains a prohibited disposal list that restricts the ability of the investment managers to sell securities in a significant unrealized loss position and requires formal attestations from investment managers regarding their lack of intent to sell certain securities.
The Company evaluates whether equity securities are other-than-temporarily impaired through a review process which includes, but is not limited to, market analysis, analyzing current events, assessing recent price declines, and management’s judgment related to the likelihood of recovery within a reasonable period of time.
Impairments considered to be other-than-temporary are recorded as a reduction of the cost of the security, and a corresponding realized loss is recognized on the Statutory Statements of Operations in the period in which the impairment is determined. Recognition of the realized loss is subject to potential offset by AVR and IMR.
The Company holds certain cash equivalents which receive bond treatment based on their underlying securities. These are classified as Other assets receiving bond treatment in Note 5.
Investment in Subsidiaries
Common stock of the Company’s insurance subsidiaries is carried at SAP capital and surplus, and investments in non-insurance subsidiaries are carried at U.S. GAAP equity value adjusted for certain items that are considered to be non-admitted. Unaudited subsidiaries are fully non-admitted.
Mortgage Loans on Real Estate
Mortgage loans on real estate, including commercial mortgage loans (CMLs) and residential mortgage loans (RMLs), are carried at the outstanding principal balance, adjusted for any impairment. The fair value of CMLs is calculated by analyzing individual loans and assigning ratings to each loan based on a combination of loan-to-value ratios and debt service coverage ratios. Fair value is determined based on these factors as well as the contractual cash flows of each loan and the current market interest rates for similar loans. The fair value of RMLs is calculated by discounting estimated cash flows, with discount rates based on current market conditions. The Company evaluates loans quarterly to assess whether there is an impairment based on the likelihood of receiving all contractual cash flows. The Company accounts for interest income on impaired loans on a cash basis. Interest accrual is discontinued for impaired loans and interest income is only recognized when received. Payments received on impaired loans are applied to accrued interest, and payments received in excess of accrued interest are applied to principal.
Real Estate
Real estate primarily represents the Company’s home office property, and is carried at depreciated cost less encumbrances in accordance with SSAP No. 40 – Real Estate Investments. Real estate income, including income received from home office property, is included in Net investment income on the Statutory Statements of Operations. Real estate, exclusive of land, is depreciated on a straight-line basis over estimated useful lives ranging from 3 to 40 years. At December 31, 2021 and 2020, accumulated depreciation was $79 and $74, respectively. Furthermore, as of December 31, 2021 and 2020, real estate was presented net of encumbrances of $31 and $41, respectively, as discussed in Note 7.
The Company also has real estate classified as held for sale that was transferred from RMLs, in the amount of $4 and $0, as of December 31, 2021 and 2020, respectively. Allianz Life intends to sell these properties at market value within 12 months of the transfer dates, and any gain or loss will be recognized at the time of sale.
Cash and Cash Equivalents
Cash and cash equivalents may include cash on hand, demand deposits, money market funds, reverse repurchase agreements (repo), and highly liquid debt instruments purchased with an original maturity of three months or less. Due to the short-term nature of these investments, the carrying value is deemed to approximate fair value.
In the normal course of business, the Company enters into bilateral and tri-party repos, whereby the Company purchases securities and simultaneously agrees to resell the same securities at a stated price on a specified date










14 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

in the future, for the purpose of earning a specified rate of return. An affiliate of the Company serves as the agent in the bilateral agreements and an unaffiliated bank serves as the custodian in the tri-party agreements. The bilateral agreements require purchases of specifically identified securities. If at any time the fair value of those purchased securities falls below the purchase price, additional collateral in the form of cash or additional securities is required to be transferred to ensure margin maintenance. The tri-party agreements allow for the purchase of certain bonds and structured securities, and require a minimum of 102% of fair value of the securities purchased to be maintained as collateral.
The Company’s repos are accounted for as collateralized lending in accordance with SSAP No. 103R – Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (SSAP No. 103R), whereby the amounts paid for the securities are reported as cash equivalents within Cash and cash equivalents on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. The difference between the amount paid and the amount at which the securities will be resold is reported as interest income within Net investment income on the Statutory Statements of Operations.
Policy Loans
Policy loans are supported by the underlying cash value of the policies. Policy loans are carried at unpaid principal balances plus accrued interest income on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. The unpaid principal balances are not in excess of the cash surrender values of the related policies.
Other Invested Assets
The Company participates in securities lending arrangements whereby specific securities are loaned to other institutions. The Company receives collateral from these arrangements including cash and cash equivalents, which can be reinvested based on the Company's discretion, and noncash collateral, which may not be sold or re-pledged unless the counterparty is in default. The Company accounts for its securities lending transactions as secured borrowings, in which the cash collateral received and the related obligation to return the cash collateral are recorded in Other invested assets and Other liabilities, respectively, on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. Noncash collateral received is not reflected on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. Securities on loan remain on the Company’s Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus, and interest and dividend income earned by the Company on loaned securities is recognized in Net investment income on the Statutory Statements of Operations.
Company policy requires a minimum of 102% of fair value of securities loaned under securities lending agreements to be maintained as collateral. The Company's sources of cash used to return cash collateral is dependent upon the liquidity of current market conditions. The Company has policies in place to manage reinvested collateral at appropriate levels of liquidity.
The Company invests in low income housing tax credit (LIHTC) investments for tax benefits. In accordance with SSAP No. 93 – Low Income Housing Tax Credit Property Investments, the LIHTC investments are carried at cost and adjusted for amortization based on the proportion of total tax credits and other tax benefits expected to be received over the life of the investments. The Company records an asset for the full unfunded investment amount upon entering into a LIHTC agreement; amortization decreases the asset balance over time. A corresponding liability is recorded for the unfunded commitment balance beginning when the LIHTC investment is initially funded, which decreases as the Company provides capital to fund. The asset and liability are recorded in Other invested assets and Other liabilities, respectively, on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. The tax benefit is recognized within Income tax expense within the Statutory Statements of Operations. The amortization of the investment is recorded as Net investment income and any impairments are included in Net realized capital gain (loss) within the Statutory Statements of Operations.
Receivables and payables for securities are carried at fair value on the trade date and represent a timing difference on securities that are traded at the balance sheet date but not settled until subsequent to the balance










15 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

sheet date. Receivables and payables for securities are included in Other invested assets and Other liabilities, respectively, on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
(k)    Derivatives
The Company utilizes derivatives within certain actively managed investment portfolios for hedging purposes.
Hedge Accounting
The Company elects hedge accounting under SSAP No. 86 and SSAP No. 108 for certain qualifying derivative instruments. To qualify for hedge accounting, at inception, the Company formally documents the risk management objective and strategy for undertaking the hedging transaction. The documentation links a specific derivative to a specific asset or liability on the Statutory Statements of Assets, Liabilities, and Capital and Surplus, identifies how the derivative is expected to offset the exposure to changes in the hedged item's fair value or variability in cash flows attributable to the designated hedge risk, and the effectiveness testing methods to be used. Hedge effectiveness is formally assessed at inception and on a quarterly basis throughout the life of the designated hedging relationships.
Hedge effectiveness is assessed using qualitative and quantitative methods. Qualitative methods may include comparison of critical terms of the derivative to the hedged item. Quantitative methods include analysis of changes in fair value or cash flows associated with the hedge relationship. Hedge effectiveness may be measured using either the dollar offset method or regression analysis. The dollar offset method compares changes in fair value or cash flows of the hedging instrument with changes in the fair value or cash flows of the hedged item attributable to the hedged risk. Regression analysis is a statistical technique used to measure the relationships between the fair values or cash flows of a derivative and a hedged item and how each reacts to changes in the designated hedge risk (i.e., interest rates, foreign currency rates).
A derivative instrument is either classified as an effective hedge or an ineffective hedge. Entities must account for the derivative at fair value if deemed to be ineffective or becomes ineffective. For those derivatives qualifying as effective for hedge accounting under SSAP No. 86, the change in the carrying value or cash flow of the derivative shall be recorded consistently with the way that changes in the carrying value or cash flows of the hedged item are recorded. For those derivatives qualifying as effective for hedge accounting under SSAP No. 108, the derivative is carried at fair value.
Foreign Currency Swaps
The Company utilizes foreign currency swaps to hedge cash flows and applies hedge accounting. Specifically, the Company uses foreign currency swaps to hedge foreign currency and interest rate fluctuations on certain underlying foreign currency denominated fixed-maturity securities. The foreign currency swaps are reported at amortized cost from the date hedge accounting is designated and deemed to be effective, which is consistent with the accounting for the bonds that are the subject of the hedge accounting transactions.
Interest Rate Swaps on Variable Annuity Insurance Liabilities
The Company utilizes interest rate swaps (IRS) to hedge the interest rate risk on certain variable annuity
guarantee benefits. These are accounted for as a cash flow hedge under SSAP No. 86 and a fair value hedge under SSAP No. 108.

Prior to January 1, 2020, the Company had IRS that hedge the interest rate risk on certain variable annuity guarantee benefits held at amortized cost in accordance with SSAP No. 86. The initial book value of the IRS represented the book value created from inception until the designation of hedge accounting. These IRS were held at amortized cost and changes were recognized to the extent they offset changes in the AG43 reserve for the hedged item due to interest rate movement. The initial book value and subsequent changes due to the hedged item or realized gains or losses recorded under hedge accounting (hedge adjustment) are amortized over the duration of the hedge program, approximated by AG43 standard










16 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

scenario revenues. The carrying value of the IRS with hedge adjustment was recorded within Other liabilities on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus, with changes in the IRS hedge adjustment recorded within Other Income on the Statutory Statements of Operations.

Effective January 1, 2020, the Company de-designated its previous hedging relationship under SSAP No. 86 and simultaneously designated the hedging relationship described above under SSAP No. 108. The remaining balance of the SSAP No. 86 hedge adjustment is recorded within Other liabilities on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus, and will be amortized over the life of the former hedge program.
The table below illustrates the hedge adjustment calculation under SSAP No. 86:








2021 2020
Hedge adjustment balance - beginning of year $ 513 
$ 582 
Amount amortized into earnings during the year (58)
(69)
Hedge adjustment balance - end of year $ 455 
$ 513 
Effective January 1, 2020, the Company designated the hedging relationship described above under SSAP No. 108. The hedged item consists of a portion of the Company's variable annuity block of business minimum benefit guarantees that are sensitive to interest rate movement. The hedged portion of the block is determined on a monthly basis based on the percentage of the economic liability being hedged. The related hedging instrument is a portfolio of interest rate swap derivatives which follows a dynamic hedging strategy. Changes in interest rates impact the present value of the future product cash flows.
The Company recognizes a net deferred asset or liability within Other assets or Other liabilities, respectively, on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus for fluctuations in fair value that do not offset the changes in the liability. Beginning July 1, 2021, the Company has elected to amortize the deferred balance that existed as of June 30, 2021 over five years, in accordance with SSAP No. 108, paragraph 14.c. Changes in the deferred balance after July 1, 2021 will be amortized over the timeframe required under SSAP No. 108, paragraph 14, which is the Macaulay duration of guarantee benefit cash flows, capped at 10 years.
The hedge strategy is compliant with VM-21 Clearly Defined Hedge Strategy (CDHS) requirements and meets all the criteria to be defined as an effective hedge relationship as required by SSAP No. 108. The Company entered into this hedging relationship effective January 1, 2020 and no changes in hedging strategy have occurred since inception. Hedge effectiveness is measured in accordance with SSAP No. 108 on a quarterly basis, both prospectively and retrospectively, and remains highly effective as of December 31, 2021.

In accordance with SSAP No. 108, an amount equal to the net deferred asset and deferred liability is allocated from Unassigned funds to Special surplus funds on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. The following table shows the deferred activity for the year ended December 31, 2021 and 2020.










2021 2020
Net deferred balance - beginning of year $ 1,844 
$ 1,435 
Amortization (240)
(214)
Additional amounts deferred (167)
623 
Net deferred balance - end of year $ 1,437 
$ 1,844 
The net deferred balance will amortize over the next 10 years, as shown below:








17 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

















Amortization year
Deferred assets
Deferred liabilities

2022
$ (189)

$ 501 

2023
(189)

501 

2024
(189)

501 

2025
(189)

501 

2026
(96)

255 

2027
(3)

9 

2028
(3)

9 

2029
(3)

9 

2030
(3)

9 

2031
(3)

$ 9 

Total
$ (867)

$ 2,304 
The company did not have other changes related to open derivatives removed from SSAP No. 86 and captured in scope of SSAP No. 108 for the years ended December 31, 2021 and 2020. During the years ended December 31, 2021 and 2020, the fair value changes available for application under SSAP No. 108 was $(694) and $927, respectively.
The Company did not have any hedging strategies identified as no longer highly effective and did not terminate any hedging strategies during the year ended December 31, 2021 and 2020.
Nonqualifying hedging
        Futures and Options Contracts
The Company provides benefits through certain life and annuity products which are linked to the fluctuation of various market indices, and certain variable annuity contracts that provide minimum guaranteed benefits. The Company has analyzed the characteristics of these benefits and has entered into over-the-counter (OTC) option contracts, exchange-traded option (ETO) contracts, and exchange-traded futures contracts tied to an underlying index with similar characteristics with the objective to economically hedge these benefits. Management monitors in-force amounts as well as option and futures contract values to ensure satisfactory matching and to identify unsatisfactory mismatches. If actual persistency deviated, management would purchase or sell option and futures contracts as deemed appropriate or take other actions.
The OTC option contracts and ETO contracts are reported at fair value in Derivative assets and Derivative liabilities on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. The fair value of the OTC options is derived internally and deemed by management to be reasonable via performing an IPV process. The process of deriving internal derivative prices requires the Company to calibrate Monte Carlo scenarios to actual market information. The calibrated scenarios are applied to derivative cash flow models to calculate fair value prices for the derivatives. The fair value of the ETO contacts is based on quoted market prices. Incremental gains and losses from expiring options are included in Net realized capital gain (loss) on the Statutory Statements of Operations. The liability for the related policyholder benefits is reported in Life policies and annuity contracts on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. The unrealized gain or loss on open OTC option contracts is recognized as a direct adjustment to Unassigned surplus within the Statutory Statements of Capital and Surplus. Any unrealized gains or losses on open OTC option contracts are recognized as realized when the contracts mature (see Note 5 for further discussion).
Futures contracts do not require an initial cash outlay, and the Company has agreed to daily net settlement based on movements of the representative index. Therefore, no asset or liability is recorded as of the end










18 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

of the reporting period. A derivative asset or liability and an offsetting variation margin payable or receivable is recorded in Derivative assets or Derivative liabilities in the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus for the outstanding unpaid variation margin representing market movements on the last trading day of the year.
Gains and losses are not considered realized until the termination or expiration of the futures contract. Unrealized gains and losses on futures contracts are reflected in the Statutory Statements of Capital and Surplus in Unassigned surplus, within Change in unrealized capital gains (loss). Realized gains and losses on futures contracts are included in the Statutory Statements of Operations, Net realized capital gain (loss), net of taxes and interest maintenance reserve.
Interest Rate Swaps, Credit Default Swaps, Total Return Swaps, and To Be Announced Securities
The Company utilizes IRS, credit default swaps (CDS), total return swaps (TRS), and To Be Announced (TBA) securities to economically hedge market risks embedded in certain life and annuity products. The IRS, CDS, TRS and TBA securities are reported at fair value in Derivative assets or Derivative liabilities on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. The fair value of the IRS, CDS, and TBA securities are derived using a third-party vendor software program and deemed by management to be reasonable. Centrally cleared IRS fair values are obtained from the exchange on which they are traded. The fair value of the TRS is based on counterparty pricing and deemed by management to be reasonable. Changes in unrealized gains and losses on the swaps are recorded as a direct adjustment to Unassigned surplus within the Statutory Statements of Capital and Surplus. Gains and losses on exchange cleared IRS are recorded as unrealized until the contracts mature or are disposed at which time they are recorded as realized, subject to offset by IMR.
(l)    Corporate-Owned Life Insurance
Corporate-owned life insurance (COLI) is recognized initially as the amount of premiums paid. Subsequent measurement of the contract is based upon the amount that could be realized assuming the surrender of an individual-life policy (or certificate in a group policy), otherwise known as the cash surrender value (CSV), in accordance with SSAP No. 21 – Other Admitted Assets (SSAP No. 21). Changes in CSV resulting from subsequent measurement of the contract are recognized as a component of Other income on the Statutory Statements of Operations. The Company’s COLI policies are reported in Other assets on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
(m)    Borrowed Money
The Company is a member of the FHLB of Des Moines, primarily for the purpose of participating in the FHLB’s mortgage collateralized loan advance program with short-term and long-term funding facilities. Members are required to purchase and hold a minimum amount of FHLB capital stock plus additional stock based on outstanding advances. Through its membership, the Company has issued debt to the FHLB in exchange for cash advances. It is part of the Company’s strategy to utilize funds borrowed from the FHLB for operations and strategic initiatives. The Company’s current borrowings are not subject to prepayment obligations.
Funds obtained from the FHLB and accrued interest are included within Borrowed money within the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus in accordance with SSAP No. 15 – Debt and Holding Company Obligations. The collateral pledged to FHLB is reported as admitted assets within the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus in accordance with admissibility testing under SSAP No. 30 – Unaffiliated Common Stock.
(n)    Income Taxes
The Company and its subsidiaries file a consolidated federal income tax return with AZOA and all of its wholly-owned subsidiaries. The consolidated tax allocation agreement stipulates that each company participating in the return will bear its share of the tax liability pursuant to certain tax allocation elections under the Internal Revenue Code (IRC) and its related regulations and reimbursement will be in accordance with an










19 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

intercompany tax reimbursement arrangement. The Company, and its insurance subsidiaries, generally will be paid for the tax benefit of any of their tax attributes used by any member of the consolidated group.
The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to significantly change the provision for federal income taxes recorded in the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. Any such change could significantly affect the amounts reported in the Statutory Statements of Operations. Management uses best estimates to establish reserves based on current facts and circumstances regarding tax exposure items where the ultimate deductibility is open to interpretation. Quarterly, management evaluates the appropriateness of such reserves based on any new developments specific to their fact patterns. Information considered includes results of completed tax examinations, Technical Advice Memorandums, and other rulings issued by the Internal Revenue Service or the tax courts.
The Company utilizes the asset and liability method of accounting for income taxes. DTAs and deferred tax liabilities (DTLs), net of the nonadmitted portion are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Gross DTAs and DTLs are measured using enacted tax rates and are considered for admitted tax asset status according to the admissibility test as set forth by the NAIC. Changes in DTAs and DTLs, including changes attributable to changes in tax rates, are recognized as a component of Unassigned surplus on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
(o)    Separate Accounts
Separate account assets and liabilities are primarily funds held for the exclusive benefit of variable and variable-indexed annuity contract holders. Separate account assets are reported at fair value in accordance with SSAP No. 56 – Separate Accounts (SSAP No. 56), with the exception of certain bonds, cash, cash equivalents, and investment income due and accrued. Certain assets that are allocated to the index options for the Allianz Index Advantage Variable Annuity (VIA) are invested in bonds, cash, cash equivalents, and investment income due and accrued, and carried at amortized cost in accordance with the product filing requirements in the state of Minnesota.
Amounts due from separate accounts primarily represent the difference between the surrender value of the contracts and the Separate account liability as disclosed on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. This receivable represents the surrender fee that would be paid to the Company upon the surrender of the policy or contract by the policyholder or contract holder as of December 31. Amounts charged to the contract holders for mortality and contract maintenance, and other administrative services fees are included in income within Fees from separate accounts on the Statutory Statements of Operations. These fees have been earned and assessed against contract holders on a daily or monthly basis throughout the contract period and are recognized as revenue when assessed and earned. Transfers to (from) separate accounts within the Statutory Statements of Operations primarily includes transfers for new premium and annuity considerations, benefit payments, surrender charge wear-off, realized and unrealized investment gains/losses, investment income, and other contractholder behavior.
(p)    Receivables
Receivable balances approximate estimated fair values. This is based on pertinent information available to management as of year-end, including the financial condition and creditworthiness of the parties underlying the receivables. Any balances outstanding more than 90 days are nonadmitted on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
(q)    Reclassifications
Prior year balances have not been reclassified to conform to the current year presentation.
(3)    Accounting Changes and Corrections of Errors








20 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

Accounting Changes
Recently Issued Accounting Standards – Adopted in 2021
In July 2020, the NAIC adopted revisions to SSAP No. 32R, Preferred Stock. The revisions update the definitions, measurement, and impairment guidance for various types of preferred stock and require perpetual preferred stock to be measured at fair value, not to exceed any currently effective call price, instead of at the lower of cost or fair value. The revisions were effective January 1, 2021. The implementation of these revisions on January 1, 2021 resulted in a pre-tax increase to surplus of $2.
In 2021, the NAIC extended the following interpretations (INT) in response to the COVID-19 pandemic:
•INT 20-03, Troubled Debt Restructuring due to COVID-19. This INT followed the interagency COVID-19 guidance issued by federal and state prudential banking regulators (and concurred by the FASB) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Specifically, a modification of a mortgage loan or bank loan terms did not result in troubled debt restructurings as long as the modification was in response to COVID-19, the borrower was current at the time of the modification, and the modification was short-term. In addition, insurers were not required to designate mortgage loans or bank loans with deferrals granted due to COVID-19 as past due or report them as nonaccrual loans. This INT was effective for the period beginning March 1, 2020 and originally expired on December 31, 2020. In January 2021, the provisions in this INT were extended updating the effective period to be the earlier of January 1, 2022 or the date that is 60 days after the date on which the national emergency declared by the President terminates. This INT did not impact the Company.
•INT 20-07, Troubled Debt Restructuring of Certain Debt Investments Due to COVID-19. This INT provided temporary guidance by allowing practical expedients when assessing whether modifications made to debt securities (under SSAP 26R and 43R) due to COVID-19 are insignificant. Specifically, the guidance proposed restructurings in response to COVID-19 are considered to be insignificant if the restructuring resulted in a 10% or less shortfall amount in the contractual amount due and did not extend the maturity of the investment by more than 3 years. This INT was effective for the period beginning March 1, 2020 and originally expired on December 31, 2020. In January 2021, the provisions in this INT were extended updating the effective period to be the earlier of January 1, 2022 or the date that is 60 days after the date on which the national emergency declared by the President terminates. This INT did not impact the Company.
In November 2021, the NAIC adopted revisions to SSAP No. 43R, Loan Backed and Structured Securities. The revisions state that non-rated residual tranches currently classified as bonds should be reclassified to other invested assets, and held at lower of cost or market. The revisions are effective December 31, 2022, with early application permitted. The company has adopted these revisions, resulting in no change due to no non-rated residual tranches classified as bonds as of December 31, 2021. There was no impact on net income or surplus during the year-ended December 31, 2021, as a result of adopting the revisions.
Recently Issued Accounting Standards – Adopted in 2020
Effective January 1, 2020, the Company adopted VM-21, as the effective guidance under which the Company's variable and variable-indexed annuities reserves are calculated. Previously, the Company calculated these reserves using guidance found in AG43. VM-21 applies to business issued on or after January 1, 2017. Under VM-21, during 2017, 2018, and 2019, the Company elected to combine contracts subject to AG43 and VM-21 for purposes of calculating reserves. In 2019, the NAIC adopted revisions to both AG43 and VM-21, effective January 1, 2020. The implementation of the 2019 revisions on January 1, 2020 resulted in a pre-tax increase of $1 to Policyholder liabilities for Life policies and annuity contracts within the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus and the corresponding decrease to surplus for the same amount is recorded through Change in reserve on account of change in valuation basis within the Statutory Statements of Capital and Surplus. The 2019 amendments allow an optional phase-in of the increase which the Company did not elect.
Effective January 1, 2020, the Company adopted SSAP No. 108, the standard establishes statutory accounting principles to address certain limited derivative transactions hedging variable annuity guarantees subject to










21 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

fluctuations as a result of interest rate sensitivity. The Company added all applicable new disclosures required by the standard; see Note 2(k) for further information. There were no impacts to net income or surplus during the year ended December 31, 2020, as a result of this adoption.
In 2016, the NAIC adopted revisions to SSAP No. 51R, Life Contracts and SSAP No. 54, Individual and Group Accident and Health Contracts, Issue Paper No. 154, Implementation of Principles-Based Reserving. These revisions relate to the adoption of the Valuation Manual and provides for principle-based reserving for Life and Heath contracts, and are effective January 1, 2017. The Valuation Manual provides the following revisions: 1) VM-20, Requirements for Principle-Based Reserves, for Life Products, includes an optional three-year deferral. The Company elected the deferral and adopted this update effective January 1, 2020. It applies to business issued on or after this date. 2) VM-21, see details disclosed above. 3) VM-22, Statutory Maximum Valuation Interest Rates for Income Annuities, was effective January 1, 2018. It applies to annuitizations on contracts issued on or after that date. Because most annuitizations occur years after a contract has been issued, its impact on net income and surplus has not been material. 4.) VM-25, Health Insurance Reserves Minimum Requirements, and VM-26, Credit Life and Disability Reserve Requirements, are not applicable as the Company does not issue these contracts.
In August 2019, the NAIC adopted SSAP No. 22R, Leases. This revised standard is a substantive revision, reorganization, and clarification of SSAP 22. It adopts much of the language of US GAAP ASU 2016-02, Leases, but retains operating lease accounting for Statutory accounting. It was effective January 1, 2020, with early adoption permitted. The Company adopted these revisions effective January 1, 2020. There was no impact on net income or surplus during the year ended December 31, 2020, as a result of adopting the revisions.
In March 2020, the NAIC adopted INT 20-01, Reference Rate Reform. The interpretation adopted the optional guidance outlined in Accounting Standards Update (ASU) 2020-04, Reference Rate Reform, for a limited period of time to ease the potential burden on accounting for reference rate reform. The practical expedients outlined in the interpretation are for modifications solely related to reference rate reform and optionally suspends assessments for re-measuring a contract and dedesignating a hedge relationship. This interpretation is effective on the date of adoption and expires on December 31, 2022. The Company adopted the optional guidance in this interpretation effective March 12, 2020. As of December 31, 2020, the Company has not made any modifications to financial assets or liabilities as a result of reference rate reform.
In May 2020, the NAIC adopted revisions to SSAP No. 26R, Bonds, which provides clarifying guidance when assessing other than temporary impairments (OTTI) for debt instruments that have been previously modified pursuant to SSAP No. 36, Troubled Debt Restructuring, or SSAP No. 103R, Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. The revisions to SSAP No. 26R state subsequent OTTI assessments for debt instruments modified under SSAP No. 36 or SSAP No 103 will be based on the modified contractual terms and not revert back to the original acquisition terms. These revisions were effective May 20, 2020 and were subsequently adopted by the Company. There was no impact on net income or surplus during the year ended December 31, 2020, as a result of adopting the revisions.
In April, May, June, and August 2020, the NAIC adopted the following interpretations (INT) in response to the COVID-19 pandemic:
•INT 2020-02, Extension of the 90-Day Rule for the Impact of COVID-19, extends a one-time optional extension of the nonadmission assessment guidance for premiums and similar receivables due from policyholders or agents. For receivables that were current prior to the beginning of the declaration of a state of emergency by the U.S. federal government on March 13, 2020 or originated on or after March 13, 2020, insurers may continue to admit assets greater than 90 days past due. This INT is applicable for the March 31, 2020, June 30, 2020, and September 30, 2020 financial statements and expired on December 30, 2020. This INT did not have an impact to the Company.
•INT 2020-03, Troubled Debt Restructuring Due to COVID-19, follows the inter-agency COVID-19 guidance issued by the federal and state prudential banking regulators (and concurred by the Financial Accounting Standards Board) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Specifically, a modification of a mortgage loan or bank loan terms does not result in troubled debt










22 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

restructuring as long as the modification is in response to COVID-19, the borrower was current at the time of the modification, and the modification is short-term. In addition, insurers are not required to designate mortgage loans or bank loans with deferrals granted due to COVID-19 as past due or report them as nonaccrual loans. This INT is effective for the period beginning March 1, 2020 and originally expired on December 31, 2020. In January 2021, the provisions in this INT were extended updating the effective period to be the earlier of January 1, 2022 or the date that is 60 days after the date on which the national emergency declared by the President terminates. The Company implemented a loan modification program that adhered to the requirements outlined in the INT for investments in commercial and residential mortgage loans.
•INT 2020-04, Mortgage Loan Impairment Assessment Due to COVID-19, defers the impairment assessment for bank loans, mortgage loans, and investments which predominantly hold underlying mortgage loans and are impacted by forbearance or modifications in response to COVID-19. This INT was applicable for the March 31, 2020, June 30, 2020, and September 30, 2020 financial statements and expired on December 30, 2020. This INT did not have a material impact to the Company.
•INT 2020-05, Investment Income Due and Accrued. This INT provides temporary relief guidance for assessing the collectability of interest income, admissibility relief of accrued investment income 90 days past due, and clarifies how interest income should be recognized during a payment holiday. This INT is applicable for the June 30, 2020, and September 30, 2020 financial statements and expired on December 30, 2020. This INT did not have a material impact to the Company.
•INT 2020-06, Participation in the 2020 TALF Program. This INT provides guidance for reporting Term Asset-Backed Securities Lending Facility (TALF) loans for the duration of the 2020 TALF program. This INT did not impact the Company as the Company did not participate in this program.
•INT 2020-07, Troubled Debt Restructuring of Certain Debt Investments Due to COVID-19. This INT provides temporary guidance by allowing practical expedients when assessing whether modifications made to debt securities (under SSAP No. 26R and SSAP No. 43R) due to COVID-19 are insignificant. Specifically, the guidance proposes restructurings in response to COVID-19 are considered to be insignificant if the restructuring results in a 10% or less shortfall amount in the contractual amount due and does not extend the maturity of the investment by more than 3 years. This INT was effective for the period beginning March 1, 2020 and originally expired on December 31, 2020. In January 2021, the provisions in this INT were extended updating the effective period to be the earlier of January 1, 2022 or the date that is 60 days after the date on which the national emergency declared by the President terminates. This INT did not have a material impact to the Company.
•INT 2020-08, COVID-19 Premium Refunds, Rate Reductions and Policyholder Dividends. This INT provides guidance for returns or benefits to policyholders. This INT did not impact the Company.
These INTs have an immaterial effect on the financial statements as of December 31, 2020. The Company will continue to monitor these INTs and assess impacts until they are nullified.
In July 2020, the NAIC adopted INT 20-09, Basis Swaps as a Result of the LIBOR Transition, to address the statutory accounting and reporting requirements for basis swaps issued by central clearing parties solely in response to the market-wide transition away from the London Interbank Offered Rate (LIBOR) and toward the Secured Oversight Financing Rate (SOFR). This INT allows basis swaps issued solely in response to reference rate reform to be classified as derivatives used for “hedging” and reported as admitted assets in the statutory financial statements. The INT is effective July 30, 2020 and was subsequently adopted by the Company. There was no impact on net income or surplus during the year ended December 31, 2020, as a result of adopting the INT.
In November 2020, the NAIC adopted revisions to SSAP No. 43R, Loan-Backed and Structured Securities. The revisions reflect the updated NAIC designation category for residential and commercial mortgage-backed securities that utilize the financial modeling guidance. The revisions were effective November 12, 2020 and were subsequently adopted by the Company. There was no impact on net income or surplus during the year ended December 31, 2020, as a result of adopting the INT.








23 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

Recently Issued Accounting Standards – Adopted in 2019
In August 2019, the NAIC adopted revisions to SSAP No. 43R, Loan-Backed and Structured Securities. These revisions clarify that when a security has different NAIC designations by lot, the reporting entity shall either report the entire investment in a single reporting line at the lowest NAIC designation that would apply to a lot, or report the investment separately by purchase lot in the investment schedule. This update only affects investments with multiple lots at different ratings and would not require the entire schedule to be disclosed at a lot level. These revisions are effective as of September 30, 2019. There was no impact to net income or surplus during the year ended December 31, 2019, as a result of adopting the revised standard.
Recently Issued Accounting Standards – To Be Adopted
Not applicable.
Corrections of Errors
The Company records correction of errors in accordance with SSAP No. 3 – Accounting Changes and Correction of Errors (SSAP No. 3). SSAP No. 3 prescribes that the correction of errors in previously issued Statutory Financial Statements will be reported as an adjustment to capital and surplus in the period the error is detected. These errors are shown within Correction of errors, net of tax, on the Statutory Statements of Capital and Surplus.
During 2021, an error was identified related to the Company’s calculation of scheduled payments for certain fixed-indexed annuity products. The model for policies who have elected the scheduled payment option always used an income period of 10 years. After payments are received, future benefits and therefore the remaining benefit period, should have reduced but did not. This resulted in the Company holding excess reserves after policyholders elected this option. The error resulted in a $50 pre-tax overstatement of policyholder liabilities for life policies and annuity contracts and a corresponding $40 after-tax understatement of total capital and surplus as of December 31, 2020. Policyholder liabilities for life policies and annuity contracts on the Company’s financial statements were adjusted in 2021 to correct for the prior period impact.
During the years ended December 31, 2020, and 2019, there were no Corrections of errors recorded on the Statutory Statements of Capital and Surplus.
(4)    Risk Disclosures
The following is a description of the significant risks facing the Company and how it attempts to mitigate those risks:
(a)    Credit Risk
Credit risk is the risk that issuers of fixed-income securities, borrowers of mortgages on commercial real estate, or other parties with whom the Company has transactions, such as reinsurers and derivative counterparties, default on their contractual obligations, resulting in unexpected credit losses.
The Company mitigates this risk by adhering to investment policies and limits that provide portfolio diversification on an asset class, asset quality, creditor, and geographical basis, and by complying with investment limitations from applicable state insurance laws and regulations. The Company considers all relevant objective information available in estimating the cash flows related to structured securities. The Company actively monitors and manages exposures, and determines whether any securities are impaired. The aggregate credit risk is influenced by management’s risk/return preferences, the economic and credit environment, and the ability to manage this risk through liability portfolio management.
For derivative counterparties, the Company mitigates credit risk by tracking and limiting exposure to each counterparty through limits that are reported regularly and, once breached, restricts further trades; establishing relationships with counterparties rated BBB+ and higher; and monitoring the CDS of each counterparty as an early warning signal to cease trading when credit default swap spreads imply severe impairment in credit quality.
The Company executes Credit Support Annexes (CSA) with all active and new counterparties which further limits credit risk by requiring counterparties to post collateral to a segregated account to cover any










24 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

counterparty exposure. Additionally most transactions are cleared through a clearinghouse thereby transferring counterparty risk from the bank to the clearinghouse that tends to have stronger credit. This often leads to increased collateralization and lower counterparty risk for the Company.
(b)    Credit Concentration Risk
Credit concentration risk is the risk of increased exposure to significant asset defaults (of a single security issuer); economic conditions (if business is concentrated in a certain industry sector or geographic area); or adverse regulatory or court decisions (if concentrated in a single jurisdiction) affecting credit.
The Company’s Finance Committee, responsible for asset/liability management (ALM) issues, recommends an investment policy to the Company’s Board of Directors (BOD) and approves the strategic asset allocation and accompanying investment mandates for an asset manager with respect to asset class. The investment policy and accompanying investment mandates specify asset allocation among major asset classes and the degree of asset manager flexibility for each asset class. The investment policy complies, at a minimum, with state statutes. Compliance with the policy is monitored by the Finance Committee who is responsible for implementing internal controls and procedures. Deviations from the policy are monitored and addressed. The Finance Committee and, subsequently, the BOD review the investment policy at least annually.
To further mitigate this risk, internal concentration limits based on credit rating and sector are established and are monitored regularly. Any ultimate obligor group exceeding these limits is placed on a restricted list to prevent further purchases, and the excess exposure may be actively sold down to comply with concentration limit guidelines. Any exceptions require Chief Risk Officer approval and monitoring by the Risk Committee. Further, the Company performs a quarterly concentration risk calculation to ensure compliance with the State of Minnesota insurance regulations.
(c)    Liquidity Risk
Liquidity risk is the risk that unexpected timing or amounts of cash needed will require liquidation of assets in a market that will result in a realized loss or an inability to sell certain classes of assets such that an insurer will be unable to meet its obligations and contractual guarantees. Liquidity risk also includes the risk that in the event of a company liquidity crisis, refinancing is only possible at higher interest rates. Liquidity risk can be affected by the maturity of liabilities, the presence of withdrawal penalties, the breadth of funding sources, and terms of funding sources. It can also be affected by counterparty collateral triggers as well as whether anticipated liquidity sources, such as credit agreements, are cancelable.
The Company manages liquidity within four specific domains: (1) monitoring product development, product management, business operations, and the investment portfolio; (2) setting ALM strategies; (3) managing the cash requirements stemming from the Company’s derivative dynamic economic hedging activities; and (4) establishing liquidity facilities to provide additional liquidity. The Company has established liquidity risk limits, which are approved by the Company’s Risk Committee, and the Company monitors its liquidity risk regularly. The Company also sets target levels for the liquid securities in its investment portfolio.
(d)    Interest Rate Risk
Interest rate risk is the risk that movements in interest rates or interest rate volatility will cause a decrease in the value of an insurer’s assets relative to the value of its liabilities and/or an unfavorable change in prepayment activity resulting in compressed interest margins.
The Company has an ALM strategy to align cash flows and duration of the investment portfolio with policyholder liability cash flows and duration. The Company further limits interest rate risk on variable annuity guarantees through interest rate hedges. The Company monitors the economic and accounting impacts of interest rate sensitivities on assets and liabilities regularly.
(e)    Equity Market Risk
Equity market risk is the risk that movements in equity prices or equity volatility will cause a decrease in the value of an insurer’s assets relative to the value of its liabilities.










25 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

The policy value of the fixed-indexed universal life, fixed-indexed annuity, and variable-indexed annuity products is generally linked to equity market indices. The Company economically hedges this exposure with derivatives.
Variable annuity products guarantee minimum payments regardless of market movements. The Company has adopted an economic hedging program to manage the equity risk of these products.
The Company monitors the impacts of equity sensitivities on assets and liabilities regularly.
Basis risk is the risk that variable annuity hedge asset values change unexpectedly relative to the value of the underlying separate account funds of the variable annuity contracts. Basis risk may arise from the Company’s inability to directly hedge the underlying investment options of the variable annuity contracts. The Company regularly reviews and synchronizes fund mappings, product design features, hedge design, and manages funds line-up.
(f)    Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes and systems, from human misbehavior or error, or from external events. Operational risk is comprised of the following seven risk categories: (1) external fraud; (2) internal fraud; (3) employment practices and workplace safety; (4) clients/third-party, products and business practices; (5) damage to physical assets; (6) business disruption and system failure; and (7) execution, delivery, and process management. Operational risk is comprehensively managed through a combination of core qualitative and quantitative activities.
The Operational Risk Management framework includes the following key activities: (1) an Operational Risk Capital Model covering all material types of operational risks, under which the Company quantifies and regularly monitors operational risk; (2) loss data capture to create transparency and gather information about losses that meet a designated threshold. Business owners are required to identify and resolve the root cause of operational loss events; and (3) an integrated risk and control system, a bottom-up risk assessment process for significant operational risk scenarios, to proactively manage significant operational risk scenarios throughout the organization.
(g)    Regulatory Change Risk
Regulatory change risk is the risk that regulatory changes and imposed regulation may materially impact the Company's business model, sales levels, company financials and ability to effectively comply with regulations.
The Company actively monitors all regulatory changes and participates in national and international discussions relating to legal, regulatory, and accounting changes. The Company maintains active membership with various professional and industry trade organizations. A formal process exists to review, analyze, and implement new legislation as it is enacted.
(h)    Rating Agency Risk
Rating agency risk is the risk that rating agencies change their outlook or rating of the Company or a subsidiary of the Company. The rating agencies generally utilize proprietary capital adequacy models in the process of establishing ratings for the Company. The Company is at risk of changes in these models and the impact that changes in the underlying business that it is engaged in can have on such models. To mitigate this risk, the Company maintains regular communications with the rating agencies and evaluates the impact of significant transactions on such capital adequacy models and considers the same in the design of transactions to minimize the adverse impact of this risk. Rating agency capital is calculated and analyzed at least annually. Rating agency risk is also addressed in the TRA process and on an ad hoc basis as necessary.
(i)    Mortality/Longevity Risk
Mortality/longevity risk is the risk that mortality experience is different than the life expectancy assumptions used by the Company to price its products.










26 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

The Company mitigates mortality risk primarily through reinsurance, whereby the Company cedes a significant portion of its mortality risk to third parties. The Company also manages mortality risk through the underwriting process. Both mortality and longevity risks are managed through the review of life expectancy assumptions and experience in conjunction with active product management.
(j)    Lapse Risk
Lapse risk is the risk that actual lapse experience evolves differently than the assumptions used for pricing and valuation exercises leading to a significant loss in Company value and/or income.
The Company mitigates this risk by performing sensitivity analysis at the time of pricing to affect product design, adding Market Value Adjustments and surrender charges when appropriate, regular ALM analysis, and exercising management levers at issue, as well as post-issue as experience evolves. Policyholder experience is monitored regularly.
(k)    Cyber Security Risk
Cyber security risk is the risk of losses due to external and/or internal attacks impacting the confidentiality, integrity, and/or availability of key systems, data, and processes reliant on digital technology. The Company has implemented preventative, detective, response, and recovery measures including firewalls, intrusion detection and prevention, advanced malware detection, spyware and anti-virus software, email protection, network and laptop encryption, web content filtering, web application firewalls, and regular scanning of all servers and network devices to identify vulnerabilities. Controls are implemented to prevent and review unauthorized access.
(l)    Reinsurance Risk
Reinsurance risk is the risk that reinsurance companies default on their obligation where the Company has ceded a portion of its insurance risk. The Company uses reinsurance to limit its risk exposure to certain business lines and to enable better capital management.
Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company.
The Company mitigates this risk by requiring certain counterparties to post collateral to cover the exposure and to meet thresholds related to the counterparty’s credit rating, exposure, or other factors. For counterparties that are not initially required to post collateral, if the thresholds are not met by those counterparties, they are required to establish a trust or letter of credit backed by assets meeting certain quality criteria. All arrangements are regularly monitored to determine whether trusts or letters of credit are sufficient to support the ceded liabilities and that their terms are being met. In addition, the Company reviews the financial standings and ratings of its reinsurance counterparties and monitors concentrations of credit risk to minimize its exposure to significant losses from reinsurer insolvencies regularly.








27 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(5)    Investments
(a)    Bonds, Other Assets Receiving Bond Treatment, and Stocks
At December 31, the amortized cost, gross unrealized gains, gross unrealized losses, and fair values of investments, excluding investments in affiliates, are shown below:





























2021


Amortized cost
Gross unrealized gains
Gross unrealized losses
Fair value
Bonds:







U.S. government
$ 3,644 

147 

39 

3,752 
Agencies not backed by the full faith and credit of the U.S. government
299 

— 

— 

299 
States and political subdivisions
9,119 

1,973 

6 

11,086 
Foreign governments
1,619 

75 

16 

1,678 
Corporate securities
68,444 

8,191 

275 

76,360 
Mortgage-backed securities
11,645 

564 

26 

12,183 
Collateralized debt obligations
12 

8 

— 

20 
Total bonds
94,782 

10,958 

362 

105,378 
Common stocks
278 

27 

2 

303 
Preferred stocks
— 

— 

— 

— 
Total
$ 95,060 

10,985 

364 

105,681 





























2020


Amortized cost
Gross unrealized gains
Gross unrealized losses
Fair value
Bonds:







U.S. government
$ 3,318 

300 

10 

3,608 
Agencies not backed by the full faith and credit of the U.S. government
3 

1 

— 

4 
States and political subdivisions
9,536 

2,335 

2 

11,869 
Foreign governments
1,138 

125 

2 

1,261 
Corporate securities
70,975 

12,730 

90 

83,615 
Mortgage-backed securities
14,126 

1,232 

9 

15,349 
Collateralized debt obligations
17 

12 

— 

29 
Total bonds
99,113 

16,735 

113 

115,735 
Common stocks
217 

18 

1 

234 
Preferred stocks
41 

2 

— 

43 
Total
$ 99,371 

16,755 

114 

116,012 
At December 31, 2021, amortized cost differed from the carrying value of bonds on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus due to NAIC-6 rates bonds where the market value was lower than amortized cost. The total unrealized losses recorded by the Company for these bonds was an insignificant amount as of December 31, 2021 and 2020.
The Company had NAIC-6 rated bonds with a statement value of $26 and $3 as of December 31, 2021 and 2020, respectively. There was no interest due on bonds in default, which was excluded from investment income due and accrued as of December 31, 2021 and 2020.
At December 31, 2021 and 2020, the Company had hybrid securities with a carrying value of $17 and $30, respectively.








28 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

As of December 31, 2021 and 2020, investments with a statement value of $31 and $23, respectively, were held on deposit with various insurance departments and in other trusts as required by statutory regulations.    
The amortized cost and fair value of bonds and other assets receiving bond treatment reported in the statutory Annual Statement Schedule D Part 1A at December 31, 2021, by contractual maturity, are shown below:











Carrying
value
Fair value
Due in 1 year or less $ 1,707 

$ 1,716 
Due after 1 year through 5 years 9,030 

9,592 
Due after 5 years through 10 years 17,877 

19,148 
Due after 10 years through 20 years 25,696 

29,965 
Due after 20 years 27,949 

31,836 
No maturity date 866 

918 
Mortgage-backed and other structured securities
 11,657 

12,203 
       Total bonds and other assets receiving bond treatment $ 94,782 

$ 105,378 
Expected maturities will differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Proceeds from sales of bonds includes sales, maturities, paydowns, and other redemptions of bonds and other assets receiving bond treatment. Proceeds from sales of bonds for the years ended December 31 are shown below:























2021
2020
2019
Proceeds from sales
$ 30,577 

8,677 

15,892 
Gross gains
1,313 

162 

75 
Gross losses
101 

28 

34 
Proceeds from sales of common stocks for the years ended December 31 are shown below:





















2021
2020
2019
Proceeds from sales
$ 241 

147 

111 
Gross gains
11 

3 

2 
Gross losses
— 

2 

2 
Proceeds from sales of preferred stocks for the years ended December 31 are shown below:





















2021
2020
2019
Proceeds from sales
$ 40 

— 

2 
Gross gains
1 

— 

— 
Gross losses
— 

— 

— 
For the years ended December 31, 2021 and 2020, there were 207 and 138 CUSIPs sold, disposed, or otherwise redeemed as a result of a callable feature, respectively. The aggregate amount of investment income generated as a result of these transactions was $182 and $56 for 2021 and 2020, respectively.
The Company’s bond portfolio includes mortgage-backed securities. Due to the high quality of these investments and the lack of subprime loans within the securities, the Company does not have a material exposure to subprime mortgages.








29 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(b)    Unrealized Investment Losses
To determine whether or not declines in fair value are other than temporary, the Company performs a quarterly review of its entire combined investment portfolio, including investments held by subsidiaries, using quoted market prices by third-party sources. For further discussion, see Notes 2 and 6.
Unrealized losses and the related fair value of investments held by the Company for the years ended December 31 are shown below:









































2021


12 months or less
Greater than 12 months
Total


Fair value
Unrealized losses
Fair value
Unrealized losses
Fair value
Unrealized losses
Bonds:











U.S. government
$ 396 

17 

272 

22 

668 

39 
Foreign government
513 

13 

41 

3 

554 

16 
States and political subdivisions
208 

5 

21 

1 

229 

6 
Corporate securities
9,417 

207 

1,083 

68 

10,500 

275 
Mortgage-backed securities
977 

19 

124 

7 

1,101 

26 
Total bonds
11,511 

261 

1,541 

101 

13,052 

362 
Common stock
53 

2 

3 

— 

56 

2 
Total temporarily impaired securities
$ 11,564 

263 

1,544 

101 

13,108 

364 









































2020


12 months or less
Greater than 12 months
Total


Fair value
Unrealized losses
Fair value
Unrealized losses
Fair value
Unrealized losses
Bonds:











U.S. government
$ 374 

10 

— 

— 

374 

10 
Foreign government
51 

2 

— 

— 

51 

2 
States and political subdivisions
85 

2 

— 

— 

85 

2 
Corporate securities
2,085 

78 

578 

12 

2,663 

90 
Mortgage-backed securities
158 

5 

41 

4 

199 

9 
Total bonds
2,753 

97 

619 

16 

3,372 

113 
Common stock
7 

— 

9 

1 

16 

1 
Total temporarily impaired securities
$ 2,760 

97 

628 

17 

3,388 

114 
As of December 31, 2021 and 2020, the number of investment holdings that were in an unrealized loss position was 1,513 and 472, respectively, for bonds, and 21 and 13, respectively, for common stocks.
As of December 31, 2021 and 2020, of the total amount of unrealized losses, $319, or 87.5%, and $76, or 67.7%, respectively, are related to unrealized losses on investment grade securities. Investment grade is defined as a security having an NAIC SVO credit rating of 1 or 2. Unrealized losses on securities are principally related to changes in interest rates or changes in sector spreads from the date of purchase. As contractual payments continue to be met, management continues to expect all contractual cash flows to be received and does not consider these investments to be other-than-temporarily impaired.










30 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(c)    Realized Investment Gains (Losses)
Net realized capital gains (losses) for the years ended December 31 are shown below:

















2021
2020
2019
Bonds $ 1,199 

(120)

13 
Stocks 11 

2 

— 
Mortgage Loans (8)

(34)

— 
Derivatives 1,883 

202 

1,062 
Other (39)

(1)

(2)
Total realized capital gains (losses) 3,046 

49 

1,073 
Income tax benefit (expense) on net realized gains (losses) (249)

— 

11 
Total realized capital gains (losses), net of taxes 2,797 

49 

1,084 
Net gains (losses) transferred to IMR, net of taxes 941 

(93)

31 
Net realized gains (losses), net of taxes and IMR $ 1,856 

142 

1,053 
(d)    Net Investment Income
Major categories of net investment income for the years ended December 31 are shown below:

















2021
2020
2019
Interest:




Bonds $ 4,233 

4,189 

4,319 
Mortgage loans on real estate 682 

647 

617 
Policy loans 12 

12 

11 
Cash, cash equivalents, and short-term investments — 

7 

23 
Dividends:




Stocks 13 

7 

7 
Investment in subsidiaries 51 

50 

67 
Rental income on real estate 20 

20 

13 
Derivatives 37 

(14)

(109)
Other (92)

47 

(7)
Gross investment income 4,956 

4,965 

4,941 
Investment expenses (137)

(138)

(146)
Net investment income before amortization of IMR 4,819 

4,827 

4,795 
Amortization of IMR 47 

37 

44 
Net investment income $ 4,866 

4,864 

4,839 
(e)    Mortgage Loans on Real Estate
The Company's investment in mortgage loans on real estate includes CMLs and RMLs at December 31, 2021 and 2020.
At December 31, 2021 and 2020, the Company's CML portfolio includes concentrations exceeding 10% for the following states:

















2021
2020

Concentration Amount Concentration %
Concentration Amount Concentration %
California $ 3,605 
22.9  %
$ 3,356 
22.6  %










31 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

The maximum lending rates for CMLs made during 2021 and 2020 were 4.5% and 4.1%, respectively. The minimum lending rates for CMLs made during 2021 and 2020 were 1.7% and 2.2%, respectively. The maximum percentage of any one loan to the value of security at the time of the loan extension exclusive of insured, guaranteed or purchased money mortgages was 77.6% and 84.8% during 2021 and 2020, respectively.
At December 31, 2021 and 2020, the Company's RML portfolio includes concentrations exceeding 10% for the following states:

















2021
2020

Concentration Amount Concentration %
Concentration Amount Concentration %
California $ 500 
35.6  %
$ 353 
46.3  %
Florida — 
—  %
80 
10.4  %
The maximum lending rates for RMLs made during 2021 and 2020 was 11.0% and 8.3%. The minimum lending rates for RMLs made during 2021 and 2020 was 2.8% and 3.0%. The maximum percentage of any one loan to the value of security at the time of the loan extension exclusive of insured, guaranteed or purchased money mortgages for RMLs was 94.8% and 93.3% during 2021 and 2020.
As of December 31, 2021 and 2020, there were no taxes, assessments, or amounts advanced that were excluded from the mortgage loan investment total.
(1)    Age Analysis of Mortgage Loans
The following table presents an age analysis of the Company's mortgage loan investments as of December 31, 2021 and 2020 by type:

















2021
2020

Residential Commercial
Residential Commercial
Current $ 1,364 
15,732 

693 
14,813 
30-59 Days Past Due 14 
— 

18 
— 
60-89 Days Past Due 2 
— 

2 
— 
90-179 Days Past Due 11 
— 

4 
— 
180+ Days Past Due 15 
16 

47 
57 
Total $ 1,406 
15,748 

764 
14,870 
For mortgage loans investments greater than 90 days past due and still accruing interest, the recorded investment and interest accrued as of December 31, 2021 and 2020 are shown below by type:

















2021
2020

Residential Commercial
Residential Commercial
Accruing Interest 90-179 Days Past Due




Recorded Investment $ — 
— 

2 
— 
Interest Accrued — 
— 

— 
— 
Accruing Interest 180+ Days Past Due




Recorded Investment — 
— 

— 
— 
Interest Accrued — 
— 

— 
— 
There were no mortgage loan investments for which interest was reduced as of December 31, 2021 and 2020.
As of December 31, 2021 and 2020 there were no RMLs in which the Company participated as a co-lender in a mortgage loan agreement. As of December 31, 2021 and 2020, for CML investments, the recorded investment for which the Company participated as a co-lender in a mortgage loan agreement was $2,471 and $1,979, respectively.










32 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(2) Impaired Mortgage Loans    
For the years ended December 31, 2021, and 2020, the recorded investment in impaired CMLs was $16, and $25, respectively. These amounts also represent the average recorded investment in impaired mortgage loans for the year ended December 31, 2021, and 2020. There was no related allowance for credit losses on these investments and the Company did not participate as a co-lender in the related mortgage loan agreement. In addition, the impaired CMLs were not in nonaccrual status and no interest income recognized using a cash-basis method of accounting during the time that the loan was impaired. There was no recorded investment in impaired RMLs for the years ended December 31, 2021, and 2020.
There was $0, $1 and $0 interest income recognized on impaired mortgage loans as of December 31, 2021, 2020 and 2019, respectively. The Company recognizes interest income on its impaired mortgage loans upon receipt of payment.
As of December 31, 2021 and 2020, the Company derecognized mortgage loans as a result of foreclosure of $4 and $0, respectively.
(3) Credit Quality Indicators
The Company analyzes certain financing receivables for credit risk by using specific credit quality indicators. The Company has determined the loan-to-value ratio and the debt service coverage ratio are the most reliable indicators in analyzing the credit risk of its CML portfolio. The loan-to-value ratio is based on the Company’s internal valuation methodologies, including discounted cash flow analysis and comparative sales, depending on the characteristics of the property being evaluated. The debt service coverage ratio analysis is normalized to reflect a 25 year amortization schedule.
The credit quality of CMLs as of December 31 is shown below:



































Debt Service Coverage Ratios



2021: Greater than 1.4x
1.2x – 1.4x
1.0x – 1.2x
Less than 1.0x
Total
Percent of Total
Loan-to-value ratios:










Less than 50% $ 4,528 

59 

98 

663 

5,348 

34.0  %
50% – 60% 4,459 

775 

249 

824 

6,307 

40.0  %
60% – 70% 2,077 

1,099 

281 

444 

3,901 

24.8  %
70% – 80% 23 

89 

35 

29 

176 

1.1  %
80% – 90% — 

— 

— 

— 

— 

—  %
90% – 100% — 

— 

— 

— 

— 

—  %
Greater than 100% — 

— 

16 

— 

16 

0.1  %
Total $ 11,087 

2,022 

679 

1,960 

15,748 

100.0  %





































Debt Service Coverage Ratios



2020: Greater than 1.4x
1.2x – 1.4x
1.0x – 1.2x
Less than 1.0x
Total
Percent of Total
Loan-to-value ratios:










Less than 50% $ 3,992 

73 

52 

622 

4,739 

31.9  %
50% – 60% 4,477 

770 

132 

359 

5,738 

38.6  %
60% – 70% 2,288 

905 

273 

582 

4,048 

27.2  %
70% – 80% — 

163 

102 

35 

300 

2.0  %
80% – 90% — 

— 

21 

— 

21 

0.1  %
90% – 100% — 

— 

— 

— 

— 

—  %
Greater than 100% — 

— 

25 

— 

25 

0.2  %
Total $ 10,757 

1,911 

605 

1,598 

14,871 

100.0  %










33 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

The Company has determined the delinquency status and the loan-to-value ratio are the most reliable indicators in analyzing the credit risk of its RML portfolio. The loan-to-value ratio is based on the Company's internal valuation methodologies, including discounted cash flow analysis and comparative sales, depending on the characteristics of the property being evaluated.
The loan-to-value ratios of RMLs as of December 31 are shown below:























2021
2020

Total
Percent of Total
Total
Percent of Total
Loan-to-value ratios:






Below 70% $ 353 

25.1  %
$ 165 

21.6  %
71% to 80% 705
50.1  %
381
49.9  %
81% to 90% 316
22.5  %
206
27.0  %
91% to 95% 33
2.3  %
12
1.6  %
Above 95% — 

—  %
— 

—  %
Total $ 1,407 

100.0  %
$ 764 

100.0  %
(f)    Loan-Backed Securities
SSAP No. 43R requires the bifurcation of impairment losses on loan-backed or structured securities into interest and noninterest-related portions. The noninterest portion is the difference between the present value of cash flows expected to be collected from the security and the amortized cost basis of the security. The interest portion is the difference between the present value of cash flows expected to be collected from the security and its fair value at the balance sheet date.
The Company recognized loan-backed securities in OTTI for the year ended December 31, 2021 as follow:























2021



OTTI Recognized in Loss


Amortized Cost Basis Before OTTI
Interest
Non-Interest
Fair Value
OTTI Recognized:






Intent to sell $ 41 

3 

— 

38 
Annual aggregate total $ 41 

3 

— 

38 
The Company had no loan-backed securities recognized in OTTI for the years ended December 31, 2020 and 2019.
(g)    Derivatives and Hedging Instruments
The Company uses exchange-traded and OTC derivative instruments as a risk management strategy to economically hedge its exposure to various market risks associated with both its products and operations. Derivative assets and liabilities that do not qualify for hedge accounting treatment are recorded at fair value in the Statutory Financial Statements using valuation techniques further discussed in Note 6.
The Company does not have derivative contracts with financing premium as of December 31, 2021 and 2020.
Derivatives held by the Company are designated as either a cash flow hedging instrument (cash flow hedge) or nonqualified hedging instrument (nonqualifying strategies).








34 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(1) Cash Flow Hedges
Foreign Currency Swaps on Debt Securities
Foreign currency swaps have notional amounts and maturity dates equal and offsetting to the underlying debt securities and are determined to be highly effective as of December 31, 2021 and 2020.
(2) Fair Value Hedges
Interest Rate Swaps on Variable Annuity Insurance Liabilities
IRS traded after June 2013 are centrally cleared through an exchange. For IRS traded prior to June 2013 the IRS exposure was netted with other OTC derivatives upon settlement and were subject to the rules of the International Swaps and Derivatives Association, Inc. agreements. The fair values of the collateral posted for OTC and exchange traded derivatives are discussed in the derivative collateral management section below.
Prior to January 1, 2020, the Company designated hedge accounting for these IRS as a cash flow hedge under SSAP No. 86. The amounts previously recorded under the SSAP No. 86 relationship continue to be deferred and amortized over the life of the former hedge program. Effective January 1, 2020, the Company de-designated its previous hedging relationship under SSAP No. 86 and simultaneously designated the hedging relationship under SSAP No. 108 as a fair value hedge. The relationship is deemed to be highly effective at December 31, 2021.
    (3) Nonqualifying Strategies
Futures and Options Contracts
OTC options and ETO are cleared through the Options Clearing Corporation, which operates under the jurisdiction of both the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission. The fair values of the collateral posted for futures, OTC options, and ETO are discussed in the derivative collateral management section below.
Interest Rate Swaps
The Company can receive the fixed or variable rate; IRS are traded in varying maturities. The fair values of the collateral posted and variation margin for OTC and centrally cleared IRS are discussed in the derivative collateral management section below.
Credit Default Swaps
The CDS within the investment portfolios assume credit risk from a single entity or referenced index for the purpose of synthetically replicating investment transactions. The Company can be required to pay or be the net receiver on the contract depending on the net position. Credit events include bankruptcy of the reference and failure to pay by the reference. Prior to January 1, 2021, the notional amount is equal to the maximum potential future loss amount. Beginning January 1, 2021, the Company updated the potential future exposure (PFE) to zero, as PFE is not determinable. The PFE is zero for the following reasons:

(a) CDS are used to hedge indices allocated to products by policyholders. Fluctuations in value of the CDS are offset by credits provided to policyholders and results in a minimal amount of hedge inefficiency. It is impossible to determine the potential future amount of hedge inefficiency.
(b) The CDS used are exchange traded and daily variation margin is required to settle market movements. This minimizes counterparty credit risk. It also makes it impossible to determine what the potential future exposure related to counterparty risk, net of variation margin received could be.
The fair value of the collateral posted for centrally cleared CDS is discussed in the derivative collateral management section below.








35 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

Total Return Swaps
The Company engages in the use of OTC TRS, which allow the parties to exchange cash flows based on a variable reference rate such as the three-month LIBOR and the return of an underlying index. The fair value of the collateral posted for OTC TRS is discussed in the derivative collateral management section below.
To Be Announced Securities
The Company uses OTC TBA forward contracts to gain exposure to the investment risk and return of mortgage-backed securities. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. The fair value of the collateral posted for OTC TBA securities is discussed in the derivative collateral management section below.
The following table presents a summary of the aggregate notional amounts and fair values of the Company’s derivative instruments reported on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus as of December 31:     







































2021
2020




Gross Fair Value


Gross Fair Value


Notional (1)
Assets
Liabilities
Notional (1)
Assets
Liabilities
Cash flow hedging instruments











Foreign currency swaps
$ 1,583 

81 

(33)

1,341 

56 

(76)
Total cash flow hedging instruments


$ 81 

(33)



56 

(76)













Fair value hedging instruments











IRS
$ 2,696 

305 

3,511 

2,709 

472 

(40)
Total fair value hedging instruments


$ 305 

3,511 



$ 472 

(40)













Nonqualifying hedging instruments











OTC options
$ 55,270 

2,174 

(1,822)

51,430 

3,433 

(3,013)
ETO
19,388 

114 

(119)

15,224 

136 

(96)
TBA securities
1,987 

— 

— 

1,331 

1 

(1)
IRS
2,233 

8 

(3,545)

2,631 

9 

(18)
Futures
19,591 

— 

— 

19,312 

— 

— 
TRS
6,633 

— 

(15)

11,653 

7 

(18)
Total nonqualifying hedging instruments


2,296 

(5,501)



3,586 

(3,146)
Total derivative instruments


$ 2,682 

(2,023)



4,114 

(3,262)













(1) Notional amounts are presented on an absolute basis.
Derivative Collateral Management
The Company manages derivative collateral for the general account and separate account combined and separate collateral for exchange-traded and OTC derivatives. The total collateral posted for exchange-traded derivatives at December 31, 2021 and 2020, had a fair value of $2,432 and $2,476, respectively, and is included in Bonds on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus and recorded at amortized cost. The Company retains ownership of the exchange-traded collateral, but the collateral resides in an account designated by the exchange. The collateral is subject to specific exchange rules regarding rehypothecation. The total collateral posted for OTC derivatives at December 31, 2021 and 2020, had a fair value of $2 and $3, respectively, and is included in Bonds on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. The Company posts collateral to OTC counterparties based upon exposure amounts. The Company retains ownership of the OTC collateral.








36 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(h)    Offsetting Assets and Liabilities
The Company elects to disclose derivative assets and liabilities eligible for offset under SSAP No. 64 – Offsetting and Netting of Assets and Liabilities on a gross basis on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus in accordance with the provisions set forth in SSAP No. 86. This treatment is consistent with the Company’s historical reporting presentation.
(i)    Securities Lending
The Company loaned securities with a carrying value of $2,809 and $2,212 and a fair value of $3,022 and $2,610 as of December 31, 2021 and 2020, respectively. The aggregate amount of collateral received through securities lending at December 31 is as follows:

















Fair Value


2021
2020
Cash



Open
2,594 

2,587 
30 days or less
— 

— 
31 to 60 days
— 

— 
61 to 90 days
— 

— 
Greater than 90 days
— 

— 
Subtotal
2,594 

2,587 
Securities received
500 

86 
Total collateral received
$ 3,094 

2,673 
The aggregate amount of cash collateral reinvested through securities lending at December 31 is as follows:





























2021
2020


Amortized cost
Fair value
Amortized cost
Fair value
Open
— 

— 

— 

— 
30 days or less
949 

949 

950 

950 
31 to 60 days
837 

837 

955 

955 
61 to 90 days
61 

61 

66 

66 
91 to 120 days
162 

162 

— 

— 
121 to 180 days
308 

308 

143 

143 
181 to 365 days
277 

277 

473 

473 
Greater than 1 year
— 

— 

— 

— 
Total collateral reinvested
$ 2,594 

2,594 

2,587 

2,587 
As of December 31, 2021 and 2020, the Company had no borrowings outstanding from collateral securities lending.
Reinvested collateral is recorded in Other invested assets on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. The amount and type of reinvested collateral at December 31 is as follows:











2021
2020
Cash and cash equivalents $ 1,665 

1,630 
Short-term investments 929 

957 
Total $ 2,594 

2,587 










37 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(j)     Reverse Repurchase Agreements
The Company participates in both bilateral and tri-party repos. As of December 31, 2021 and 2020, the Company did not sell or acquire any securities that resulted in default. The Company did not recognize a liability to return cash collateral as of December 31, 2021 and 2020.
All collateral received, as of December 31, 2021 and 2020, were bonds with a designated NAIC-1 rating. Further information related to repos for the years ended December 31, 2021 and 2020, is as follows:    



















As of year end
2021
2020
1. Maturity



a. Overnight
 $ 1,161 

430 
b. 2 Days to 1 Week
 — 

— 
2. Collateral Pledged and Securities Acquired Under Repo


a. Cash Collateral Pledged - Secured Borrowing
 $ 1,161 

430 
b. Fair Value of Securities Acquired Under Repo - Secured Borrowing
 1,161 

435 





















Maximum Amount
2021
2020
1. Maturity



a. Overnight $ 1,161 

2,878 
b. 2 Days to 1 Week — 

— 
2. Collateral Pledged and Securities Acquired Under Repo


a. Cash Collateral Pledged - Secured Borrowing $ 1,161 

2,878 
b. Fair Value of Securities Acquired Under Repo - Secured Borrowing 1,161 

2,906 
(k)    Non-insurance SCA Investments
A summary of the Company’s SSAP No. 97 – Investments in Subsidiary, Controlled and Affiliated Entities, non-insurance SCA investments, including their respective asset value and NAIC filing information, as of December 31, 2021 is as follows:













































SCA Name
Gross Asset
Non-Admitted Asset
Net Admitted Assets
NAIC Filing Date
NAIC Filing Type
NAIC Filing Balance
Re-submission Required?
AZLPF
$ 789 

— 

789 

5/25/2021
S2
777 

N
Total
$ 789 

— 

789 

XXX
XXX
777 

XXX
(l)    FHLB Agreements
The Company held Class A FHLB membership stock of $10 and $10 at December 31, 2021 and 2020 and activity stock of $80 and $60 at December 31, 2021 and 2020, respectively. The Company has a fully collateralized borrowings with a balance of $2,000 and $1,500 as of December 31, 2021 and 2020 which is recorded in Borrowed money on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. All FHLB transaction activity occurs in the Company's general account.
Securities collateral pledged to FHLB at December 31 is as follows:















2021
2020
Carrying value
$ 1,988 

1,336 
Fair value
2,381 

1,736 
The maximum of collateral pledged to FHLB during the year ended December 31 was as follows:















2021
2020
Carrying value
$ 4,290 

1,994 
Fair value
5,052 

2,254 










38 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

As of December 31, 2021 and 2020, the Company had $2,000 and $1,500, respectively, in total borrowing capacity under its agreement with the FHLB. The maximum amount of aggregate borrowing from FHLB during the years ended December 31, 2021 and 2020 was $4,000 and $2,000, respectively. Borrowings are not subject to prepayment penalties. Outstanding borrowings as of December 31, 2021, were issued on various dates ranging from October 17, 2016 to December 20, 2021 and interest rates on those borrowings range from 0.2% to 3.2%. Interest paid on borrowings was $17 and $15 for the year ended December 31, 2021 and 2020 .
(m)    Restricted Assets
As of December 31, 2021 and 2020, the Company had the following restricted assets, including assets pledged to others as collateral:







































Gross Restricted




Percentage


Total general account
Total from prior year
Increase (decrease)
Total current year admitted restricted
Gross restricted to total assets
Admitted restricted to total admitted assets
Collateral held under security lending arrangements
$ 3,094 

2,673 

421 

3,094 

1.8  %
1.8  %
FHLB Capital Stock
90 

70 

20 

90 

— 

— 
On deposit with states
4 

4 

— 

4 

— 

— 
On deposit with other regulatory bodies
27 

19 

8 

27 

— 

— 
Pledged as collateral to FHLB (including assets backing funding agreements)
1,988 

1,336 

652 

1,988 

1.1 

1.1 
Derivative collateral
2,338 

2,266 

72 

2,338 

1.3 

1.3 
Modco Assets
25,773 

— 

25,773 

25,773 

14.8 

14.9 
Total restricted assets
$ 33,314 

6,368 

26,946 

33,314 

19.0  %
19.1  %
(n)    Low Income Housing Tax Credits
As of December 31, 2021 the Company had various LIHTC investments with a range of 4 to 13 remaining years of unexpired tax credits and no required holding period.
The amount of tax credits and other tax benefits recognized during the years ended December 31, 2021, 2020 and 2019 is $44, $38, and $29, respectively.
The balance of the investment recognized in the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus for the years ended December 31, 2021 and 2020 is $503 and $403, respectively.
Additionally, the Company's LIHTC investments require a commitment of capital. The Company has open capital commitments of $271 and $199 at December 31, 2021 and 2020, respectively, which are recorded as an unfunded commitment liability in other liabilities. LIHTC commitments are considered an open capital commitment beginning when the Company formally commits to fund the LIHTC, but they are not recorded as an unfunded commitment asset and liability until the Company has begun funding the LIHTC.
(o)    5GI Securities
As of December 31, 2021 and 2020, details regarding the Company's 5GI securities are as follows:























2021
2020

Number of Securities Aggregate Book Adjusted Carrying Value Aggregate Fair Value
Number of Securities Aggregate Book Adjusted Carrying Value Aggregate Fair Value
Bonds — 
$ — 
— 

— 
$ — 
— 
Loan-backed and structured securities — 
— 
— 

1 
1 
1 
Total — 
$ — 
— 

1 
$ 1 
1 










39 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(6)    Fair Value Measurements
SSAP No. 100R – Fair Value establishes a fair value hierarchy that prioritizes the inputs used in the valuation techniques to measure fair value.
Level 1 –     Unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date.
Level 2 –     Valuations derived from techniques that utilize observable inputs, other than quoted prices included in Level 1, which are observable for the asset or liability either directly or indirectly, such as:
(a)    Quoted prices for similar assets or liabilities in active markets.
(b)    Quoted prices for identical or similar assets or liabilities in markets that are not active.
(c)    Inputs other than quoted prices that are observable.
(d)    Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 –     Valuations derived from techniques in which the significant inputs are unobservable. Level 3 fair values reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).
The Company has analyzed the valuation techniques and related inputs, evaluated its assets and liabilities reported at fair value, and determined an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Based on the results of this evaluation and investment class analysis, each financial asset and liability was classified into Level 1, 2, or 3.
The following presents the assets and liabilities measured at fair value on a recurring basis and their corresponding level in the fair value hierarchy at December 31:





























2021


Level 1
Level 2 (a)
Level 3
Total
Assets at fair value:







Bonds
$ — 

3 

— 

3 
Common stocks
$ 213 

— 

— 

213 
Derivative assets
114 

2,644 

— 

2,758 
Separate account assets
21,319 

7,043 

— 

28,362 
Total assets reported at fair value
21,646 

9,690 

— 

31,336 
Liabilities at fair value:







Derivative liabilities
119 

1,894 

15 

2,028 
Separate account derivative liabilities
— 

5,329 

— 

5,329 
Total liabilities reported at fair value
$ 119 

7,223 

15 

7,357 









(a) The Company does not have any assets or liabilities measured at net asset value (NAV) that are included in Level 2 within this table.










40 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)



























2020


Level 1
Level 2 (a)
Level 3
Total
Assets at fair value:







Bonds
$ — 

4 

— 

4 
Common stocks
163 

— 

1 

164 
Derivative assets
136 

4,036 

7 

4,179 
Separate account assets
21,789 

11,408 

— 

33,197 
Total assets reported at fair value
22,088 

15,448 

8 

37,544 
Liabilities at fair value:







Derivative liabilities
96 

3,161 

18 

3,275 
Separate account derivative liabilities
— 

10,332 

— 

10,332 
Total liabilities reported at fair value
$ 96 

13,493 

18 

13,607 









(a) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 within this table.
The following is a discussion of the methodologies used to determine fair values for the assets and liabilities listed in the above table. These fair values represent an exit price (i.e., what a buyer in the marketplace would pay for an asset in a current sale or charge to transfer a liability). The Company has not made changes to valuation techniques in 2021.
(a)    Valuation of Bonds and Unaffiliated Stock
The fair value of bonds is based on quoted market prices in active markets when available. Based on the market data, the securities are categorized into asset class, and based on the asset class of the security, appropriate pricing applications, models and related methodology, and standard inputs are utilized to determine what a buyer in the marketplace would pay for the security in a current sale. When quoted prices are not readily available or in an inactive market, standard inputs used in the valuation models, listed in approximate order of priority, include, but are not limited to, benchmark yields, reported trades, Municipal Securities Rulemaking Board reported trades, Nationally Recognized Municipal Securities Information Repository material event notices, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. In some cases, including private placement securities and certain difficult-to-price securities, internal pricing models may be used that are based on market proxies. Internal pricing models based on market spread and U.S. Treasury rates are used to value private placement holdings. The primarily unobservable input used in the discounted cash flow models for states and political subdivisions, foreign government, and corporate bonds is a corporate index option adjusted spread (OAS). CDO and certain mortgage-backed securities are priced by a third-party vendor and the Company internally reviews the valuation for reasonableness. The Company does not have insight into the specific inputs; however, the key unobservable inputs would generally include default rates.
Generally, U.S. Treasury securities and exchange-traded stocks are included in Level 1. Most bonds for which prices are provided by third-party pricing sources are included in Level 2, because the inputs used are market observable. Bonds for which prices were obtained from broker quotes, certain bonds without active trading markets and private placement securities that are internally priced are included in Level 3.
The fair value of unaffiliated common stocks is based on quoted market prices in active markets when available and included in Level 1. When quoted prices are not readily available or in an inactive market, the Company arrives at fair value utilizing internal pricing models based on available market inputs or obtains valuations from third party brokers or investment managers. Such investments may be categorized in Level 2 or Level 3. The primary unobservable input used to value common stock are indicative quotes received from third-party vendors.










41 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

The fair value of unaffiliated preferred stocks is based on quoted market prices in active markets. When available, such investments are included in Level 1. When quoted prices are not readily available or in an inactive market, the Company arrives at fair value utilizing internal pricing models based on available market inputs. Such investments may be categorized in Level 2 or Level 3.
(b)    Valuation of Derivatives
Active markets for OTC options do not exist. The fair value of OTC options is derived internally, by calculating their expected discounted cash flows, using a set of calibrated, risk-neutral stochastic scenarios, including a market data monitor, a market data model generator, a stochastic scenario calibrator, and the actual asset pricing calculator. The valuation results are reviewed by Management via the Pricing Committee. OTC options that are internally priced, foreign currency swaps, credit default swaps (CDS), To Be Announced (TBA) securities, and interest rate swaps (IRS) are included in Level 2, because they use market observable inputs. TRS are included in Level 3 because they use valuation techniques in which significant inputs are unobservable. The fair value of ETOs and futures are based on quoted market prices and are generally included in Level 1.
Certain derivatives are priced using external third-party vendors. The Company has controls in place to monitor the valuations of these derivatives. Using market observable inputs, IRS prices are derived from a third-party source and are independently recalculated internally and reviewed for reasonableness at the position level on a monthly basis. TRS prices are obtained from the respective counterparties. These prices are also internally recalculated and reviewed for reasonableness at the position level on a monthly basis. The Company does not have insight into the specific inputs used by third-party vendors; however, the key unobservable input would generally include the spread.
(c)    Valuation of Separate Account Assets and Separate Account Derivative Liabilities
Separate account assets and Separate account derivative liabilities, with the exception of certain bonds, cash, cash equivalents, and investment income due and accrued, are carried at fair value, which is based on the fair value of the underlying assets which are described throughout this note. Funds in the separate accounts are primarily invested in variable investment option funds with the following investment types: bond, domestic equity, international equity, or specialty. Variable investment option funds are included in Level 1 because their fair value is based on quoted prices in active, observable markets. The remaining investments are categorized similar to the investments held by the Company in the general account (e.g., if the separate account invested in bonds, short-term investments and derivatives, that portion could be classified within Level 2 or Level 3). Certain bonds, cash, and cash equivalents, along with related accrued investment income, carried at amortized cost within the separate account have an amortized cost of $19,917 and $12,704 as of December 31, 2021 and 2020, respectively, and a fair value of $20,719 and $13,689 as of December 31, 2021 and 2020, respectively. Separate account assets carried at amortized cost are included in the table in section 6(h) below.
(d)    Level 3 Rollforward
The following table provides a reconciliation of the beginning and ending balances for the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis:








42 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)























January 1, 2021 Transfers into
Level 3		 Transfers out
of Level 3		 Total gains
and (losses)
included in
Net Income		 Total gains
and (losses)
included in
Surplus		 Purchases, issuances, sales and settlements December 31, 2021








Preferred stocks — 
41 
— 
— 
— 
(41)
— 
Common stocks 1 
— 
— 
— 
— 
(1)
— 
TRS assets 7 
— 
— 
297 
(7)
(297)
— 
Total Level 3 Assets 8 
— 
— 
297 
(7)
(298)
— 








TRS liabilities (18)
— 
— 
(423)
3 
423 
(15)
Total Level 3 Liabilities $ (18)
— 
— 
(423)
3 
423 
(15)

























January 1, 2020 Transfers into
Level 3		 Transfers out
of Level 3		 Total gains
and (losses)
included in
Net Income		 Total gains
and (losses)
included in
Surplus		 Purchases, issuances, sales and settlements December 31, 2020








Common stocks 1 
— 

— 
— 
— 
1 
TRS assets 1 
— 
— 
960 
6 
(960)
7 
Total Level 3 Assets 2 
— 
— 
960 
6 
(960)
8 








TRS liabilities (13)
— 
— 
(568)
(5)
568 
(18)
Total Level 3 Liabilities $ (13)
— 
— 
(568)
(5)
568 
(18)
(e)    Transfers
The Company reviews its fair value hierarchy classifications annually. Transfers between levels occur when there are changes in the observability of inputs and market activity.
All transfers into Level 3 were a result of observable inputs no longer being considered reliable or could no longer be validated against an alternative source. The transfers out of Level 3 were a result of securities no longer being carried at fair value as a result of new availability of reliable observable inputs or the ability to validate market price of the security against an alternative source.
(f)    Sensitivity of Fair Value Measurements to Changes in Unobservable Inputs
Bonds: The primary unobservable input used in the discounted cash flow models for states and political subdivisions, foreign government, and corporate bonds is a corporate index option adjusted spread (OAS). The corporate index OAS used is based on a security's sector, rating, and average life. A significant increase (decrease) of the corporate index OAS in isolation could result in a decrease (increase) in fair value.
CDO and certain mortgage-backed securities are priced by a third-party vendor and the Company internally reviews the valuation for reasonableness. The Company does not have insight into the specific inputs used; however, the key unobservable inputs would generally include default rates. A significant increase (decrease) in default rates in isolation could result in an decrease (increase) in fair value.
Common and preferred stocks: The primary unobservable inputs used to value common and preferred stock are indicative quotes received from third-party vendors and subsequent offering prices. A significant increase (decrease) in either the indicative quotes or offering prices in isolation could result in an increase (decrease) in fair value.
Derivative assets and liabilities: The TRS are priced by a third-party vendor and the Company internally reviews the valuation for reasonableness. The Company does not have insight into the specific inputs used; however, the key unobservable input would generally include the spread. For a long position, a significant increase (decrease) in the spread used in the fair value of the TRS in isolation could result in higher (lower)










43 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

fair value. For a short position, a significant increase (decrease) in the spread used in the fair value of the TRS in isolation could result in lower (higher) fair value.
(g)    Estimates
The Company has been able to estimate the fair value of all financial assets and liabilities.
(h)    Aggregate Fair Value of Financial Instruments
The following tables present the carrying amounts and fair values of all financial instruments at December 31 (b):

































2021






Fair Value


Aggregate Fair Value
Admitted Assets/
Carrying Value
Level 1
Level 2
Level 3
Financial Assets









Bonds
$ 104,413 

93,817 

4,062 

81,773 

18,578 
Common stocks, unaffiliated
303 

303 

213 

— 

90 
Mortgage loans on real estate
17,673 

17,154 

— 

— 

17,673 
Cash equivalents
3,210 

3,210 

1,694 

1,516 

— 
Derivative assets
2,758 

2,682 

114 

2,644 

— 
Securities lending reinvested collateral assets
2,594 

2,594 

— 

2,594 

— 
Other invested assets
1,052 

1,052 

— 

102 

950 
COLI
713 

713 

— 

713 

— 
Separate account assets
49,082 

48,279 

22,298 

26,784 

— 
Financial Liabilities









Deposit-type contracts
$ 5,056 

4,577 

— 

— 

5,056 
Other investment contracts
97,132 

88,311 

— 

— 

97,132 
Borrowed money
1,976 

2,001 

— 

— 

1,976 
Derivative liabilities
2,028 

2,023 

119 

1,894 

15 
Payable for securities lending
2,594 

2,594 

— 

2,594 

— 
Payable for securities
271 

271 

— 

— 

271 
Separate account liabilities
49,082 

48,279 

22,298 

26,784 

— 











(b) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 in this table. In addition, the Company has no assets or liabilities for which it is not practicable to measure at fair value.










44 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

































2020






Fair Value


Aggregate Fair Value
Admitted Assets/ Carrying Value
Level 1
Level 2
Level 3
Financial Assets









Bonds
$ 115,710 

99,088 

4,995 

93,714 

17,001 
Preferred stocks, unaffiliated
43 

41 

— 

— 

43 
Common stocks, unaffiliated
234 

234 

163 

— 

71 
Mortgage loans on real estate
17,117 

15,634 

— 

— 

17,117 
Cash equivalents
878 

878 

448 

430 

— 
Derivative assets
4,179 

4,114 

136 

4,036 

7 
Securities lending reinvested collateral assets
2,587 

2,587 

— 

2,587 

— 
Other invested assets
757 

757 

— 

23 

734 
COLI
653 

653 

— 

653 

— 
Separate account assets
46,886 

45,901 

22,732 

24,154 

— 
Financial Liabilities









Deposit-type contracts
$ 5,395 

4,749 

— 

— 

5,395 
Other investment contracts
103,518 

95,083 

— 

— 

103,518 
Borrowed money
1,516 

1,501 

— 

— 

1,516 
Derivative liabilities
3,275 

3,262 

96 

3,161 

18 
Payable for securities lending
2,587 

2,587 

— 

2,587 

— 
Payable for securities
199 

199 

— 

— 

199 
Separate account liabilities
46,886 

45,901 

22,732 

24,154 

— 











(b) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 in this table. In addition, the Company has no assets or liabilities for which it is not practicable to measure at fair value.
A description of the Company’s valuation techniques for financial instruments not reported at fair value and categorized within the fair value hierarchy is shown below:
Valuation of FHLB Stock
FHLB stock, included in Common stocks, is not traded in an active market and is categorized in Level 3. FHLB stock is carried at cost, which approximates fair value unless it is impaired, based on provisions within the Company’s FHLB agreement that allow for return of outstanding shares of FHLB stock at the Company’s cost basis.
Valuation of Mortgage Loans on Real Estate
The fair value of commercial mortgage loans on real estate is calculated by analyzing individual loans and assigning ratings to each loan based on a combination of loan-to-value ratios and debt service coverage ratios. Fair value is determined based on these factors as well as the contractual cash flows of each loan and the current market interest rates for similar loans. The fair value of residential mortgage loans on real estate is calculated by discounting estimated cash flows, with discount rates based on current market conditions.








45 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

Valuation of Cash Equivalents
Cash equivalents are comprised of money market mutual funds, cash equivalent bonds, and reverse repurchase agreements. The fair value of money market mutual funds and cash equivalent bonds are based on quoted market prices in active markets and included in Level 1. Reverse repurchase prices are provided by third-party pricing sources and included in Level 2, because the inputs used to determine fair value are market observable.
Valuation of Securities Lending Reinvested Collateral Assets
Collateral held from securities lending agreements is primarily comprised of short-term and long-term highly liquid fixed-maturity securities. Fair values are determined and classified within the fair value hierarchy in a manner consistent with the method utilized to determine the fair value of similar securities (fixed-income securities, equity securities, cash and cash equivalents) held within the Company’s general account investment portfolio.
Valuation of Other Invested Assets
Other invested assets include LIHTC investments, limited partnership investments, loans to affiliates, and restricted stock unit (RSU) assets. As there is no observable market data on which to calculate fair value of the LIHTC investment balances, the fair value is set equal to carrying value. Limited partnership investments are recorded using the cost method in line with SSAP No. 48 – Joint Ventures, Partnerships and Limited Liability Companies using unobservable inputs. Loans to affiliates are carried at cost; due to the lack of an active market, the current carrying value is the only market price at which the transaction could be settled, the Company believes cost approximates fair value. Due to the use of unobservable inputs, LIHTC investments, limited partnership investments, and loans to affiliates are categorized as Level 3. RSU assets tied to the share price of Allianz SE stock but does not participate in an active market; given this, it is categorized as Level 2.
Valuation of COLI
The COLI policies held by the Company are carried at their respective cash surrender values, which approximates fair value. The cash surrender value of the policies is based on the value of the underlying assets, which are regularly priced utilizing observable inputs. The COLI asset is included within Other assets on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. At December 31, 2021 and 2020, the cash surrender value in an investment vehicle is $713 and $653, respectively, and is allocated into the following categories based on primary underlying investment characteristics:








2021 2020
Bonds 47.0  % 80.0  %
Stocks 21.0  % 20.0  %
Other Invested Assets 32.0  % —  %
Valuation of Deposit-Type Contracts
Fair values of deposit-type contracts are based on discounted cash flows using internal inputs, including the discount rate and consideration of the Company’s own credit standing and a risk margin for actuarial inputs.
Valuation of Other Investment Contracts
Other investment contracts are included within Life policies and annuity contracts within the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. Other investment contracts include certain reserves related to deferred annuities and other payout annuities that may include life contingencies, but do not have significant mortality risk due to substantial periods certain. Fair values are based on discounted cash flows using internal inputs, including the discount rate and consideration of the Company’s own credit standing and a risk margin for market inputs.










46 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

Valuation of Borrowed Money
The fair value of the FHLB borrowing is calculated on a discounted cash flow basis. Each position includes a monthly interest rate, a maturity payment amount, and a maturity date. The interest and maturity payments are projected as of the valuation date, and the expected cash flows are discounted using the valuation date swap curve.
Valuation of Payable for Securities Lending
Securities lending payable is set equal the to the cash collateral received. Due to the short-term nature of these loans, the carrying value is deemed to approximate fair value.
Valuation of Payable for Securities
Included in Payable for securities is the LIHTC investments unfunded commitment liability. As there is no observable market data on which to calculate fair value of the LIHTC investment unfunded commitment asset and liability, fair value is set equal to carrying value, and the balance is categorized as Level 3.
Valuation of Separate Account Liabilities
The fair value of separate account liabilities approximates the fair value of separate account assets.
(7)    Mortgage Notes Payable
In 2004, the Company obtained an $80 mortgage loan from an unrelated third-party for the Company’s headquarters. In 2005, the Company agreed to enter into a separate loan agreement with the same counterparty in conjunction with the construction of an addition to the Company’s headquarters of $65. This loan was funded in 2006 and combined with the existing mortgage. As of December 31, 2021 and 2020, the combined loan had a balance of $31 and $41, respectively, and is reported within Real estate on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. This 20 year, fully amortizing loan has an interest rate of 5.52%, with a maturity date of August 1, 2024. The level principal and interest payments are made monthly. The loan allows for prepayment; however, it is accompanied by a make-whole provision.
Interest expense for all loans is $2, $3, and $3, in 2021, 2020, and 2019, respectively, and is presented in Net investment income on the Statutory Statements of Operations.
The future principal payments required under the loan are as follows:




2022 $ 11 
2023 12 
2024 8 
2025 — 
2026 — 
2027 and beyond — 
Total $ 31 










47 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(8)    Electronic Data Processing Equipment and Software (EDP)
EDP at December 31 and the changes in the balance for the years then ended are as follows:













2021
2020
Amortization:


Software amortization 8 

7 
Net EDP balance, by major classes of assets:


Servers, computers and peripherals — 

2 
Software 53 

38 
Net EDP balance 53 

40 
Nonadmitted (53)

(38)
Net admitted EDP balance $ — 

2 
The Company has a gross EDP asset of $55 and $73 and accumulated depreciation and amortization of $(2) and $(33) at December 31, 2021 and 2020, respectively. Servers, computers and peripherals are depreciated over the lesser of their useful life or three years and the net balance is nonadmitted. Software is amortized over the lesser of their useful life or five years. Nonoperating software is nonadmitted and operating software is admitted to the extent it meets the criteria defined in SSAP No. 16R - Electronic Data Processing Equipment and Software.

(9)    Income Taxes
(a)    Deferred Tax Assets and Liabilities
The components of the net DTA or net DTL are as follows:

















December 31, 2021

Ordinary
Capital
Total
Total gross deferred tax assets
 $ 998 

48 

1,046 
Statutory valuation allowance adjustments
 — 

— 

— 
Adjusted gross deferred tax assets
 998 

48 

1,046 
Deferred tax assets nonadmitted
 (6)

— 

(6)
Subtotal net admitted deferred tax assets
 992 

48 

1,040 
Deferred tax liabilities
 (536)

(17)

(553)
Net admitted deferred tax assets (liabilities)
 $ 456 

31 

487 



















December 31, 2020

Ordinary
Capital
Total
Total gross deferred tax assets
 $ 911 

52 

963 
Statutory valuation allowance adjustments
 — 

— 

— 
Adjusted gross deferred tax assets
 911 

52 

963 
Deferred tax assets nonadmitted
 — 

— 

— 
Subtotal net admitted deferred tax assets
 911 

52 

963 
Deferred tax liabilities
 (684)

(6)

(690)
Net admitted deferred tax assets (liabilities)
 $ 227 

46 

273 










48 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

















Change

Ordinary
Capital
Total
Total gross deferred tax assets
 $ 87 

(4)

83 
Statutory valuation allowance adjustments
 — 

— 

— 
Adjusted gross deferred tax assets
 87 

(4)

83 
Deferred tax assets nonadmitted
 (6)

— 

(6)
Subtotal net admitted deferred tax assets
 81 

(4)

77 
Deferred tax liabilities
 147 

(10)

137 
Net admitted deferred tax assets (liabilities)
 $ 228 

(14)

214 
The amount of admitted adjusted gross DTAs allowed under each component of SSAP No. 101 – Income Taxes (SSAP No. 101) as of December 31 are as follows:

















December 31, 2021

Ordinary
Capital
Total
Federal income taxes paid in prior years recoverable through loss carrybacks (11.a) $ — 

48 

48 
Adjusted gross DTAs expected to be realized after application of the threshold limitations
 — 

— 

— 
Lesser of 11.b.i or 11.b.ii:
 — 

— 

— 
Adjusted gross DTAs expected to be realized following the balance sheet date (11.b.i.)
 456 

— 

456 
Adjusted gross DTAs allowed per limitation threshold (11.b.ii)
 N/A
N/A
1,533 
Lesser of 11.b.i or 11.b.ii
 456 

— 

456 
Adjusted gross DTAs offset by gross DTLs (11.c)
 536 

— 

536 
Deferred tax assets admitted
 $ 992 

48 

1,040 



















December 31, 2020

Ordinary
Capital
Total
Federal income taxes paid in prior years recoverable through loss carrybacks (11.a) $ — 

3 

3 
Adjusted gross DTAs expected to be realized after application of the threshold limitations
 — 

— 

— 
Lesser of 11.b.i or 11.b.ii:
 — 

— 

— 
Adjusted gross DTAs expected to be realized following the balance sheet date (11.b.i.)
 419 

49 

468 
Adjusted gross DTAs allowed per limitation threshold (11.b.ii)
 N/A
N/A
1,108 
Lesser of 11.b.i or 11.b.ii
 419 

49 

468 
Adjusted gross DTAs offset by gross DTLs (11.c)
 492 

— 

492 
Deferred tax assets admitted
 $ 911 

52 

963 










49 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

















Change

Ordinary
Capital
Total
Federal income taxes paid in prior years recoverable through loss carrybacks (11.a) $ — 

44 

44 
Adjusted gross DTAs expected to be realized after application of the threshold limitations
 — 

— 

— 
Lesser of 11.b.i or 11.b.ii:
 — 

— 

— 
Adjusted gross DTAs expected to be realized following the balance sheet date (11.b.i.)
 37 

(49)

(12)
Adjusted gross DTAs allowed per limitation threshold (11.b.ii)
 N/A
N/A
425 
Lesser of 11.b.i or 11.b.ii
 37 

(49)

(12)
Adjusted gross DTAs offset by gross DTLs (11.c)
 44 

— 

44 
Deferred tax assets admitted
 $ 81 

(5)

76 
Ratios used for threshold limitation as of December 31 are as follows:





























December 31





2021
2020
Change
Ratio percentage used to determine recovery period and threshold limitation amount 1,082  %
705  %
377  %
Amount of adjusted capital and surplus used to determine recovery period threshold limitation $ 10,218 

7,386 

2,832 
Impact of tax planning strategies on the determination of net admitted adjusted gross DTAs is as follows:

















December 31, 2021

Ordinary
Capital
Total
Net admitted adjusted gross DTAs - (percentage of total net admitted adjusted gross DTAs)
 —  %
—  %
—  %



















December 31, 2020

Ordinary
Capital
Total
Net admitted adjusted gross DTAs - (percentage of total net admitted adjusted gross DTAs)
 —  %
93.7  %
93.7  %



















Change

Ordinary
Capital
Total
Net admitted adjusted gross DTAs - (percentage of total net admitted adjusted gross DTAs)
 —  %
(93.7) %
(93.7) %
The Company’s tax planning strategies do not include the use of reinsurance.
(b)    Unrecognized Deferred Tax Liabilities
There are no temporary differences for which DTLs are not recognized.








50 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(c)    Current and Deferred Income Taxes
The significant components of income taxes incurred (i.e. Current income tax expense) include:































December 31
2021-2020 Change
2020-2019 Change

2021
2020
2019

Current year federal tax expense (benefit) - ordinary income $ 1,091 

18 

773 

1,073 

(755)
Current year foreign tax expense (benefit) - ordinary income — 

— 

— 

— 

— 
Subtotal 1,091 

18 

773 

1,073 

(755)
Current year tax expense - net realized capital gains (losses) 249 

— 

(11)

249 

11 
Federal and foreign income taxes incurred $ 1,340 

18 

762 

1,322 

(744)
DTAs and DTLs consist of the following major components:





















December 31
Deferred tax assets
2021
2020
Change
Ordinary:





Unrealized losses
$ 14 

— 

14 
Deferred acquisition costs
186 

169 

17 
Expense accruals
82 

63 

19 
Policyholder reserves
701 

666 

35 
Fixed assets
— 

— 

— 
Nonadmitted assets
15 

13 

2 
Subtotal
998 

911 

87 
Statutory valuation allowance adjustment
— 

— 

— 
Nonadmitted ordinary deferred tax assets
(6)

— 

(6)
Admitted ordinary tax assets
992 

911 

81 







Capital:





Impaired assets
48 

51 

(3)
Unrealized losses
— 

1 

(1)
Subtotal
48 

52 

(4)
Statutory valuation allowance adjustment
— 

— 

— 
Nonadmitted capital deferred tax assets
— 

— 

— 
Admitted capital deferred tax assets
48 

52 

(4)
Admitted deferred tax assets
$ 1,040 

963 

77 










51 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)





















December 31
Deferred tax liabilities
2021
2020
Change
Ordinary:





Investments
$ (53)

(54)

1 
Fixed assets
(4)

(5)

1 
Policyholder reserves
(356)

(445)

89 
Software capitalization
(11)

(7)

(4)
Unrealized gains
(64)

(79)

15 
Other
(48)

(94)

46 
Subtotal
(536)

(684)

148 







Capital:





Unrealized gains
(17)

(6)

(11)
Subtotal
(17)

(6)

(11)
Deferred tax liabilities
$ (553)

(690)

137 
Net deferred tax assets (liabilities)
$ 487 

273 

214 
The realization of the DTAs is dependent upon the Company’s ability to generate sufficient taxable income in future periods. Based on historical results and the prospects for future current operations, management anticipates that it is more likely than not that future taxable income will be sufficient for the realization of the remaining DTAs.
The Coronavirus Aid, Relief, and Economic Security Act, (CARES Act of 2020) was enacted on March 27, 2020, thereby allowing net operating losses (NOLs) arising in tax years beginning after December 31, 2017, and before January 1, 2021 (e.g., NOLs incurred in 2018, 2019, or 2020 by a calendar-year taxpayer) to be carried back to each of the five tax years preceding the tax year of such loss.
In computing taxable income, life insurance companies are allowed a deduction attributable to their life insurance and accident and health reserves. The Tax Act of 2017 significantly changed the methodology by which these reserves are computed for tax purposes. The changes are effective for tax years beginning after 2017 and are subject to a transition rule that spreads the additional income tax liability over the subsequent eight years beginning in 2018.  Due to complexities in the new methodology and limited guidance from the Internal Revenue Service and U.S. Treasury, the Company has recorded provisional amounts for the deferred tax revaluation associated with the changes in the computation of life insurance tax reserves based on information available at December 31, 2017.  Pursuant to Interpretation of the SAP Working Group 18-01: Updated Tax Estimates under the Tax Cuts and Jobs Act, provisional tax computations related to these amounts were reasonably estimated as of December 31, 2017 and have been adjusted based on guidance received from Internal Revenue Service and U.S. Treasury. Adjusted amounts are reflected in the Company's results of operations for the years ended December 31, 2021, 2020, and 2019.
The Change in net deferred income tax is comprised of the following (this analysis is exclusive of the nonadmitted DTAs as the Change in nonadmitted assets is reported separately from the Change in net deferred income tax in the Unassigned surplus section of the Statutory Statements of Capital and Surplus):

















December 31


2021
2020
Change
Net deferred tax assets (liabilities)
 $ 493 

273 

220 
Statutory valuation allowance adjustment
 — 

— 

— 
Net deferred tax assets (liabilities) after statutory valuation allowance
 493 

273 

220 
Tax effect of unrealized gains (losses)
 149 

154 

(5)
Statutory valuation allowance adjustment allocated to unrealized gains (losses)
 — 

— 

— 
Change in net deferred income tax



$ 215 










52 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(d)    Reconciliation of Federal Income Tax Rate to Actual Effective Rate
The provision for federal income taxes incurred is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The significant items causing this difference are as follows:

















December 31, 2021
December 31, 2020
December 31, 2019
Federal income tax rate 21.0  %
21.0  %
21.0  %
Amortization of IMR (1.9)

(1.3)

(3.6)
Dividends received deduction (1.3)

(1.7)

(4.2)
Nondeductible expenses 0.1 

— 

0.9 
Affiliated LLC income (0.2)

(2.4)

— 
COLI (2.4)

(1.0)

(5.5)
Tax hedges (6.5)

0.2 

65.8 
Tax hedge reclassification 73.7 

6.8 

84.7 
Tax credits (9.6)

(7.2)

(13.6)
Prior period adjustments (1.2)

(0.6)

(0.4)
Change in deferred taxes on impairments 0.6 

(5.0)

3.6 
Change in deferred taxes on nonadmitted assets (0.4)

(0.6)

(0.7)
Reinsurance 83.5 

(5.5)

19.8 
Correction of Error 2.0 

— 

— 
NOL Carryback Benefit — 

(12.2)

— 
Tax Contingencies 10.6 

5.5 

— 
Realized Capital Gains Tax 47.4 

(0.1)

— 
Other (1.4)

— 

0.6 
Effective tax rate 214.0  %
(4.1) %
168.4  %






Federal and foreign income taxes incurred (1)
 207.4  %
2.9  %
293.7  %
Realized Capital Gains Tax 47.4 

(0.1)

— 
Change in net deferred tax (40.8)

(6.9)

(125.3)
Effective tax rate 214.0  %
(4.1) %
168.4  %






(1) Prior to 2020, tax on capital gains (losses) was excluded from federal and foreign income taxes incurred and detailed in Note 5(c).
(e)    Carryforwards, Recoverable Taxes, and IRC Section 6603 Deposits
As of December 31, 2021, there are no operating losses or tax credit carryforwards available for tax purposes.
There are no Federal income taxes available for recoupment in the event of future net losses.
There are no aggregate deposits admitted under Section 6603 of the IRC.
The Company had tax contingencies computed in accordance with SSAP No. 5R, Liabilities, Contingencies and Impairment of Assets, and SSAP No. 101 as of December 31, 2021 and 2020. The Company does not believe the tax contingencies will significantly increase within the next 12 months.
The Company recognizes interest and penalties accrued related to unrecognized tax benefits in federal income tax expense. During the years ended December 31, 2021, 2020, and 2019 the Company recognized expenses of $23, $9, and $0 in interest and penalties, respectively. The Company had $32 and $9 for the unrecognized tax benefits and related accrued interest at December 31, 2021 and 2020, respectively.








53 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(f)    Consolidated Federal Income Tax Return
The Company’s federal income tax return is consolidated with AZOA. The method of allocation between the subsidiaries of AZOA is subject to written agreement, approved by the Allianz Life Board of Directors. Allocation is based upon separate return calculations with current credit for net losses. Intercompany tax balances are settled annually after the consolidated return is filed.

The Company is included in the consolidated group for which AZOA files a federal income tax return on behalf of all group members. As a member of the AZOA consolidated group, the Company is no longer subject to U.S. Federal and non-U.S. income tax examinations for years prior to 2016, though examinations of combined returns filed by AZOA, which include the Company, by certain U.S. state and local tax authorities, may still be conducted for 2008 and subsequent years. The Internal Revenue Service (IRS) examination of AZOA for the 2016 and 2017 income tax returns has completed the exam phase and has been assigned to appeals for an issue related to variable annuity hedging income recognition. The IRS has also initiated an examination of AZOA's 2018 income tax return, which is expected to close by the end of 2022.
As of December 31, 2021, the companies included in the consolidated group for which AZOA files a federal income tax return is included below:




Members of Consolidated Tax Group
Allianz Life Insurance Company of North America Allianz Life Insurance Company of Missouri
Allianz Life Insurance Company of New York Allianz Underwriters Insurance Company
AZOA Services Corporation AGCS Marine Insurance Company
Allianz Global Risks US Insurance Company William H. McGee & Co., Inc.
Allianz Reinsurance of America, Inc. Allianz Reinsurance Management Services, Inc.
Allianz Technology of America, Inc. Fireman’s Fund Insurance Company
Allianz Renewable Energy Partners of America LLC Fireman’s Fund Indemnity Corporation
Allianz Renewable Energy Partners of America 2 LLC National Surety Corporation
PFP Holdings, Inc. Chicago Insurance Company
AZL PF Investments, Inc. Interstate Fire & Casualty Company
Dresdner Kleinwort Pfandbriefe Investments II, Inc. Associated Indemnity Corporation
Allianz Fund Investments, Inc. American Automobile Insurance Company
Yorktown Financial Companies, Inc. The American Insurance Company
Questar Capital Corporation Allianz Risk Transfer, Inc.
Questar Agency, Inc. Allianz Risk Transfer (Bermuda), Ltd.
(10)    Accident and Health Claim Reserves
Accident and health claim reserves are based on estimates that are subject to uncertainty. Uncertainty regarding reserves of a given accident year is gradually reduced as new information emerges each succeeding year, thereby allowing more reliable reevaluations of such reserves. While management believes that reserves as of December 31, 2021 are appropriate, uncertainties in the reserving process could cause reserves to develop favorably or unfavorably in the near term as new or additional information emerges. Any adjustments to reserves are reflected in the operating results of the periods in which they are made. Movements in reserves could significantly impact the Company’s future reported earnings.








54 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

Activity in the accident and health claim reserves is summarized as follows:





















2021
2020
2019
Balance at January 1, net of reinsurance recoverables of $665, $654, and $574, respectively
$ 337 

335 

299 
Incurred related to:





Current year
189 

139 

143 
Prior years
(47)

(46)

(24)
Total incurred
142 

93 

119 
Paid related to:





Current year
10 

7 

7 
Prior years
84 

84 

76 
Total paid
94 

91 

83 
Balance at December 31, net of reinsurance recoverables of $734, $665, and $654, respectively
$ 385 

337 

335 
Prior year incurred claim reserves for 2021, 2020 and 2019 were favorable as a result of re-estimation of unpaid claims and claim adjustment expenses, principally on the individual LTC line of business.










55 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(11)    Reinsurance
The Company primarily enters into reinsurance agreements to manage risk resulting from its life, annuity, and accident and health businesses, as well as businesses the Company has chosen to exit. In the normal course of business, the Company seeks to limit its exposure to loss by ceding risks under yearly renewal term, coinsurance, and modified coinsurance.
The Company monitors the financial exposure and financial strength of the reinsurers on an ongoing basis. The Company attempts to mitigate risk by securing recoverable balances with various forms of collateral, including arranging trust accounts and letters of credit with certain reinsurers.
The effect of reinsurance on reserves, deposit-type contracts, and claims, for amounts recoverable from other insurers, was as follows:















For the years ended December 31,
Reduction in:
2021
2020
Aggregate reserves
$ 16,141 

6,636 
Deposit-type contracts
132 

99 
Policy and contract claims
28 

29 
Reinsurance reserves, recoverables, and receivables at December 31, 2021 and 2020, are covered by collateral of $14,731 and $6,140, respectively, in addition to the letter of credit on behalf of AZMO, as noted in Note 2.
Life insurance, annuities, and accident and health business assumed from and ceded to other companies are as follows:



























Year ended
Direct amount
Ceded to other companies
Assumed from other companies
Net amount
December 31, 2021







Life insurance in-force
$ 65,088 

41,500 

50 

23,638 
Premiums:







Life
1,453 

94 

1 

1,360 
Annuities
13,226 

623 

— 

12,603 
Accident and health
168 

68 

62 

162 
Total premiums
$ 14,847 

785 

63 

14,125 









December 31, 2020







Life insurance in-force
$ 53,399 

34,345 

54 

19,108 
Premiums:







Life
1,200 

88 

1 

1,113 
Annuities
9,473 

398 

— 

9,075 
Accident and health
170 

68 

56 

158 
Total premiums
$ 10,843 

554 

57 

10,346 









December 31, 2019







Life insurance in-force
$ 45,817 

30,060 

58 

15,815 
Premiums:







Life
989 

88 

1 

902 
Annuities
12,135 

387 

— 

11,748 
Accident and health
172 

70 

53 

155 
Total premiums
$ 13,296 

545 

54 

12,805 
The Company holds securities backing term life and universal life with secondary guarantees ceded reserves in compliance with Actuarial Guideline 48. As of December 31, 2021 and 2020, the Company had 8 and 7 reinsurance










56 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

contracts, respectively, in which risks under covered policies have been ceded. The Company held primary securities in an amount at least equal to the required level of primary securities for all of these contracts.
There are no nonaffiliated reinsurers owned in excess of 10% or controlled, either directly or indirectly, by the Company or by a representative, officer, trustee, or director of the Company.
There are no policies issued by the Company that have been reinsured with a company chartered in a country other than the United States that is owned in excess of 10% or controlled directly or indirectly by an insured, a beneficiary, a creditor, or any other person not primarily engaged in the insurance business.
The Company does not have any reinsurance agreements in effect under which the reinsurer may unilaterally cancel any reinsurance for reasons other than for nonpayment of premium or other similar credits.
The Company does not have reinsurance agreements in effect such that the amount of losses paid or accrued through the statement date may result in a payment to the reinsurer of amounts that, in aggregate and allowing for offset of mutual credits from other reinsurance agreements with the same reinsurer, exceed the total direct premium collected under the reinsured policies.
The Company did not write off any uncollectible recoverables during 2021, 2020, and 2019.
The Company has reported in its operations $43 of claims incurred for the current year ended, as a result of commutation of reinsurance with Hannover Life Reassurance Company of America.
Effective January 1, 2021, the Company executed a new reinsurance agreement with Hannover Life Reassurance Company of America that covers certain in force fixed annuity policies. The agreement resulted in a reduction in Policyholder liabilities, life policies, and annuity contracts in the amount of $161 as of December 31, 2021.
Effective September 1, 2021, the Company executed a new reinsurance agreement with Hannover Life     Reassurance Company of America that covers certain in force fixed annuity policies, and resulted in $185 of reserve credit as of December 31, 2021.
Effective September 30, 2021, the Company executed a new reinsurance agreement with Munich American Reassurance Company that covers certain in force fixed annuity policies, and resulted in $444 of reserve credit as of December 31, 2021.
Effective October 1, 2021, the Company executed a new reinsurance agreement with Hannover Life Reassurance Company of America that covers certain in force fixed annuity policies, and resulted in $206 of reserve credit as of December 31, 2021.
Effective October 1, 2021 the Company executed a new reinsurance agreement with Resolution Re LTD that covers certain in force fixed annuity policies. This covers approximately $26,394 of in force fixed reserves, but did not result in any reinsurance credit as this agreement is modified coinsurance.
Effective October 1, 2021, the Company executed a new reinsurance agreement with Talcott Resolution Life Ins Co that covers certain in force fixed annuity policies, and resulted in $8,178 of reserve credit as of December 31, 2021. The Company transferred assets with an approximate book value of $8,000 as of October 1, 2021 to Talcott Resolution Life Ins Co as part of this coinsurance agreement on the closing date of December 29, 2021. The transfer was accounted for as a sale in accordance with SSAP No. 103R, and the Company has no continuing involvement with these assets.
Effective November 1, 2021, the Company executed a new reinsurance agreement with RGA Reinsurance Company that covers certain in force fixed annuity policies, and resulted in $300 of reserve credit as of December 31, 2021.








57 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(12)    Annuity Actuarial Reserves and Deposit Liabilities by Withdrawal Characteristics
Information regarding the Company’s annuity actuarial reserves and deposit liabilities by withdrawal characteristics at December 31 is as follows:





























2021
Percentage of total
2020
Percentage of total
Subject to discretionary withdrawal:







With market value adjustment
$ 48,992 

33  %
$ 43,198 

31  %
At book value less current surrender charges of 5% or more
37,866 

25 

36,364 

26 
At market value
20,998 

13 

21,361 

14 
Total with adjustment or at market value
107,856 

71 

100,923 

71 
At book value without adjustment (minimal or no charge or adjustment)
33,967 

23 

30,641 

22 
Not subject to discretionary withdrawal
7,380 

5 

8,133 

6 
Total gross
149,203 

100  %
139,697 

100  %
Reinsurance ceded
11,960 



2,523 


Total net
$ 137,243 



$ 137,174 


Amount included in At book value less current charges of 5% or more that will move to At book value without adjustment in the year after the statement date:
$ 2,798 



$ 6,776 


















Reconciliation of total annuity actuarial reserves and deposit fund liabilities:
2021
2020
Life, Accident and Health Annual Statement:



Annuities, net (excluding supplementary contracts with life contingencies)
$ 88,413 

95,185 
Supplemental contracts with life contingencies, net
2,083 

2,091 
Deposit-type contracts
4,577 

4,749 
Subtotal
95,073 

102,025 
Separate Accounts Annual Statement:



Annuities, net (excluding supplementary contracts with life contingencies)
42,155 

35,137 
Supplemental contracts with life contingencies, net
15 

11 
Subtotal
42,170 

35,148 
Total annuity actuarial reserves and deposit fund liabilities
$ 137,243 

137,174 










58 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(13)    Life Actuarial Reserves by Withdrawal Characteristics
Information regarding the Company’s life actuarial reserves by withdrawal characteristics at December 31 is as follows:













2021
General Account Account value Cash value Reserve
Subject to discretionary withdrawal, surrender values, or policy loans:


Universal life $ 817 
816 
822 
Universal life with secondary guarantees 59 
53 
144 
Indexed life 6,871 
5,945 
5,989 
Other permanent cash value life insurance 105 
105 
105 
Variable universal life 2 
2 
2 
Not subject to discretionary withdrawal or no cash values:


Term policies without cash value XXX XXX 199 
Disability, active lives XXX XXX 49 
Disability, disabled lives XXX XXX 6 
Miscellaneous reserves XXX XXX 46 
Total gross 7,854 
6,921 
7,362 
Reinsurance ceded 616 
616 
878 
Total net $ 7,238 
6,305 
6,484 





2020
General Account Account value Cash value Reserve
Subject to discretionary withdrawal, surrender values, or policy loans:


Universal life $ 845 
844 
851 
Universal life with secondary guarantees 61 
54 
158 
Indexed life 5,458 
4,701 
4,738 
Other permanent cash value life insurance 115 
115 
115 
Variable universal life 3 
3 
3 
Not subject to discretionary withdrawal or no cash values:


Term policies without cash value XXX XXX 204 
Disability, active lives XXX XXX 48 
Disability, disabled lives XXX XXX 6 
Miscellaneous reserves XXX XXX 54 
Total gross 6,482 
5,717 
6,177 
Reinsurance ceded 645 
644 
904 
Total net $ 5,837 
5,073 
5,273 




The Company does not have any Life policies with guarantees in the separate account.





2021
Separate Account Nonguaranteed Account value Cash value Reserve
Subject to discretionary withdrawal, surrender values, or policy loans:


Variable universal life $ 21 
21 
21 
Total gross 21 
21 
21 










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ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)










Reinsurance ceded — 
— 
— 
Total net $ 21 
21 
21 





2020
Separate Account Nonguaranteed Account Value Cash Value Reserve
Subject to discretionary withdrawal, surrender values, or policy loans:


Variable universal life $ 19 
18 
18 
Total gross 19 
18 
18 
Reinsurance ceded — 
— 
— 
Total net $ 19 
18 
18 












Reconciliation of total life actuarial reserves: 2021 2020
Life, Accident, and Health Annual Statement:

Life insurance, net $ 6,412 
$ 5,210 
Disability, active lives, net 47 
47 
Disability, disabled lives, net 1 
1 
Miscellaneous reserves, net 24 
14 
Subtotal 6,484 
5,273 
Separate Accounts Annual Statement:

Life insurance, net 21 
18 
Subtotal 21 
18 
Total life actuarial reserves $ 6,505 
$ 5,291 

(14)    Separate Accounts
The Company’s separate accounts represent funds held for the benefit of contract holders entitled to payments under variable annuity contracts, variable life policies and market value adjusted annuity contracts issued through the Company’s separate accounts and underwritten by the Company. As of December 31, 2021 and 2020, the Company's separate accounts are classified as nonguaranteed. Information regarding the Company’s separate accounts for the years ended December 31 is as follows:











2021
2020
Premiums, considerations, or deposits 5,927 

4,149 
Reserves for accounts with assets at fair value 21,209 

21,574 
Reserves for accounts with assets at amortized cost 20,982 

13,592 
Total reserves 42,191 

35,166 
By withdrawal characteristics:


At book value without MV adjustment and with current surrender charge of 5% or more 18,665 

12,643 
At fair value 21,166 

21,535 
At book value without MV adjustment and with current surrender charge of less than 5% 2,326 

959 
Subtotal 42,157 

35,137 
Not subject to discretionary withdrawal 34 

29 
Total 42,191 

35,166 










60 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

As of December 31, 2021 and 2020, the Company’s separate accounts included legally insulated assets and non-insulated assets attributed to the following products/transactions:























2021
2020
Product/transaction
Legally insulated Not legally insulated
Legally insulated Not legally insulated
Variable Annuities
$ 21,158 
— 

21,602 
— 
Variable Life
21 
— 

19 
— 
Variable Annuities (Non-Unitized Insulated)
524 
— 

998 
— 
Variable Annuities (Non-Unitized Non-Insulated)
— 
26,548 

— 
23,244 
Variable Annuities (MN MVA)
— 
28 

— 
38 
Total
$ 21,703 
26,576 

22,619 
23,282 
The Company’s separate account liabilities contain guaranteed benefits. The liabilities for guaranteed benefits are supported by the Company’s general account assets. To compensate the general account for the risk taken, the separate account paid risk charges of $171, $180, $204, $212, and $221 during the past five years, respectively. The general account of the Company paid $4, $19, $16, $5, and $0 towards separate account guarantees during the past five years, respectively.
A reconciliation of net transfers to (from) separate accounts for the years ended December 31 is included in the following table:



















2021
2020
2019
Transfers as reported in the Summary of Operations of the Separate Accounts Annual Statement:




Transfers to separate accounts $ 5,927 

4,149 

1,277 
Transfers from separate accounts (3,507)

(2,689)

3,975 
Net transfers to separate accounts 2,420 

1,460 

5,252 
Reconciling adjustments:




Other adjustments 4 

— 

2 
Transfers as reported in the Statutory Statements of Operations $ 2,424 

1,460 

5,254 
(15)Related-Party Transactions
(a)     Organization Changes
On October 11, 2018, the Company announced the decision to sell the Questar Capital and Asset Management representative network to an unaffiliated wealth management firm. The closing date of the sale was March 1, 2019.
The Company legally dissolved and terminated its subsidiary, Allianz Annuity Company of Missouri (AAMO), by voluntary action on February 24, 2020. Upon termination, AAMO paid an insignificant dividend to the Company.
On July 1 2020, American Financial Marketing, LLC, Ann Arbor Annuity Exchange, LLC, GamePlan Financial Marketing, LLC, and The Annuity Store Financial & Insurance Services, LLC, all of which are wholly owned subsidiaries of TruChoice Financial Group, LLC (TruChoice), which is a wholly owned subsidiary of AIIG, which is a wholly owned subsidiary of the Company, merged into TruChoice. TruChoice was the surviving entity.
Allianz Investment Management U.S. LLC, a Minnesota limited company was formed on October 11, 2020. Allianz Life is its direct parent.
On January 1, 2021, the Company formed Allianz Strategic Investments (ASI), a non-insurance subsidiary. ASI’s sole operations are investment activities associated with direct equity holdings performed in coordination










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ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

with Allianz Life. Allianz Life has made various capital contributions into ASI in the form of preferred and common stock investments as indicated in the table below in 15(e) on page 63.
The company legally dissolved and terminated its subsidiary Questar Asset Management (QAM) on September 30, 2021. Upon termination, QAM paid a dividend to Yorktown. Yorktown subsequently paid a dividend to the Company as indicated in the table below in 15(e) on page 63.
(b)    Related-Party Invested Assets
The Company has an agreement to lend AZOA $39. The remaining loan balance was $30 and $39 as of December 31, 2021 and 2020, respectively, and is included in Other invested assets on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. Repayment of this loan began in 2021 and has a final maturity date of August 30, 2023. The interest rate is a fixed rate of 0.34%. Interest income earned and accrued had an immaterial impact to the Company during 2021, 2020, and 2019, respectively.
The Company invests in limited partnerships that are managed by its affiliate Pacific Investment Management Company (PIMCO). The total committed capital for the limited partnerships is $123 of which $63 and $45 is unfunded as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the fair value of the investment is $64 and $35 respectively, and is recorded in Other invested assets on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
The Company has a seed money investment in exchange traded funds that are managed by a related party, PIMCO, with a reported balance of $33 as of December 31, 2021 within Other invested assets on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.

The Company invests in bonds that are managed by a related party, PIMCO. The total committed capital for the bond is $360, of which $186 was unfunded as of December 31, 2021. The Company reported a balance of $174 as of December 31, 2021 related to the PIMCO bonds.

The Company has a seed money investment in exchange traded funds that are managed by a related party, AIM. The Company reported a balance of $71 and $58 as of December 31, 2021 and 2020 related to the seed money investment within Stocks on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. There is no additional commitment related to these investments.
(c)     Service Fees
The Company incurred fees for services provided by affiliated companies of $194, $183, and $157 in 2021, 2020, and 2019, respectively. The Company’s liability for these expenses was $50 and $37 at December 31, 2021 and 2020, respectively, and is included in Other liabilities on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. In the normal course of business, the outstanding amount is settled in cash.
The Company earned revenues for various services provided to affiliated companies and subsidiaries of $71, $59, and $54 in 2021, 2020, and 2019, respectively. The receivable for these revenues was $7 and $6 for 2021 and 2020, respectively, and is included in Other assets on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. In the normal course of business, the outstanding amount is settled in cash.
The Company has agreements with its affiliates PIMCO, Oppenheimer Capital LLC (OpCap), and with certain other related parties whereby (1) specific investment options managed by PIMCO and OpCap are made available through the Company's separate accounts to holders of the Company's variable annuity products, and (2) the Company receives compensation for providing administrative and recordkeeping services relating to the investment options managed by PIMCO and OpCap. Income recognized by the Company from these affiliates for distribution and in-force related costs as a result of providing investment options to the contractholders was $7, $7, and $8 during 2021, 2020, and 2019, respectively, which is included in Fees from separate accounts on the Statutory Statements of Operations. At December 31, 2021 and 2020, $1 and $1, respectively, were included for related receivables of these fees in Other assets on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.










62 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

The Company has incurred commission expense related to the distribution of variable annuity products from Allianz Life Financial Services, LLC (ALFS) in the amount of $427, $320, and $285 for the years ended December 31, 2021, 2020, and 2019, respectively. The Company has an agreement with ALFS, whereby interest receivable is assigned to the company and 12b-1 fee receivables are assigned to the Company and AZNY. The Company has also agreed with AZNY to share in reimbursing ALFS for direct and indirect expenses incurred in performing services for the Company and AZNY. In the event that assigned receivables exceed expenses, ALFS records a dividend-in-kind to the Company and a loss on the transaction with AZNY. The Company recorded a net (expense) revenue from this agreement of $(42), $(20), and $2 for the years ended December 31, 2021, 2020, and 2019, respectively.
(d)     Dividends to Parent
The Company paid cash dividends to AZOA of $900, $750, and $325 in 2021, 2020, and 2019, respectively. Based on the ordinary dividend limitations set forth under Minnesota Insurance Law, the dividends paid in 2021 and 2020 were considered as extraordinary, and dividends paid in 2019 were considered ordinary.
(e)     Capital Contributions and Dividends with Subsidiaries
During the years ended December 31, the Company received dividends from its subsidiaries as follows:





















2021
2020
2019
Allianz Investment Management, LLC
$ 41 

51 

56 
ALFS
— 

— 

2 
AZL PF Investments, Inc.
— 

50 

— 
Allianz Individual Insurance Group, LLC (AIIG)
4 

— 

— 
Yorktown
— 

— 

9 
Total
$ 45 

101 

67 
During the years ended December 31, the Company made capital contributions to subsidiaries as follows:





















2021
2020
2019
Yorktown
$ — 

— 

1 
Allianz Investment Management U.S. LLC (AIM US)
8 

1 

— 
ALFS
48 

20 

8 
ASI
$ 66 

$ — 

$ — 
Total
$ 122 

21 

9 
(f)     Reinsurance
The Company wholly-owns AZMO, a Special Purpose Life Reinsurance Captive Insurance Company domiciled in Missouri. The Company cedes to AZMO, and AZMO provides reinsurance on a coinsurance basis and modified coinsurance basis, a 100% quota share of the Company’s net liability of level term life insurance policies and certain universal life insurance policies written directly by the Company. The total premium and associated reserve amounts ceded from the Company to AZMO for the years ended December 31, 2021, 2020, and 2019 were $2, $3, and $6, respectively. The Company recorded a ceding commission of $1 for 2021, 2020, and 2019, respectively. In addition, the Company recorded a deferred gain of $97 upon execution of the reinsurance agreement in 2009, of which $3, $2 and $2 was amortized in 2021, 2020, and 2019, respectively, and included in Commissions and expense allowances on reinsurance ceded on the Statutory Statements of Operations.
The Company has reinsurance recoverables and receivables related to reinsurance agreements with affiliated entities. Total affiliated reinsurance recoverables and receivables were $3 and $1 as of December 31, 2021 and 2020, respectively, and are included in Other assets on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.








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ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

(g)     Line of Credit Agreement
The Company has a line of credit agreement with its subsidiary, AZNY, to provide liquidity, as needed. The Company’s lending capacity under the agreement is limited to 5% of the general account admitted assets of AZNY as of the preceding year end. The Company provided $25 to AZNY under the terms of this agreement on March 17, 2020. The full amount was repaid on April 15, 2020. There was no outstanding balance under the line of credit agreement as of December 31, 2021 and 2020.
(16)    Employee Benefit Plans
The Company participates in the Allianz Asset Accumulation Plan (AAAP), a defined contribution plan sponsored by Allianz of America Corporation (AZOAC). Eligible employees are immediately enrolled in the AAAP on their first day of employment. The AAAP will accept participants’ pretax, Roth 401(k), and/or after-tax contributions up to 80% of the participants’ eligible compensation, although contributions remain subject to annual limitations set by the Internal Revenue Service. The Company matches up to a maximum of 7.5% of the employees’ eligible compensation. Participants are 100% vested in the Company’s matching contribution after three years of service.
The AAAP administration expenses and the trust fund, including trustee fees, investment manager fees, and audit fees, are payable from the trust fund but may, at the Company’s discretion, be paid by the Company. All legal fees are paid by the Company. It is the Company’s policy to fund the AAAP costs as incurred. The Company has expensed $13, $13, and $13 in 2021, 2020, and 2019, respectively, toward the AAAP matching contributions and administration expenses.
A defined group of highly compensated employees is eligible to participate in the AZOAC Deferred Compensation Plan. The purpose of the plan is to provide tax planning opportunities, as well as supplemental funds upon retirement. The plan is unfunded, meaning no assets of the Company have been segregated or defined to represent the liability for accrued assets under the plan. Employees are 100% vested upon enrollment in the plan for funds they have deferred. Employees’ funds are invested on a pay period basis and are immediately vested. Participants and the Company share the administrative fee. The accrued liability of $75 and $61 as of December 31, 2021 and 2020, respectively, is recorded in Other liabilities on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
The Company sponsors a nonqualified deferred compensation plan for a defined group of agents. The Company can make discretionary contributions to the plan in the form and manner the Company determines reasonable. Discretionary contributions are currently determined based on production. The accrued liability of $65 and $66 as of December 31, 2021 and 2020, respectively, is recorded in Other liabilities on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
The Company participates in a stock-based compensation plan sponsored by Allianz SE, which awards certain employees Restricted Stock Units (RSU) that are tied to Allianz SE stock. Allianz SE determines the number of RSU granted to each participant. The Company records expense equal to the change in fair value of the units during the reporting period, which includes the Company's estimate of the number of awards expected to be forfeited. A change in value of $8, $5, and $10 was recorded in 2021, 2020, and 2019, respectively, and is included in General and administrative expenses on the Statutory Statements of Operations. The related liability of $18 and $18 as of December 31, 2021 and 2020, respectively, is recorded in Other liabilities on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus.
(17)    Statutory Capital and Surplus
Statutory accounting practices prescribed or permitted by the Company’s state of domicile are directed toward insurer solvency and protection of policyholders. As such, the Company is required to meet minimum statutory capital and surplus requirements. The Company’s statutory capital and surplus as of December 31, 2021 and 2020, were in compliance with these requirements. The maximum amount of ordinary dividends that can be paid by Minnesota insurance companies to the stockholder without prior approval of the Department is subject to restrictions relating to statutory earned surplus, also known as unassigned funds. Unassigned funds are determined in accordance with the accounting procedures and practices governing preparation of the statutory annual statement. In accordance with










64 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

Minnesota Statutes, the Company may declare and pay from its Unassigned surplus cash dividends of not more than the greater of 10% of its prior year-end statutory surplus, or the net gain from operations of the insurer, not including realized gains, for the 12-month period ending the 31st day of the next preceding year. Based on these limitations, ordinary dividends of $1,070 can be paid in 2022 without prior approval of the Department.
Regulatory Risk-Based Capital
An insurance enterprise’s state of domicile imposes minimum risk-based capital requirements that were developed by the NAIC. The formulas for determining the amount of risk-based capital specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of an enterprise’s regulatory total adjusted capital to its authorized control level risk-based capital, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. This ratio for the Company significantly exceeds required minimum thresholds as of December 31, 2021 and 2020.
(18)    Direct Premiums Written by Third-Party Administrators
The Company has direct premiums written by third-party administrators (TPAs). The types of business written by the TPAs include life, accidental death and dismemberment, medical, disability, excess risk, and LTC. The authority granted to the TPAs includes claims payment, claims adjustment, underwriting, and premium collection. Total premiums written by TPAs were $136, $148, and $116 for 2021, 2020, and 2019, respectively. For the years ended December 31, 2021, 2020, and 2019, there were no individual TPAs that wrote premiums that equaled at least 5% of the capital and surplus of the Company.
(19)    Capital Structure
The Company is authorized to issue three types of capital stock, as outlined in the table below:



























Authorized
Issued and outstanding
Par value, per share
Redemption and liquidation rights
Common stock
40,000,000 

20,000,001 

$ 1.00 

None
Preferred stock:







Class A (consisting of Series A and B below)
200,000,000 

18,903,484 

$ 1.00 

Designated by Board for each series issued
Class A, Series A
8,909,195 

8,909,195 

$ 1.00 

$35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid
Class A, Series B
10,000,000 

9,994,289 

$ 1.00 

$35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid
Class B
400,000,000 

— 

$ 1.00 

Designated by Board for each series issued
Holders of Class A preferred stock and of common stock are entitled to one vote per share with respect to all matters presented to or subject to the vote of shareholders. Holders of Class B preferred stock have no voting rights. All issued and outstanding shares are owned by AZOA. See Note 1 for further discussion.
Each share of Class A preferred stock is convertible into one share of the Company’s common stock. The Company may redeem any or all of the Class A preferred stock at any time. Dividends will be paid to each class of stock only when declared by the BOD. In the event a dividend is declared, dividends must be paid to holders of Class A preferred stock, Class B preferred stock, and common stock, each in that order.








65 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

As discussed in Note 15 to these Statutory Financial Statements, the Company carried out various capital transactions with related parties during 2021, 2020, and 2019.
(20)    Reconciliation to the Annual Statement
The Company is required to file an Annual Statement with the Department. As of December 31, 2021 and 2020, there is no difference in admitted assets or liabilities between this report and the Annual Statement. As of December 31, 2021, 2020, and 2019, there is no difference in capital and surplus or net income between this report and the Annual Statement.
(21)    Commitments and Contingencies
The Company and its subsidiaries are named as defendants in various pending or threatened legal proceedings on an ongoing basis, arising from the conduct of business, including two putative class action proceedings: Sanchez v. Allianz Life Ins. Co. of North America (Superior Court of California, L.A. County, BC594715), which has been certified as a class, and Small v. Allianz Life Ins. Co. of North America (United Stated District Court, Central District of California, Case No. 2:20-cv-01944-AB (KESx), which has not been certified as a class action. The Company generally intends to vigorously contest the lawsuits, but may pursue settlement negotiations in some cases, if appropriate. The outcome of the cases is uncertain at this time, and there can be no assurance that such litigation, or any future litigation, will not have a material adverse effect on the Company and/or its subsidiaries. The Company recognizes legal costs as incurred.
The Company is contingently liable for possible future assessments under regulatory requirements pertaining to insolvencies and impairments of unaffiliated insurance companies. Provision has been made for assessments currently received and assessments anticipated for known insolvencies.
The financial services industry, variable and fixed annuities, life insurance, distribution companies, and broker-dealers, is subject to close scrutiny by regulators, legislators, and the media.
Federal and state regulators, such as state insurance departments, state securities departments, the SEC, the Financial Industry Regulatory Authority, the Internal Revenue Service, and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning various selling practices, including suitability reviews, product exchanges, sales to seniors, and compliance with, among other things, insurance and securities law. The Company may become subject to ongoing market conduct examinations and investigations by regulators, which may have a material adverse effect on the Company.
It can be expected that annuity and life product designs, management, and sales practices will be an ongoing source of regulatory scrutiny and enforcement actions, litigation, and rulemaking.
These matters could result in legal precedents and new industry-wide legislation, rules, and regulations that could significantly affect the financial services industry, including life insurance and annuity companies. It is unclear at this time whether any such litigation or regulatory actions will have a material adverse effect on the Company in the future.
Certain guarantees of the Company provide for the maintenance of a subsidiary’s regulatory capital, surplus levels and liquidity sufficient to meet certain obligations. Those unlimited guarantees are made on behalf of certain wholly owned subsidiaries (AZNY, AZMO, ALFS and Questar Capital Corporation, through its parent, Yorktown). These guarantees are not limited and cannot be estimated as of the balance sheet date. From time to time, the Company makes capital contributions to these subsidiaries as needed under the guarantees. Capital contributions made during the years ended December 31, 2021, 2020, and 2019 are detailed in Note 15.
The Company had investments in limited partnerships that required a commitment of capital of $274 and $306 for the years ended December 31, 2021 and 2020, respectively. The Company had commitments to fund private placement investments of $612 and 187 as of December 31, 2021 and 2020, respectively.
(22)    Subsequent Events
The Company has evaluated subsequent events through April 4, 2022, which is the date the Statutory Financial Statements were available to be issued. No material subsequent events have occurred since December 31, 2021 that require adjustment to the Statutory Financial Statements.








66 of 67


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Statutory Financial Statements
(Dollars in millions, except share data and security holdings quantities)

In March 2022, the Company made a capital contribution of $30 to the Allianz Life Insurance Company of New York and paid a cash dividend of $4,100 to AZOA.
As a result of the Russia/Ukraine conflict, economic uncertainties have arisen, which may negatively impact the Company's net income and surplus. The extent to which the conflict impacts our business, net income, and surplus, as well as our capital and liquidity position, will depend on future developments, which are highly uncertain and cannot be estimated, including the scope and duration of the conflict and actions taken by governmental authorities and other third parties in response to the conflict.








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