Equity

9 Months Ended

Sep. 30, 2020

EQUITY

Accumulated Other Comprehensive Income (Loss)

AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Unaudited Interim Statements of Comprehensive Income. The balance of and changes in each component of AOCI as of and for the nine months ended September 30, 2020 and 2019 are as follows:


	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2019	$	(934)	$	429,546	$	428,612
Change in OCI before reclassifications	(154)		1,586,843		1,586,689
Amounts reclassified from AOCI	0		(26,350)		(26,350)
Income tax benefit (expense)	32		(327,704)		(327,672)
Balance, September 30, 2020	$	(1,056)	$	1,662,335	$	1,661,279


	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2018	$	(1,078)	$	(323,295)	$	(324,373)
Change in OCI before reclassifications	(244)		1,316,155		1,315,911
Amounts reclassified from AOCI	0		20,591		20,591
Income tax benefit (expense)	51		(280,717)		(280,666)
Balance, September 30, 2019	$	(1,271)	$	732,734	$	731,463

(1)Includes cash flow hedges of $23 million and $0 million as of September 30, 2020 and December 31, 2019, respectively, and $27 million and $(4) million as of September 30, 2019 and December 31, 2018, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Amounts reclassified from AOCI(1)(2):
Net unrealized investment gains (losses):
Cash flow hedges—Currency/ Interest rate(3)	$	(9,602)	$	(10,305)	$	11,188	$	(15,693)
Net unrealized investment gains (losses) on available-for-sale securities	73		(1,199)		15,162		(4,898)
Total net unrealized investment gains (losses)(4)	(9,529)		(11,504)		26,350		(20,591)
Total reclassifications for the period	$	(9,529)	$	(11,504)	$	26,350	$	(20,591)

(1)All amounts are shown before tax.

(2)Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3)See Note 4 for additional information on cash flow hedges.

(4)See table below for additional information on unrealized investment gains (losses), including the impact on DAC and other costs and future policy benefits and other liabilities.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains (losses) on available-for-sale fixed maturity securities and certain other invested assets and other assets are included in the Company’s Unaudited Interim Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from OCI those items that are included as part of “Net income” for a period that had been part of OCI in earlier periods. The amounts for the periods indicated below, split between amounts related to available-for-sale fixed maturity securities on which an allowance for credit losses has been recognized, and all other net unrealized investment gains (losses), are as follows:

Net Unrealized Investment Gains (Losses) on Available-for-Sale Fixed Maturity Securities on which an allowance for credit losses has been recognized


	Net Unrealized Gains (Losses) on Investments		DAC and Other Costs(2)		Future Policy Benefits and Other Liabilities(3)		Deferred Income Tax (Liability) Benefit		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in thousands)
Balance, December 31, 2019(1)	$	0	$	0	$	0	$	0	$	0
Net investment gains (losses) on investments arising during the period	46		0		0		(10)		36

Increase (decrease) due to non-credit related losses recognized in AOCI during the period	(60)		0		0		13		(47)
Impact of net unrealized investment (gains) losses on DAC and other costs	0		693		0		(146)		547
Impact of net unrealized investment (gains) losses on future policy benefits and other liabilities	0		0		121		(25)		96
Balance, September 30, 2020	$	(14)	$	693	$	121	$	(168)	$	632

(1)Allowance for credit losses on available-for-sale fixed maturity securities effective January 1, 2020.

(2)"Other costs" primarily includes reinsurance recoverables, DSI and VOBA.

(3)"Other liabilities" primarily includes reinsurance payables and deferred reinsurance gains.

All Other Net Unrealized Investment Gains (Losses) in AOCI


	Net Unrealized Gains (Losses) on Investments(1)		DAC and Other Costs(3)		Future Policy Benefits and Other Liabilities(4)		Deferred Income Tax (Liability) Benefit		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in thousands)
Balance, December 31, 2019(2)	$	736,930	$	(156,175)	$	(35,983)	$	(115,226)	$	429,546
Net investment gains (losses) on investments arising during the period	1,799,495		0		0		(377,895)		1,421,600
Reclassification adjustment for (gains) losses included in net income	(26,350)		0		0		5,534		(20,816)
Reclassification due to allowance for credit losses recorded during the period	60		0		0		(13)		47
Impact of net unrealized investment (gains) losses on DAC and other costs	0		(197,485)		0		41,472		(156,013)
Impact of net unrealized investment (gains) losses on future policy benefits and other liabilities	0		0		(16,027)		3,366		(12,661)
Balance, September 30, 2020	$	2,510,135	$	(353,660)	$	(52,010)	$	(442,762)	$	1,661,703

(1)Includes cash flow hedges. See Note 4 for information on cash flow hedges.

(2)Includes net unrealized gains (losses) for which an OTTI loss had been previously recognized.

(3)"Other costs" primarily includes reinsurance recoverables, DSI and VOBA.

(4)"Other liabilities" primarily includes reinsurance payables and deferred reinsurance gains.