The Company has extensive transactions and relationships with Prudential Insurance and other affiliates. Although we seek to ensure that these transactions and relationships are fair and reasonable, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties.

The Company’s general and administrative expenses are charged to the Company using allocation methodologies based on business production processes. Management believes that the methodology is reasonable and reflects costs incurred by Prudential Insurance to process transactions on behalf of the Company. The Company operates under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space are provided by Prudential Insurance. The Company reviews its allocation methodology periodically which it may adjust accordingly. General and administrative expenses include allocations of stock compensation expenses related to a stock-based awards program and a deferred compensation program issued by Prudential Financial. The expense charged to the Company for the stock-based awards program was $0.1 million and $0.0 million for the three months ended September 30, 2021 and 2020, respectively, and $0.4 million and $0.1 million for the nine months ended September 30, 2021 and 2020, respectively. The expense charged to the Company for the deferred compensation program was $0.3 million and $0.2 million for the three months ended September 30, 2021 and 2020, respectively, and $1.5 million and $0.5 million for the nine months ended September 30, 2021 and 2020, respectively.

The Company is charged for its share of employee benefit expenses. These expenses include costs for funded and non-funded, non-contributory defined benefit pension plans. Some of these benefits are based on final earnings and length of service while others are based on an account balance, which takes into consideration age, service and earnings during a career. The Company’s share of net expense for the pension plans was $2.4 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively, and $7.1 million and $2.0 million for the nine months ended September 30, 2021 and 2020, respectively.

The Company is also charged for its share of the costs associated with welfare plans issued by Prudential Insurance. These expenses include costs related to medical, dental, life insurance and disability. The Company's share of net expense for the welfare plans was $0.9 million and $0.6 million for the three months ended September 30, 2021 and 2020, respectively, and $2.9 million and $1.6 million for the nine months ended September 30, 2021 and 2020, respectively.

Prudential Insurance sponsors voluntary savings plans for its employee 401(k) plans. The plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The Company's expense for its share of the voluntary savings plan was $0.9 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $2.7 million and $0.8 million for the nine months ended September 30, 2021 and 2020, respectively.

The Company pays commissions and certain other fees to Prudential Annuities Distributors, Inc ("PAD") in consideration for PAD’s marketing and underwriting of the Company’s products. Commissions and fees are paid by PAD to broker-dealers who sell the Company’s products. Commissions and fees paid by the Company to PAD were $110 million and $61 million for the three months ended September 30, 2021 and 2020, respectively, and $347 million and $113 million for the nine months ended September 30, 2021 and 2020, respectively.

The Company is charged for its share of corporate expenses incurred by Prudential Financial to benefit its businesses, such as advertising, executive oversight, external affairs and philanthropic activity. The Company’s share of corporate expenses was $7 million and $5 million for the three months ended September 30, 2021 and 2020, respectively, and $20 million and $11 million for the nine months ended September 30, 2021 and 2020, respectively.

In accordance with an agreement with PGIM, Inc. (“PGIM”), the Company pays investment management expenses to PGIM who acts as investment manager to certain Company general account and separate account assets. Investment management expenses paid to PGIM related to this agreement were $7 million and $6 million for the three months ended September 30, 2021 and 2020, respectively, and $18 million and $16 million for the nine months ended September 30, 2021 and 2020, respectively. These expenses are recorded as “Net investment income” in the Company's Unaudited Interim Statements of Operations and Comprehensive Income (Loss).

The Company has made investments in joint ventures with certain subsidiaries of Prudential Financial. "Other invested assets" includes $0 million and $534 million as of September 30, 2021 and December 31, 2020, respectively. "Net investment income" related to these ventures includes a loss of $0 million and a gain of $8 million for the three months ended September 30, 2021 and 2020, respectively, and gains of $17 million and $5 million for the nine months ended September 30, 2021 and 2020, respectively. Effective July 1, 2021, the Company transferred these investments in joint ventures to Pruco Life. See Note 1 for additional information.

The Company has a revenue sharing agreement with AST Investment Services, Inc. (“ASTISI”) and PGIM Investments LLC (“PGIM Investments”) whereby the Company receives fee income based on policyholders' separate account balances invested in the Advanced Series Trust and The Prudential Series Fund. Income received from ASTISI and PGIM Investments related to this agreement was $24 million and $23 million for the three months ended September 30, 2021 and 2020, respectively, and $72 million and $66 million for the nine months ended September 30, 2021 and 2020, respectively. These revenues are recorded as “Asset management and service fees” in the Company's Unaudited Interim Statements of Operations and Comprehensive Income (Loss).

The affiliated notes receivable shown above are classified as available-for-sale securities carried at fair value. The Company monitors the internal and external credit ratings of these loans and loan performance. The Company also considers any guarantees made by Prudential Insurance for loans due from affiliates. Effective August 2021, the Company transferred these affiliated loan receivables to Pruco Life at fair value.

Accrued interest receivable related to these loans was $0.0 million at both September 30, 2021 and December 31, 2020 and is included in “Other assets”. Revenues related to these loans were $0.2 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $0.9 million and $1.1 million for the nine months ended September 30, 2021 and 2020, respectively, and are included in “Asset management and service fees”.

The commercial mortgage loan shown above is carried at unpaid principal balance, net of unamortized deferred loan origination fees and expenses, and net of an allowance for losses. The Company reviews the performance and credit quality of the commercial mortgage on an on-going basis. This affiliated commercial mortgage loan was transferred to Pruco Life as part of the 2021 Variable Annuities Recapture. See Note 1 for additional information.

Accrued interest receivable related to the loan was $0.0 million and $0.3 million at September 30, 2021 and December 31, 2020, respectively, and is included in "Accrued investment income". Revenues were $0.0 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively, and $1.7 million and $1.2 million for the nine months ended September 30, 2021 and 2020, respectively, and are included in "Net investment income".

The Company participates in affiliated asset trades with parent and sister companies. Book and market value differences for trades with a parent and sister are recognized within "Additional paid in capital" ("APIC") and "Realized investment gains (losses), net", respectively. The table below shows affiliated asset trades for the nine months ended September 30, 2021 and for the year ended December 31, 2020, excluding those related to the 2021 Variable Recapture, as described in Note 1.


Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		APIC, Net of Tax Increase/(Decrease)		Realized Investment Gain (Loss)
				(in thousands)
Prudential International Insurance Service Company	March 2020	Purchase	Fixed Maturities	$	107,014	$	107,014	$	0	$	0
Prudential Insurance	March 2020	Purchase	Fixed Maturities	$	258,885	$	258,885	$	0	$	0
Prudential Insurance	April 2020	Purchase	Fixed Maturities	$	91,131	$	91,131	$	0	$	0
Prudential Insurance	June 2020	Sale	Fixed Maturities	$	65,646	$	57,699	$	0	$	7,947
Gibraltar Life Insurance Company	June 2020	Purchase	Fixed Maturities	$	222,091	$	222,091	$	0	$	0
Prudential Insurance	April 2021	Purchase	Fixed Maturities	$	200,873	$	200,873	$	0	$	0
Prudential Insurance	April 2021	Purchase	Commercial Mortgage Loan	$	176,904	$	176,904	$	0	$	0
Vantage Casualty Insurance Co.	June 2021	Purchase	Fixed Maturities	$	14,662	$	14,662	$	0	$	0
Prudential Insurance	June 2021	Sale	Equities	$	3,050	$	3,013	$	0	$	37
Pruco Life	June 2021	Sale	Equities	$	40,284	$	38,026	$	0	$	2,258
Passaic Fund LLC	June 2021	Transfer Out	Other Invested Assets	$	12,350	$	12,350	$	0	$	0
Passaic Fund LLC	July 2021	Transfer Out	Other Invested Assets	$	195,776	$	195,926	$	0	$	(150)
Prudential Insurance	September 2021	Purchase	Fixed Maturities	$	2,104	$	2,104	$	0	$	0
Prudential Insurance	September 2021	Sale	Fixed Maturities	$	11,788	$	10,844	$	0	$	944
Prudential Retirement Insurance and Annuity Company	September 2021	Sale	Fixed Maturities	$	26,086	$	24,349	$	0	$	1,737


Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		APIC, Net of Tax Increase/(Decrease)		Realized Investment Gain (Loss)
				(in thousands)
Prudential Retirement Insurance and Annuity Company	September 2021	Purchase	Fixed Maturities	$	35,311	$	35,311	$	0	$	0
Prudential Insurance	September 2021	Purchase	Derivatives	$	71	$	71	$	0	$	0
Prudential Retirement Insurance and Annuity Company	September 2021	Purchase	Derivatives	$	(991)	$	(991)	$	0	$	0


Affiliate	Date Issued	Amount of Notes - September 30, 2021		Amount of Notes - December 31, 2020		Interest Rate			Date of Maturity
		(in thousands)
Prudential Insurance	4/20/2016	$	0	$	93,671		3.47	%		6/20/2021
Prudential Insurance	4/20/2016	0		93,671			4.39	%		12/15/2023
Prudential Insurance	4/20/2016	0		28,102			4.39	%		12/15/2023
Prudential Insurance	4/20/2016	0		93,671			3.95	%		6/20/2024
Prudential Insurance	4/20/2016	0		37,468			3.95	%		6/20/2024
Prudential Insurance	4/20/2016	0		46,835			3.95	%		6/20/2024
Prudential Insurance	6/28/2016	0		26,000			2.59	%		6/28/2021



Total Loans Payable to Affiliates		$	0	$	419,418

Effective August 2021, $300 million in long-term debt was transferred from the Company to Pruco Life based on the market value of the loans plus accrued interest which totaled $326 million. The Company recognized a loss of $24 million on the transfer. The $300 million debt was legally extinguished.

The total interest expense to the Company related to affiliated loans and cash collateral with PGF was $1 million and $9 million for the three months ended September 30, 2021 and 2020, respectively, and $9 million and $45 million for the nine months ended September 30, 2021 and 2020, respectively.