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Related Party Transactions
 3 Months Ended
Mar. 31, 2022
Related Party Transactions [Abstract]  
Related Party Transactions RELATED PARTY TRANSACTIONS
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.

Expense Charges and Allocations

The majority of the Company’s expenses are allocations or charges from Prudential Insurance or other affiliates. These expenses can be grouped into general and administrative expenses and agency distribution expenses.

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 $0.0 million for both the three months ended March 31, 2022 and 2021. The expense charged to the Company for the deferred compensation program was $0.0 million and $0.7 million for the three months ended March 31, 2022 and 2021, 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 $0.0 million and $2.3 million for the three months ended March 31, 2022 and 2021, 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 $0.0 million and $1.1 million for the three months ended March 31, 2022 and 2021, 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 $0.0 million and $0.9 million for the three months ended March 31, 2022 and 2021, 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 $29 million and $120 million for the three months ended March 31, 2022 and 2021, 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 $9 million and $8 million for the three months ended March 31, 2022 and 2021, respectively.

Affiliated Investment Management Expenses

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 $4 million and $6 million for the three months ended March 31, 2022 and 2021, respectively. These expenses are recorded as “Net investment income” in the Company's Unaudited Interim Statements of Operations and Comprehensive Income (Loss).
Derivative Trades

In its ordinary course of business, the Company enters into OTC derivative contracts with an affiliate, PGF. For these OTC derivative contracts, PGF has a substantially equal and offsetting position with an external counterparty. See Note 4 for additional information.

Joint Ventures

The Company has made investments in joint ventures with certain subsidiaries of Prudential Financial. "Other invested assets" includes $0 million as of both March 31, 2022 and December 31, 2021. "Net investment income" related to the ventures includes no gain or loss for the three months ended March 31, 2022 and a gain of $4 million for the three months ended March 31, 2021.
Affiliated Asset Management and Service Fees

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 $22 million and $23 million for the three months ended March 31, 2022 and 2021, respectively. These revenues are recorded as “Asset management and service fees” in the Company's Unaudited Interim Statements of Operations and Comprehensive Income (Loss).

Affiliated Asset Transfers

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 three months ended March 31, 2022 and for the year ended December 31, 2021, excluding those related to the 2021 Variable Annuities Recapture effective July 1, 2021, as described in Note 1 to the Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.
AffiliateDateTransaction Security Type  Fair Value  Book Value  APIC, Net of Tax Increase/(Decrease)Realized
Investment
Gain (Loss)
(in thousands)
Prudential InsuranceApril 2021PurchaseFixed Maturities$200,873 $200,873 $0 $0 
Prudential InsuranceApril 2021PurchaseCommercial Mortgage Loan$176,904 $176,904 $0 $0 
Vantage Casualty Insurance Co.June 2021PurchaseFixed Maturities$14,662 $14,662 $0 $0 
Prudential InsuranceJune 2021SaleEquities$3,050 $3,013 $0 $37 
Pruco LifeJune 2021SaleEquities$40,284 $38,026 $0 $2,258 
Passaic Fund LLCJune 2021Transfer OutOther Invested Assets$12,350 $12,350 $0 $0 
Passaic Fund LLCJuly 2021Transfer OutOther Invested Assets$195,776 $195,926 $0 $(150)
Prudential InsuranceSeptember 2021PurchaseFixed Maturities$2,104 $2,104 $0 $0 
Prudential InsuranceSeptember 2021SaleFixed Maturities$11,788 $10,844 $0 $944 
Prudential Retirement Insurance and Annuity CompanySeptember 2021SaleFixed Maturities$26,086 $24,349 $0 $1,737 
Prudential Retirement Insurance and Annuity CompanySeptember 2021PurchaseFixed Maturities$35,311 $35,311 $0 $0 
Prudential InsuranceSeptember 2021PurchaseDerivatives$71 $71 $0 $0 
AffiliateDateTransaction Security Type  Fair Value  Book Value  APIC, Net of Tax Increase/(Decrease)Realized
Investment
Gain (Loss)
(in thousands)
Prudential Retirement Insurance and Annuity CompanySeptember 2021PurchaseDerivatives$(991)$(991)$0 $0 
Prudential FinancialOctober 2021SaleEquities$10,000 $10,000 $0 $0 
Pruco LifeNovember 2021SaleDerivatives$1,112 $0 $0 $1,112 
Prudential Arizona ReinsuranceNovember 2021PurchaseFixed Maturities$55,304 $55,304 $0 $0 
Pruco LifeDecember 2021Transfer OutFixed Maturities$2,037,619 $1,934,118 $0 $103,501 
Pruco LifeDecember 2021SaleFixed Maturities$57,087 $56,977 $0 $110 
Prudential FinancialDecember 2021DividendFixed Maturities$166,676 $166,676 $0 $0 
Prudential FinancialDecember 2021SaleFixed Maturities$144,465 $138,020 $0 $6,445 
Prudential FinancialDecember 2021PurchaseCommercial Mortgage Loan$184,525 $184,525 $0 $0 
Pruco LifeDecember 2021Transfer OutCommercial Mortgage Loan$538,152 $517,309 $0 $20,843 
Pruco LifeDecember 2021SaleDerivatives$8,455 $2,345 $0 $6,110 
Pruco LifeJanuary 2022SaleFixed Maturities$4,432 $4,942 $0 $(510)
Prudential FinancialJanuary 2022SaleCommercial Mortgage Loan$29,215 $29,544 $0 $(329)
Pruco LifeJanuary 2022SaleDerivatives$404 $404 $0 $0 
Pruco LifeFebruary 2022SaleFixed Maturities$128,909 $138,478 $0 $(9,569)
Prudential FinancialMarch 2022SaleFixed Maturities$32,541 $33,463 $0 $(922)

Debt Agreements

Through March 31, 2022, the Company was authorized to borrow funds up to $9 billion from Prudential Financial and its affiliates to meet its capital and other funding needs. As of March 31, 2022 and December 31, 2021, there were no short and long-term debt to affiliates outstanding.

The total interest expense to the Company related to affiliated loans and cash collateral with PGF was $0 million and $4 million for the three months ended March 31, 2022 and 2021, respectively.

Contributed Capital and Dividends

Through March 2022 and December 2021, the Company did not receive any capital contributions.

In March 2022, the Company had a return of capital in the amount of $306 million to PAI. In July 2021, in connection with the 2021 Variable Annuities Recapture, there was a $3,813 million return of capital to PAI.

In March, June and December of 2021, the Company paid a dividend of $192 million, $188 million and $451 million, respectively, to PAI.

Reinsurance with Affiliates

As discussed in Note 6, the Company participates in reinsurance transactions with certain affiliates.