10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________

FORM 10-Q

_________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from                      to                     

Commission File Number 033-44202

_________________________________________________________________ 

Fortitude Life Insurance & Annuity Company

(Exact Name of Registrant as Specified in its Charter)

Arizona	06-1241288
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

Ten Exchange Place

Suite 2210

Jersey City, NJ 07302

(615) 981-8801

(Address and Telephone Number of Registrant’s Principal Executive Offices)

Prudential Annuities Life Assurance Corporation

One Corporate Drive

Shelton, CT 06484

(615) 981-8801

(Former name and address since last report)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Not Applicable	Not Applicable	Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of the Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer", "accelerated filer", "smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer	☒	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of November 10, 2022, 25,000 shares of the registrant’s Common Stock (par value $100) consisting of 100 voting shares and 24,900 non-voting shares were outstanding. As of such date, Fortitude Group Holdings, LLC, a Delaware limited liability company, owned all of the registrant’s Common Stock.

TABLE OF CONTENTS

			Page
PART I FINANCIAL INFORMATION
	Item 1.	Financial Statements:
		Unaudited Interim Consolidated Statements of Financial Position as of September 30, 2022 (Successor Company) and December 31, 2021 (Predecessor Company)	5
		Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended September 30, 2022 (Successor Company), the three months ended March 31, 2022 (Predecessor Company), and the three and nine months ended September 30, 2021 (Predecessor Company)	6
		Unaudited Interim Consolidated Statements of Equity for the three and six months ended September 30, 2022 (Successor Company), the three months ended March 31, 2022 (Predecessor Company), and the three and nine months ended September 30, 2021 (Predecessor Company)	7
		Unaudited Interim Consolidated Statements of Cash Flows for the six months ended September 30, 2022 (Successor Company), the three months ended March 31, 2022 (Predecessor Company), and the nine months ended September 30, 2021 (Predecessor Company)	8
		Notes to Unaudited Interim Consolidated Financial Statements	10
		1.    Business and Basis of Presentation	10
		2.    Significant Accounting Policies and Pronouncements	11
		3. Business Combination	14
		4. Segment Information	14
		5.    Investments	18
		6.    Derivatives and Hedging	27
		7.    Fair Value of Assets and Liabilities	35
		8.    Income Taxes	48
		9.    Equity	49
		10. Commitments and Contingent Liabilities	52
		11.  Related Party Transactions	54
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	61
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	76
	Item 4.	Controls and Procedures	79
PART II OTHER INFORMATION			80
	Item 1.	Legal Proceedings	80
	Item 1A.	Risk Factors	80
	Item 6.	Exhibits	81
SIGNATURES			82

3

FORWARD-LOOKING STATEMENTS

Certain of the statements included in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “includes,” “plans,” “assumes,” “estimates,” “projects,” “intends,” “should,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Fortitude Life Insurance & Annuity Company (FLIAC). There can be no assurance that future developments affecting FLIAC will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (1) the ongoing impact of the COVID-19 pandemic on the global economy, financial markets and our business, (2) losses on investments or financial contracts due to deterioration in credit quality or value, or counterparty default; (3) losses on insurance products due to mortality experience or policyholder behavior experience that differs significantly from our expectations when we price our products; (4) changes in interest rates and equity prices that may (a) adversely impact the profitability of our products, the value of separate accounts supporting these products or the value of assets we manage, (b) result in losses on derivatives we use to hedge risk or increase collateral posting requirements and (c) limit opportunities to invest at appropriate returns; (5) guarantees within certain of our products which are market sensitive and may decrease our earnings or increase the volatility of our results of operations or financial position; (6) liquidity needs resulting from (a) derivative collateral market exposure, (b) asset/liability mismatches, (c) the lack of available funding in the financial markets or (d) unexpected cash demands due to severe mortality calamity or lapse events; (7) financial or customer losses, or regulatory and legal actions, due to inadequate or failed processes or systems, external events and human error or misconduct such as (a) disruption of our systems and data, (b) an information security breach, (c) a failure to protect the privacy of sensitive data (d) reliance on third parties or (e) labor and employment matters; (8) changes in the regulatory landscape, including related to (a) financial sector regulatory reform, (b) changes in tax laws, (c) fiduciary rules and other standards of care, (d) state insurance laws and developments regarding group-wide supervision, capital and reserves, and (e) privacy and cybersecurity regulation; (9) technological changes which may adversely impact companies in our investment portfolio or cause insurance experience to deviate from our assumptions; (10) ratings downgrades; (11) market conditions that may adversely affect the sales or persistency of our products; (12) competition; (13) reputational damage; and (14) risks associated with the integration process related to the company's change in ownership. FLIAC does not intend, and is under no obligation, to update any particular forward-looking statement included in this document. See “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Reports on Form 10-Q for the periods ended March 31, 2022 and June 30, 2022 for discussion of certain risks relating to our business.

4

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements                                     

Fortitude Life Insurance & Annuity Company

Unaudited Interim Consolidated Statements of Financial Position

(in millions, except share data)

	Successor Company		Predecessor Company
	September 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Fixed maturity securities: September 30, 2022 at fair value (1); December 31, 2021, available-for-sale, at fair value (net of $1 allowance for credit losses, amortized cost - $8,556)	$	5,565	$	8,771
Fixed maturity securities, trading, at fair value (amortized cost: December 31, 2021 - $28)	—		27
Equity securities, at fair value (cost - September 30, 2022 - $201; December 31, 2021 - $323) (1)	170		322
Commercial mortgage and other loans (net of $5 allowance for credit losses)	—		1,504
Short-term investments	37		875
Other invested assets (includes $400 and $13 of assets measured at fair value at September 30, 2022 and December 31, 2021, respectively)	430		106
Total investments	6,202		11,605
Cash and cash equivalents	1,276		2,016
Accrued investment income	56		61
Reinsurance recoverables (1)	220		8,108
Net modified coinsurance receivable, at fair value (1)	70		—
Income taxes	90		909
Deposit asset, at fair value (1)	859		2,659
Other assets	119		954
Separate account assets	23,016		32,267
TOTAL ASSETS	$	31,908	$	58,579
LIABILITIES AND EQUITY
LIABILITIES
Insurance liabilities, at fair value (1)	$	6,304	$	—
Future policy benefits	—		4,505
Policyholders’ account balances	—		11,750
Reinsurance payables	—		7,183
Other liabilities	848		1,192
Separate account liabilities	23,016		32,267
Total liabilities	30,168		56,897
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 10)
EQUITY
Common stock, $100 par value; 25,000 shares authorized, issued and outstanding	3		3
Additional paid-in capital	1,763		592
Retained (deficit) earnings	(337)		917
Accumulated other comprehensive income	311		170
Total equity	1,740		1,682
TOTAL LIABILITIES AND EQUITY	$	31,908	$	58,579
(1) As of April 1, 2022 we have elected the fair value option for these financial statement line items. See Note 2 for further discussion.

See Notes to Unaudited Interim Consolidated Financial Statements

5

Fortitude Life Insurance & Annuity Company

Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss)

(in millions)

	Successor Company				Predecessor Company
	Three Months Ended		Six Months Ended		Three Months Ended		Three Months Ended		Nine Months Ended
	September 30				March 31		September 30
	2022						2021
REVENUES
Premiums	$	8	$	11	$	8	$	6	$	33
Policy charges and fee income	131		261		97		106		1,128
Net investment income	92		189		99		101		386
Asset management and service fees	26		48		20		23		232
Other losses	(16)		(15)		(19)		(42)		(556)
Investment gains (losses), net	(455)		(1,753)		481		5,081		7,373
TOTAL REVENUES	(214)		(1,259)		686		5,275		8,596
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	(104)		(974)		—		—		—
Policyholders’ benefits	—		—		26		(242)		(216)
Interest credited to policyholders’ account balances	—		—		85		441		610
Amortization of deferred policy acquisition costs	—		—		104		19		402
Commission expense	27		45		35		1,408		1,739
General, administrative and other expenses	17		55		3		(90)		38
TOTAL BENEFITS AND EXPENSES	(60)		(874)		253		1,536		2,573
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	(154)		(385)		433		3,739		6,023
Income tax expense (benefit)	3		(48)		77		778		1,247
NET INCOME (LOSS)	$	(157)	$	(337)	$	356	$	2,961	$	4,776
Other comprehensive income (loss), before tax:
Changes in own-credit risk related to insurance liabilities	149		394		—		—		—
Net unrealized investment losses	—		—		(561)		(88)		(1,580)
Total	149		394		(561)		(88)		(1,580)
Less: Income tax expense (benefit) related to other comprehensive income (loss)	32		83		(118)		(19)		(332)
Other comprehensive income (loss), net of taxes	117		311		(443)		(69)		(1,248)
Comprehensive income (loss)	$	(40)	$	(26)	$	(87)	$	2,892	$	3,528

See Notes to Unaudited Interim Consolidated Financial Statements

6

Fortitude Life Insurance & Annuity Company

Unaudited Interim Consolidated Statements of Equity

(in millions)

	Common   Stock		Additional   Paid-in Capital		Retained Earnings/(Accumulated Deficit)		Accumulated Other Comprehensive   Income (Loss)		Total Equity
Balance, 12/31/2021 (Predecessor Company)	$	3	$	592	$	917	$	170	$	1,682
Return of capital	—		(306)		—		—		(306)
Comprehensive income (loss):
Net income	—		—		356		—		356
Other comprehensive loss, net of tax	—		—		—		(443)		(443)
Total comprehensive loss									(87)
Balance, 3/31/2022 (Predecessor Company)	$	3	$	286	$	1,273	$	(273)	$	1,289
Balance, 4/1/2022 (Successor Company)	$	3	$	1,763	$	—	$	—	$	1,766
Comprehensive income (loss):
Net loss	—		—		(180)		—		(180)
Other comprehensive income, net of tax	—		—		—		194		194
Total comprehensive income									14
Balance, 6/30/2022 (Successor Company)	$	3	$	1,763	$	(180)	$	194	$	1,780
Comprehensive income (loss):
Net loss	—		—		(157)		—		(157)
Other comprehensive income, net of tax	—		—		—		117		117
Total comprehensive loss									(40)
Balance, 9/30/2022 (Successor Company)	$	3	$	1,763	$	(337)	$	311	$	1,740

	Predecessor Company
	Common   Stock		Additional   Paid-in Capital		Retained Earnings/(Accumulated Deficit)		Accumulated Other Comprehensive   Income (Loss)		Total Equity
Balance, 12/31/2020	$	3	$	4,383	$	(3,217)	$	1,533	$	2,702
Dividend to parent	—		—		(192)		—		(192)
Comprehensive income (loss):
Net income	—		—		1,890		—		1,890
Other comprehensive loss, net of tax	—		—		—		(1,413)		(1,413)
Total comprehensive income									477
Balance, 3/31/2021	$	3	$	4,383	$	(1,519)	$	120	$	2,987
Dividend to parent	—		—		(188)		—		(188)
Comprehensive income (loss):
Net loss	—		—		(75)		—		(75)
Other comprehensive income, net of tax	—		—		—		234		234
Total comprehensive income									159
Balance, 6/30/2021	$	3	$	4,383	$	(1,782)	$	354	$	2,958
Return of capital	—		(3,813)		—		—		(3,813)
Assets purchased/transferred from/to affiliates	—		21		—		—		21
Comprehensive income (loss):
Net income	—		—		2,961		—		2,961
Other comprehensive loss, net of tax	—		—		—		(69)		(69)
Total comprehensive income									2,892
Balance, 9/30/2021	$	3	$	591	$	1,179	$	285	$	2,058

See Notes to Unaudited Interim Consolidated Financial Statements

7

Fortitude Life Insurance & Annuity Company

Unaudited Interim Consolidated Statements of Cash Flows

(in millions)

	Successor Company		Predecessor Company
	Six Months Ended September 30		Three Months Ended March 31		Nine Months Ended September 30
	2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(337)	$	356	$	4,776
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities:
Investment (gains) losses, net	1,753		(481)		(7,373)
Interest credited to policyholders’ account balances	—		85		610
Other, net	(10)		2		4
Change in:
Insurance liabilities, at fair value	(6,888)		—		—
Fair value of deposit asset	1,748		—		—
Net modified coinsurance receivable, at fair value	4,114		—		—
Future policy benefits	—		60		604
Accrued investment income	(20)		1		48
Net receivables from/payables to parent and affiliates	—		(37)		(23)
Deferred policy acquisition costs	—		104		3,488
Income taxes	262		142		686
Reinsurance recoverables, net	19		(39)		40
Derivatives, net	(37)		(1,079)		(3,001)
Other, net	(14)		(3)		(1,924)
Cash flows from (used in) operating activities	590		(889)		(2,065)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale/maturity/prepayment of:
Fixed maturity securities, at fair value	3,048		—		—
Fixed maturity securities, available-for-sale	—		422		8,859
Fixed maturity securities, trading	—		—		2,082
Equity securities	—		95		46
Secured receivable	60		—		—
Commercial mortgage and other loans	—		39		116
Other invested assets	5		1		44
Short-term investments	289		795		389
Payments for the purchase/origination of:
Fixed maturity securities, at fair value	(4,134)		—		—
Fixed maturity securities, available-for-sale	—		(751)		(5,142)
Fixed maturity securities, trading	—		—		(5,384)
Equity securities	(10)		—		(6)
Secured receivable	(7)		—		—
Commercial mortgage and other loans	—		(13)		(1,090)
Other invested assets	(131)		—		(225)
Short-term investments	(23)		(94)		(166)
Derivatives, net	—		3		(88)
Other, net	(41)		—		54
Cash flows from (used in) investing activities	(944)		497		(511)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net policyholder's account deposits (withdrawals)	(109)		62		4,124
Cash collateral for loaned securities	(36)		205		—
Repayments of debt (maturities longer than 90 days)	—		—		(300)
Net increase/(decrease) in short-term borrowing	—		—		(120)
Drafts outstanding	(3)		(7)		(10)
Distribution to parent	—		(306)		(774)
Repurchase agreements	200		—		—
Cash flows from (used in) financing activities	52		(46)		2,920
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(302)		(438)		344
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	1,578		2,016		1,069
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,276	$	1,578	$	1,413

8

During the six months ended September 30, 2022, we had novations within our Ceded Business related to variable-indexed annuities under the reinsurance agreement with Pruco Life Insurance Company, a subsidiary of Prudential Financial, Inc., that resulted in non-cash transactions of $4,116 million of investments with a corresponding offset of $(4,116) million related to the modified coinsurance payable, which is presented on a net basis with the modified coinsurance receivable as "Net modified coinsurance receivable, at fair value" in the consolidated statement of cash flows and consolidated statement of financial position.

See Notes to Unaudited Interim Consolidated Financial Statements

9

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

1.    BUSINESS AND BASIS OF PRESENTATION

Fortitude Life Insurance & Annuity Company and its wholly-owned subsidiary (collectively, “FLIAC” or the “Company”), with its principal offices in Jersey City, New Jersey, is a wholly-owned subsidiary of Fortitude Group Holdings, LLC (“FGH”). Prior to April 1, 2022, the Company (previously named Prudential Annuities Life Assurance Corporation ("PALAC")) was a wholly-owned subsidiary of Prudential Annuities, Inc ("PAI"), an indirect wholly-owned subsidiary of Prudential Financial, Inc. ("Prudential Financial"), a New Jersey Corporation. On April 1, 2022, PAI completed the sale of its equity interest in the Company to FGH. As a result, the Company is no longer an affiliate of Prudential Financial or any of its affiliates. See Basis of Presentation below and Note 3 for further information regarding the acquisition.

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). The accompanying Unaudited Consolidated Financial Statements present the consolidated results of operations, financial condition, and cash flows of the Company and a variable interest entity ("VIE") that meets the requirements for consolidation. All intercompany transactions have been eliminated in consolidation.

Following the acquisition of FLIAC, purchase accounting was applied to FGH's financial statements and we have elected to "push down" the basis to FLIAC in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations. The application of push-down accounting created a new basis of accounting for all assets and liabilities based on fair value at the date of acquisition. As a result, FLIAC's financial position, results of operations, and cash flows subsequent to the acquisition are not comparable with those prior to April 1, 2022, and therefore have been segregated to indicate pre-acquisition and post-acquisition periods. The pre-acquisition period through March 31, 2022 is referred to as the Predecessor Company. The post-acquisition period, April 1, 2022 and forward, includes the impact of push-down accounting and is referred to as the Successor Company. See Note 3 for further information regarding the acquisition and our application of push-down accounting.

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Predecessor Company’s Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of 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.

COVID-19

Since the first quarter of 2020, the novel coronavirus (“COVID-19”) has at times resulted in extreme stress and disruption in the global economy and financial markets. The COVID-19 pandemic has impacted, and may continue to impact, the Successor Company's results of operations, financial condition, and cash flows. Due to the highly uncertain nature of these conditions, it is not possible to estimate the ultimate impacts at this time. The risks may have manifested, and may continue to manifest, in the Successor Company's financial statements in the areas of, among others, i) insurance liabilities and related balances: potential changes to assumptions regarding investment returns, mortality, and policyholder behavior, which are reflected in our insurance liabilities and ii) investments: increased risk of loss on our investments due to default or deterioration in credit quality or value. We cannot predict what impact the COVID-19 pandemic will ultimately have on our businesses.

10

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Novation of Ceded Business

In the second quarter of 2022, in accordance with applicable state law, a program was instituted to novate a significant portion of the Ceded Business policies from FLIAC to Pruco Life Insurance Company ("Pruco Life"). The program does not have an impact on net equity or net income but has resulted in the reduction of certain activity/balances associated with these policies. During the six months ended September 30, 2022, approximately $6 billion of account value, which generally approximates fair values of insurance liabilities, was transferred out of the Company as a result of the novation program, which represents approximately 60 percent of account value since the acquisition of the Company on April 1, 2022.

Predecessor Company Reinsurance Transactions

Effective April 1, 2016, the Predecessor Company reinsured the variable annuity base contracts, along with the living benefit guarantees, from Pruco Life, excluding the Pruco Life Insurance Company of New Jersey ("PLNJ") business which was reinsured to The Prudential Insurance Company of America ("Prudential Insurance"), in each case under a coinsurance and modified coinsurance agreement. This reinsurance agreement covers new and in force business and excludes business reinsured externally. As of December 31, 2020, Pruco Life discontinued the sales of traditional variable annuities with guaranteed living benefit riders. The discontinuation had no impact on the reinsurance agreement between Pruco Life and the Predecessor Company.

Effective July 1, 2021, Pruco Life recaptured the risks related to its business, as discussed above, that had previously been reinsured to the Predecessor Company from April 1, 2016 through June 30, 2021. The product risks related to the previously reinsured business that were being managed in the Predecessor Company, were transferred to Pruco Life. This transaction is referred to as the "2021 Variable Annuities Recapture". See Note 1 to the Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021, for more details.

Effective December 1, 2021, the Predecessor Company entered into a reinsurance agreement with Pruco Life under which the Predecessor Company reinsured certain of its variable and fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal income feature to Pruco Life.

Predecessor Company

During the first quarter of 2022, the Predecessor Company recorded an out-of-period adjustment which decreased “Investment gains (losses), net” by $48 million, resulting in a net decrease of $48 million to “Income (loss) from operations before income taxes” during the three months ended March 31, 2022. This adjustment related to certain portions of reinsurance activity that had been incorrectly recorded during the fourth quarter of 2021. Management evaluated the impact of all out-of-period adjustments, both individually and in the aggregate, and concluded that they were not material to any current or previously reported quarterly or annual financial statements.

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

2.    SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

Accounting Policy Election

Fair Value Option

Following the acquisition, we have elected to prospectively apply the fair value option to several of FLIAC's assets and liabilities. We have made this election as it improves our operational efficiency and better aligns the recognition and measurement of our investments, insurance liabilities, and associated reinsurance activity with how we expect to manage the business.

The following represents the financial statement line items impacted by the fair value election and the changes to such line items from what was previously presented under the Predecessor Company:

11

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Successor Company	Predecessor Company
	Financial Statement Line Item
STATEMENTS OF FINANCIAL POSITION
Assets
Investments
	"Fixed maturity securities, at fair value"	"Fixed maturity securities, available-for-sale, at fair value" and "Fixed maturity securities, trading, at fair value"
	"Equity securities, at fair value"	"Equity securities, at fair value"
	"Secured Receivable" (1)	"Commercial mortgage and other loans"
Other
	"Reinsurance recoverables" and "Net modified coinsurance receivable, at fair value" (2)	"Reinsurance recoverables" and "Reinsurance payables"
	"Deposit asset at fair value" (3)	"Deposit asset"
Liabilities
	"Insurance liabilities, at fair value"	"Future policy benefits" and "Policyholders' account balances"
STATEMENTS OF OPERATIONS
Revenues
	"Investment gains (losses), net"	"Realized investment gains (losses), net" and "Net unrealized investment gains (losses)" (4)
Benefits and Expenses
	"Policyholder benefits and changes in fair value of insurance liabilities"	"Policyholders' benefits" and "Interest credited to policyholders' account balances"
STATEMENTS OF COMPREHENSIVE INCOME
Other comprehensive income (loss)
	"Changes in own-credit risk related to insurance liabilities"	N/A
(1) Also includes certain fixed maturity securities previously contained in "Fixed maturity securities, available-for-sale" by the Predecessor Company. See "Secured Receivable"section below for further discussion.
(2) Balances unrelated to the modified coinsurance agreement will remain in the respective reinsurance recoverable and payable line items.
(3) Included within "Other assets" by the Predecessor Company.
(4) Represents "Net unrealized investment gains (losses)" included in Other comprehensive income (loss).

During the third quarter of 2022 we purchased residential mortgage loans for which we have elected to apply the fair value option. The investments are included in Other invested assets in the unaudited interim consolidated statements of financial position. See Note 5 for further information.

12

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Secured Receivable

The economics of commercial mortgage and other loans and certain fixed maturity securities held by the Predecessor Company have been transferred to FLIAC via participation agreements. The legal ownership and control over the participated assets was not transferred and cannot be freely pledged or exchanged by FLIAC. This transfer did not meet the requirements of sale accounting and is therefore accounted for as a secured borrowing. These participated assets are represented on our balance sheet, at fair value, in the form of a secured receivable, all of which is associated with our Ceded Business segment. During the third quarter of 2022, all assets within the participation agreements were transferred out of the Company as part of the novation program discussed in Note 1. Accordingly, the Secured Receivable is no longer carried on FLIAC's balance sheet as of September 30, 2022. There was no impact to net income or equity as a result of these transfers.

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of an Accounting Standards Update ("ASU") to the ASC. We consider the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material.

ASU issued but not yet adopted as of September 30, 2022 — ASU 2018-12

ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018, and was amended by ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date, issued in October 2019, and ASU 2020-11, Financial Services-Insurance (Topic 944): Effective Date and Early Application, issued in November 2020. Public business entities that meet the definition of an SEC filer and are not Small Reporting Companies that early adopt ASU 2018-12 are allowed to apply the guidance either as of January 1, 2020 or January 1, 2021 (and record transition adjustments as of January 1, 2020 or January 1, 2021, respectively) in their 2022 financial statements. Companies that do not early adopt ASU 2018-12 will apply the guidance as of January 1, 2021 (and record transition adjustments as of January 1, 2021) in the 2023 financial statements.

As previously discussed, we have elected to apply the fair value option for all of our insurance liabilities. As a result of this election, our insurance liabilities are no longer within the scope of ASU 2018-12.

Other ASUs issued but not yet adopted as of September 30, 2022

Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosure	This ASU eliminates the accounting guidance for Troubled Debt Restructurings (“TDR”) for creditors and adds enhanced disclosure requirements for certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. Following adoption of the ASU, all loan refinancings are subject to the modification guidance in ASC 310-20. This ASU also amends the guidance on the vintage disclosures to require disclosure of current-period gross write-offs by year of origination.	January 1, 2023 using the prospective method with an option to apply a modified retrospective transition method for the recognition and measurement of TDRs which will include a cumulative effect adjustment on the balance sheet in the period of adoption. Early adoption is permitted beginning January 1, 2022, including adoption in an interim period provided guidance is applied as of the beginning of the year.	Following our election of the fair value option for our secured receivable, and the expectation to elect the fair value option on any newly acquired financing receivables, we do not expect the adoption of the ASU to have an impact on the Consolidated Financial Statements or Notes to the Consolidated Financial Statements

13

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

3. BUSINESS COMBINATION

As referenced in Note 2, we have applied push-down accounting to FLIAC's consolidated financial statements, which resulted in the initial recognition of its assets and liabilities at fair value as of the acquisition date, April 1, 2022.

The total preliminary purchase consideration of the acquisition was $1,761 million, comprised of $1,748 million cash transferred for the purchase price and a $13 million cash reimbursement to the seller for transaction costs incurred. A bargain purchase gain was recognized in the amount of $5 million, representing the excess of the fair value of net assets acquired over the consideration paid. The bargain purchase gain was allocated to additional paid-in capital to reflect the transaction and the new basis of net assets recorded.

The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date and represents amounts recognized for each major class of assets and liabilities, after application of push-down accounting.

	Successor Company
	April 1, 2022
	(in millions)
ASSETS
Total investments	$	10,807
Cash and cash equivalents	1,578
Reinsurance recoverables	239
Net modified coinsurance receivable	68
Income taxes	352
Deposit asset	2,607
Other assets	96
Separate account assets	29,426
TOTAL ASSETS	$	45,173
LIABILITIES
Insurance liabilities	$	13,611
Other liabilities	370
Separate account liabilities	29,426
TOTAL LIABILITIES	43,407
Net assets acquired	1,766
Consideration	1,761
BARGAIN PURCHASE GAIN	$	5

During the third quarter of 2022, the Successor Company made the following corrections to the previously reported fair value of assets acquired and liabilities assumed at the acquisition date, which are reflected in the above chart. These corrections had no impact to net assets acquired, consideration paid, or the bargain purchase gain.

•$105 million decrease to Reinsurance recoverables;

•$63 million increase to Net modified coinsurance receivable;

•$8 million decrease to Deposit asset; and

•$50 million decrease to Insurance liabilities.

14

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

4.    SEGMENT INFORMATION

Following the acquisition by FGH, we have separated our business into two reportable segments, which we refer to as the "Retained Business" and the "Ceded Business."

The Retained Business consists of variable annuity products with guaranteed lifetime withdrawal benefit features as well as smaller blocks of variable annuity products with certain other living benefit and death benefit features. The Retained Business also includes variable universal life and fixed payout annuity products. The Retained Business is actively managed by FLIAC management and the Successor Company retains the full economic benefits and risks.

The Ceded Business represents certain business (primarily registered index-linked annuities and fixed annuities, which includes fixed indexed and fixed deferred annuities, and other variable annuities) where 100 percent of the assets and liabilities have been fully ceded to Prudential Insurance and Pruco Life under existing coinsurance and modified coinsurance agreements. We have a modco payable of $2,136 million equal to the assets held in the Ceded Business, which is included in the net modified coinsurance receivable. Historical information has not been revised for the segment presentation and is not comparable following the election of push-down accounting as of April 1, 2022.

The following is the Consolidated Statement of Financial Position by segment:

	September 30, 2022
	Retained Business		Ceded Business		Total
	(in millions)
ASSETS
Total investments	$	4,310	$	1,892	$	6,202
Cash and cash equivalents	553		723		1,276
Accrued investment income	45		11		56
Reinsurance recoverables	—		220		220
Net modified coinsurance receivable	—		70		70
Income taxes	90		—		90
Deposit asset	—		859		859
Other assets	117		2		119
Separate account assets	21,024		1,992		23,016
TOTAL ASSETS	$	26,139	$	5,769	$	31,908
LIABILITIES AND EQUITY
LIABILITIES
Insurance liabilities	$	3,019	$	3,285	$	6,304
Other liabilities	356		492		848
Separate account liabilities	21,024		1,992		23,016
TOTAL LIABILITIES	24,399		5,769		30,168
EQUITY	1,740		—		1,740
TOTAL LIABILITIES AND EQUITY	$	26,139	$	5,769	$	31,908

    

15

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following is comprehensive income (loss) by segment:

	Three Months Ended September 30, 2022
	Retained Business		Ceded Business		Total
	(in millions)
REVENUES
Premiums	$	8	$	—	$	8
Policy charges and fee income	131		—		131
Net investment income	47		45		92
Asset management and service fees	26		—		26
Other losses	(4)		(12)		(16)
Investment gains (losses), net	(463)		8		(455)
TOTAL REVENUES	(255)		41		(214)
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	(145)		41		(104)
Commission expense	27		—		27
General, administrative and other expenses	17		—		17
TOTAL BENEFITS AND EXPENSES	(101)		41		(60)
LOSS FROM OPERATIONS BEFORE INCOME TAXES	(154)		—		(154)
Income tax expense	3		—		3
NET LOSS	$	(157)	$	—	$	(157)
Other comprehensive income, before tax:
Changes in own-credit risk related to insurance liabilities	149		—		149
Less: Income tax expense	32		—		32
Other comprehensive income, net of taxes	117		—		117
Comprehensive loss	$	(40)	$	—	$	(40)

16

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Six Months Ended September 30, 2022
	Retained Business		Ceded Business		Total
	(in millions)
REVENUES
Premiums	$	11	$	—	$	11
Policy charges and fee income	261		—		261
Net investment income	82		107		189
Asset management and service fees	48		—		48
Other losses	(4)		(11)		(15)
Investment losses, net	(571)		(1,182)		(1,753)
TOTAL REVENUES	(173)		(1,086)		(1,259)
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	112		(1,086)		(974)
Commission expense	45		—		45
General, administrative and other expenses	55		—		55
TOTAL BENEFITS AND EXPENSES	212		(1,086)		(874)
LOSS FROM OPERATIONS BEFORE INCOME TAXES	(385)		—		(385)
Income tax benefit	(48)		—		(48)
NET LOSS	$	(337)	$	—	$	(337)
Other comprehensive income, before tax:
Changes in own-credit risk related to insurance liabilities	394		—		394
Less: Income tax expense	83		—		83
Other comprehensive income, net of taxes	311		—		311
Comprehensive loss	$	(26)	$	—	$	(26)

17

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

5.    INVESTMENTS

As discussed in Note 2, we have elected to apply the fair value option for FLIAC's entire portfolio of fixed maturity and equity securities, its secured receivable, and residential mortgage loans. The impact of the election has resulted in the following changes:

•Elimination of the "available-for-sale" designation on all fixed maturity securities, resulting in a change in the recording of unrealized gains and losses through "Investment gains (losses), net" in the consolidated statement of operations rather than in "Accumulated other comprehensive income" ("AOCI") as a component of equity in the consolidated statement of financial position;

•Elimination of the required allowance for current expected credit losses on applicable financial assets under ASC 326 - Financial Instruments - Credit Losses, which include fixed maturity securities designated as "available-for-sale" and mortgage and other loans; and

•Elimination of a significant portion of the required disclosures for available-for-sale securities. These disclosures primarily relate to the amortized cost and unrealized gains and losses on available-for-sale securities. Disclosures for historical periods under the Predecessor Company are retained throughout this note.

The accumulated unrealized gains and losses recorded in AOCI at March 31, 2022 related to the available-for-sale securities were reset in conjunction with our election of push-down accounting on April 1, 2022. Similarly, the allowance for credit losses at March 31, 2022 on our available-for-sale securities and secured receivable was eliminated in conjunction with our election of push-down accounting on April 1, 2022. As of September 30, 2022, there was no balance remaining in AOCI for unrealized gains and losses on our available-for-sale securities and no remaining allowance for credit losses.

See Note 7 for further discussion and disclosures of the fair values of these financial assets.

The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading) for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	654	$	74	$	1	$	—	$	727
Obligations of U.S. states and their political subdivisions	281		15		—		—		296
Foreign government bonds	106		9		1		—		114
U.S. public corporate securities	2,345		134		18		—		2,461
U.S. private corporate securities	1,635		24		14		1		1,644
Foreign public corporate securities	793		11		9		—		795
Foreign private corporate securities	920		5		34		—		891
Asset-backed securities(1)	1,058		5		1		—		1,062
Commercial mortgage-backed securities	692		22		8		—		706
Residential mortgage-backed securities(2)	72		3		—		—		75
Total fixed maturities, available-for-sale	$	8,556	$	302	$	86	$	1	$	8,771

(1)Includes credit-tranched securities collateralized by loan obligations, auto loans, education loans, equipment leases and sub-prime mortgages.

(2)Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

18

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the fair value and gross unrealized losses on available-for-sale fixed maturity securities without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross   Unrealized  Losses		Fair Value		Gross   Unrealized  Losses		Fair Value		Gross   Unrealized  Losses
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	74	$	1	$	—	$	—	$	74	$	1
Obligations of U.S. states and their political subdivisions	5		—		—		—		5		—
Foreign government bonds	13		1		7		—		20		1
U.S. public corporate securities	696		12		153		6		849		18
U.S. private corporate securities	855		14		—		—		855		14
Foreign public corporate securities	522		8		50		1		572		9
Foreign private corporate securities	689		34		—		—		689		34
Asset-backed securities	499		1		—		—		499		1
Commercial mortgage-backed securities	157		5		75		3		232		8
Residential mortgage-backed securities	6		—		—		—		6		—
Total fixed maturities, available-for-sale	$	3,516	$	76	$	285	$	10	$	3,801	$	86

As of December 31, 2021, the gross unrealized losses on fixed maturity available-for-sale securities without an allowance were comprised of $73 million related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $13 million related to other than high or highest quality securities based on NAIC or equivalent rating. As of December 31, 2021, the $10 million of gross unrealized losses of twelve months or more were concentrated in the Predecessor Company’s corporate securities within the consumer non-cyclical, capital goods, and finance sectors.

The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on write-downs and the allowance for credit losses of fixed maturities, for the Predecessor Company:

	Predecessor Company
	Three months ended September 30		Nine months ended September 30
	2021
	(in millions)
Fixed maturities, available-for-sale:
Proceeds from sales(1)	$	216	$	8,009
Proceeds from maturities/prepayments	196		607
Gross investment gains on sales and maturities	157		1,296
Gross investment losses on sales and maturities	(14)		(75)
Write-downs recognized in earnings (2)	—		(23)
(Addition to) release of allowance for credit losses	(2)		(2)

(1)Includes $(243) million of non-cash related proceeds due to the timing of trade settlements for the nine months ended September 30, 2021.

(2)Amounts represent write-downs on securities actively marketed for sale.

19

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the activity in the allowance for credit losses for fixed maturity securities, for the Predecessor Company:

	Predecessor Company
	Three Months Ended March 31, 2022
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	—	$	—	$	1	$	—	$	—	$	—	$	1
Additions to allowance for credit losses not previously recorded	—		—		—		—		—		—		—
Reductions for securities sold during the period	—		—		—		—		—		—		—
Additions on securities with previous allowance	—		—		—		—		—		—		—
Balance, end of period	$	—	$	—	$	1	$	—	$	—	$	—	$	1

	Predecessor Company
	Three Months Ended September 30, 2021
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Additions to allowance for credit losses not previously recorded	—		—		2		—		—		—		2
Reductions for securities sold during the period	—		—		—		—		—		—		—
Reductions on securities with previous allowance	—		—		—		—		—		—		—
Balance, end of period	$	—	$	—	$	2	$	—	$	—	$	—	$	2

20

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Predecessor Company
	Nine Months Ended September 30, 2021
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	—	$	—	$	1	$	—	$	—	$	—	$	1
Additions to allowance for credit losses not previously recorded	—		—		3		—		—		—		3
Reductions for securities sold during the period	—		—		(1)		—		—		—		(1)
Reductions on securities with previous allowance	—		—		(1)		—		—		—		(1)
Balance, end of period	$	—	$	—	$	2	$	—	$	—	$	—	$	2

See Note 2 to the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information about the Predecessor Company’s methodology for developing our allowance for credit losses for the Predecessor Company.

For the three and nine months ended September 30, 2021, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to adverse projected cash flows in the capital goods and transportation sectors within private corporate securities.

The Predecessor Company did not have any fixed maturity securities purchased with credit deterioration as of December 31, 2021.

Fixed Maturity Securities, Trading (Predecessor Company)

The net change in unrealized gains (losses) from fixed maturity securities, trading still held at period end, recorded by the Predecessor Company within “Other income (loss),” was $24 million and $(276) million during the three and nine months ended September 30, 2021, respectively.

Equity Securities (Predecessor Company)

The net change in unrealized gains (losses) from equity securities still held at period end, recorded by the Predecessor Company within “Other income (loss),” was $(3) million and $(12) million during the three and nine months ended September 30, 2021, respectively.

21

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Commercial Mortgage and Other Loans (Predecessor Company)

The following table sets forth the composition of “Commercial mortgage and other loans,” for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Amount (in millions)		% of Total
Commercial mortgage and agricultural property loans by property type:
Apartments/Multi-Family	$	385	25.5	%
Hospitality	17		1.1
Industrial	624		41.5
Office	196		13.0
Other	134		8.9
Retail	102		6.7
Total commercial mortgage loans	1,458		96.7	%
Agricultural property loans	51		3.3
Total commercial mortgage and agricultural property loans	1,509		100.0	%
Allowance for credit losses	(5)
Total net commercial mortgage and agricultural property loans	$	1,504

As of December 31, 2021, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States with the largest concentrations in California (34%), Texas (18%) and New York (7%) and included loans secured by properties in Europe (8%) and Australia (1%).

22

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans for the Predecessor Company:

	Predecessor Company
	Three Months Ended March 31,
	2022
	Commercial Mortgage Loans		Agricultural Property Loans		Total
	(in millions)
Allowance, beginning of period	$	5	$	—	$	5
Release of allowance for expected losses	(1)		—		(1)
Allowance, end of period	$	4	$	—	$	4

	Predecessor Company
	Three Months Ended September 30						Nine Months Ended September 30
	2021
	Commercial Mortgage Loans		Agricultural Property Loans		Total		Commercial Mortgage Loans		Agricultural Property Loans		Total
	(in millions)
Allowance, beginning of period	$	5	$	—	$	5	$	7	$	—	$	7
Addition to (release of) allowance for expected losses	(1)		—		(1)		(3)		—		(3)
Allowance, end of period	$	4	$	—	$	4	$	4	$	—	$	4

See Note 2 to the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information about the Predecessor Company's methodology for developing the allowance and expected losses.

For the three months ended March 31, 2022 and the three and nine months ended September 30, 2021, the net decrease in the allowance for credit losses on commercial mortgage and other loans was primarily related to the improving credit environment. Also impacting the decline for the three months ended September 30, 2021 were loan sales.

23

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Amortized Cost by Origination Year
	2021		2020		2019		2018		2017		Prior		Total
	(in millions)
Commercial Mortgage Loans
Loan-to-Value Ratio:
0%-59.99%	$	150	$	—	$	21	$	7	$	93	$	232	$	503
60%-69.99%	389		33		10		11		39		28		510
70%-79.99%	317		48		17		—		21		21		424
80% or greater	—		—		—		—		—		21		21
Total	$	856	$	81	$	48	$	18	$	153	$	302	$	1,458
Debt Service Coverage Ratio:
Greater or Equal to 1.2x	$	856	$	81	$	48	$	7	$	120	$	295	$	1,407
1.0 - 1.2x	—		—		—		11		—		—		11
Less than 1.0x	—		—		—		—		33		7		40
Total	$	856	$	81	$	48	$	18	$	153	$	302	$	1,458
Agricultural Property Loans
Loan-to-Value Ratio:
0%-59.99%	$	40	$	1	$	—	$	—	$	3	$	7	$	51
60%-69.99%	—		—		—		—		—		—		—
70%-79.99%	—		—		—		—		—		—		—
80% or greater	—		—		—		—		—		—		—
Total	$	40	$	1	$	—	$	—	$	3	$	7	$	51
Debt Service Coverage Ratio:
Greater or Equal to 1.2x	$	40	$	1	$	—	$	—	$	3	$	3	$	47
1.0 - 1.2x	—		—		—		—		—		—		—
Less than 1.0x	—		—		—		—		—		4		4
Total	$	40	$	1	$	—	$	—	$	3	$	7	$	51

See Note 2 to the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information about the commercial mortgage and other loans credit quality monitoring process.

As of December 31, 2021 there were no commercial and other loans past due or in non-accrual status held by the Predecessor Company. For additional information regarding the Predecessor Company's policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021.

The Predecessor Company did not hold any commercial mortgage and other loans that were purchased with credit deterioration as of December 31, 2021.

For the three months ended September 30, 2021, all commercial mortgage loans acquired were through direct origination. For the nine months ended September 30, 2021, there were $167 million commercial mortgage loans acquired, other than those through direct origination. For both the three and nine months ended September 30, 2021 there were $707 million of commercial and other loans sold.

24

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Other Invested Assets

The following table sets forth the composition of “Other invested assets,” as of the dates indicated.

	Successor Company		Predecessor Company
	September 30, 2022		December 31, 2021
	(in millions)
LPs/LLCs:
Equity method:
Private equity	$	14	$	19
Real estate-related	5		62
Subtotal equity method	19		81
Fair value:
Private equity	64		4
Real estate-related	—		6
Subtotal fair value	64		10
Total LPs/LLCs	83		91
Derivative instruments	265		3
Other	82		12
Total other invested assets	$	430	$	106

Amounts contained within Other are comprised primarily of residential mortgage loans and policy loans.

Accrued Investment Income

The following table sets forth the composition of “Accrued investment income,” as of the dates indicated:

	Successor Company		Predecessor Company
	September 30, 2022		December 31, 2021
	(in millions)
Fixed maturity securities	$	45	$	58
Commercial mortgage and other loans	—		3
Other invested assets	6		—
Short-term investments and cash equivalents	5		—
Total accrued investment income	$	56	$	61

There were no write-downs on accrued investment income for the three and six months ended September 30, 2022, the three months ended March 31, 2022, and the three and nine months ended September 30, 2021.

25

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:

	Successor Company				Predecessor Company
	Three Months Ended September 30		Six Months Ended September 30		Three Months Ended March 31		Three Months Ended September 30		Nine Months Ended September 30
	2022						2021
	(in millions)
Fixed maturities securities (1)	$	76	$	156	$	61	$	82	$	308
Equity securities	1		2		1		1		3
Secured receivable	7		18		—		—		—
Commercial mortgage and other loans	—		—		11		14		46
Other invested assets	10		14		29		11		50
Short-term investments and cash equivalents	3		5		1		1		1
Gross investment income	97		195		103		109		408
Less: investment expenses	(5)		(6)		(4)		(8)		(22)
Net investment income	$	92	$	189	$	99	$	101	$	386

(1)Includes fixed maturity securities classified as available-for-sale and trading for the three months ended March 31, 2022 and the three and nine months ended, September 30, 2021.

The activity above includes interest income related to fair value option investments.

Investment Gains (Losses), Net 

The following table sets forth “Investment gains (losses), net” by investment type, for the periods indicated:

	Successor Company				Predecessor Company
	Three Months Ended September 30		Six Months Ended September 30		Three Months Ended March 31		Three Months Ended September 30		Nine Months Ended September 30
	2022						2021
	(in millions)
Fixed maturity securities (1)	$	(458)	$	(1,102)	$	(21)	$	141	$	1,197
Secured receivable	(8)		(59)		—		—		—
Commercial mortgage and other loans	—		—		—		28		28
Derivatives	24		(560)		502		4,906		6,139
Other invested assets and equity securities	(13)		(32)		—		6		9
Investment gains (losses), net	$	(455)	$	(1,753)	$	481	$	5,081	$	7,373

(1)For the Predecessor Company, includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading.

Net Unrealized Gains (Losses) on Investments within AOCI (Predecessor Company)

The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:

	Predecessor Company
	December 31, 2021
	(in millions)
Fixed maturity securities, available-for-sale without an allowance	$	216
Derivatives designated as cash flow hedges(1)	25
Net unrealized gains on investments	$	241

26

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(1)For more information on cash flow hedges for the Predecessor Company, see Note 6.

Repurchase Agreements and Securities Lending

In the normal course of business, FLIAC sells securities under agreements to repurchase and enters into securities lending transactions. These balances are recorded within Other liabilities in the unaudited interim consolidated statements of financial position.

The following table sets forth the remaining contractual maturities of the Successor Company's outstanding repurchase agreements by security type.

	Successor Company
	September 30, 2022
	Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 days		30-90 days		Total
	(in millions)
U.S. corporate public securities	$	—	$	—	$	200	$	200

The following table sets forth the remaining contractual maturities of the Successor Company's cash collateral received for securities loaned by security type:

	Successor Company
	September 30, 2022
	Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 days		30-90 days		Total
	(in millions)
Equity securities	$	169	$	—	$	—	$	169

As of December 31, 2021 the Predecessor Company had no outstanding repurchase agreements or securities lending transactions.

6.    DERIVATIVES AND HEDGING

Types of Derivative Instruments and Derivative Strategies

The Company utilizes various derivative instruments and strategies to manage its risk. Commonly used derivative instruments include but are not necessarily limited to:

•Interest rate contracts: futures, swaps, forwards, options, caps and floors

•Equity contracts: futures, options and total return swaps

•Foreign exchange contracts: futures, options, forwards and swaps

•Credit contracts: single and index reference credit default swaps

The Predecessor Company previously accounted for the index-linked features of certain annuity products as embedded derivatives. The Successor Company elected the fair value option for these annuity products, all of which are included in the Ceded Business. See Note 7 for further information.

See below for information on these contracts and the related strategies.

Interest Rate Contracts

Interest rate swaps and futures are used by the Company to reduce risks from changes in interest rates, manage interest rate exposures arising from mismatches between assets and liabilities and to hedge against changes in their values it owns or anticipates acquiring or selling.

27

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Swaps may be attributed to specific assets or liabilities or to a portfolio of assets or liabilities. Under interest rate swaps, the Company agrees with counterparties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed upon notional principal amount.

In standardized exchange-traded interest rate futures transactions, the Company purchases or sells a specified number of contracts, the values of which are determined by the daily market values of underlying referenced investments. The Company enters into exchange-traded futures with regulated futures commission's merchants who are members of a trading exchange.

Equity Contracts

Equity options, total return swaps, and futures are used by the Company to manage its exposure to the equity markets which impacts the value of assets and liabilities it owns or anticipates acquiring or selling.

Equity index options are contracts which will settle in cash based on differentials in the underlying indices at the time of exercise and the strike price. The Company uses combinations of purchases and sales of equity index options to hedge the effects of adverse changes in equity indices within a predetermined range.

Total return swaps are contracts whereby the Company agrees with counterparties to exchange, at specified intervals, the difference between the return on an asset (or market index) and Secured Overnight Financing Rate ("SOFR") plus an associated funding spread based on a notional amount. The Company generally uses total return swaps to hedge the effect of adverse changes in equity indices.

In standardized exchange-traded equity futures transactions, the Company purchases or sells a specified number of contracts, the values of which are determined by the daily market values underlying referenced equity indices. The Company enters into exchange-traded futures with regulated futures commission's merchants who are members of a trading exchange.

Foreign Exchange Contracts

Currency derivatives, including currency swaps and forwards, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell.

Under currency forwards, the Company agrees with counterparties to deliver a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. The Company executes forward sales of the hedged currency in exchange for U.S. dollars at a specified exchange rate. The maturities of these forwards correspond with the future periods in which the non-U.S. dollar-denominated earnings are expected to be generated.

Under currency swaps, the Company agrees with counterparties to exchange, at specified intervals, the difference between one currency and another at an exchange rate and calculated by reference to an agreed principal amount. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party.

Credit Contracts

The Company purchases credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio.

Primary Risks Managed by Derivatives

The tables below provide a summary, by operating segment, of the gross notional amount and fair value of derivative contracts, by the primary underlying risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral. As part of our application of push-down accounting in connection with the acquisition of the Company, we have de-designated the Predecessor Company's hedging relationships for all of our derivative instruments and accordingly any related accumulated unrealized gains and losses that were previously recorded in AOCI were reset to zero at the acquisition date. Historical information has not been restated

28

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

under the updated segmentation and is not comparable following the change in ownership on April 1, 2022. See Notes 2 and 3 for further information regarding the acquisition of the Company and Note 4 for further information regarding the Company's segments.

	Successor Company
	September 30, 2022
Primary Underlying Risk/Instrument Type	Gross Notional Values/Units			Fair Value
				Assets		Liabilities
	(in millions)
Retained Business
Interest Rate
Interest Rate Swaps	$	9,761		$	212	$	(546)
Currency/Interest Rate
Foreign Currency Swaps	97		—	17		—
Credit
Credit Default Swaps	520			1		(1)
Equity
Equity Futures	1,728			180		—
Total Return Swaps	—			94		—
Equity Options	3,686			232		—
Total Derivatives, Retained Business	15,792			736		(547)
Ceded Business
Interest Rate
Interest Rate Swaps	2,693			49		(119)
Currency/Interest Rate
Foreign Currency Swaps	423			88		—
Credit
Credit Default Swaps	71			—		(3)
Equity
Total Return Swaps	4			—		(1)
Equity Options	10,133			232		(571)
Total Derivatives, Ceded Business	13,324			369		(694)
Total Derivatives (1)	$	29,116		$	1,105	$	(1,241)

(1)     Recorded in “Other invested assets” and “Other liabilities” in the Unaudited Interim Consolidated Statements of Financial Position.

29

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Predecessor Company
	December 31, 2021
Primary Underlying Risk/Instrument Type	Gross Notional		Fair Value
			Assets		Liabilities
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Currency/Interest Rate
Foreign Currency Swaps	$	637	$	29	$	(1)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Futures	$	55	$	—	$	—
Interest Rate Swaps	10,520		339		(255)
Foreign Currency
Foreign Currency Forwards	50		—		(1)
Currency/Interest Rate
Foreign Currency Swaps	208		10		(1)
Credit
Credit Default Swaps	1,746		48		—
Equity
Equity Futures	855		1		(1)
Total Return Swaps	4,803		88		(81)
Equity Options	20,582		963		(1,028)
Total Derivatives Not Qualifying as Hedge Accounting Instruments	$	38,819	$	1,449	$	(1,367)
Total Derivatives (1)(2)	$	39,456	$	1,478	$	(1,368)

(1)Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $4,060 million as of December 31, 2021 included in “Future policy benefits” and $2,041 million as of December 31, 2021 included in “Policyholders’ account balances". Other assets included $400 million as of December 31, 2021. The fair value of the related reinsurance, included in "Reinsurance recoverables" and/or "Reinsurance payables" was an asset of $1,881 million as of December 31, 2021.

(2)Recorded in “Other invested assets”, “Other liabilities”, and "Payables to parent and affiliates" in the Unaudited Interim Consolidated Statements of Financial Position.

30

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables) that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	Successor Company
	September 30, 2022
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the  Statements of Financial Position		Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives	$	1,105	$	(840)	$	265	$	(265)	$	—
Offsetting of Financial Liabilities:
Derivatives	$	1,241	$	(956)	$	285	$	—	$	285

	Predecessor Company
	December 31, 2021
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position		Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives	$	1,478	$	(1,475)	$	3	$	—	$	3
Offsetting of Financial Liabilities:
Derivatives	$	1,368	$	(1,154)	$	215	$	(215)	$	—

(1)Amounts exclude the excess of collateral received/pledged from/to the counterparty.

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above see “Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

31

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables provide the financial statement classification and impact of derivatives, by segment.

	Successor Company
	Three Months Ended September 30		Six Months Ended September 30
	2022
	Investment gains (losses), net
	(in millions)
Retained Business
Interest Rate	$	(259)	$	(704)
Currency/Interest Rate	12		12
Credit	(2)		(2)
Equity	124		827
Total, Retained Business	(125)		133
Ceded Business
Interest Rate	(36)		(56)
Currency	—		2
Currency/Interest Rate	(36)		94
Credit	2		(4)
Equity	219		(729)
Total, Ceded Business	149		(693)
Total	$	24	$	(560)

	Predecessor Company
	Three Months Ended March 31, 2022
	Realized Investment Gains (Losses)		Net Investment Income		Other Income (Loss)		Change in AOCI
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Currency/Interest Rate	$	1	$	1	$	2	$	4
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(527)		—		—		—
Currency	—		—		—		—
Currency/Interest Rate	(6)		—		—		—
Credit	(12)		—		—		—
Equity	59		—		—		—
Embedded Derivatives	986		—		—		—
Total Derivatives Not Qualifying as Hedge Accounting Instruments:	500		—		—		—
Total	$	501	$	1	$	2	$	4

32

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Predecessor Company
	Three Months Ended September 30, 2021
	Realized Investment Gains (Losses)		Net Investment Income		Other Income (Loss)		Change in AOCI
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Currency/Interest Rate	$	3	$	2	$	5	$	33
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(63)		—		—		—
Currency	2		—		—		—
Currency/Interest Rate	(9)		—		—		—
Credit	1		—		—		—
Equity	(18)		—		—		—
Embedded Derivatives	4,990		—		—		—
Total Derivatives Not Qualifying as Hedge Accounting Instruments:	4,903		—		—		—
Total	$	4,906	$	2	$	5	$	33

	Predecessor Company
	Nine Months Ended September 30, 2021
	Realized Investment Gains (Losses)		Net Investment Income		Other Income (Loss)		Change in AOCI
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Currency/Interest Rate	$	8	$	11	$	11	$	58
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(1,853)		—		—		—
Currency	2		—		—		—
Currency/Interest Rate	1		—		—		—
Credit	11		—		—		—
Equity	(1,798)		—		—		—
Embedded Derivatives	9,769		—		—		—
Total Derivatives Not Qualifying as Hedge Accounting Instruments:	6,132		—		—		—
Total	$	6,140	$	11	$	11	$	58

33

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Presented below is a roll forward of current period cash flow hedges in AOCI before taxes:

	Predecessor Company
	(in millions)
Balance, December 31, 2021	$	25
Amount recorded in AOCI
Currency/Interest Rate	9
Total amount recorded in AOCI	9
Amount reclassified from AOCI to income
Currency/Interest Rate	(5)
Total amount reclassified from AOCI to income	(5)
Balance, March 31, 2022	$	29

The changes in fair value of cash flow hedges are deferred in AOCI and are included in "Net unrealized investment gains (losses)" in the Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss); these amounts are then reclassified to earnings when the hedged item affects earnings.

Following the application of push-down accounting, amounts previously deferred in AOCI related to the Predecessor Company's cash flow hedges were classified to retained earnings due to the Successor Company's election to de-designate the hedging relationship for all of its derivative instruments. Accordingly, there were no amounts recorded in or reclassified from AOCI by the Successor Company during the three and six months ended September 30, 2022. Due to the Successor Company's election to apply push-down accounting and the de-designation of all hedging relationships on the acquisition date, the Successor Company does not expect to reclassify any amounts from AOCI to earnings during the subsequent twelve months ending September 30, 2023.

The exposures the Predecessor Company hedged with these qualifying cash flow hedges were the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments.

There were no material amounts reclassified from AOCI into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging.

Counterparty Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. FLIAC manages credit risk by (i) entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties governed by master netting agreement, as applicable; (ii) trading through central clearing and OTC parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single-party credit exposures which are subject to periodic management review.

Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position.

34

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

7.    FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement – Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 - Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities.

Level 2 - Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs.

Level 3 - Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value.

For a discussion of the Company's valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see further below as well as Note 5 to the Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021.

35

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Fair Value Option Election

As discussed in Note 2, we have elected to adopt the fair value option for several of our financial assets and liabilities. The following are the financial assets and liabilities for which we have elected the fair value option:

•Fixed maturity securities - We have elected the fair value option for our entire fixed maturity securities portfolio. Following the election, fixed maturity securities will no longer carry available-for-sale or trading designations. Following the election, there have been no significant changes in the pricing inputs and valuation methodologies for these securities as disclosed in Note 5 of the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

•Equity securities - We have elected the fair value option for our entire equity securities portfolio. Following the election, there have been no significant changes in the pricing inputs and valuation methodologies for these securities as disclosed in Note 5 of the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

•Secured receivable - We have elected the fair value option for our entire Secured receivable, which represents our participating interest in the underlying commercial mortgage and other loans and certain private credit fixed maturity security securities. See "Updated Fair Value Methods and Assumptions" further below. During the third quarter of September 30, 2022, all assets within the Secured receivable were transferred out of the Company as part of the novation program discussed in Note 1. Accordingly, the Secured receivable is no longer carried on FLIAC's unaudited interim consolidated statements of financial position as of September 30, 2022.

•Residential mortgage loans - We have elected the fair value option for our entire residential mortgage loans portfolio, which are reported in "Other invested assets". See "Updated Fair Value Methods and Assumptions" further below.

•Reinsurance recoverable - We have elected the fair value option for the Reinsurance recoverables associated with the reinsurance agreement with Prudential Insurance. See "Updated Fair Value Methods and Assumptions" further below.

•Net modified coinsurance receivable - We have elected the fair value option for our modified coinsurance receivable and payable balances associated with the reinsurance agreement with Pruco Life regarding variable annuity base contracts, along with the living benefit guarantees. See "Updated Fair Value Methods and Assumptions" further below.

•Deposit asset - We have elected the fair value option for the deposit asset associated with the reinsurance agreement with Pruco Life regarding fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal. See "Updated Fair Value Methods and Assumptions" further below.

•Insurance liabilities - We have elected the fair value option for the entirety of our insurance liabilities. See "Updated Fair Value Methods and Assumptions" further below.

36

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Assets and Liabilities by Hierarchy Level – The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

	Successor Company
	September 30, 2022
	Level 1		Level 2		Level 3		Netting (1)		Total
	(in millions)
Assets
Fixed Maturity Securities
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	643	$	—	$	—	$	643
Obligations of U.S. states and their political subdivisions	—		167		—		—		167
Foreign government bonds	—		15		—		—		15
U.S. corporate public securities	—		2,681		—		—		2,681
U.S. corporate private securities	—		359		334		—		693
Foreign corporate public securities	—		203		—		—		203
Foreign corporate private securities	—		274		32		—		306
Asset-backed securities(2)	—		507		155		—		662
Commercial mortgage-backed securities	—		162		—		—		162
Residential mortgage-backed securities	—		33		—		—		33
Total Fixed Maturity Securities	—		5,044		521		—		5,565
Equity securities	170		—		—		—		170
Short-term investments	37		—		—		—		37
Cash and cash equivalents	519		757		—		—		1,276
Other invested assets(3)	180		925		71		(840)		336
Deposit asset	—		—		859		—		859
Reinsurance recoverables	—		—		220		—		220
Net modified coinsurance receivable	—		—		70		—		70
Subtotal excluding separate account assets	906		6,726		1,741		(840)		8,533
Separate account assets(4)	—		23,016		—		—		23,016
Total assets	$	906	$	29,742	$	1,741	$	(840)	$	31,549
Liabilities
Insurance Liabilities	$	—	$	—	$	6,304	$	—	$	6,304
Other liabilities	—		1,241		—		(956)		285
Total liabilities	$	—	$	1,241	$	6,304	$	(956)	$	6,589

37

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Predecessor Company
	December 31, 2021
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Assets
Fixed Maturity Securities, available-for-sale:
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	727	$	—	$	—	$	727
Obligations of U.S. states and their political subdivisions	—		296		—		—		296
Foreign government bonds	—		114		—		—		114
U.S. corporate public securities	—		2,460		—		—		2,460
U.S. corporate private securities	—		1,556		89		—		1,645
Foreign corporate public securities	—		795		—		—		795
Foreign corporate private securities	—		791		101		—		892
Asset-backed securities(2)	—		1,039		23		—		1,062
Commercial mortgage-backed securities	—		674		32		—		706
Residential mortgage-backed securities	—		54		20		—		74
Total Fixed Maturity Securities, available-for-sale	—		8,506		265		—		8,771
Fixed maturities, trading	—		27		—				27
Equity securities	321		—		1				322
Short-term investments	519		263		13				795
Cash equivalents	372		1,359		8				1,739
Other invested assets(3)	1		1,477		—		(1,475)		3
Other assets	—				400				400
Reinsurance recoverables	—				1,881				1,881
Subtotal excluding separate account assets	1,213		11,632		2,568		(1,475)		13,938
Separate account assets(4)	—		32,267		—				32,267
Total assets	$	1,213	$	43,899	$	2,568	$	(1,475)	$	46,205
Liabilities
Future policy benefits(5)	$	—	$	—	$	4,060	$	—	$	4,060
Policyholders' account balances	—		—		2,041		—		2,041
Payables to parent and affiliates	—		1,367		—		(1,152)		215
Other liabilities	1		—		—		(1)		—
Total liabilities	$	1	$	1,367	$	6,101	$	(1,153)	$	6,316

(1)“Netting” amounts represent offsetting considerations as disclosed in Note 6.

(2)Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3)Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value ("NAV") per share (or its equivalent) as a practical expedient. At September 30, 2022 (Successor Company) and December 31, 2021 (Predecessor Company), the fair values of such investments were $64 million and $10 million, respectively.

(4)Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Statements of Financial Position.

(5)As of December 31, 2021, the net embedded derivative liability position of $4,060 million includes $62 million of embedded derivatives in an asset position and $4,122 million of embedded derivatives in a liability position.

38

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Quantitative Information Regarding Internally Priced Level 3 Assets and Liabilities – The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities.

	Successor Company
	September 30, 2022
	Fair Value		Valuation Techniques	Unobservable     Inputs	Minimum		Maximum		Weighted Average		Impact of Increase in Input on Fair  Value(1)
	(in millions)
Assets:
Retained business
Corporate securities (2)	$	334	Discounted cash flow	Discount rate	3.85	%	8.89	%	6.00	%	Decrease
	32		Discounted cash flow	Discount rate	5.11	%	7.33	%	6.22	%	Decrease
Asset-backed securities	155		Discounted cash flow	Discount rate	3.35	%	8.47	%	4.84	%	Decrease
Other invested assets - Residential mortgage loans	71		Trade price	Trade price	N/A		N/A		N/A		Increase
Deposit asset	859		Fair values are determined using the same unobservable inputs as insurance liabilities.
Reinsurance recoverables	220		Fair values are determined using the same unobservable inputs as insurance liabilities.
Net modified coinsurance receivable	70		Fair values are determined using the same unobservable inputs as insurance liabilities.
Liabilities:
Insurance liabilities
Retained business	$	3,019	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over risk free	0.18	%	2.85	%			Decrease
				Utilization rate(8)	77	%	100	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	16	%			Decrease
				Equity volatility curve	22	%	30	%			Increase
Ceded business	$	3,285	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over SOFR (7)	0.00	%	1.96	%			Decrease
				Utilization rate(8)	77	%	100	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	16	%			Decrease
				Equity volatility curve	22	%	30	%			Increase

39

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Predecessor Company
	December 31, 2021
	Fair Value		Valuation Techniques	Unobservable     Inputs	Minimum		Maximum		Weighted Average		Impact of Increase in Input on Fair  Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	163	Discounted cash flow	Discount rate	2.34	%	10.17	%	2.82	%	Decrease
			Market Comparables	EBITDA multiples(3)	6.5X		12.4X		8.8X		Increase
			Liquidation	Liquidation value	62.58	%	62.58	%	62.58	%	Increase
Other assets	400		Fair values are determined using the same unobservable inputs as policyholders' account balances.
Reinsurance recoverables	1,881		Fair values are determined using the same unobservable inputs as future policy benefits and policyholders' account balances.
Liabilities:
Future policy benefits(4)	$	4,060	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over LIBOR(7)	0.03	%	1.13	%			Decrease
				Utilization rate(8)	39	%	96	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	15	%			Decrease
				Equity volatility curve	16	%	25	%			Increase
Policyholders' account balances(5)	$	2,041	Discounted cash flow	Lapse rate(6)	1	%	42	%			Decrease
				Spread over LIBOR(7)	0.03	%	1.17	%			Decrease
				Equity volatility curve	6	%	31	%			Increase

(1)Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.

(2)Includes assets classified as fixed maturity securities, at fair value as of September 30, 2022 and fixed maturity securities, available-for-sale and fixed maturity securities, trading as of December 31, 2021.

(3)Represents multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.

(4)Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(5)Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s annuity products that are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(6)Lapse rates for contracts with living benefit guarantees are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these embedded derivatives.

(7)The spread over the SOFR and LIBOR swap curve represents the premium added to the proxy for the risk-free rate (SOFR/LIBOR) to reflect the Company's estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements, living benefit guarantees, and index-linked interest crediting guarantees are insurance liabilities and are therefore senior to debt.

(8)The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration and begin lifetime withdrawals at various time intervals from contract inception.The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

(9)The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of September 30, 2022 and December 31, 2021, the minimum withdrawal rate assumption is 76% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.

(10)The range reflects the mortality rates for the vast majority of business with living benefits, with policyholders ranging from 45 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age, and duration. A mortality improvement assumption is also incorporated into the overall mortality table.

40

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Interrelationships Between Unobservable Inputs – In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another, or multiple, inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:

Corporate Securities – The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors. During weaker economic cycles, as the expectations of default increases, credit spreads widen, which results in a decrease in fair value.

Future Policy Benefits (Predecessor Company)/Insurance Liabilities, at fair value (Successor Company) – The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent that more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money.

Updated Fair Value Methods and Assumptions

The following represents the updated methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis subsequent to the election of the fair value option:

Secured receivable - Fair value for the underlying commercial mortgage loans is based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate or foreign government bond rate (for non-U.S. dollar-denominated loans) plus an appropriate credit spread for loans of similar quality, average life and currency. The quality ratings for these loans, a primary determinant of the credit spreads and a significant component of the pricing process, are based on an internally-developed methodology. Certain commercial mortgage loans are valued incorporating other factors, including the terms of the loans, the principal exit strategies for the loans, prevailing interest rates and credit risk.

The fair values of the underlying private credit fixed maturities, which are originated by internal private asset managers, are primarily determined using discounted cash flow models. These models primarily use observable inputs that include Treasury or similar base rates plus estimated credit spreads to value each security. The credit spreads are obtained through a survey of private market intermediaries who are active in both primary and secondary transactions, and consider, among other factors, the credit quality and the reduced liquidity associated with private placements. Internal adjustments are made to reflect variation in observed sector spreads. Since most private placements are valued using standard market observable inputs and inputs derived from, or corroborated by, market observable data including, but not limited to observed prices and spreads for similar publicly or privately traded issues. For certain private fixed maturities, the discounted cash flow model may incorporate significant unobservable inputs, which reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset.

Residential mortgage loans - Fair value for residential mortgage loans is based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate or foreign government bond rate (for non-U.S. dollar-denominated loans) plus an appropriate credit spread for loans of similar quality, average life, and currency. The quality ratings for these loans, a primary determinant of the credit spreads and a significant component of the pricing process, are based on an internally-developed methodology. Certain residential mortgage loans are valued incorporating other factors, including the terms of the loans, the principal exit strategies for the loans, prevailing interest rates and credit risk.

Deposit asset - The deposit asset represents assets, held in trust by the reinsurer, that back the insurance liabilities under the reinsurance agreement regarding our fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal income. The deposit is recorded to match the associated insurance liabilities, which are recorded at fair value. Accordingly, the fair value of our deposit asset is determined by the fair value calculation of our insurance liabilities. See discussion of the fair value determination for insurance liabilities below.

41

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Reinsurance recoverable - The reinsurance recoverable represents a recoverable that backs the insurance liabilities under the reinsurance agreement regarding the business reinsured to Prudential Insurance. The reinsurance recoverable is recorded to match the associated insurance liabilities, which are recorded at fair value. Accordingly, the fair value of our reinsurance recoverable is determined by the fair value calculation of our insurance liabilities. See discussion of the fair value determination for insurance liabilities below.

Modified coinsurance agreement receivables and payables - The modified coinsurance receivable represents the reserve credits for the insurance liabilities covered under the reinsurance agreements regarding our variable annuity base contracts, along with guaranteed benefits. The modified coinsurance receivable is recorded to match the associated insurance liabilities, which are recorded at fair value. Accordingly, the fair value of our modified coinsurance receivable is determine by the fair value calculation of our insurance liabilities. See our discussion of the fair value determination for insurance liabilities below. Similarly, the modified coinsurance payable primarily represents the fair value of the cession of assets backing the ceded insurance liabilities under the reinsurance agreement. Accordingly, the fair value of the modified coinsurance payable is calculated to match the fair value of the assets under the reinsurance agreement. See our discussion of the fair value determination for the respective assets within the modified coinsurance portfolio, which are included in our discussion of fair value herein as well as Note 5 of the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Insurance liabilities - Our insurance liabilities are comprised of guarantees primarily associated with the living benefit features of certain variable annuity contracts, including guaranteed minimum accumulation benefits ("GMAB"), guaranteed withdrawal benefits ("GMWB"), guaranteed minimum death benefits ("GMDB") and guaranteed minimum income and withdrawal benefits ("GMIWB"). These are optional riders that are added to the base variable annuity contract, which includes Mortality and Expense charges (M&E) and contract charges. The fair values of these liabilities are calculated as the present value of future expected benefit payments to customers, anticipated future trail commissions paid to agents and certain administrative expenses less the present value of future expected rider fees, M&E charges, contract charges and the anticipated future reimbursement of certain asset management fees. This methodology could result in either a liability or asset balance, given changing capital market conditions and various actuarial assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management's judgment.

The significant inputs to the valuation models include capital market assumptions, such as interest rate levels and volatility assumptions, as well as actuarially determined assumptions, including contractholder behavior, such as lapse rates, benefit utilization rates, withdrawal rates, and mortality rates. Since many of these assumptions are unobservable and are considered to be significant inputs to the liability valuation, the insurance liabilities have been reflected within Level 3 in the fair value hierarchy.

Changes in Level 3 Assets and Liabilities – The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate.

42

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Successor Company
	Three Months Ended September 30, 2022
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturity securities
Corporate securities(3)	$	314	$	(22)	$	232	$	—	$	—	$	(44)	$	(114)	$	—	$	—	$	366	$	—
Structured securities(4)	25		(2)		150		—		—		(18)		—		—		—		155		—
Other assets:
Other invested assets	—		—		71		—		—		—		—		—		—		71
Secured receivable	1,555		(9)		22		(60)		—		—		(1,508)		—		—		—		—
Deposit asset	2,158		(3)		—		—		—		—		(1,296)		—		—		859		—
Reinsurance recoverables	378		(158)		—		—		—		—		—		—		—		220		—
Net modified coinsurance receivable	215		(145)		—		—		—		—		—		—		—		70		—

	Successor Company
	Six Months Ended September 30, 2022
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturity securities
Corporate securities(3)	$	190	$	(38)	$	439	$	—	$	—	$	(55)	$	(117)	$	—	$	(53)	$	366	$	—
Structured securities(4)	33		(2)		175		(10)		—		(18)		(10)		—		(13)		155		—
Other assets:
Other invested assets	—		—		71		—		—		—		—		—		—		71
Secured receivable	1,622		(59)		22		(75)		—		—		(1,510)		—		—		—		—
Deposit asset	2,615		(144)		—		—		—		—		(1,612)		—		—		859		—
Reinsurance recoverables	344		(124)		—		—		—		—		—		—		—		220		—
Net modified coinsurance receivable	5		65		—		—		—		—		—		—		—		70		—

43

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Successor Company
	Three Months Ended September 30, 2022
			Incurred losses
	Fair Value, beginning of period		Reduction in estimates of ultimate losses		Increase in estimates of ultimate losses		Change in fair value (discount rate)		Paid losses		Other		Fair Value, end of period
	(in millions)
Insurance Liabilities	$	11,257	$	(4,615)	$	393	$	(808)	$	111	$	(34)	$	6,304

	Successor Company
	Six Months Ended September 30, 2022
			Incurred losses
	Fair Value, beginning of period		Reduction in estimates of ultimate losses		Increase in estimates of ultimate losses		Change in fair value (discount rate)		Paid losses		Other		Fair Value, end of period
	(in millions)
Insurance Liabilities	$	13,611	$	(6,269)	$	1,599	$	(2,328)	$	209	$	(518)	$	6,304

"Total realized and unrealized gains (losses)" related to our level 3 assets are included in earnings in Investment gains (losses). In addition, all activity related to our level 3 liabilities are recognized in earnings within change in Policyholders' benefits and changes in fair value of insurance liabilities.

	Predecessor Company
	Three Months Ended March 31, 2022
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Corporate securities(3)	190		(9)		5		(4)		—		(2)		—		—		—		180		(9)
Structured securities(4)	76		(4)		—		(10)		—		(2)		—		—		(13)		47		(4)
Other assets:
Equity securities	1		—		—		—		—		—		—		—		—		1		—
Short term investments	13		—		—		—		—		(13)		—		—		—		—		—
Cash equivalents	8		—		—		—		—		(8)		—		—		—		—		—
Other assets	400		(21)		13		—		—		(16)		—		—		—		376		(6)
Reinsurance recoverables	1,881		201		4		—		—		19		(239)		—		—		1,866		222
Liabilities:
Future policy benefits	(4,060)		715		—		—		(48)		—		—		—		—		(3,393)		686
Policyholders' account balances(5)	(2,041)		124		—		—		—		(17)		—		—		—		(1,934)		89

44

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Predecessor Company
	Three Months Ended March 31, 2022
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (loss)
	(in millions)
Fixed maturities, available-for-sale	$	—	$	—	$	(12)	$	—	$	—	$	—	$	(12)
Other assets:
Other assets	(21)		—		—		—		(6)		—		—
Reinsurance recoverables	201		—		—		—		222		—		—
Liabilities:
Future policy benefits	715		—		—		—		686		—		—
Policyholders' account balances	124		—		—		—		89		—		—

	Predecessor Company
	Three Months Ended September 30, 2021
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	15	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	15	$	—
Corporate securities(3)	232		(6)		143		(11)		—		(14)		(122)		2		—		224		(5)
Structured securities(4)	216		—		32		—		—		(1)		(20)		—		(172)		55		—
Other assets:
Fixed maturities, trading	5		—		2		—		—		—		—		—		(5)		2		—
Equity securities	5		—		—		—		—		—		(4)		—		—		1		—
Short term investments	23		—		6		—		—		(17)		—		—		—		12		—
Cash equivalents	—		—		—		—		—		—		—		—		—		—		—
Other assets	68		1		1		—		—		(1)		—		—		—		69		—
Reinsurance recoverables	302		(4)		4		—		—		—		—		—		—		302		(1)
Liabilities:
Future policy benefits	(12,530)		8,380		—		—		(49)		—		—		—		—		(4,199)		14
Policyholders' account balances(5)	(1,361)		(8)		—		—		(88)		—		—		—		—		(1,457)		543

45

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Predecessor Company
	Three Months Ended September 30, 2021
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (loss)
	(in millions)
Fixed maturities, available-for-sale	$	—	$	—	$	(6)	$	—	$	(2)	$	—	$	(3)
Other assets:
Fixed maturities, trading	—		—		—		—		—		—		—
Equity securities	—		—		—		—		—		—		—
Short term investments	—		—		—		—		—		—		—
Cash equivalents	—		—		—		—		—		—		—
Other assets	1		—		—		—		—		—		—
Reinsurance recoverables	(4)		—		—		—		(1)		—		—
Liabilities:
Future policy benefits	8,380		—		—		—		14		—		—
Policyholders' account balances	(8)		—		—		—		543		—		—

	Predecessor Company
	Nine Months Ended September 30, 2021
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	15	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	15	$	—
Corporate securities(3)	149		(5)		249		(11)		—		(45)		(122)		17		(8)		224		(6)
Structured securities(4)	19		(1)		235		—		—		(6)		(20)		—		(172)		55		(1)
Other assets:
Fixed maturities, trading	5		—		2		—		—		—		—		—		(5)		2		—
Equity securities	4		1		—		—		—		—		(4)		—		—		1		1
Short term investments	10		—		30		—		—		(29)		—		1		—		12		—
Cash equivalents	—		—		—		—		—		—		—		—		—		—		—
Other assets	54		14		7		—		—		(6)		—		—		—		69		8
Reinsurance recoverables	409		(120)		13		—		—		—		—		—		—		302		(106)
Liabilities:
Future policy benefits	(17,314)		13,746		—		—		(631)		—		—		—		—		(4,199)		1,281
Policyholders' account balances(5)	(580)		(516)		—		—		(361)		—		—		—		—		(1,457)		79

46

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Predecessor Company
	Nine Months Ended September 30, 2021
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (loss)
	(in millions)
Fixed maturities, available-for-sale	$	(3)	$	—	$	(3)	$	—	$	(5)	$	—	$	(2)
Other assets:
Fixed maturities, trading	—		—		—		—		—		—		—
Equity securities	—		1		—		—		—		1		—
Short term investments	—		—		—		—		—		—		—
Cash equivalents	—		—		—		—		—		—		—
Other assets	14		—		—		—		8		—		—
Reinsurance recoverables	(120)		—		—		—		(106)		—		—
Liabilities:
Future policy benefits	13,746		—		—		—		1,281		—		—
Policyholders' account balances	(516)		—		—		—		79		—		—

.

(1)Realized investment gains (losses) on future policy benefits and reinsurance recoverables primarily represent the change in the fair value of the Company's living benefit guarantees on certain of its variable annuity contracts.

(2)Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(3)Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.

(4)Includes asset-backed and residential mortgage-backed securities.

(5)Issuances and settlements for Policyholders' account balances are presented net in the rollforward.

Change in Fair Value of Insurance Contracts

The components of the change in fair value of our insurance contracts are reported in several categories within Revenues and Benefits and expenses in our consolidated statements of operations and comprehensive income (loss). The revenue items include Premiums, Policy charges and fee income, and Asset management and service fees. The Benefits and expenses items include Policyholders' benefits and changes in fair value of insurance liabilities and commission expense. Policyholders' benefits and changes in fair value of insurance liabilities includes the following changes in fair value of the assets and liabilities for which we have elected the fair value option:

	Successor Company
	Three Months Ended		Six Months Ended
	September 30, 2022
	(in millions)
Assets:
Reinsurance recoverables	$	(158)	$	(19)
Net modified coinsurance receivable	(145)		2
Deposit asset	(1,299)		(1,748)
Liabilities:
Insurance liabilities	$	4,953	$	7,307

47

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Fair Value of Financial Instruments

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position. In some cases the carrying amount equals or approximates fair value.

	Successor Company
	September 30, 2022
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Accrued investment income	$	—	$	56	$	—	$	56	$	56
Other invested assets - Policy loans	—		—		11		11		11
Liabilities:
Repurchase agreements	$	—	$	200	$	—	$	200	$	200
Cash collateral for loaned securities	—		169		—		169		169

	Predecessor Company
	December 31, 2021
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Commercial mortgage and other loans	$	—	$	—	$	1,516	$	1,516	$	1,504
Policy loans	—		—		12		12		12
Short-term investments	81		—		—		81		81
Cash and cash equivalents	277		—		—		277		277
Accrued investment income	—		61		—		61		61
Reinsurance recoverables	—		—		9		9		8
Receivables from parent and affiliates	—		5		—		5		5
Other assets	—		4		2,275		2,279		2,279
Total assets	$	358	$	70	$	3,812	$	4,240	$	4,227
Liabilities:
Policyholders’ account balances - investment contracts	$	—	$	—	$	2,391	$	2,391	$	2,381
Payables to parent and affiliates	—		36		—		36		36
Other liabilities	—		105		—		105		105
Separate account liabilities - investment contracts	—		—		—		—		—
Total liabilities	$	—	$	141	$	2,391	$	2,532	$	2,522

(1)Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.

8.    INCOME TAXES

The Company uses a full year projected effective tax rate approach to calculate taxes. In addition, certain items impacting total income tax expense are recorded in the periods in which they occur. The projected effective tax rate is the ratio of projected “Income tax expense (benefit)” divided by projected “Income (loss) from operations before income taxes”.

48

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

For the three and six months ended September 30, 2022, the Successor Company's income tax provision amounted to an income tax expense (benefit) of $3 million and $(48) million, or (1.9) percent and 12.5 percent of loss from operations before income taxes, respectively. The effective tax rates for the Successor Company differed from the U.S. statutory tax rate of 21 percent primarily due to the establishment of a valuation allowance on deferred tax assets, non-taxable investment income, and tax credits. See below for further information regarding the valuation allowance on deferred tax assets.

The Predecessor Company's income tax provision amounted to an income tax expense of $77 million, $778 million, and $1,247 million, or 17.8 percent, 20.8 percent, and 20.7 percent of income from operations before income tax, for three months ended March 31, 2022, the three months ended September 30, 2021, and the nine months ended September 30, 2021, respectively. The effective tax rates for the Predecessor Company differed from the U.S. statutory tax rate of 21 percent primarily due to non-taxable investment income and tax credits.

Acquisition-Related Tax Elections

In conjunction with the acquisition of FLIAC, FGH and PAI agreed to make a joint election under Section 338(h)(10) of the U.S. Internal Revenue Code and under any similar provisions of state or local law (the “Section 338(h)(10) Election”) with respect to the purchase of the shares of FLIAC. Under this election, the parties agreed to treat the transaction for federal income tax purposes as if it had been structured as an asset sale and purchase. As a result of this election, the tax basis of the Successor Company's assets and liabilities were reset to fair value at the time of the acquisition, which resulted in the elimination of previously established current and deferred income tax balances and the establishment of new balances that reflect the updated tax basis, including tax deductible goodwill. See Note 3 for further information regarding the acquisition and the associated updated income tax balances.

Valuation Allowance on Deferred Tax Assets

The application of U.S. GAAP requires the evaluation of the recoverability of deferred tax assets and establishment of a valuation allowance, if necessary, to reduce the deferred tax asset to an amount that is more likely than not expected to be realized, including an assessment of the character of future income necessary to realize a deferred tax asset. During the third quarter of 2022, the Company established a valuation allowance of $37 million with respect to realized and unrealized capital losses on our fixed maturity securities portfolio. A portion of the deferred tax asset relates to unrealized capital losses for which the carryforward period has not yet begun, and as such, when assessing its recoverability, we consider our ability and intent to hold the underlying securities to recovery. The amount of the deferred tax asset considered realizable may be adjusted if projections of future taxable income, including the character of that taxable income during the requisite carryforward period, are updated or if objective negative evidence exists that outweighs the positive evidence.

9.    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 Consolidated Statements of Operations and Comprehensive Income (Loss).

As discussed in Note 1, we have elected to apply pushdown accounting to FLIAC at the acquisition date, April 1, 2022. As part of this election, accumulated unrealized gains and losses that were previously recorded in AOCI were reset to zero at the acquisition date. In addition, as discussed in Note 2, we have elected to apply the fair value option on our entire portfolio of fixed maturity securities. As a result, all unrealized gains and losses related to our fixed maturity securities are recorded through earnings rather than AOCI. As discussed in Note 6, we have de-designated the hedging relationship for all of our derivative instruments. Accordingly, all changes in our derivative instruments are recorded through earnings.

The balance of and changes in each component of AOCI are as follows:

49

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Changes in Own-Credit Risk Related to Insurance Liabilities		Net Unrealized Investment Gains (Losses)(1)		Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2021 (Predecessor Company)	$	(1)	$	—	$	171	$	170
Change in OCI before reclassifications	—		—		(576)		(576)
Amounts reclassified from AOCI	—		—		15		15
Income tax benefit	—		—		118		118
Balance, March 31, 2022 (Predecessor Company)	$	(1)	$	—	$	(272)	$	(273)
Balance,  April 1, 2022 (Successor Company)	$	—	$	—	$	—	$	—
Change in OCI before reclassifications	—		245		—		245
Income tax expense	—		(51)		—		(51)
Balance, June 30, 2022 (Successor Company)	$	—	$	194	$	—	$	194
Change in OCI before reclassifications	—		149		—		149
Income tax expense	—		(32)		—		(32)
Balance, September 30, 2022 (Successor Company)	$	—	$	311	$	—	$	311

(1)Includes cash flow hedges of $29 million and $25 million as of March 31, 2022 and December 31, 2021, respectively.

	Predecessor Company
	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2020	$	(1)	$	1,534	$	1,533
Change in OCI before reclassifications	—		(354)		(354)
Amounts reclassified from AOCI	—		(1,226)		(1,226)
Income tax benefit	—		332		332
Balance, September 30, 2021	$	(1)	$	286	$	285

(1)Includes cash flow hedges of $15 million and $(43) million as of September 30, 2021 and December 31, 2020, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Predecessor Company
	Three Months Ended March 31,		Three Months Ended September 30,		Nine Months Ended September 30,
	2022		2021
	(in millions)
Amounts reclassified from AOCI(1)(2):
Net unrealized investment gains (losses):
Cash flow hedges—Currency/ Interest rate(3)	$	5	$	11	$	29
Net unrealized investment gains (losses) on available-for-sale securities	(20)		141		1,197
Total net unrealized investment gains (losses)(4)	(15)		152		1,226
Total reclassifications for the period	$	(15)	$	152	$	1,226

50

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(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 6 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) (Predecessor Company)

Net unrealized investment gains (losses) on available-for-sale fixed maturity securities and certain other invested assets and other assets were included in the Predecessor Company’s Unaudited Interim Statements of Financial Position as a component of AOCI. Changes in these amounts included reclassification adjustments to exclude from OCI those items that were 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 net unrealized investment gains (losses) on 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:

	Predecessor Company
	Net Unrealized Gains (Losses) on Investments on Available-for-Sale Fixed Maturity Securities on which an allowance for credit losses has been recognized		Net Unrealized Gains (Losses) on All Other  Investments(1)		DAC and Other Costs(2)		Future Policy Benefits and Other Liabilities(3)		Income Tax Benefit (Expense)		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2021	$	—	$	240	$	(16)	$	(7)	$	(46)	$	171
Net investment gains (losses) on investments arising during the period	—		(591)		—		—		125		(466)
Reclassification adjustment for (gains) losses included in net income	—		15		—		—		(4)		11
Impact of net unrealized investment (gains) losses	—		—		9		6		(3)		12
Balance, March 31, 2022	$	—	$	(336)	$	(7)	$	(1)	$	72	$	(272)

	Predecessor Company
	Net Unrealized Gains (Losses) on Investments on Available-for-Sale Fixed Maturity Securities on which an allowance for credit losses has been recognized		Net Unrealized Gains (Losses) on All Other  Investments(1)		DAC and Other Costs(2)		Future Policy Benefits and Other Liabilities(3)		Income Tax Benefit (Expense)		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2020	$	—	$	2,369	$	(363)	$	(63)	$	(409)	$	1,534
Net investment gains (losses) on investments arising during the period	2		(742)		—		—		156		(584)
Reclassification adjustment for (gains) losses included in net income	(2)		(1,224)		—		—		257		(969)
Reclassification due to allowance for credit losses recorded during the period	—		—		—		—		—		—
Impact of net unrealized investment (gains) losses	—		—		325		61		(81)		305
Balance, September 30, 2021	$	—	$	403	$	(38)	$	(2)	$	(77)	$	286

51

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(1)Includes cash flow hedges. See Note 6 for information on cash flow hedges.

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

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

10.    COMMITMENTS AND CONTINGENT LIABILITIES

Commitments

The Predecessor Company has made commitments to fund commercial mortgage loans. As of December 31, 2021, the outstanding balance on commitments to fund commercial mortgage loans was $21 million. These amounts include unfunded commitments that are not unconditionally cancellable. The Successor Company had no commitments outstanding on commercial mortgage loans as of September 30, 2022 due to the fact that all commercial mortgage loans were transferred out under the novation program discussed in Note 1. The Company has made commitments to purchase or fund investments, mostly private fixed maturity securities and alternative investments. As of September 30, 2022 and December 31, 2021, $261 million and $96 million, respectively, of these commitments were outstanding. These amounts include unfunded commitments that are not unconditionally cancellable. See Note 11 for further information regarding certain commitments to related parties.

Contingent Liabilities

On an ongoing basis, the Company and its regulators review its operations including, but not limited to, sales and other customer interface procedures and practices, and procedures for meeting obligations to its customers and other parties. These reviews may result in the modification or enhancement of processes or the imposition of other action plans, including concerning management oversight, sales and other customer interface procedures and practices, and the timing or computation of payments to customers and other parties. In certain cases, if appropriate, the Company may offer customers or other parties remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “Litigation and Regulatory Matters” below.

It is possible that the results of operations or the cash flows of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flows for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its business. Pending legal and regulatory actions include proceedings specific to the Company and proceedings generally applicable to business practices in the industry in which it operates. The Company is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company’s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if material, is disclosed. The Company estimates that as of September 30, 2022, the aggregate range of reasonably possible losses in excess of accruals and recoveries from unaffiliated indemnitors established for those litigation and regulatory matters for which such an estimate currently can be made is not considered to be material. This estimate is not an indication of expected loss, if any, or the Company’s maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its

52

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

The following discussion of litigation and regulatory matters provides an update of those matters discussed in Note 15 to the Company's Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Regulatory

Variable Products

Prior to its acquisition by FGH on April 1, 2022, the Company has received regulatory inquiries and requests for information from state and federal regulators, including a subpoena from the U.S. Securities and Exchange Commission, concerning the appropriateness of variable product sales and replacement activity. The Company is cooperating with regulators and may become subject to additional regulatory inquiries and other actions related to this matter.

Summary

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flows in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flows for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial statements. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial statements.

53

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

11.    RELATED PARTY TRANSACTIONS

Successor Company

The Successor Company has transactions and relationships with 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 Successor Company’s expenses are allocations or charges from FGH. These expenses primarily relate to general and administrative expenses which include accounting, actuarial, risk management, and data processing services. FGH also provides the Company with personnel and certain other services. The allocation of costs for other services are based on estimated level of usage, transactions or time incurred in providing the respective services. During the three and six months ended September 30, 2022, FLIAC was allocated $8 million and $15 million, respectively, of costs for these services.

Intercompany Liquidity Agreement

Effective April 1, 2022 FLIAC entered into an intercompany liquidity agreement with FGH that allows the Successor Company to borrow funds of up to $50 million to meet its short-term liquidity and other capital needs. During the third quarter of 2022, the borrowing capacity of the agreement was increased to $150 million. As of September 30, 2022, there were no borrowings under the agreement. In October 2022, FLIAC borrowed $75 million of funds under the agreement and subsequently repaid the amount in full, plus interest. In November 2022, FLIAC borrowed $75 million of funds under the agreement and expects to repay the outstanding amount, plus interest, in full within one month of borrowing.

Affiliated Investment and Advisory Activities

As of April 1, 2022, FLIAC became affiliated with The Carlyle Group Inc. (“Carlyle”), whereby Carlyle, through an affiliated investment fund has a 71.5% equity investment in its parent, FGH. In addition, FLIAC entered into an investment management and consulting services agreement with an affiliate of Carlyle. During the quarter ended June 30, 2022, FLIAC incurred $10 million of costs from this Carlyle affiliate for services provided to the Successor Company in connection with FGH's purchase of the Company from Prudential Financial.

Certain of Carlyle's affiliates also provide investment management services for FLIAC pursuant to investment management agreements. Investment management fees are charged based on a percentage of assets under management and were de minimis for the three and six months ended September 30, 2022. As of September 30, 2022, assets under management had a market value of $623 million and were comprised primarily of private credit fixed income assets and limited partnership interests or investments in limited partnerships. FLIAC recognized $2 million and $3 million of investment income on such assets during the three and six months ended September 30, 2022, respectively.

In connection with the investment management agreements, as of September 30, 2022, FLIAC has committed $42 million to fund private investments where one or more Carlyle entities serves as general partner to the fund.

54

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Affiliated Asset Transfers

The Successor Company may participate in affiliated asset transfers with its parent and affiliates. Book and market value differences for trades with its parent and affiliates are recognized within "Investment gains (losses), net". The table below shows affiliated asset trades for the six months ended September 30, 2022.

Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		Investment Gains (Losses), net
				(in millions)
Fortitude Reinsurance Company, Ltd.	July 2022	Purchase	Fixed Maturity Security	$	37	$	37	$	—
Fortitude Reinsurance Company, Ltd.	July 2022	Purchase	Fixed Maturity Security	15		15		—
Fortitude Reinsurance Company, Ltd.	July 2022	Purchase	Limited Partnership	9		9		—
Fortitude Re Investments, LLC	August 2022	Purchase	Fixed Maturity Security	42		42		—
Fortitude Re Investments, LLC	August 2022	Purchase	Fixed Maturity Security	23		23		—
Fortitude Re Investments, LLC	August 2022	Purchase	Limited Partnership	15		15		—

Predecessor Company

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

Expense Charges and Allocations

The Predecessor Company’s expenses were allocations or charges from Prudential Insurance or other affiliates. These expenses were grouped into general and administrative expenses and agency distribution expenses.

The Predecessor Company’s general and administrative expenses were charged using allocation methodologies based on business production processes. The Predecessor Company operated under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space were provided by Prudential Insurance. The Predecessor Company reviewed its allocation methodology periodically and made adjustments accordingly. General and administrative expenses included 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 Predecessor Company for the stock-based awards program was $0 million for the three months ended March 31, 2022, $0.1 million and $0.4 million for the three and nine months ended September 30, 2021, respectively. The expense charged to the Predecessor Company for the deferred compensation program was $0.3 million and $1.5 million for the three and nine months ended September 30, 2021, respectively.

The Predecessor Company was charged for its share of employee benefit expenses. These expenses included costs for funded and non-funded, non-contributory defined benefit pension plans. Some of these benefits were based on final earnings and length of service while others were based on an account balance, which takes into consideration age, service and earnings during a career. The Predecessor Company’s share of net expense for the pension plans was $0.0 million for the three months ended March 31, 2022 and $2.4 million and $7.1 million for the three and nine months ended September 30, 2021, respectively.

The Predecessor Company was also charged for its share of the costs associated with welfare plans issued by Prudential Insurance. These expenses included costs related to medical, dental, life insurance and disability. The Predecessor Company's share of net expense for the welfare plans was $0.0 million for the three months ended March 31, 2022 and $0.9 million and $2.9 million for the three and nine months ended September 30, 2021, respectively.

Prudential Insurance sponsors voluntary savings plans for its employee 401(k) plans. The plans provided for salary reduction contributions by employees and matching contributions by the Predecessor Company of up to 4% of annual salary. The Predecessor Company's expense for its share of the voluntary savings plan was $0.0 million for the three months ended March 31, 2022 and $0.9 million and $2.7 million for the three and nine months ended September 30, 2021, respectively.

55

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Predecessor Company paid commissions and certain other fees to Prudential Annuities Distributors, Inc ("PAD"), an affiliate of the Predecessor Company, in consideration for PAD’s marketing and underwriting of the Company’s products. Commissions and fees were paid by PAD to broker-dealers who sold the Predecessor Company’s products. Commissions and fees paid by the Predecessor Company to PAD were $29 million for the three months ended March 31, 2022 and $110 million and $347 million for the three and nine months ended September 30, 2021, respectively.

The Predecessor Company was 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 Predecessor Company’s share of corporate expenses was $9 million for three months ended March 31, 2022 and $7 million and $20 million for the three and nine months ended September 30, 2021, respectively.

Affiliated Investment Management Expenses

The Predecessor Company paid investments management expenses in accordance with an agreement with PGIM, Inc. (“PGIM”), an affiliate of the Predecessor Company and investment manager to certain Predecessor Company general account and separate account assets. Investment management expenses paid to PGIM related to this agreement were $4 million for the three months ended March 31, 2022 and $7 million and $18 million for the three and nine months ended September 30, 2021. These expenses were recorded as “Net investment income” in the Company's Unaudited Consolidated Interim Statements of Operations and Comprehensive Income (Loss).

Derivative Trades

In its ordinary course of business, the Predecessor Company entered into OTC derivative contracts with an affiliate, PGF. For these OTC derivative contracts, PGF had a substantially equal and offsetting position with an external counterparty. See Note 6 for additional information.

Joint Ventures

The Predecessor Company previously made investments in joint ventures with certain subsidiaries of Prudential Financial. "Net investment income" related to these ventures included no gain or loss for the three months ended March 31, 2022 and gains of $8 million and $17 million for the three and nine months ended September 30, 2021, respectively.

Affiliated Asset Management and Service Fees

The Predecessor Company had a revenue sharing agreement with AST Investment Services, Inc. (“ASTISI”) and PGIM Investments LLC (“PGIM Investments”) whereby the Predecessor Company received 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 for the three months ended March 31, 2022 and $24 million and $72 million for the three and nine months ended September 30, 2021, respectively. These revenues were recorded as “Asset management and service fees” in the Company's Unaudited Consolidated Interim Statements of Operations and Comprehensive Income (Loss).

56

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Affiliated Asset Transfers

The Predecessor Company participated in affiliated asset trades with former parent and sister companies. Book and market value differences for trades with a parent and sister were recognized within "Realized investment gains (losses), net". The table below shows affiliated asset trades for the three months ended March 31, 2022 and for the year ended December 31, 2021.

Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		Realized Investment Gain (Loss)
				(in millions)
Prudential Insurance	April 2021	Purchase	Fixed Maturities	$	201	$	201	$	—
Prudential Insurance	April 2021	Purchase	Commercial Mortgage Loan	177		177		—
Vantage Casualty Insurance Co.	June 2021	Purchase	Fixed Maturities	15		15		—
Prudential Insurance	June 2021	Sale	Equities	3		3		—
Pruco Life	June 2021	Sale	Equities	40		38		2
Passaic Fund LLC	June 2021	Transfer Out	Other Invested Assets	12		12		—
Passaic Fund LLC	July 2021	Transfer Out	Other Invested Assets	196		196		—
Prudential Insurance	September 2021	Purchase	Fixed Maturities	2		2		—
Prudential Insurance	September 2021	Sale	Fixed Maturities	12		11		1
Prudential Retirement Insurance and Annuity Company	September 2021	Sale	Fixed Maturities	26		24		2
Prudential Retirement Insurance and Annuity Company	September 2021	Purchase	Fixed Maturities	35		35		—
Prudential Insurance	September 2021	Purchase	Derivatives	—		—		—
Prudential Retirement Insurance and Annuity Company	September 2021	Purchase	Derivatives	(1)		(1)		—
Prudential Financial	October 2021	Sale	Equities	10		10		—
Pruco Life	November 2021	Sale	Derivatives	1		—		1

57

Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		Realized Investment Gain (Loss)
				(in millions)
Prudential Arizona Reinsurance	November 2021	Purchase	Fixed Maturities	55		55		—
Pruco Life	December 2021	Transfer Out	Fixed Maturities	2,038		1,934		104
Pruco Life	December 2021	Sale	Fixed Maturities	57		57		—
Prudential Financial	December 2021	Dividend	Fixed Maturities	167		167		—
Prudential Financial	December 2021	Sale	Fixed Maturities	144		138		6
Prudential Financial	December 2021	Purchase	Commercial Mortgage Loan	185		185		—
Pruco Life	December 2021	Transfer Out	Commercial Mortgage Loan	538		517		21
Pruco Life	December 2021	Sale	Derivatives	8		2		6
Pruco Life	January 2022	Sale	Fixed Maturities	4		5		(1)
Prudential Financial	January 2022	Sale	Commercial Mortgage Loan	29		30		—
Pruco Life	January 2022	Sale	Derivatives	—		—		—
Pruco Life	February 2022	Sale	Fixed Maturities	129		138		(10)
Prudential Financial	March 2022	Sale	Fixed Maturities	$	33	$	33	$	(1)

Debt Agreements

The Predecessor 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 December 31, 2021, there was no short or long-term debt to affiliates outstanding.

Effective August 2021, $300 million in long-term debt was transferred from the Predecessor 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 incurred by the Predecessor Company related to affiliated loans and cash collateral with PGF was $0 million for the three months ended March 31, 2022 and $1 million and $9 million for the three and nine months ended September 30, 2021, respectively.

Contributed Capital and Dividends

Through March 31, 2022 and December 31, 2021, the Predecessor Company did not receive any capital contributions.

In March 2022, the Predecessor 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 Predecessor Company paid a dividend of $192 million, $188 million, and $451 million respectively, to PAI.

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Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Reinsurance with Affiliates of Predecessor Company

The Predecessor Company used reinsurance as part of its risk management and capital management strategies for certain of its living benefit guarantees and variable annuity base contracts.

Effective April 1, 2016, the Predecessor Company reinsured the variable annuity base contracts, along with the living benefit guarantees, from Pruco Life Insurance Company ("Pruco Life"), excluding the Pruco Life Insurance Company of New Jersey ("PLNJ") business which was reinsured to The Prudential Insurance Company of America (“Prudential Insurance”), in each case under a coinsurance and modified coinsurance agreement. This reinsurance agreement covers new and in force business and excludes business reinsured externally. As of December 31, 2020, Pruco Life discontinued the sales of traditional variable annuities with guaranteed living benefit riders. The discontinuation has no impact on the reinsurance agreement between Pruco Life and the Company.

Effective July 1, 2021, Pruco Life recaptured the risks related to its business, as discussed above, that had previously been reinsured to the Company from April 1, 2016 through June 30, 2021. The product risks related to the previously reinsured business that were being managed in the Predecessor Company, were transferred to Pruco Life. In addition, the living benefit hedging program related to the previously reinsured living benefit riders will be managed within Pruco Life after the recapture. This transaction is referred to as the "2021 Variable Annuities Recapture". See Note 1 to the Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021, for more details.

Effective December 1, 2021, the Company entered into a reinsurance agreement with Pruco Life under which the Company reinsured certain of its variable and fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal income feature to Pruco Life.

Effective December 31, 2015, the Company surrendered its New York license and reinsured the majority of its New York business, both the living benefit guarantees and base contracts, to Prudential Insurance. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. The Company believes a material reinsurance liability resulting from such inability of reinsurers to meet their obligations is unlikely.

Realized investment gains and losses include the impact of reinsurance agreements, particularly reinsurance agreements involving living benefit guarantees.

Reinsurance amounts included in the audited Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021 were as follows:

	December 31, 2021
	(in millions)
Reinsurance recoverables	$	8,108
Deferred policy acquisition costs	(530)
Deferred sales inducements	(26)
Value of business acquired	(2)
Other assets	54
Reinsurance payables	7,183
Other liabilities	824

The reinsurance recoverables by counterparty are broken out below:

	December 31, 2021
	(in millions)
Prudential Insurance	$	372
Pruco Life	7,736
Total reinsurance recoverables	$	8,108

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Fortitude Life Insurance & Annuity Company

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Reinsurance amounts, included in the Predecessor Company’s Unaudited Interim Statements of Operations and Comprehensive Income (Loss), were as follows:

	Predecessor Company
	Three Months Ended March 31		Three Months Ended September 30		Nine Months Ended September 30
	2021
	(in millions)
Premiums:
Direct	$	9	$	7	$	19
Assumed	—		—		16
Ceded	(1)		(1)		(3)
Net premiums	8		6		33
Policy charges and fee income:
Direct	102		113		329
Assumed	—		—		819
Ceded(1)	(5)		(7)		(20)
Net policy charges and fee income	97		106		1,128
Asset management and service fees:
Direct	22		25		73
Assumed	—		—		165
Ceded	(2)		(2)		(6)
Net asset management and service fees	20		23		232
Realized investment gains (losses), net:
Direct	312		(3,243)		(4,856)
Assumed	—		8,328		12,350
Ceded	169		(5)		(122)
Realized investment gains (losses), net	481		5,081		7,373
Policyholders' benefits (including change in reserves):
Direct	31		19		44
Assumed	—		(257)		(254)
Ceded(2)	(5)		(4)		(5)
Net policyholders' benefits (including change in reserves)	26		(242)		(216)
Interest credited to policyholders’ account balances:
Direct	91		43		139
Assumed	—		399		476
Ceded	(6)		(2)		(6)
Net interest credited to policyholders’ account balances	85		441		610
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization	(41)		1,193		1,708

(1)Includes $0.0 million, $(0.4) million and $(0.4) million of unaffiliated activity (with respect to the Predecessor Company) for the three months ended March 31, 2022 three month ended September 30, 2021 and the nine months ended September 30, 2021, respectively.

(2) Includes $0.0 million and $(2.9) million, and $(3.3) million of unaffiliated activity (with respect to the Predecessor Company) for the three months ended March 31, 2022, the three month ended September 30, 2021, and the nine months ended September 30, 2021, respectively.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Prior to April 1, 2022, Fortitude Life Insurance & Annuity Company ("FLIAC" or the "Company"), which was previously named Prudential Annuities Life Assurance Corporation ("PALAC"), was a wholly-owned subsidiary of Prudential Annuities, Inc ("PAI"), an indirect wholly-owned subsidiary of Prudential Financial, Inc. ("Prudential Financial"), a New Jersey Corporation. On April 1, 2022 PAI completed the sale of its equity interest in the Company to Fortitude Group Holdings, LLC ("FGH"). As a result, the Company is no longer an affiliate of Prudential Financial or any of its affiliates.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) addresses the financial condition of FLIAC as of September 30, 2022 and its results of operations for the three and six months ended September 30, 2022. The MD&A also addresses the results of operations of PALAC for the three months ended March 31, 2022 compared to the same prior year period. Other periods presented in the consolidated statement of financial condition or consolidated statement of operations are not comparable due to the election to apply push-down accounting to the Company following its acquisition by FGH. See "Accounting Policies & Pronouncements" for further information. You should read the following analysis of our financial condition and results of operations in conjunction with the MD&A, the “Risk Factors” section, and the audited Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as well as the statements under “Forward-Looking Statements”, and the Unaudited Interim Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

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Overview

The Company was established in 1969 and has been a provider of annuity contracts for the individual market in the United States. The Company’s products have been sold primarily to individuals to provide for long-term savings and retirement needs and to address the economic impact of premature death, estate planning concerns and supplemental retirement income.

The Company has sold a wide array of annuities, including deferred and immediate variable annuities with (1) fixed interest rate allocation options, subject to a market value adjustment, that are registered with the United States Securities and Exchange Commission (the “SEC”), and (2) fixed-rate allocation options subject to a limited market value adjustment or no market value adjustment and not registered with the SEC. The Company ceased offering these products.

Novation of Ceded Business

In the second quarter of 2022, in accordance with applicable state law, a program was instituted to novate a significant portion of the Ceded Business policies from FLIAC to Pruco Life Insurance Company ("Pruco Life"). The program does not have an impact on stockholders' equity or net income but has resulted in the reduction of certain activity/balances associated with these policies. During the six months ended September 30, 2022, approximately $6 billion of account value, which generally approximates fair values of insurance liabilities, was transferred out of the Company as a result of the novation program, which represents approximately 60 percent of account value since the acquisition of the Company on April 1, 2022.

Predecessor Company Reinsurance Transactions

Effective April 1, 2016, the Company reinsured the variable annuity base contracts, along with the living benefit guarantees, from Pruco Life, excluding the Pruco Life Insurance Company of New Jersey ("PLNJ") business which was reinsured to The Prudential Insurance Company of America (“Prudential Insurance”), in each case under a coinsurance and modified coinsurance agreement. This reinsurance agreement covers new and in-force business and excludes business reinsured externally. As of December 31, 2020, Pruco Life discontinued the sales of traditional variable annuities with guaranteed living benefit riders. The discontinuation has no impact on the reinsurance agreement between Pruco Life and the Company.

Effective July 1, 2021, Pruco Life recaptured the risks related to its business, as discussed above, that had previously been reinsured to the Company from April 1, 2016 through June 30, 2021. The product risks related to the previously reinsured business that were being managed in the Company, were transferred to Pruco Life. In addition, the living benefit hedging program related to the previously reinsured living benefit riders will be managed within Pruco Life after the recapture. This transaction is referred to as the "2021 Variable Annuities Recapture". See Note 1 to the Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021, for more details.

Effective December 1, 2021, the Company entered into a reinsurance agreement with Pruco Life under which the Company reinsured certain of its variable and fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal income feature to Pruco Life.

COVID-19

Since the first quarter of 2020, the COVID-19 pandemic has at times caused extreme stress and disruption in the global economy and financial markets and elevated mortality and morbidity for the global population. The COVID-19 pandemic impacted our results of operations in the current period and is expected to impact our results of operations in future periods. The Company has taken several measures to manage the impacts of this crisis.

•Results of Operations. See “Results of Operations” for a discussion of results for the third quarter of 2022.

•Risk Factors. The COVID-19 pandemic has at times adversely impacted our results of operations, financial position, investment portfolio, new business opportunities and operations, and these impacts may continue. For additional information on the risks to our business posed by the COVID-19 pandemic, see “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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Impact of a Changing Interest Rate Environment

As a financial services company, market interest rates are a key driver of our results of operations and financial condition. Changes in interest rates can affect our results of operations and/or our financial condition in several ways, including favorable or adverse impacts to:

•investment-related activity, including: investment income returns, net interest margins, net investment spread results, new money rates, mortgage loan prepayments and bond redemptions;

•the recoverability of deferred tax assets related to losses on our fixed maturity securities portfolio;

•hedging costs and other risk mitigation activities;

•insurance reserve levels and market experience true-ups;

•customer account values, including their impact on fee income;

•product design features, crediting rates and sales mix; and

•policyholder behavior, including surrender or withdrawal activity.

For more information on interest rate risks, see “Risk Factors—Market Risk” included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Revenues and Expenses

The Company earns revenues principally from contract fees, mortality and expense fees, and asset administration fees from annuity and investment products, all of which primarily result from the sale and servicing of annuity products. The Company also earns net investment income from the investment of general account and other funds. The Company’s operating expenses principally consist of annuity benefit guarantees provided, reserves established for anticipated future annuity benefit guarantees, and costs of managing risk related to these products. The Company's operating expenses also include interest credited to policyholders' account balances, general business expenses, reinsurance premiums, and commissions and other costs of selling and servicing the various products it sold.

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Accounting Policies & Pronouncements

Application of Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the application of accounting policies that often involve a significant degree of judgment. Management on an ongoing basis, reviews estimates and assumptions used in the preparation of financial statements. If management determines that modifications in assumptions and estimates are appropriate given current facts and circumstances, the Company’s results of operations and financial position as reported in the Unaudited Interim Financial Statements could change significantly.

Following the acquisition of FLIAC, purchase accounting was applied to FGH's financial statements and we have elected to "push down" the basis to FLIAC in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations. The application of push-down accounting created a new basis of accounting for all assets and liabilities based on fair value at the date of acquisition. As a result, FLIAC's financial position, results of operations, and cash flows subsequent to the acquisition are not comparable with those prior to April 1, 2022, and therefore have been segregated to indicate pre-acquisition and post-acquisition periods. The pre-acquisition period through March 31, 2022 is referred to as the Predecessor Company. The post-acquisition period, April 1, 2022 and forward, includes the impact of push-down accounting and is referred to as the Successor Company.

Management believes the accounting policies relating to the following areas are most dependent on the application of estimates and assumptions and require management’s most difficult, subjective, or complex judgments:

•Insurance liabilities;

•Valuation of investments, including derivatives;

•Reinsurance recoverables/payables;

•Taxes on income, including valuation allowances; and

•Reserves for contingencies, including reserves for losses in connection with unresolved legal matters.

Future Adoption of New Accounting Pronouncements

ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the Financial Accounting Standards Board (“FASB”) on August 15, 2018, and was amended by ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date, issued in October 2019, and ASU 2020-11, Financial Services-Insurance (Topic 944): Effective Date and Early Application, issued in November 2020. Large calendar-year public companies that early adopt ASU 2018-12 are allowed to apply the guidance either as of January 1, 2020 or January 1, 2021 (and record transition adjustments as of January 1, 2020 or January 1, 2021, respectively) in the 2022 financial statements. Companies that do not early adopt ASU 2018-12 would apply the guidance as of January 1, 2021 (and record transition adjustments as of January 1, 2021) in the 2023 financial statements.

As previously discussed, the Company has elected to apply the fair value option for all of its insurance liabilities. As a result of this election, the Company's insurance liabilities are no longer within the scope of ASU 2018-12.

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Segment and Product Overview

Our business is comprised of two major blocks of in-force policies, which we refer to as the “Retained Business” and the “Ceded Business”. The Retained Business consists of variable annuity products with guaranteed lifetime withdrawal benefit features as well as smaller blocks of variable annuity products with certain other living benefit and death benefit features. The Retained Business also includes variable universal life and fixed payout annuity products. The Retained Business is actively managed by FLIAC management and the Successor Company retains the full economic benefits and risks. The Retained Business consists of variable annuity contracts originated between 1993 – 2010. These products allow the holder to direct investments into certain separate account funds to receive tax deferred build-up within the contract. Most of the contracts have optional living benefit riders, commonly known as guaranteed minimum withdrawal benefits, which entitle the holder to elect to withdraw a guaranteed amount from the contract while alive, irrespective of the balance in their separate account. Almost all of the contracts also offer a guaranteed amount payable to a beneficiary upon the death of the holder, which is commonly known as a guaranteed minimum death benefit.

The Ceded Business represents certain business (primarily registered index linked-annuities and fixed annuities, which includes fixed indexed and fixed deferred annuities, and other variable annuities) where 100 percent of the assets and liabilities have been fully ceded to Prudential Insurance and Pruco Life under existing coinsurance and modified coinsurance agreements. The Ceded Business will continue to impact certain line items within the Company’s financial statements but will not have a material impact to stockholders’ equity or net income and will represent the economic impact of Prudential Insurance and Pruco Life. See also "Novation of Ceded Business" within the "Overview" section herein Item 2 for information regarding the impacts of the novation program on the Ceded Business.

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Changes in Financial Position

As noted under Accounting Policies and Pronouncements, the Company's financial position subsequent to the acquisition is not comparable with that prior to April 1, 2022. As a result, the following discussion regarding changes in the financial position of the Successor Company will be based on changes subsequent to the acquisition-date balance sheet as of April 1, 2022. Also included below is discussion regarding the changes from December 31, 2021 to March 31, 2022 as previously disclosed in the Predecessor Company's first quarter of 2022 10-Q.

SUCCESSOR COMPANY

Retained Business

Assets decreased approximately $6.0 billion from $32.1 billion at April 1, 2022 to $26.1 billion at September 30, 2022. The decrease was primarily driven by a $5.8 billion decline in separate account assets due to market depreciation resulting mostly from unfavorable equity market performance.

Liabilities decreased approximately $5.9 billion from $30.3 billion at April 1, 2022 to $24.4 billion at September 30, 2022. The decrease was primarily driven by a $5.8 billion decline in separate account liabilities, corresponding to the decrease in separate account assets, as discussed above.

Equity was approximately $1.8 billion at both April 1, 2022 and September 30, 2022, with a net loss of $337 million offset by an increase in our own-credit risk (OCR) impact on the fair value of insurance liabilities, net of tax, of $311 million reflected in accumulated other comprehensive income (loss).

Ceded Business

Assets decreased $7.4 billion from $13.2 billion at April 1, 2022 to $5.8 billion at September 30, 2022. The decrease was primarily driven by a $5.0 billion decline in total investments due primarily to the previously mentioned novations during the second and third quarters of 2022. Also contributing to the $5.0 billion decline in total investments were losses in the derivatives portfolio, primarily related to equity options. The remainder of the decline in assets was driven primarily by a $1.8 billion decrease in the deposit asset which moved commensurately with the novation-related decline in the associated insurance liabilities under its fixed indexed annuity reinsurance agreement with Pruco Life. Also contributing to the decline in the insurance liabilities under the reinsurance agreement with Pruco life was a decrease in equity markets.

Liabilities decreased $7.4 billion from $13.2 billion at April 1, 2022 to $5.8 billion at September 30, 2022. The decrease was primarily driven by a $7.0 billion decline in the fair value of insurance liabilities, which was primarily due to the previously mentioned novations during the second and third quarters of 2022.

There was no equity within our Ceded Business at both April 1, 2022 and September 30, 2022 as the assets are fully offset by the liabilities.

PREDECESSOR COMPANY

Total assets decreased $4.2 billion from $58.6 billion at December 31, 2021 to $54.4 billion at March 31, 2022. Significant components were:

•$2.8 billion decrease in Separate account assets primarily driven by unfavorable equity market performance and net outflows.

Total liabilities decreased $3.8 billion from $56.9 billion at December 31, 2021 to $53.1 billion at March 31, 2022. Significant components were:

•$0.7 billion decrease in Future policy benefits driven by a decrease in reserves related to our variable annuity living benefit guarantees due to widening non-performance risk ("NPR") spreads and rising interest rates.

•$2.8 billion decrease in Separate account liabilities corresponding to the decrease in Separate account assets, as discussed above.

Total equity decreased $0.4 billion from $1.7 billion at December 31, 2021 to $1.3 billion at March 31, 2022, primarily driven by $0.4 billion of unrealized losses on investments driven by rising interest rates reflected in Accumulated other comprehensive income (loss) and a return of capital of $0.3 billion, partially offset by net income of $0.4 billion.

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Results of Operations

As noted under Accounting Policies and Pronouncements, the Company's results of operations subsequent to the acquisition are not comparable with those prior to April 1, 2022. As a result, the following discussion regarding the results of operations of the Successor Company will not be compared to previous periods and will be based solely on activity for the periods subsequent to the acquisition. Also included below is discussion regarding the results of operations as previously disclosed in the Predecessor Company's first quarter of 2022 and third quarter of 2021 10-Q's.

SUCCESSOR COMPANY

LOSS FROM OPERATIONS BEFORE INCOME TAXES

Three Months Ended September 30, 2022

Retained Business

The loss from operations before income taxes of $154 million was driven primarily by investment losses in the fixed maturity securities portfolio resulting from higher interest rates. Partially offsetting the investment losses were favorable changes in the fair value of insurance liabilities, excluding changes in OCR, driven primarily by higher interest rates. Also partially offsetting the drivers of the loss from operations before income taxes were policy charges and fee income and net investment income.

Ceded Business

There was no impact to the loss from operations before income tax as all revenues and expenses are ceded back to Prudential Insurance or Pruco Life.

Six Months Ended September 30, 2022

Retained Business

The loss from operations before income taxes of $337 million was driven primarily by investment losses in the fixed maturity securities portfolio resulting from higher interest rates. Also contributing to the loss were changes in the fair value of insurance liabilities, excluding changes in OCR, driven primarily by a decline in equity markets, partially offset by higher interest rates. Further contributing to the loss were elevated general, administrative and other expenses driven by acquisition-related expenses that we expect to decline in future periods. Partially offsetting the drivers of the loss from operations before income taxes were policy charges and fee income and net investment income.

Ceded Business

There was no impact to the loss from operations before income tax as all revenues and expenses are ceded back to Prudential Insurance or Pruco Life.

REVENUES, BENEFITS, AND EXPENSES

Three Months Ended September 30, 2022

Retained Business

Revenues were $(255) million for the three months ended September 30, 2022, driven primarily by investment losses in the fixed maturity securities portfolio resulting from higher interest rates, partially offset by policy charges and fee income and net investment income.

Benefits and expenses were $(101) million for the three months ended September 30, 2022, driven primarily by favorable changes in the fair value of insurance liabilities, excluding changes in OCR, due to higher interest rates.

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Ceded Business

There was no impact to the loss from operations before income taxes as all revenues and expenses are ceded back to Prudential Insurance or Pruco Life.

Six Months Ended September 30, 2022

Retained Business

Revenues were $(173) million for the six months ended September 30, 2022, driven primarily by investment losses in the fixed maturity securities portfolio resulting from higher interest rates. Partially offsetting the impact of the investment losses were policy charges and fee income and net investment income.

Benefits and expenses were $212 million for the six months ended September 30, 2022 and primarily driven by the increase in the fair value of insurance liabilities. Also contributing to benefits and expenses for the period were general, administrative and other expenses driven by acquisition-related expenses that we expect to decline in future periods.

Ceded Business

There was no impact to the loss from operations before income taxes as all revenues and expenses are ceded back to Prudential Insurance or Pruco Life.

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PREDECESSOR COMPANY

LOSS FROM OPERATIONS BEFORE INCOME TAXES

Three Months Ended March 31, 2022

Income (loss) from operations before income taxes decreased $2 billion from a gain of $2.4 million for the three months ended March 31, 2021 to a gain of $0.4 billion for the three months ended March 31, 2022, primarily driven by:

•Realized investment gains (losses), net decrease reflecting prior year's favorable impact related to the portions of our U.S. GAAP liability before NPR, that are excluded from our hedge targets driven by rising interest rates and favorable prior year equity market performance.

Three Months Ended September 30, 2021

Income (loss) from operations before income taxes increased $3.8 billion from a loss of $47.6 million for the three months ended September 30, 2020 to a gain of $3.7 billion for the three months ended September 30, 2021, primarily driven by:

•Significant investment gains (losses), net reflecting a favorable impact related to the 2021 Variable Annuities Recapture and the portion of our U.S. GAAP liability before NPR, that are excluded from our hedge targets driven by rising interest rates. Also contributing is an unfavorable NPR adjustment.

Nine Months Ended September 30, 2021

Income (loss) from operations before income taxes increased $9.7 billion from a loss of $3.7 billion for the nine months ended September 30, 2020 to income of $6.0 billion for the nine months ended September 30, 2021. Excluding the impact of our annual reviews and update of assumptions and other refinements, income (loss) from operations increased $9.7 billion primarily driven by:

•Significant investment gains (losses), net reflecting a favorable impact related to the 2021 Variable Annuities Recapture and the portions of our U.S. GAAP liability before NPR, that are excluded from our hedge target driven by rising interest rates and favorable equity market performance. Also contributing is an unfavorable NPR adjustment.

The following table provides the net impact to the Unaudited Interim Statements of Operations for the Predecessor Company, which is primarily driven by the changes in the U.S. GAAP embedded derivative liability and hedge positions under the Asset Liability Management ("ALM") strategy, and the related amortization of DAC and other costs.

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	Predecessor Company
	Three Months Ended March 31		Three Months Ended September 30		Nine Months Ended September 30
	2022		2021
	(in millions) (1)
U.S. GAAP embedded derivative and hedging positions
Change in value of U.S.GAAP liability, pre-NPR(2)	$	459	$	47	$	5,628
Change in the NPR adjustment	156		(47)		(950)
Change in fair value of hedge assets, excluding capital hedges(3)	(392)		63		(3,049)
Change in fair value of capital hedges(4)	39		37		(766)
2021 Variable Annuities Recapture Impact	—		5,142		5,142
Other	218		(203)		903
Realized investment gains (losses), net, and related adjustments	480		5,039		6,908
Market experience updates(5)	(57)		(14)		147
Charges related to realized investments gains (losses), net	(97)		14		(246)
Net impact from changes in the U.S. GAAP embedded derivative and hedge positions, after the impact of NPR, DAC and other costs(6)	$	326	$	5,039	$	6,809

(1) Positive amount represents income; negative amount represents a loss.

(2) Represents the change in the liability (excluding NPR) for our variable annuities which is measured utilizing a valuation                 methodology that is required under U.S. GAAP. This liability includes such items as risk margins which are required by U.S. GAAP but not included in our best estimate of the liability.

(3) Represents the changes in fair value of the derivatives utilized to hedge potential claims associated with our variable annuity living benefit guarantees.

(4) Represents the changes in fair value of equity derivatives of the capital hedge program intended to protect a portion of the overall capital position of our business against exposure to the equity markets.

(5) Represents the immediate impacts in current period results from changes in current market conditions on estimates of profitability.

(6) Excludes amounts from the changes in unrealized gains and losses from fixed income instruments recorded in OCI (versus net income) of $(70) million for the three months ended March 31, 2022 and $(45) million and $1,673 million for the three and nine months ended September 30, 2021, respectively.

For the three months ended March 31, 2022, the gain of $326 million was driven by a favorable impact related to the U.S. GAAP liability before NPR, net of change in fair value of hedge assets (excluding capital hedge) largely due to rising interest rates.

For the three months ended September 30, 2021, the gain of $5,039 million was driven by the favorable impact related to the 2021 Variable Annuities Recapture. See Note 1 to the Unaudited Interim Financial Statements for further details.

For the nine months ended September 30, 2021, the gain of $6,809 million was driven by the favorable impact related to the 2021 Variable Annuities Recapture and the portions of our U.S. GAAP liability before NPR, net of the change in fair value of hedge assets (excluding capital hedges) primarily driven by rising interest rates and favorable equity market performance. Also contributing is an unfavorable NPR adjustment.

REVENUES, BENEFITS, AND EXPENSES

Three Months Ended March 31, 2022

Revenues decreased $2.4 billion from a gain of $3.1 billion for the three months ended March 31, 2021 to a gain of $0.7 billion for the three months ended March 31, 2022 primarily driven by:

•Realized investment gains (losses), net decrease reflecting prior year's favorable impact related to the portions of our U.S. GAAP liability before NPR, that are excluded from our hedge targets driven by rising interest rates and favorable prior year equity market performance.

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Three Months Ended September 30, 2021

Revenues increased $4.8 billion from a gain of $0.5 billion for the three months ended September 30, 2020 to a gain of $5.3 billion for the three months ended September 30, 2021 primarily driven by:

•Significant investment gains (losses), net reflecting a favorable impact related to the 2021 Variable Annuities Recapture and the portion of our U.S. GAAP liability before NPR, that are excluded from our hedge targets driven by rising interest rates. Also contributing is an unfavorable NPR adjustment.

Benefits and expenses increased $0.9 billion from $0.6 billion for the three months ended September 30, 2020 to $1.5 billion for the three months ended September 30, 2021 primarily driven by:

•Higher Commission expense primarily driven by the unwinding of assumed deferred acquisition costs, partially offset by ceding allowance received as part of the 2021 Variable Annuities Recapture.

Nine Months Ended September 30, 2021

Revenues increased $10.7 billion from a loss of $2.1 billion for the nine months ended September 30, 2020 to a gain of $8.6 billion for the nine months ended September 30, 2021. Excluding the impact of our annual reviews and update to our assumptions and other refinements, revenues increased $10.8 billion primarily driven by:

•Significant Realized investment gains (losses), net reflecting a favorable impact related to the 2021 Variable Annuities Recapture and the portions of our U.S. GAAP liability before NPR, that are excluded from our hedge target driven by rising interest rates and favorable equity market performance. Also contributing is an unfavorable NPR adjustment.

Benefits and expenses increased $1.0 billion from $1.6 billion for the nine months ended September 30, 2020 to $2.6 billion for the nine months ended September 30, 2021. Excluding the impact of our annual reviews and update to our assumptions and other refinements, benefits and expenses increased $1.1 billion primarily driven by:

•Higher Commission expense primarily driven by the unwinding of assumed deferred acquisition costs, partially offset by ceding allowance received as part of the 2021 Variable Annuities Recapture.

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Retained Business Strategies and Risk Management

We manage the Retained Business with a focus on long-term economics and a willingness to sustain short-term volatility in our earnings, while remaining compliant with our risk appetite framework. Our overall business strategy is to generate above-market risk adjusted returns by:

•Ensuring we have a strong statutory balance sheet following capital market stresses, including but not limited to, sharp reductions in equity prices and interest rates and increases in credit spreads,

•Leveraging our investment capabilities to deploy a portion of our asset portfolio into private fixed income securities with a sufficiently wide spread to comparable public securities,

•Investing in high-quality liquid public fixed income securities and preserving a cash balance sufficient to pay current claims and expenses, while maintaining collateral to satisfy margin requirements in connection with the derivative transactions forming our Asset Liability Matching (ALM) strategy, as described below.

The primary risk exposures of our Retained Business relate to actual deviations from, or changes to, the pricing assumptions developed at acquisition for these products, including capital markets assumptions such as equity market returns, interest rates and market volatility, along with actuarial assumptions such as contractholder mortality, the timing and amount of annuitization and withdrawals, and contract lapses. For these risk exposures, achievement of our expected returns is subject to the risk that actual experience will differ from the pricing assumptions developed at acquisition for these products. We have developed and implemented a risk management strategy to mitigate the potential adverse effects of fluctuations in capital markets, specifically equity markets and interest rates, primarily through a combination of i) Product Design Features and ii) our ALM strategy.

Product Design Features

A portion of the variable annuity contracts includes an asset transfer feature. This feature is implemented at the contract level, and transfers assets between certain variable investment sub-accounts selected by the annuity contractholder and, depending on the benefit feature, a fixed-rate account in the general account or a bond fund sub-account within the separate account. The objective of the asset transfer feature is to reduce our exposure to equity market risk and market volatility. The transfers are based on a static mathematical formula used with the particular benefit which considers a number of factors, including, but not limited to, the impact of investment performance on the contractholder’s total account value. Other product design features we utilize include, among others, asset allocation restrictions, minimum issuance age requirements and certain limitations on the amount of contractholder purchase payments.

ALM Strategy

We employ an ALM strategy that utilizes a combination of both fixed income instruments and derivatives to meet expected claims associated with our variable annuity living and death benefit guarantees. The economic liability we manage with this ALM strategy consists of expected living and death benefit claims net of expected separate account fee revenue. For the portion of our ALM strategy executed with derivatives, we enter into a range of exchange-traded and over-the-counter ("OTC") equity, interest rate and credit derivatives, including, but not limited to: equity and treasury futures; total return, credit default and interest rate swaps; and options, including equity options, swaptions, and floors and caps. The intent of this strategy is to more efficiently manage the capital and liquidity associated with these products. We explicitly consider liquidity and risk-based capital as well as current market conditions in our asset/liability management strategies. Below is specific discussion on our ALM strategy regarding interest and equity risks:

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Market Risk Related to Interest Rates

In order to mitigate the impact that an unfavorable interest rate environment has on our net interest margins, we employ strategic asset allocations and derivative strategies within a disciplined risk management framework. These strategies seek to target the interest rate sensitivity of the assets to a certain percentage of the estimated interest rate sensitivity of the product liabilities. Our asset/liability management program is holistic, in that it considers contributions from both our fixed income asset portfolio, as well as our interest rate derivatives, in offsetting the interest rate sensitivity of our liabilities.

We use duration and convexity analyses to measure price sensitivity to interest rate changes. Duration measures the relative sensitivity of the fair value of a financial instrument to changes in interest rates. Convexity measures the rate of change in duration with respect to changes in interest rates. We use asset/liability management and derivative strategies to manage our interest rate exposure by managing the relative sensitivity of asset and liability values to interest rate changes to within a certain prescribed tolerance range.

Market Risk Related to Equity Prices

We have exposure to equity risk primarily through the impact of changes in equities prices on the incidence and magnitude of future contractholder claims, as well as fee revenue. We manage this risk using equity-based derivatives. As with interest rate risk, we target the equity sensitivity of the assets (equity derivatives) to a certain percentage of the estimated equity market sensitivity of the economic liability. We manage the relative sensitivity of asset and liability values to equity price changes to within a certain prescribed tolerance range.

We manage equity risk against benchmarks in respective markets. We benchmark returns of equity holdings against a blend of market indices, mainly the S&P 500 and Russell 2000 for U.S. equities. We benchmark foreign equity returns against the MSCI EAFE, a market index of European, Australian and Far Eastern equities. We target price sensitivities that approximate those of the benchmark indices. For equity investments within the separate accounts, the investment risk is borne by the separate account contractholder rather than by the Company.

Income Taxes

For information regarding income taxes, see Note 8 to the Unaudited Interim Financial Statements.

Liquidity and Capital Resources

This section supplements and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Overview

Liquidity is a measure of a company’s ability to generate cash flows sufficient to meet the short-term and long-term cash requirements of the Company. Capital refers to the long-term financial resources available to support the operations of our business, fund business growth, and provide a cushion to withstand adverse circumstances. Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of our business, general economic conditions, our ability to borrow and our access to capital markets.

Effective and prudent liquidity and capital management is a priority across the organization. Management monitors the liquidity of the Company on a daily basis and projects borrowing and capital needs over a multi-year time horizon. We use a Risk Appetite Framework ("RAF") to ensure that all risks taken by the Company aligns with our capacity and willingness to take those risks. The RAF provides a dynamic assessment of capital and liquidity stress impacts, including scenarios similar to, and more severe than, those occurring due to COVID-19, and is intended to ensure that sufficient resources are available to absorb those impacts. We believe that our capital and liquidity resources are sufficient to satisfy the capital and liquidity requirements of the Company.

Our businesses are subject to comprehensive regulation and supervision by domestic and international regulators. These regulations currently include requirements (many of which are the subject of ongoing rule-making) relating to capital, leverage, liquidity, stress-testing, overall risk management, credit exposure reporting and credit concentration. For information on these regulatory initiatives and their potential impact on us, see “Business - Regulation" and “Risk Factors” included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021.

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Capital

We manage FLIAC to regulatory capital levels and utilize the risk-based capital (“RBC”) ratio as a primary measure of capital adequacy. RBC is calculated based on statutory financial statements and risk formulas consistent with the practices of the National Association of Insurance Commissioners ("NAIC"). RBC considers, among other things, risks related to the type and quality of the invested assets, insurance-related risks associated with an insurer’s products and liabilities, equity market and interest rate risks and general business risks. RBC determines the minimum amount of capital required of an insurer to support its operations and underwriting coverage. The ratio of a company’s Total Adjusted Capital (TAC) to RBC is the corresponding RBC ratio. RBC ratio calculations are intended to assist insurance regulators in measuring an insurer’s solvency and ability to pay future claims. The reporting of RBC measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities, but is available to the public. The Company’s capital levels substantially exceed the minimum level required by applicable insurance regulations. Our regulatory capital levels may be affected in the future by changes to the applicable regulations, proposals for which are currently under consideration by both domestic and international insurance regulators.

The regulatory capital level of the Company can be materially impacted by interest rate and equity market fluctuations, changes in the values of derivatives, the level of impairments recorded, and credit quality migration of the investment portfolio, among other items. In addition, the reinsurance of business or the recapture of business subject to reinsurance arrangements due to defaults by, or credit quality migration affecting, the reinsurers or for other reasons could negatively impact regulatory capital levels. The Company’s regulatory capital level is also affected by statutory accounting rules, which are subject to change by each applicable insurance regulator.

The Predecessor Company made distributions to its parent, PAI, for the periods indicated below. Following the previously discussed change in ownership, the Successor Company made no dividends to FGH during the six months ended September 30, 2022.

	Return of Capital		Dividends
	(in millions)
March 31, 2022	$	306	$	—
September 30, 2021	$	3,813	$	—
June 30, 2021	$	—	$	188
March 31, 2021	$	—	$	192

Liquidity

Our liquidity is managed to ensure stable, reliable and cost-effective sources of cash flows to meet all of our obligations. Liquidity is provided by a variety of sources, as described more fully below, including portfolios of liquid assets. Our investment portfolios are integral to the overall liquidity of the Company. We use a projection process for cash flows from operations to ensure sufficient liquidity to meet projected cash outflows, including claims.

Liquidity is measured against internally-developed benchmarks that take into account the characteristics of both the asset portfolio and the liabilities that they support. We consider attributes of the various categories of liquid assets (for example, type of asset and credit quality) in calculating internal liquidity measures to evaluate our liquidity under various stress scenarios, including company-specific and market-wide events. We continue to believe that cash generated by ongoing operations and the liquidity profile of our assets provide sufficient liquidity under reasonably foreseeable stress scenarios.

The principal sources of the Company’s liquidity are premiums and certain annuity considerations, investment and fee income, investment maturities, sales of investments and internal borrowings. The principal uses of that liquidity include benefits, claims, and payments to policyholders and contractholders in connection with surrenders, withdrawals and net policy loan activity. Other uses of liquidity include commissions, general and administrative expenses, purchases of investments, the payment of dividends and returns of capital to the parent company, hedging and reinsurance activity and payments in connection with financing activities.

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In managing liquidity, we consider the risk of policyholder and contractholder withdrawals of funds earlier than our assumptions when selecting assets to support these contractual obligations. We also consider the risk of future collateral requirements under stressed market conditions in respect of the derivatives we utilize.

Liquid Assets

Liquid assets include cash and cash equivalents, short-term investments, U.S. Treasury fixed maturities and fixed maturities that are not designated as held-to-maturity, and public equity securities. As of September 30, 2022 and December 31, 2021, the Company had liquid assets of $7 billion and $12 billion, respectively. The portion of liquid assets comprised of cash and cash equivalents and short-term investments was $1.3 billion and $2.9 billion as of September 30, 2022 and December 31, 2021, respectively.

Effective April 1, 2022 FLIAC entered into an intercompany liquidity agreement with FGH that allowed the Successor Company to borrow funds of up to $50 million to meet its short-term liquidity and other capital needs. During the third quarter of 2022, the borrowing capacity of the agreement was increased to $150 million. As of September 30, 2022, there were no borrowings under the agreement. In November 2022, FLIAC borrowed $75 million of funds under the agreement and expects to repay the outstanding amount, plus interest, in full within one month of borrowing.

Liquidity Regarding Hedging Activities

The hedging portion of our risk management strategy for the Retained Business is being managed within the Company. We enter into a range of exchange-traded, cleared, and other OTC derivatives in order to hedge market sensitive exposures against changes in certain capital market risks. The portion of the risk management strategy comprising the hedging portion requires access to liquidity to meet the Company's payment obligations relating to these derivatives, such as payments for periodic settlements, purchases, maturities and terminations. These liquidity needs can vary materially due to, among other items, changes in interest rates, equity markets, mortality, and policyholder behavior.

The hedging portion of the risk management strategy may also result in derivative-related collateral postings to (when we are in a net pay position) or from (when we are in a net receive position) counterparties. The net collateral position depends on changes in interest rates and equity markets related to the amount of the exposures hedged. Depending on market conditions, the collateral posting requirements can result in material liquidity needs when we are in a net pay position.

Repurchase Agreements and Securities Lending

In the normal course of business, we may enter into repurchase agreements and securities lending agreements with unaffiliated financial institutions, which are typically large or highly rated, to earn spread income and facilitate trading activity. Under these agreements, the Company transfers securities to the counterparty and receives cash as collateral. The cash received is generally invested in short-term investments or fixed maturity securities.

For repurchase agreements, a liability representing the amount that the securities will be repurchased is recorded in "Other liabilities" in our consolidated statement of financial position. For securities lending agreements, a liability representing the return of cash collateral is recorded in "Other liabilities" in our consolidated statement of financial position. As of September 30, 2022, the liabilities associated with our outstanding repurchase and securities lending agreements were $200 million and $169 million, respectively.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is defined as the risk of loss from changes in interest rates and equity prices resulting from asset/liability mismatches where the change in the value of our liabilities is not offset by the change in value of our assets. Following the acquisition of the Company from PAI on April 1, 2022, we have updated certain aspects of our hedging strategy that have resulted in changes to our economic exposure to market risk as previously described in Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” in the Predecessor Company's Annual Report on Form 10-K, for the year ended December 31, 2021, filed with the Securities and Exchange Commission. See also Item 1A, “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2021, for a discussion of how difficult conditions in the financial markets and the economy generally may materially adversely affect our business and results of our operations.

Market Risk Management

Management of market risk, which we consider to be a combination of both investment risk and market risk exposures, includes the identification and measurement of various forms of risk, the establishment of risk thresholds and the creation of processes intended to maintain risks within these thresholds while optimizing returns on the underlying assets or liabilities.

Our risk management process utilizes a variety of tools and techniques, including:

•Measurement of price sensitivity to market changes (e.g., interest rates, equity index prices, foreign exchange);

•Hedge Target definition;

•Asset/liability management, which includes our hedging programs; and

•Stress scenario testing related to our risk appetite framework

Measurement of Price Sensitivity to Market Changes

We measure the price sensitivity to market changes on a daily basis. Sensitivities of both assets and liabilities are gauged and these measurements form the basis for actions we take under our asset/liability and hedging programs. We measure both a target level of price sensitivity, as well as tolerance levels above and below the target, for each market change.

Hedge Target

The definition of the Hedge Target is critical for market risk management, as it specifies the measure of a liability and its attendant price sensitivities. We use a fair value-based measure of the liability as our hedge target. Consistent with our approach to risk manage the full economics of the business, we have established a hedge target that reflects the net present value of the full set of product cash flows. For most of the products in the business, this generally includes:

•Living benefit rider claims we expect to pay in the future;

•Living benefit rider fees we receive over time;

•M&E fees we receive on the base variable annuity contracts;

•Net revenue sharing income we contractually receive; and

•Certain product-related expenses.

•Guaranteed death benefits/fees

Asset/Liability Management

We manage assets to liability-based measures. For example, we identify target durations for assets based on Hedge Target characteristics and asset portfolios are managed to within ranges around them. This mitigates potential unanticipated economic losses from interest rate and equity price movements. We utilize a combination of fixed income securities and derivatives to implement asset/liability management.

To the extent that we identify a mismatch between asset and liability sensitivities, we enter into derivatives transactions to cover the difference. Derivatives are used to supplement risk mitigation provided by the fixed income securities portfolio. Our derivatives primarily include swaps, futures and options contracts that are exchange-traded or contracted in the OTC market.

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Stress Scenario Testing Related to Our Risk Appetite Framework

We have established a risk appetite framework that limits the amount of market risks we can take after consideration of our asset/liability management initiatives. We run stress scenario tests periodically to assess the impact of extreme market movements on our balance sheet. This ensures that we have sufficient capital under stressed market conditions.

Market Risk Related to Interest Rates

We perform liability-driven investing and engage in careful asset/liability management. Asset/liability mismatches create the risk that changes in liability values will differ from the changes in the value of the related assets. Additionally, changes in interest rates may impact other items including, but not limited to, the following:

•Net investment spread between the amounts that we are required to pay and the rate of return we are able to earn on investments for certain products supported by general account investments;

•Asset-based fees earned on assets under management or contractholder account values;

•Estimated total gross profits;

•Net exposure to the guarantees provided under certain products; and

•Our capital levels.

In order to mitigate the impact that an unfavorable interest rate environment has on our net interest margins, we employ a proactive asset/liability management program, which includes strategic asset allocation and derivative strategies within a disciplined risk management framework. We seek to hedge the interest rate sensitivity of our liabilities with our fixed income assets and derivatives. Our asset/liability management program also helps manage duration gaps and other risks between assets and liabilities through the use of derivatives. We adjust this dynamic process as customer behavior changes and as changes in the market environment occur.

We use duration and convexity analyses to measure price sensitivity to interest rate changes. Duration measures the relative sensitivity of the fair value of a financial instrument to changes in interest rates. Convexity measures the rate of change in duration with respect to changes in interest rates. We use asset/liability management and derivative strategies to manage our interest rate exposure by matching the relative sensitivity of asset and liability values to interest rate changes, or controlling “duration mismatch” of assets and liability duration targets. In certain markets, capital market limitations that hinder our ability to acquire assets that approximate the duration of some of our liabilities are considered in setting duration targets. We consider risk-based capital as well as current market conditions in our asset/liability management strategies.

The Company also mitigates interest rate risk through a market value adjusted (“MVA”) provision on certain of the Company’s annuity products' fixed investment options. This MVA provision limits interest rate risk by subjecting the contractholder to an MVA when funds are withdrawn or transferred to variable investment options before the end of the guarantee period. In the event of rising interest rates, which generally make the fixed maturity securities underlying the guarantee less valuable, the MVA could be negative. In the event of declining interest rates, which generally make the fixed maturity securities underlying the guarantee more valuable, the MVA could be positive. The resulting increase or decrease in the value of the fixed option, from the calculation of the MVA, is designed to offset the decrease or increase in the market value of the securities underlying the guarantee.

We assess the impact of interest rate movements on the value of our Retained Business financial assets, financial liabilities, and derivatives using hypothetical test scenarios that assume either upward or downward 100 basis point parallel shifts in the yield curve from prevailing interest rates. The following table sets forth the net estimated potential change in fair value on these financial instruments from hypothetical 100 basis point upward and downward parallel shift at September 30, 2022. While the test scenario is for illustrative purposes only and does not reflect our expectations regarding future interest rates or the performance of fixed income markets, it is a near-term, reasonably possible hypothetical change that illustrates the potential impact of such events. These test scenarios do not measure the changes in value that could result from non-parallel shifts in the yield curve, which we would expect to produce different changes in discount rates for different maturities. As a result, the actual change in fair value from a 100 basis point change in interest rates could be different from that indicated by these calculations. The estimated changes in fair values do not include separate account assets.

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	September 30, 2022
					Hypothetical Change in Fair Value
	Notional		Fair Value		100 bps Decrease		100 bps Increase
	(in millions)
Assets
Fixed maturity securities			$	3,903	$	410	$	(370)
Liabilities
Interest rate swaps	$	9,761	$	334	$	441	$	(402)
Non-OCR fair value of variable annuity liabilities			1,630		(1,095)		919
					$	(654)	$	517
Net change					$	(244)	$	147

Market Risk Related to Equity Prices

We have exposure to equity risk primarily through asset/liability mismatches, including our equity-based derivatives, and variable annuity contracts. We manage equity risk against benchmarks in respective markets. We benchmark our return on equity holdings against a blend of market indices, mainly the S&P 500 and Russell 2000 for U.S. equities. We benchmark foreign equities against the MSCI EAFE, a market index of European, Australian and Far Eastern equities. We target price sensitivities that approximate those of the benchmark indices. For equity investments within the separate accounts, the investment risk is borne by the separate account contractholder rather than by the Company.

We estimate our equity risk from a hypothetical 10% decline in equity benchmark levels. The following table sets forth the net estimated potential loss in fair value from such a decline in certain of our Retained Business financial assets, financial liabilities, and derivatives as of September 30, 2022. For comparison, we have also shown the impact of a 10 percent increase in equity prices in those same financial assets, financial liabilities and derivatives. While these scenarios are for illustrative purposes only and do not reflect our expectations regarding future performance of equity markets or of our equity portfolio, they do represent near-term, reasonably possible hypothetical changes that illustrate the potential impact of such events. In addition, these scenarios do not reflect the impact of basis risk, such as potential differences in the performance of the investment funds underlying the variable annuity products relative to the market indices we use as a basis for developing our hedging strategy. The impact of basis risk could result in larger differences between the change in fair value of the equity-based derivatives and the liability in comparison to these scenarios. In calculating these amounts, we exclude separate account equity securities.

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	September 30, 2022
					Hypothetical Change in Fair Value
	Notional		Fair Value		10 percent decrease		10 percent increase
	(in millions)
Assets
Equity futures	$	1,728	$	180	$	173	$	(173)
Total return swaps	—		94		93		(93)
Equity options	3,686		232		132		(98)
			$	506	$	398	$	(364)
Liabilities
Non-OCR fair value of variable annuity liabilities			$	1,630	$	(404)	$	374
Net change					$	(6)	$	10

Item 4. Controls and Procedures

In order to provide reasonable assurance that the information we must disclose in our filings with the SEC is recorded, processed, summarized and reported on a timely basis, the Company’s management, including our Chief Executive Officer and Chief Financial Officer, has reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Securities Exchange Act of 1934, as amended (“Exchange Act”) Rule 15d-15(e), as of September 30, 2022. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2022 our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2022, management has advanced efforts to integrate FLIAC into FGH’s internal controls over financial reporting. As part of these integration efforts, management has evaluated and implemented changes to business processes and controls, including controls over financial data received from significant service providers. Other than these integration efforts, there were no other changes in our internal control over financial reporting during the quarter ended September 30, 2022 which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

See Note 10 to the Unaudited Interim Financial Statements under “Litigation and Regulatory Matters” for a description of certain pending litigation and regulatory matters affecting us, and certain risks to our business presented by such matters, which is incorporated herein by reference.

Item 1A. Risk Factors

You should carefully consider the risks described under “Risk Factors” in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021. These risks could materially affect our business, results of operations or financial condition, or cause our actual results to differ materially from those expected or those expressed in any forward-looking statements made by, or on behalf of, the Company. These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Forward-Looking Statements” and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.

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Item 6. Exhibits

EXHIBIT INDEX

31.1 Section 302 Certification of the Chief Executive Officer

31.2 Section 302 Certification of the Chief Financial Officer

32.1 Section 906 Certification of the Chief Executive Officer

32.2 Section 906 Certification of the Chief Financial Officer

101.INS - XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH - XBRL Taxonomy Extension Schema Document.

101.CAL - XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB - XBRL Taxonomy Extension Label Linkbase Document

101.PRE - XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF - XBRL Taxonomy Extension Definition Linkbase Document

104.Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FORTITUDE LIFE INSURANCE & ANNUITY COMPANY
By:	/s/ Kai Talarek
Name	Kai Talarek
	Senior Vice President and Chief Financial Officer
	(Authorized Signatory and Principal Financial Officer)

Date: November 10, 2022

82

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I, Alon Neches, certifythat:

1.I have reviewed this Quarterly Report on Form 10-Q of Fortitude Life Insurance & Annuity Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 10, 2022

/s/ Alon Neches

Alon Neches

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

I, Kai Talarek, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Fortitude Life Insurance & Annuity Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 10, 2022

/s/ Kai Talarek

Kai Talarek

Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. Section 1350, I, Alon Neches, President and Chief Executive Officer of Fortitude Life Insurance & Annuity Company (the “Company”), hereby certify that the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 10, 2022

/s/ Alon Neches

Alon Neches

President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. Section 1350, I, Kai Talarek, Senior Vice President and Chief Financial Officer of Fortitude Life Insurance & Annuity Company (the “Company”), hereby certify that the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 10, 2022

/s/ Kai Talarek

Kai Talarek

Senior Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Cover - shares	9 Months Ended
	Sep. 30, 2022	Nov. 10, 2022
Entity Addresses [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	033-44202
Entity Incorporation, State or Country Code	AZ
Entity Tax Identification Number	06-1241288
Entity Address, Address Line One	Ten Exchange Place
Entity Address, City or Town	Jersey City
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07302
City Area Code	(615)
Local Phone Number	981-8801
Entity Address, Address Line Two	Suite 2210
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		25,000
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Registrant Name	FORTITUDE LIFE INSURANCE & ANNUITY CO
Entity Central Index Key	0000881453
Current Fiscal Year End Date	--12-31
Former Address
Entity Addresses [Line Items]
Entity Address, Address Line One	One Corporate Drive
Entity Address, City or Town	Shelton
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06484
City Area Code	(615)
Local Phone Number	981-8801

XML

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($)		Sep. 30, 2022	Dec. 31, 2021
Assets
Fixed maturity securities: September 30, 2022 at fair value (1); December 31, 2021, available-for-sale, at fair value (net of $1 allowance for credit losses, amortized cost - $8,556)	[1]	$ 5,565,000,000	$ 8,771,000,000
Fixed maturity securities, trading, at fair value (amortized cost: December 31, 2021 - $28)		0	27,000,000
Equity securities, at fair value (cost - September 30, 2022 - $201; December 31, 2021 - $323) (1)	[1]	170,000,000	322,000,000
Commercial mortgage and other loans (net of $5 allowance for credit losses)		0	1,504,000,000
Short-term investments		37,000,000	875,000,000
Other invested assets (includes $400 and $13 of assets measured at fair value at September 30, 2022 and December 31, 2021, respectively)		430,000,000	106,000,000
Total investments		6,202,000,000	11,605,000,000
Cash and cash equivalents		1,276,000,000	2,016,000,000
Accrued investment income		56,000,000	61,000,000
Reinsurance recoverables	[1]	220,000,000	8,108,000,000
Net modified coinsurance receivable	[1]	70,000,000	0
Income taxes		90,000,000	909,000,000
Deposit asset, at fair value	[1]	859,000,000	2,659,000,000
Other assets		119,000,000	954,000,000
Separate account assets		23,016,000,000	32,267,000,000
Total assets		31,908,000,000	58,579,000,000
Liabilities:
Insurance liabilities, at fair value	[1]	6,304,000,000	0
Future policy benefits		0	4,505,000,000
Policyholders' account balances		0	11,750,000,000
Reinsurance payables		0	7,183,000,000
Other liabilities		848,000,000	1,192,000,000
Separate account liabilities		23,016,000,000	32,267,000,000
Total liabilities		30,168,000,000	56,897,000,000
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 10)
EQUITY
Common stock, $100 par value; 25,000 shares authorized, issued and outstanding		3,000,000	3,000,000
Additional paid-in capital		1,763,000,000	592,000,000
Retained (deficit) earnings		(337,000,000)	917,000,000
Accumulated other comprehensive income		311,000,000	170,000,000
Total equity		1,740,000,000	1,682,000,000
TOTAL LIABILITIES AND EQUITY		$ 31,908,000,000	$ 58,579,000,000

[1] As of April 1, 2022 we have elected the fair value option for these financial statement line items. See Note 2 for further discussion.

XML

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (PARENTHETICAL) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Allowance for credit losses		$ 1
Amortized cost		8,556
Fixed maturity securities, trading, amortized cost		28
Equity securities, cost	$ 201	323
Commercial mortgage and other loans, allowance for credit losses	5	5
Other invested assets, fair value	$ 400	$ 13
Common stock, par value (in dollars per share)	$ 100	$ 100
Common stock authorized (in shares)	25,000	25,000
Common stock issued (in shares)	25,000	25,000
Common stock outstanding (in shares)	25,000	25,000

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UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	3 Months Ended			6 Months Ended	9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
REVENUES
Premiums	$ 8	$ 8	$ 6	$ 11	$ 33
Policy charges and fee income	131	97	106	261	1,128
Net investment income	92	99	101	189	386
Asset management and service fees	26	20	23	48	232
Other losses	(16)	(19)	(42)	(15)	(556)
Investment gains (losses), net	(455)	481	5,081	(1,753)	7,373
TOTAL REVENUES	(214)	686	5,275	(1,259)	8,596
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	(104)	0	0	(974)	0
Policyholders’ benefits	0	26	(242)	0	(216)
Interest credited to policyholders’ account balances	0	85	441	0	610
Amortization of deferred policy acquisition costs	0	104	19	0	402
Commission expense	27	35	1,408	45	1,739
General, administrative and other expenses	17	3	(90)	55	38
TOTAL BENEFITS AND EXPENSES	(60)	253	1,536	(874)	2,573
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	(154)	433	3,739	(385)	6,023
Income tax expense (benefit)	3	77	778	(48)	1,247
NET INCOME (LOSS)	(157)	356	2,961	(337)	4,776
Other comprehensive income (loss), before tax:
Changes in own-credit risk related to insurance liabilities	149	0	0	394	0
Net unrealized investment losses	0	(561)	(88)	0	(1,580)
Total	149	(561)	(88)	394	(1,580)
Less: Income tax expense (benefit) related to other comprehensive income (loss)	32	(118)	(19)	83	(332)
Other comprehensive income (loss), net of taxes	117	(443)	(69)	311	(1,248)
Comprehensive income (loss)	$ (40)	$ (87)	$ 2,892	$ (26)	$ 3,528

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UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions	Total	Transferred To From Affiliates	Common   Stock	Additional   Paid-in Capital	Additional   Paid-in Capital Transferred To From Affiliates	Retained Earnings/(Accumulated Deficit)	Accumulated Other Comprehensive   Income (Loss)
Beginning Balance at Dec. 31, 2020	$ 2,702		$ 3	$ 4,383		$ (3,217)	$ 1,533
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividend to parent	(192)					(192)
Comprehensive income (loss):
Net income (loss)	1,890					1,890
Other comprehensive income (loss), net of taxes	(1,413)						(1,413)
Total comprehensive income (loss)	477
Ending Balance at Mar. 31, 2021	1,289		3	286		1,273	(273)
Beginning Balance at Dec. 31, 2020	2,702		3	4,383		(3,217)	1,533
Comprehensive income (loss):
Net income (loss)	4,776
Other comprehensive income (loss), net of taxes	(1,248)
Ending Balance at Sep. 30, 2021	2,058		3	591		1,179	285
Beginning Balance at Mar. 31, 2021	1,289		3	286		1,273	(273)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividend to parent	(188)					(188)
Comprehensive income (loss):
Net income (loss)	(75)					(75)
Other comprehensive income (loss), net of taxes	234						234
Total comprehensive income (loss)	159
Ending Balance at Jun. 30, 2021	2,958		3	4,383		(1,782)	354
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Return of capital	(3,813)			(3,813)
Assets purchased/transferred from/to affiliates		$ 21			$ 21
Comprehensive income (loss):
Net income (loss)	2,961					2,961
Other comprehensive income (loss), net of taxes	(69)						(69)
Total comprehensive income (loss)	2,892
Ending Balance at Sep. 30, 2021	2,058		3	591		1,179	285
Beginning Balance at Dec. 31, 2021	1,682		3	592		917	170
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Return of capital	(306)			(306)
Comprehensive income (loss):
Net income (loss)	356					356
Other comprehensive income (loss), net of taxes	(443)						(443)
Total comprehensive income (loss)	(87)
Ending Balance at Mar. 31, 2022	2,987		3	4,383		(1,519)	120
Comprehensive income (loss):
Net income (loss)	(337)
Other comprehensive income (loss), net of taxes	311
Ending Balance at Sep. 30, 2022	1,740		3	1,763		(337)	311
Beginning Balance at Apr. 01, 2022	1,766		3	1,763		0	0
Comprehensive income (loss):
Net income (loss)	(180)					(180)
Other comprehensive income (loss), net of taxes	194						194
Total comprehensive income (loss)	14
Ending Balance at Jun. 30, 2022	1,780		3	1,763		(180)	194
Comprehensive income (loss):
Net income (loss)	(157)					(157)
Other comprehensive income (loss), net of taxes	117						117
Total comprehensive income (loss)	(40)
Ending Balance at Sep. 30, 2022	$ 1,740		$ 3	$ 1,763		$ (337)	$ 311

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UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended				6 Months Ended	9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (157)	$ 356	$ 2,961	$ 1,890	$ (337)		$ 4,776
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities:
Investment (gains) losses, net	455	(481)	(5,081)	(481)	1,753		(7,373)
Interest credited to policyholders’ account balances		85			0		610
Other, net		2			(10)		4
Change in:
Insurance liabilities, at fair value		0			(6,888)		0
Fair value of deposit asset		0			1,748		0
Net modified coinsurance receivable, at fair value		0			4,114		0
Future policy benefits		60			0		604
Accrued investment income		1			(20)		48
Net receivables from/payables to parent and affiliates		(37)			0		(23)
Deferred policy acquisition costs		104			0		3,488
Income taxes		142			262		686
Reinsurance recoverables, net		(39)			19		40
Derivatives, net		(1,079)			(37)		(3,001)
Other, net		(3)			(14)		(1,924)
Cash flows from (used in) operating activities		(889)			590		(2,065)
Proceeds from the sale/maturity/prepayment of:
Fixed maturity securities, at fair value		0			3,048		0
Fixed maturity securities, available-for-sale		422			0		8,859
Fixed maturity securities, trading		0			0		2,082
Equity securities		95			0		46
Secured receivable		0			60		0
Commercial mortgage and other loans		39			0		116
Other invested assets		1			5		44
Short-term investments		795			289		389
Payments for the purchase/origination of:
Fixed maturity securities, at fair value		0			(4,134)		0
Fixed maturity securities, available-for-sale		(751)			0		(5,142)
Fixed maturity securities, trading		0			0		(5,384)
Equity securities		0			(10)		(6)
Secured receivable		0			(7)		0
Commercial mortgage and other loans		(13)			0		(1,090)
Other invested assets		0			(131)		(225)
Short-term investments		(94)			(23)		(166)
Derivatives, net		3			0		(88)
Other, net		0			(41)		54
Cash flows from (used in) investing activities		497			(944)		(511)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net policyholder's account deposits (withdrawals)		62			(109)		4,124
Cash collateral for loaned securities		205			(36)		0
Repayments of debt (maturities longer than 90 days)		0			0		(300)
Net increase/(decrease) in short-term borrowing		0			0		(120)
Drafts outstanding		(7)			(3)		(10)
Distribution to parent		(306)			0		(774)
Repurchase agreements		0			200		0
Cash flows from (used in) financing activities		(46)			52		2,920
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(438)			(302)		344
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		2,016		$ 1,069	1,578	$ 2,016	1,069
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 1,276	$ 1,578	$ 1,413		$ 1,276	$ 1,276	$ 1,413

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UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Millions	6 Months Ended
	Sep. 30, 2022 USD ($)
Statement of Cash Flows [Abstract]
Novations, investments	$ 4,116
Modified coinsurance payable	$ 4,116

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BUSINESS AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BUSINESS AND BASIS OF PRESENTATION

BUSINESS AND BASIS OF PRESENTATION

Fortitude Life Insurance & Annuity Company and its wholly-owned subsidiary (collectively, “FLIAC” or the “Company”), with its principal offices in Jersey City, New Jersey, is a wholly-owned subsidiary of Fortitude Group Holdings, LLC (“FGH”). Prior to April 1, 2022, the Company (previously named Prudential Annuities Life Assurance Corporation ("PALAC")) was a wholly-owned subsidiary of Prudential Annuities, Inc ("PAI"), an indirect wholly-owned subsidiary of Prudential Financial, Inc. ("Prudential Financial"), a New Jersey Corporation. On April 1, 2022, PAI completed the sale of its equity interest in the Company to FGH. As a result, the Company is no longer an affiliate of Prudential Financial or any of its affiliates. See Basis of Presentation below and Note 3 for further information regarding the acquisition.

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). The accompanying Unaudited Consolidated Financial Statements present the consolidated results of operations, financial condition, and cash flows of the Company and a variable interest entity ("VIE") that meets the requirements for consolidation. All intercompany transactions have been eliminated in consolidation.

Following the acquisition of FLIAC, purchase accounting was applied to FGH's financial statements and we have elected to "push down" the basis to FLIAC in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations. The application of push-down accounting created a new basis of accounting for all assets and liabilities based on fair value at the date of acquisition. As a result, FLIAC's financial position, results of operations, and cash flows subsequent to the acquisition are not comparable with those prior to April 1, 2022, and therefore have been segregated to indicate pre-acquisition and post-acquisition periods. The pre-acquisition period through March 31, 2022 is referred to as the Predecessor Company. The post-acquisition period, April 1, 2022 and forward, includes the impact of push-down accounting and is referred to as the Successor Company. See Note 3 for further information regarding the acquisition and our application of push-down accounting.

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Predecessor Company’s Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of 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.

COVID-19

Since the first quarter of 2020, the novel coronavirus (“COVID-19”) has at times resulted in extreme stress and disruption in the global economy and financial markets. The COVID-19 pandemic has impacted, and may continue to impact, the Successor Company's results of operations, financial condition, and cash flows. Due to the highly uncertain nature of these conditions, it is not possible to estimate the ultimate impacts at this time. The risks may have manifested, and may continue to manifest, in the Successor Company's financial statements in the areas of, among others, i) insurance liabilities and related balances: potential changes to assumptions regarding investment returns, mortality, and policyholder behavior, which are reflected in our insurance liabilities and ii) investments: increased risk of loss on our investments due to default or deterioration in credit quality or value. We cannot predict what impact the COVID-19 pandemic will ultimately have on our businesses.

Novation of Ceded Business

In the second quarter of 2022, in accordance with applicable state law, a program was instituted to novate a significant portion of the Ceded Business policies from FLIAC to Pruco Life Insurance Company ("Pruco Life"). The program does not have an impact on net equity or net income but has resulted in the reduction of certain activity/balances associated with these policies. During the six months ended September 30, 2022, approximately $6 billion of account value, which generally approximates fair values of insurance liabilities, was transferred out of the Company as a result of the novation program, which represents approximately 60 percent of account value since the acquisition of the Company on April 1, 2022.

Predecessor Company Reinsurance Transactions

Effective April 1, 2016, the Predecessor Company reinsured the variable annuity base contracts, along with the living benefit guarantees, from Pruco Life, excluding the Pruco Life Insurance Company of New Jersey ("PLNJ") business which was reinsured to The Prudential Insurance Company of America ("Prudential Insurance"), in each case under a coinsurance and modified coinsurance agreement. This reinsurance agreement covers new and in force business and excludes business reinsured externally. As of December 31, 2020, Pruco Life discontinued the sales of traditional variable annuities with guaranteed living benefit riders. The discontinuation had no impact on the reinsurance agreement between Pruco Life and the Predecessor Company.

Effective July 1, 2021, Pruco Life recaptured the risks related to its business, as discussed above, that had previously been reinsured to the Predecessor Company from April 1, 2016 through June 30, 2021. The product risks related to the previously reinsured business that were being managed in the Predecessor Company, were transferred to Pruco Life. This transaction is referred to as the "2021 Variable Annuities Recapture". See Note 1 to the Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021, for more details.

Effective December 1, 2021, the Predecessor Company entered into a reinsurance agreement with Pruco Life under which the Predecessor Company reinsured certain of its variable and fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal income feature to Pruco Life.

Predecessor Company

During the first quarter of 2022, the Predecessor Company recorded an out-of-period adjustment which decreased “Investment gains (losses), net” by $48 million, resulting in a net decrease of $48 million to “Income (loss) from operations before income taxes” during the three months ended March 31, 2022. This adjustment related to certain portions of reinsurance activity that had been incorrectly recorded during the fourth quarter of 2021. Management evaluated the impact of all out-of-period adjustments, both individually and in the aggregate, and concluded that they were not material to any current or previously reported quarterly or annual financial statements.

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

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SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

Accounting Policy Election

Fair Value Option

Following the acquisition, we have elected to prospectively apply the fair value option to several of FLIAC's assets and liabilities. We have made this election as it improves our operational efficiency and better aligns the recognition and measurement of our investments, insurance liabilities, and associated reinsurance activity with how we expect to manage the business.

The following represents the financial statement line items impacted by the fair value election and the changes to such line items from what was previously presented under the Predecessor Company:

	Successor Company	Predecessor Company
	Financial Statement Line Item
STATEMENTS OF FINANCIAL POSITION
Assets
Investments
	"Fixed maturity securities, at fair value"	"Fixed maturity securities, available-for-sale, at fair value" and "Fixed maturity securities, trading, at fair value"
	"Equity securities, at fair value"	"Equity securities, at fair value"
	"Secured Receivable" (1)	"Commercial mortgage and other loans"
Other
	"Reinsurance recoverables" and "Net modified coinsurance receivable, at fair value" (2)	"Reinsurance recoverables" and "Reinsurance payables"
	"Deposit asset at fair value" (3)	"Deposit asset"
Liabilities
	"Insurance liabilities, at fair value"	"Future policy benefits" and "Policyholders' account balances"
STATEMENTS OF OPERATIONS
Revenues
	"Investment gains (losses), net"	"Realized investment gains (losses), net" and "Net unrealized investment gains (losses)" (4)
Benefits and Expenses
	"Policyholder benefits and changes in fair value of insurance liabilities"	"Policyholders' benefits" and "Interest credited to policyholders' account balances"
STATEMENTS OF COMPREHENSIVE INCOME
Other comprehensive income (loss)
	"Changes in own-credit risk related to insurance liabilities"	N/A
(1) Also includes certain fixed maturity securities previously contained in "Fixed maturity securities, available-for-sale" by the Predecessor Company. See "Secured Receivable"section below for further discussion.
(2) Balances unrelated to the modified coinsurance agreement will remain in the respective reinsurance recoverable and payable line items.
(3) Included within "Other assets" by the Predecessor Company.
(4) Represents "Net unrealized investment gains (losses)" included in Other comprehensive income (loss).

During the third quarter of 2022 we purchased residential mortgage loans for which we have elected to apply the fair value option. The investments are included in Other invested assets in the unaudited interim consolidated statements of financial position. See Note 5 for further information.

Secured Receivable

The economics of commercial mortgage and other loans and certain fixed maturity securities held by the Predecessor Company have been transferred to FLIAC via participation agreements. The legal ownership and control over the participated assets was not transferred and cannot be freely pledged or exchanged by FLIAC. This transfer did not meet the requirements of sale accounting and is therefore accounted for as a secured borrowing. These participated assets are represented on our balance sheet, at fair value, in the form of a secured receivable, all of which is associated with our Ceded Business segment. During the third quarter of 2022, all assets within the participation agreements were transferred out of the Company as part of the novation program discussed in Note 1. Accordingly, the Secured Receivable is no longer carried on FLIAC's balance sheet as of September 30, 2022. There was no impact to net income or equity as a result of these transfers.

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of an Accounting Standards Update ("ASU") to the ASC. We consider the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material.

ASU issued but not yet adopted as of September 30, 2022 — ASU 2018-12

ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018, and was amended by ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date, issued in October 2019, and ASU 2020-11, Financial Services-Insurance (Topic 944): Effective Date and Early Application, issued in November 2020. Public business entities that meet the definition of an SEC filer and are not Small Reporting Companies that early adopt ASU 2018-12 are allowed to apply the guidance either as of January 1, 2020 or January 1, 2021 (and record transition adjustments as of January 1, 2020 or January 1, 2021, respectively) in their 2022 financial statements. Companies that do not early adopt ASU 2018-12 will apply the guidance as of January 1, 2021 (and record transition adjustments as of January 1, 2021) in the 2023 financial statements.

As previously discussed, we have elected to apply the fair value option for all of our insurance liabilities. As a result of this election, our insurance liabilities are no longer within the scope of ASU 2018-12.

Other ASUs issued but not yet adopted as of September 30, 2022

Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosure	This ASU eliminates the accounting guidance for Troubled Debt Restructurings (“TDR”) for creditors and adds enhanced disclosure requirements for certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. Following adoption of the ASU, all loan refinancings are subject to the modification guidance in ASC 310-20. This ASU also amends the guidance on the vintage disclosures to require disclosure of current-period gross write-offs by year of origination.	January 1, 2023 using the prospective method with an option to apply a modified retrospective transition method for the recognition and measurement of TDRs which will include a cumulative effect adjustment on the balance sheet in the period of adoption. Early adoption is permitted beginning January 1, 2022, including adoption in an interim period provided guidance is applied as of the beginning of the year.	Following our election of the fair value option for our secured receivable, and the expectation to elect the fair value option on any newly acquired financing receivables, we do not expect the adoption of the ASU to have an impact on the Consolidated Financial Statements or Notes to the Consolidated Financial Statements

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BUSINESS COMBINATION

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

BUSINESS COMBINATION

BUSINESS COMBINATION

As referenced in Note 2, we have applied push-down accounting to FLIAC's consolidated financial statements, which resulted in the initial recognition of its assets and liabilities at fair value as of the acquisition date, April 1, 2022.

The total preliminary purchase consideration of the acquisition was $1,761 million, comprised of $1,748 million cash transferred for the purchase price and a $13 million cash reimbursement to the seller for transaction costs incurred. A bargain purchase gain was recognized in the amount of $5 million, representing the excess of the fair value of net assets acquired over the consideration paid. The bargain purchase gain was allocated to additional paid-in capital to reflect the transaction and the new basis of net assets recorded.

The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date and represents amounts recognized for each major class of assets and liabilities, after application of push-down accounting.

	Successor Company
	April 1, 2022
	(in millions)
ASSETS
Total investments	$	10,807
Cash and cash equivalents	1,578
Reinsurance recoverables	239
Net modified coinsurance receivable	68
Income taxes	352
Deposit asset	2,607
Other assets	96
Separate account assets	29,426
TOTAL ASSETS	$	45,173
LIABILITIES
Insurance liabilities	$	13,611
Other liabilities	370
Separate account liabilities	29,426
TOTAL LIABILITIES	43,407
Net assets acquired	1,766
Consideration	1,761
BARGAIN PURCHASE GAIN	$	5

During the third quarter of 2022, the Successor Company made the following corrections to the previously reported fair value of assets acquired and liabilities assumed at the acquisition date, which are reflected in the above chart. These corrections had no impact to net assets acquired, consideration paid, or the bargain purchase gain.

•$105 million decrease to Reinsurance recoverables;

•$63 million increase to Net modified coinsurance receivable;

•$8 million decrease to Deposit asset; and

•$50 million decrease to Insurance liabilities.

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SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Following the acquisition by FGH, we have separated our business into two reportable segments, which we refer to as the "Retained Business" and the "Ceded Business."

The Retained Business consists of variable annuity products with guaranteed lifetime withdrawal benefit features as well as smaller blocks of variable annuity products with certain other living benefit and death benefit features. The Retained Business also includes variable universal life and fixed payout annuity products. The Retained Business is actively managed by FLIAC management and the Successor Company retains the full economic benefits and risks.

The Ceded Business represents certain business (primarily registered index-linked annuities and fixed annuities, which includes fixed indexed and fixed deferred annuities, and other variable annuities) where 100 percent of the assets and liabilities have been fully ceded to Prudential Insurance and Pruco Life under existing coinsurance and modified coinsurance agreements. We have a modco payable of $2,136 million equal to the assets held in the Ceded Business, which is included in the net modified coinsurance receivable. Historical information has not been revised for the segment presentation and is not comparable following the election of push-down accounting as of April 1, 2022.

The following is the Consolidated Statement of Financial Position by segment:

	September 30, 2022
	Retained Business		Ceded Business		Total
	(in millions)
ASSETS
Total investments	$	4,310	$	1,892	$	6,202
Cash and cash equivalents	553		723		1,276
Accrued investment income	45		11		56
Reinsurance recoverables	—		220		220
Net modified coinsurance receivable	—		70		70
Income taxes	90		—		90
Deposit asset	—		859		859
Other assets	117		2		119
Separate account assets	21,024		1,992		23,016
TOTAL ASSETS	$	26,139	$	5,769	$	31,908
LIABILITIES AND EQUITY
LIABILITIES
Insurance liabilities	$	3,019	$	3,285	$	6,304
Other liabilities	356		492		848
Separate account liabilities	21,024		1,992		23,016
TOTAL LIABILITIES	24,399		5,769		30,168
EQUITY	1,740		—		1,740
TOTAL LIABILITIES AND EQUITY	$	26,139	$	5,769	$	31,908

    

The following is comprehensive income (loss) by segment:

	Three Months Ended September 30, 2022
	Retained Business		Ceded Business		Total
	(in millions)
REVENUES
Premiums	$	8	$	—	$	8
Policy charges and fee income	131		—		131
Net investment income	47		45		92
Asset management and service fees	26		—		26
Other losses	(4)		(12)		(16)
Investment gains (losses), net	(463)		8		(455)
TOTAL REVENUES	(255)		41		(214)
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	(145)		41		(104)
Commission expense	27		—		27
General, administrative and other expenses	17		—		17
TOTAL BENEFITS AND EXPENSES	(101)		41		(60)
LOSS FROM OPERATIONS BEFORE INCOME TAXES	(154)		—		(154)
Income tax expense	3		—		3
NET LOSS	$	(157)	$	—	$	(157)
Other comprehensive income, before tax:
Changes in own-credit risk related to insurance liabilities	149		—		149
Less: Income tax expense	32		—		32
Other comprehensive income, net of taxes	117		—		117
Comprehensive loss	$	(40)	$	—	$	(40)

	Six Months Ended September 30, 2022
	Retained Business		Ceded Business		Total
	(in millions)
REVENUES
Premiums	$	11	$	—	$	11
Policy charges and fee income	261		—		261
Net investment income	82		107		189
Asset management and service fees	48		—		48
Other losses	(4)		(11)		(15)
Investment losses, net	(571)		(1,182)		(1,753)
TOTAL REVENUES	(173)		(1,086)		(1,259)
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	112		(1,086)		(974)
Commission expense	45		—		45
General, administrative and other expenses	55		—		55
TOTAL BENEFITS AND EXPENSES	212		(1,086)		(874)
LOSS FROM OPERATIONS BEFORE INCOME TAXES	(385)		—		(385)
Income tax benefit	(48)		—		(48)
NET LOSS	$	(337)	$	—	$	(337)
Other comprehensive income, before tax:
Changes in own-credit risk related to insurance liabilities	394		—		394
Less: Income tax expense	83		—		83
Other comprehensive income, net of taxes	311		—		311
Comprehensive loss	$	(26)	$	—	$	(26)

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INVESTMENTS

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

INVESTMENTS

As discussed in Note 2, we have elected to apply the fair value option for FLIAC's entire portfolio of fixed maturity and equity securities, its secured receivable, and residential mortgage loans. The impact of the election has resulted in the following changes:

•Elimination of the "available-for-sale" designation on all fixed maturity securities, resulting in a change in the recording of unrealized gains and losses through "Investment gains (losses), net" in the consolidated statement of operations rather than in "Accumulated other comprehensive income" ("AOCI") as a component of equity in the consolidated statement of financial position;

•Elimination of the required allowance for current expected credit losses on applicable financial assets under ASC 326 - Financial Instruments - Credit Losses, which include fixed maturity securities designated as "available-for-sale" and mortgage and other loans; and

•Elimination of a significant portion of the required disclosures for available-for-sale securities. These disclosures primarily relate to the amortized cost and unrealized gains and losses on available-for-sale securities. Disclosures for historical periods under the Predecessor Company are retained throughout this note.

The accumulated unrealized gains and losses recorded in AOCI at March 31, 2022 related to the available-for-sale securities were reset in conjunction with our election of push-down accounting on April 1, 2022. Similarly, the allowance for credit losses at March 31, 2022 on our available-for-sale securities and secured receivable was eliminated in conjunction with our election of push-down accounting on April 1, 2022. As of September 30, 2022, there was no balance remaining in AOCI for unrealized gains and losses on our available-for-sale securities and no remaining allowance for credit losses.

See Note 7 for further discussion and disclosures of the fair values of these financial assets.

The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading) for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	654	$	74	$	1	$	—	$	727
Obligations of U.S. states and their political subdivisions	281		15		—		—		296
Foreign government bonds	106		9		1		—		114
U.S. public corporate securities	2,345		134		18		—		2,461
U.S. private corporate securities	1,635		24		14		1		1,644
Foreign public corporate securities	793		11		9		—		795
Foreign private corporate securities	920		5		34		—		891
Asset-backed securities(1)	1,058		5		1		—		1,062
Commercial mortgage-backed securities	692		22		8		—		706
Residential mortgage-backed securities(2)	72		3		—		—		75
Total fixed maturities, available-for-sale	$	8,556	$	302	$	86	$	1	$	8,771

(1)Includes credit-tranched securities collateralized by loan obligations, auto loans, education loans, equipment leases and sub-prime mortgages.

(2)Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

The following tables set forth the fair value and gross unrealized losses on available-for-sale fixed maturity securities without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross   Unrealized  Losses		Fair Value		Gross   Unrealized  Losses		Fair Value		Gross   Unrealized  Losses
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	74	$	1	$	—	$	—	$	74	$	1
Obligations of U.S. states and their political subdivisions	5		—		—		—		5		—
Foreign government bonds	13		1		7		—		20		1
U.S. public corporate securities	696		12		153		6		849		18
U.S. private corporate securities	855		14		—		—		855		14
Foreign public corporate securities	522		8		50		1		572		9
Foreign private corporate securities	689		34		—		—		689		34
Asset-backed securities	499		1		—		—		499		1
Commercial mortgage-backed securities	157		5		75		3		232		8
Residential mortgage-backed securities	6		—		—		—		6		—
Total fixed maturities, available-for-sale	$	3,516	$	76	$	285	$	10	$	3,801	$	86

As of December 31, 2021, the gross unrealized losses on fixed maturity available-for-sale securities without an allowance were comprised of $73 million related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $13 million related to other than high or highest quality securities based on NAIC or equivalent rating. As of December 31, 2021, the $10 million of gross unrealized losses of twelve months or more were concentrated in the Predecessor Company’s corporate securities within the consumer non-cyclical, capital goods, and finance sectors.

The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on write-downs and the allowance for credit losses of fixed maturities, for the Predecessor Company:

	Predecessor Company
	Three months ended September 30		Nine months ended September 30
	2021
	(in millions)
Fixed maturities, available-for-sale:
Proceeds from sales(1)	$	216	$	8,009
Proceeds from maturities/prepayments	196		607
Gross investment gains on sales and maturities	157		1,296
Gross investment losses on sales and maturities	(14)		(75)
Write-downs recognized in earnings (2)	—		(23)
(Addition to) release of allowance for credit losses	(2)		(2)

(1)Includes $(243) million of non-cash related proceeds due to the timing of trade settlements for the nine months ended September 30, 2021.

(2)Amounts represent write-downs on securities actively marketed for sale.

The following tables set forth the activity in the allowance for credit losses for fixed maturity securities, for the Predecessor Company:

	Predecessor Company
	Three Months Ended March 31, 2022
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	—	$	—	$	1	$	—	$	—	$	—	$	1
Additions to allowance for credit losses not previously recorded	—		—		—		—		—		—		—
Reductions for securities sold during the period	—		—		—		—		—		—		—
Additions on securities with previous allowance	—		—		—		—		—		—		—
Balance, end of period	$	—	$	—	$	1	$	—	$	—	$	—	$	1

	Predecessor Company
	Three Months Ended September 30, 2021
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Additions to allowance for credit losses not previously recorded	—		—		2		—		—		—		2
Reductions for securities sold during the period	—		—		—		—		—		—		—
Reductions on securities with previous allowance	—		—		—		—		—		—		—
Balance, end of period	$	—	$	—	$	2	$	—	$	—	$	—	$	2

	Predecessor Company
	Nine Months Ended September 30, 2021
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	—	$	—	$	1	$	—	$	—	$	—	$	1
Additions to allowance for credit losses not previously recorded	—		—		3		—		—		—		3
Reductions for securities sold during the period	—		—		(1)		—		—		—		(1)
Reductions on securities with previous allowance	—		—		(1)		—		—		—		(1)
Balance, end of period	$	—	$	—	$	2	$	—	$	—	$	—	$	2

See Note 2 to the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information about the Predecessor Company’s methodology for developing our allowance for credit losses for the Predecessor Company.

For the three and nine months ended September 30, 2021, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to adverse projected cash flows in the capital goods and transportation sectors within private corporate securities.

The Predecessor Company did not have any fixed maturity securities purchased with credit deterioration as of December 31, 2021.

Fixed Maturity Securities, Trading (Predecessor Company)

The net change in unrealized gains (losses) from fixed maturity securities, trading still held at period end, recorded by the Predecessor Company within “Other income (loss),” was $24 million and $(276) million during the three and nine months ended September 30, 2021, respectively.

Equity Securities (Predecessor Company)

The net change in unrealized gains (losses) from equity securities still held at period end, recorded by the Predecessor Company within “Other income (loss),” was $(3) million and $(12) million during the three and nine months ended September 30, 2021, respectively.

Commercial Mortgage and Other Loans (Predecessor Company)

The following table sets forth the composition of “Commercial mortgage and other loans,” for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Amount (in millions)		% of Total
Commercial mortgage and agricultural property loans by property type:
Apartments/Multi-Family	$	385	25.5	%
Hospitality	17		1.1
Industrial	624		41.5
Office	196		13.0
Other	134		8.9
Retail	102		6.7
Total commercial mortgage loans	1,458		96.7	%
Agricultural property loans	51		3.3
Total commercial mortgage and agricultural property loans	1,509		100.0	%
Allowance for credit losses	(5)
Total net commercial mortgage and agricultural property loans	$	1,504

As of December 31, 2021, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States with the largest concentrations in California (34%), Texas (18%) and New York (7%) and included loans secured by properties in Europe (8%) and Australia (1%).

The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans for the Predecessor Company:

	Predecessor Company
	Three Months Ended March 31,
	2022
	Commercial Mortgage Loans		Agricultural Property Loans		Total
	(in millions)
Allowance, beginning of period	$	5	$	—	$	5
Release of allowance for expected losses	(1)		—		(1)
Allowance, end of period	$	4	$	—	$	4

	Predecessor Company
	Three Months Ended September 30						Nine Months Ended September 30
	2021
	Commercial Mortgage Loans		Agricultural Property Loans		Total		Commercial Mortgage Loans		Agricultural Property Loans		Total
	(in millions)
Allowance, beginning of period	$	5	$	—	$	5	$	7	$	—	$	7
Addition to (release of) allowance for expected losses	(1)		—		(1)		(3)		—		(3)
Allowance, end of period	$	4	$	—	$	4	$	4	$	—	$	4

See Note 2 to the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information about the Predecessor Company's methodology for developing the allowance and expected losses.

For the three months ended March 31, 2022 and the three and nine months ended September 30, 2021, the net decrease in the allowance for credit losses on commercial mortgage and other loans was primarily related to the improving credit environment. Also impacting the decline for the three months ended September 30, 2021 were loan sales.

The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Amortized Cost by Origination Year
	2021		2020		2019		2018		2017		Prior		Total
	(in millions)
Commercial Mortgage Loans
Loan-to-Value Ratio:
0%-59.99%	$	150	$	—	$	21	$	7	$	93	$	232	$	503
60%-69.99%	389		33		10		11		39		28		510
70%-79.99%	317		48		17		—		21		21		424
80% or greater	—		—		—		—		—		21		21
Total	$	856	$	81	$	48	$	18	$	153	$	302	$	1,458
Debt Service Coverage Ratio:
Greater or Equal to 1.2x	$	856	$	81	$	48	$	7	$	120	$	295	$	1,407
1.0 - 1.2x	—		—		—		11		—		—		11
Less than 1.0x	—		—		—		—		33		7		40
Total	$	856	$	81	$	48	$	18	$	153	$	302	$	1,458
Agricultural Property Loans
Loan-to-Value Ratio:
0%-59.99%	$	40	$	1	$	—	$	—	$	3	$	7	$	51
60%-69.99%	—		—		—		—		—		—		—
70%-79.99%	—		—		—		—		—		—		—
80% or greater	—		—		—		—		—		—		—
Total	$	40	$	1	$	—	$	—	$	3	$	7	$	51
Debt Service Coverage Ratio:
Greater or Equal to 1.2x	$	40	$	1	$	—	$	—	$	3	$	3	$	47
1.0 - 1.2x	—		—		—		—		—		—		—
Less than 1.0x	—		—		—		—		—		4		4
Total	$	40	$	1	$	—	$	—	$	3	$	7	$	51

See Note 2 to the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information about the commercial mortgage and other loans credit quality monitoring process.

As of December 31, 2021 there were no commercial and other loans past due or in non-accrual status held by the Predecessor Company. For additional information regarding the Predecessor Company's policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021.

The Predecessor Company did not hold any commercial mortgage and other loans that were purchased with credit deterioration as of December 31, 2021.

For the three months ended September 30, 2021, all commercial mortgage loans acquired were through direct origination. For the nine months ended September 30, 2021, there were $167 million commercial mortgage loans acquired, other than those through direct origination. For both the three and nine months ended September 30, 2021 there were $707 million of commercial and other loans sold.

Other Invested Assets

The following table sets forth the composition of “Other invested assets,” as of the dates indicated.

	Successor Company		Predecessor Company
	September 30, 2022		December 31, 2021
	(in millions)
LPs/LLCs:
Equity method:
Private equity	$	14	$	19
Real estate-related	5		62
Subtotal equity method	19		81
Fair value:
Private equity	64		4
Real estate-related	—		6
Subtotal fair value	64		10
Total LPs/LLCs	83		91
Derivative instruments	265		3
Other	82		12
Total other invested assets	$	430	$	106

Amounts contained within Other are comprised primarily of residential mortgage loans and policy loans.

Accrued Investment Income

The following table sets forth the composition of “Accrued investment income,” as of the dates indicated:

	Successor Company		Predecessor Company
	September 30, 2022		December 31, 2021
	(in millions)
Fixed maturity securities	$	45	$	58
Commercial mortgage and other loans	—		3
Other invested assets	6		—
Short-term investments and cash equivalents	5		—
Total accrued investment income	$	56	$	61

There were no write-downs on accrued investment income for the three and six months ended September 30, 2022, the three months ended March 31, 2022, and the three and nine months ended September 30, 2021.

Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:

	Successor Company				Predecessor Company
	Three Months Ended September 30		Six Months Ended September 30		Three Months Ended March 31		Three Months Ended September 30		Nine Months Ended September 30
	2022						2021
	(in millions)
Fixed maturities securities (1)	$	76	$	156	$	61	$	82	$	308
Equity securities	1		2		1		1		3
Secured receivable	7		18		—		—		—
Commercial mortgage and other loans	—		—		11		14		46
Other invested assets	10		14		29		11		50
Short-term investments and cash equivalents	3		5		1		1		1
Gross investment income	97		195		103		109		408
Less: investment expenses	(5)		(6)		(4)		(8)		(22)
Net investment income	$	92	$	189	$	99	$	101	$	386

(1)Includes fixed maturity securities classified as available-for-sale and trading for the three months ended March 31, 2022 and the three and nine months ended, September 30, 2021.

The activity above includes interest income related to fair value option investments.

Investment Gains (Losses), Net 

The following table sets forth “Investment gains (losses), net” by investment type, for the periods indicated:

	Successor Company				Predecessor Company
	Three Months Ended September 30		Six Months Ended September 30		Three Months Ended March 31		Three Months Ended September 30		Nine Months Ended September 30
	2022						2021
	(in millions)
Fixed maturity securities (1)	$	(458)	$	(1,102)	$	(21)	$	141	$	1,197
Secured receivable	(8)		(59)		—		—		—
Commercial mortgage and other loans	—		—		—		28		28
Derivatives	24		(560)		502		4,906		6,139
Other invested assets and equity securities	(13)		(32)		—		6		9
Investment gains (losses), net	$	(455)	$	(1,753)	$	481	$	5,081	$	7,373

(1)For the Predecessor Company, includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading.

Net Unrealized Gains (Losses) on Investments within AOCI (Predecessor Company)

The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:

	Predecessor Company
	December 31, 2021
	(in millions)
Fixed maturity securities, available-for-sale without an allowance	$	216
Derivatives designated as cash flow hedges(1)	25
Net unrealized gains on investments	$	241

(1)For more information on cash flow hedges for the Predecessor Company, see Note 6.

Repurchase Agreements and Securities Lending

In the normal course of business, FLIAC sells securities under agreements to repurchase and enters into securities lending transactions. These balances are recorded within Other liabilities in the unaudited interim consolidated statements of financial position.

The following table sets forth the remaining contractual maturities of the Successor Company's outstanding repurchase agreements by security type.

	Successor Company
	September 30, 2022
	Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 days		30-90 days		Total
	(in millions)
U.S. corporate public securities	$	—	$	—	$	200	$	200

The following table sets forth the remaining contractual maturities of the Successor Company's cash collateral received for securities loaned by security type:

	Successor Company
	September 30, 2022
	Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 days		30-90 days		Total
	(in millions)
Equity securities	$	169	$	—	$	—	$	169

As of December 31, 2021 the Predecessor Company had no outstanding repurchase agreements or securities lending transactions.

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DERIVATIVES AND HEDGING

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING

DERIVATIVES AND HEDGING

Types of Derivative Instruments and Derivative Strategies

The Company utilizes various derivative instruments and strategies to manage its risk. Commonly used derivative instruments include but are not necessarily limited to:

•Interest rate contracts: futures, swaps, forwards, options, caps and floors

•Equity contracts: futures, options and total return swaps

•Foreign exchange contracts: futures, options, forwards and swaps

•Credit contracts: single and index reference credit default swaps

The Predecessor Company previously accounted for the index-linked features of certain annuity products as embedded derivatives. The Successor Company elected the fair value option for these annuity products, all of which are included in the Ceded Business. See Note 7 for further information.

See below for information on these contracts and the related strategies.

Interest Rate Contracts

Interest rate swaps and futures are used by the Company to reduce risks from changes in interest rates, manage interest rate exposures arising from mismatches between assets and liabilities and to hedge against changes in their values it owns or anticipates acquiring or selling.

Swaps may be attributed to specific assets or liabilities or to a portfolio of assets or liabilities. Under interest rate swaps, the Company agrees with counterparties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed upon notional principal amount.

In standardized exchange-traded interest rate futures transactions, the Company purchases or sells a specified number of contracts, the values of which are determined by the daily market values of underlying referenced investments. The Company enters into exchange-traded futures with regulated futures commission's merchants who are members of a trading exchange.

Equity Contracts

Equity options, total return swaps, and futures are used by the Company to manage its exposure to the equity markets which impacts the value of assets and liabilities it owns or anticipates acquiring or selling.

Equity index options are contracts which will settle in cash based on differentials in the underlying indices at the time of exercise and the strike price. The Company uses combinations of purchases and sales of equity index options to hedge the effects of adverse changes in equity indices within a predetermined range.

Total return swaps are contracts whereby the Company agrees with counterparties to exchange, at specified intervals, the difference between the return on an asset (or market index) and Secured Overnight Financing Rate ("SOFR") plus an associated funding spread based on a notional amount. The Company generally uses total return swaps to hedge the effect of adverse changes in equity indices.

In standardized exchange-traded equity futures transactions, the Company purchases or sells a specified number of contracts, the values of which are determined by the daily market values underlying referenced equity indices. The Company enters into exchange-traded futures with regulated futures commission's merchants who are members of a trading exchange.

Foreign Exchange Contracts

Currency derivatives, including currency swaps and forwards, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell.

Under currency forwards, the Company agrees with counterparties to deliver a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. The Company executes forward sales of the hedged currency in exchange for U.S. dollars at a specified exchange rate. The maturities of these forwards correspond with the future periods in which the non-U.S. dollar-denominated earnings are expected to be generated.

Under currency swaps, the Company agrees with counterparties to exchange, at specified intervals, the difference between one currency and another at an exchange rate and calculated by reference to an agreed principal amount. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party.

Credit Contracts

The Company purchases credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio.

Primary Risks Managed by Derivatives

The tables below provide a summary, by operating segment, of the gross notional amount and fair value of derivative contracts, by the primary underlying risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral. As part of our application of push-down accounting in connection with the acquisition of the Company, we have de-designated the Predecessor Company's hedging relationships for all of our derivative instruments and accordingly any related accumulated unrealized gains and losses that were previously recorded in AOCI were reset to zero at the acquisition date. Historical information has not been restated

under the updated segmentation and is not comparable following the change in ownership on April 1, 2022. See Notes 2 and 3 for further information regarding the acquisition of the Company and Note 4 for further information regarding the Company's segments.

	Successor Company
	September 30, 2022
Primary Underlying Risk/Instrument Type	Gross Notional Values/Units			Fair Value
				Assets		Liabilities
	(in millions)
Retained Business
Interest Rate
Interest Rate Swaps	$	9,761		$	212	$	(546)
Currency/Interest Rate
Foreign Currency Swaps	97		—	17		—
Credit
Credit Default Swaps	520			1		(1)
Equity
Equity Futures	1,728			180		—
Total Return Swaps	—			94		—
Equity Options	3,686			232		—
Total Derivatives, Retained Business	15,792			736		(547)
Ceded Business
Interest Rate
Interest Rate Swaps	2,693			49		(119)
Currency/Interest Rate
Foreign Currency Swaps	423			88		—
Credit
Credit Default Swaps	71			—		(3)
Equity
Total Return Swaps	4			—		(1)
Equity Options	10,133			232		(571)
Total Derivatives, Ceded Business	13,324			369		(694)
Total Derivatives (1)	$	29,116		$	1,105	$	(1,241)

(1)     Recorded in “Other invested assets” and “Other liabilities” in the Unaudited Interim Consolidated Statements of Financial Position.

	Predecessor Company
	December 31, 2021
Primary Underlying Risk/Instrument Type	Gross Notional		Fair Value
			Assets		Liabilities
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Currency/Interest Rate
Foreign Currency Swaps	$	637	$	29	$	(1)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Futures	$	55	$	—	$	—
Interest Rate Swaps	10,520		339		(255)
Foreign Currency
Foreign Currency Forwards	50		—		(1)
Currency/Interest Rate
Foreign Currency Swaps	208		10		(1)
Credit
Credit Default Swaps	1,746		48		—
Equity
Equity Futures	855		1		(1)
Total Return Swaps	4,803		88		(81)
Equity Options	20,582		963		(1,028)
Total Derivatives Not Qualifying as Hedge Accounting Instruments	$	38,819	$	1,449	$	(1,367)
Total Derivatives (1)(2)	$	39,456	$	1,478	$	(1,368)

(1)Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $4,060 million as of December 31, 2021 included in “Future policy benefits” and $2,041 million as of December 31, 2021 included in “Policyholders’ account balances". Other assets included $400 million as of December 31, 2021. The fair value of the related reinsurance, included in "Reinsurance recoverables" and/or "Reinsurance payables" was an asset of $1,881 million as of December 31, 2021.

(2)Recorded in “Other invested assets”, “Other liabilities”, and "Payables to parent and affiliates" in the Unaudited Interim Consolidated Statements of Financial Position.

Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables) that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	Successor Company
	September 30, 2022
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the  Statements of Financial Position		Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives	$	1,105	$	(840)	$	265	$	(265)	$	—
Offsetting of Financial Liabilities:
Derivatives	$	1,241	$	(956)	$	285	$	—	$	285

	Predecessor Company
	December 31, 2021
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position		Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives	$	1,478	$	(1,475)	$	3	$	—	$	3
Offsetting of Financial Liabilities:
Derivatives	$	1,368	$	(1,154)	$	215	$	(215)	$	—

(1)Amounts exclude the excess of collateral received/pledged from/to the counterparty.

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above see “Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The following tables provide the financial statement classification and impact of derivatives, by segment.

	Successor Company
	Three Months Ended September 30		Six Months Ended September 30
	2022
	Investment gains (losses), net
	(in millions)
Retained Business
Interest Rate	$	(259)	$	(704)
Currency/Interest Rate	12		12
Credit	(2)		(2)
Equity	124		827
Total, Retained Business	(125)		133
Ceded Business
Interest Rate	(36)		(56)
Currency	—		2
Currency/Interest Rate	(36)		94
Credit	2		(4)
Equity	219		(729)
Total, Ceded Business	149		(693)
Total	$	24	$	(560)

	Predecessor Company
	Three Months Ended March 31, 2022
	Realized Investment Gains (Losses)		Net Investment Income		Other Income (Loss)		Change in AOCI
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Currency/Interest Rate	$	1	$	1	$	2	$	4
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(527)		—		—		—
Currency	—		—		—		—
Currency/Interest Rate	(6)		—		—		—
Credit	(12)		—		—		—
Equity	59		—		—		—
Embedded Derivatives	986		—		—		—
Total Derivatives Not Qualifying as Hedge Accounting Instruments:	500		—		—		—
Total	$	501	$	1	$	2	$	4

	Predecessor Company
	Three Months Ended September 30, 2021
	Realized Investment Gains (Losses)		Net Investment Income		Other Income (Loss)		Change in AOCI
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Currency/Interest Rate	$	3	$	2	$	5	$	33
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(63)		—		—		—
Currency	2		—		—		—
Currency/Interest Rate	(9)		—		—		—
Credit	1		—		—		—
Equity	(18)		—		—		—
Embedded Derivatives	4,990		—		—		—
Total Derivatives Not Qualifying as Hedge Accounting Instruments:	4,903		—		—		—
Total	$	4,906	$	2	$	5	$	33

	Predecessor Company
	Nine Months Ended September 30, 2021
	Realized Investment Gains (Losses)		Net Investment Income		Other Income (Loss)		Change in AOCI
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Currency/Interest Rate	$	8	$	11	$	11	$	58
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(1,853)		—		—		—
Currency	2		—		—		—
Currency/Interest Rate	1		—		—		—
Credit	11		—		—		—
Equity	(1,798)		—		—		—
Embedded Derivatives	9,769		—		—		—
Total Derivatives Not Qualifying as Hedge Accounting Instruments:	6,132		—		—		—
Total	$	6,140	$	11	$	11	$	58

Presented below is a roll forward of current period cash flow hedges in AOCI before taxes:

	Predecessor Company
	(in millions)
Balance, December 31, 2021	$	25
Amount recorded in AOCI
Currency/Interest Rate	9
Total amount recorded in AOCI	9
Amount reclassified from AOCI to income
Currency/Interest Rate	(5)
Total amount reclassified from AOCI to income	(5)
Balance, March 31, 2022	$	29

The changes in fair value of cash flow hedges are deferred in AOCI and are included in "Net unrealized investment gains (losses)" in the Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss); these amounts are then reclassified to earnings when the hedged item affects earnings.

Following the application of push-down accounting, amounts previously deferred in AOCI related to the Predecessor Company's cash flow hedges were classified to retained earnings due to the Successor Company's election to de-designate the hedging relationship for all of its derivative instruments. Accordingly, there were no amounts recorded in or reclassified from AOCI by the Successor Company during the three and six months ended September 30, 2022. Due to the Successor Company's election to apply push-down accounting and the de-designation of all hedging relationships on the acquisition date, the Successor Company does not expect to reclassify any amounts from AOCI to earnings during the subsequent twelve months ending September 30, 2023.

The exposures the Predecessor Company hedged with these qualifying cash flow hedges were the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments.

There were no material amounts reclassified from AOCI into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging.

Counterparty Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. FLIAC manages credit risk by (i) entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties governed by master netting agreement, as applicable; (ii) trading through central clearing and OTC parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single-party credit exposures which are subject to periodic management review.

Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position.

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FAIR VALUE OF ASSETS AND LIABILITIES

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE OF ASSETS AND LIABILITIES

FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement – Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 - Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities.

Level 2 - Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs.

Level 3 - Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value.

For a discussion of the Company's valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see further below as well as Note 5 to the Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Fair Value Option Election

As discussed in Note 2, we have elected to adopt the fair value option for several of our financial assets and liabilities. The following are the financial assets and liabilities for which we have elected the fair value option:

•Fixed maturity securities - We have elected the fair value option for our entire fixed maturity securities portfolio. Following the election, fixed maturity securities will no longer carry available-for-sale or trading designations. Following the election, there have been no significant changes in the pricing inputs and valuation methodologies for these securities as disclosed in Note 5 of the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

•Equity securities - We have elected the fair value option for our entire equity securities portfolio. Following the election, there have been no significant changes in the pricing inputs and valuation methodologies for these securities as disclosed in Note 5 of the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

•Secured receivable - We have elected the fair value option for our entire Secured receivable, which represents our participating interest in the underlying commercial mortgage and other loans and certain private credit fixed maturity security securities. See "Updated Fair Value Methods and Assumptions" further below. During the third quarter of September 30, 2022, all assets within the Secured receivable were transferred out of the Company as part of the novation program discussed in Note 1. Accordingly, the Secured receivable is no longer carried on FLIAC's unaudited interim consolidated statements of financial position as of September 30, 2022.

•Residential mortgage loans - We have elected the fair value option for our entire residential mortgage loans portfolio, which are reported in "Other invested assets". See "Updated Fair Value Methods and Assumptions" further below.

•Reinsurance recoverable - We have elected the fair value option for the Reinsurance recoverables associated with the reinsurance agreement with Prudential Insurance. See "Updated Fair Value Methods and Assumptions" further below.

•Net modified coinsurance receivable - We have elected the fair value option for our modified coinsurance receivable and payable balances associated with the reinsurance agreement with Pruco Life regarding variable annuity base contracts, along with the living benefit guarantees. See "Updated Fair Value Methods and Assumptions" further below.

•Deposit asset - We have elected the fair value option for the deposit asset associated with the reinsurance agreement with Pruco Life regarding fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal. See "Updated Fair Value Methods and Assumptions" further below.

•Insurance liabilities - We have elected the fair value option for the entirety of our insurance liabilities. See "Updated Fair Value Methods and Assumptions" further below.

Assets and Liabilities by Hierarchy Level – The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

	Successor Company
	September 30, 2022
	Level 1		Level 2		Level 3		Netting (1)		Total
	(in millions)
Assets
Fixed Maturity Securities
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	643	$	—	$	—	$	643
Obligations of U.S. states and their political subdivisions	—		167		—		—		167
Foreign government bonds	—		15		—		—		15
U.S. corporate public securities	—		2,681		—		—		2,681
U.S. corporate private securities	—		359		334		—		693
Foreign corporate public securities	—		203		—		—		203
Foreign corporate private securities	—		274		32		—		306
Asset-backed securities(2)	—		507		155		—		662
Commercial mortgage-backed securities	—		162		—		—		162
Residential mortgage-backed securities	—		33		—		—		33
Total Fixed Maturity Securities	—		5,044		521		—		5,565
Equity securities	170		—		—		—		170
Short-term investments	37		—		—		—		37
Cash and cash equivalents	519		757		—		—		1,276
Other invested assets(3)	180		925		71		(840)		336
Deposit asset	—		—		859		—		859
Reinsurance recoverables	—		—		220		—		220
Net modified coinsurance receivable	—		—		70		—		70
Subtotal excluding separate account assets	906		6,726		1,741		(840)		8,533
Separate account assets(4)	—		23,016		—		—		23,016
Total assets	$	906	$	29,742	$	1,741	$	(840)	$	31,549
Liabilities
Insurance Liabilities	$	—	$	—	$	6,304	$	—	$	6,304
Other liabilities	—		1,241		—		(956)		285
Total liabilities	$	—	$	1,241	$	6,304	$	(956)	$	6,589

	Predecessor Company
	December 31, 2021
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Assets
Fixed Maturity Securities, available-for-sale:
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	727	$	—	$	—	$	727
Obligations of U.S. states and their political subdivisions	—		296		—		—		296
Foreign government bonds	—		114		—		—		114
U.S. corporate public securities	—		2,460		—		—		2,460
U.S. corporate private securities	—		1,556		89		—		1,645
Foreign corporate public securities	—		795		—		—		795
Foreign corporate private securities	—		791		101		—		892
Asset-backed securities(2)	—		1,039		23		—		1,062
Commercial mortgage-backed securities	—		674		32		—		706
Residential mortgage-backed securities	—		54		20		—		74
Total Fixed Maturity Securities, available-for-sale	—		8,506		265		—		8,771
Fixed maturities, trading	—		27		—				27
Equity securities	321		—		1				322
Short-term investments	519		263		13				795
Cash equivalents	372		1,359		8				1,739
Other invested assets(3)	1		1,477		—		(1,475)		3
Other assets	—				400				400
Reinsurance recoverables	—				1,881				1,881
Subtotal excluding separate account assets	1,213		11,632		2,568		(1,475)		13,938
Separate account assets(4)	—		32,267		—				32,267
Total assets	$	1,213	$	43,899	$	2,568	$	(1,475)	$	46,205
Liabilities
Future policy benefits(5)	$	—	$	—	$	4,060	$	—	$	4,060
Policyholders' account balances	—		—		2,041		—		2,041
Payables to parent and affiliates	—		1,367		—		(1,152)		215
Other liabilities	1		—		—		(1)		—
Total liabilities	$	1	$	1,367	$	6,101	$	(1,153)	$	6,316

(1)“Netting” amounts represent offsetting considerations as disclosed in Note 6.

(2)Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3)Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value ("NAV") per share (or its equivalent) as a practical expedient. At September 30, 2022 (Successor Company) and December 31, 2021 (Predecessor Company), the fair values of such investments were $64 million and $10 million, respectively.

(4)Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Statements of Financial Position.

(5)As of December 31, 2021, the net embedded derivative liability position of $4,060 million includes $62 million of embedded derivatives in an asset position and $4,122 million of embedded derivatives in a liability position.

Quantitative Information Regarding Internally Priced Level 3 Assets and Liabilities – The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities.

	Successor Company
	September 30, 2022
	Fair Value		Valuation Techniques	Unobservable     Inputs	Minimum		Maximum		Weighted Average		Impact of Increase in Input on Fair  Value(1)
	(in millions)
Assets:
Retained business
Corporate securities (2)	$	334	Discounted cash flow	Discount rate	3.85	%	8.89	%	6.00	%	Decrease
	32		Discounted cash flow	Discount rate	5.11	%	7.33	%	6.22	%	Decrease
Asset-backed securities	155		Discounted cash flow	Discount rate	3.35	%	8.47	%	4.84	%	Decrease
Other invested assets - Residential mortgage loans	71		Trade price	Trade price	N/A		N/A		N/A		Increase
Deposit asset	859		Fair values are determined using the same unobservable inputs as insurance liabilities.
Reinsurance recoverables	220		Fair values are determined using the same unobservable inputs as insurance liabilities.
Net modified coinsurance receivable	70		Fair values are determined using the same unobservable inputs as insurance liabilities.
Liabilities:
Insurance liabilities
Retained business	$	3,019	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over risk free	0.18	%	2.85	%			Decrease
				Utilization rate(8)	77	%	100	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	16	%			Decrease
				Equity volatility curve	22	%	30	%			Increase
Ceded business	$	3,285	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over SOFR (7)	0.00	%	1.96	%			Decrease
				Utilization rate(8)	77	%	100	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	16	%			Decrease
				Equity volatility curve	22	%	30	%			Increase

	Predecessor Company
	December 31, 2021
	Fair Value		Valuation Techniques	Unobservable     Inputs	Minimum		Maximum		Weighted Average		Impact of Increase in Input on Fair  Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	163	Discounted cash flow	Discount rate	2.34	%	10.17	%	2.82	%	Decrease
			Market Comparables	EBITDA multiples(3)	6.5X		12.4X		8.8X		Increase
			Liquidation	Liquidation value	62.58	%	62.58	%	62.58	%	Increase
Other assets	400		Fair values are determined using the same unobservable inputs as policyholders' account balances.
Reinsurance recoverables	1,881		Fair values are determined using the same unobservable inputs as future policy benefits and policyholders' account balances.
Liabilities:
Future policy benefits(4)	$	4,060	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over LIBOR(7)	0.03	%	1.13	%			Decrease
				Utilization rate(8)	39	%	96	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	15	%			Decrease
				Equity volatility curve	16	%	25	%			Increase
Policyholders' account balances(5)	$	2,041	Discounted cash flow	Lapse rate(6)	1	%	42	%			Decrease
				Spread over LIBOR(7)	0.03	%	1.17	%			Decrease
				Equity volatility curve	6	%	31	%			Increase

(1)Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.

(2)Includes assets classified as fixed maturity securities, at fair value as of September 30, 2022 and fixed maturity securities, available-for-sale and fixed maturity securities, trading as of December 31, 2021.

(3)Represents multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.

(4)Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(5)Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s annuity products that are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(6)Lapse rates for contracts with living benefit guarantees are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these embedded derivatives.

(7)The spread over the SOFR and LIBOR swap curve represents the premium added to the proxy for the risk-free rate (SOFR/LIBOR) to reflect the Company's estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements, living benefit guarantees, and index-linked interest crediting guarantees are insurance liabilities and are therefore senior to debt.

(8)The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration and begin lifetime withdrawals at various time intervals from contract inception.The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

(9)The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of September 30, 2022 and December 31, 2021, the minimum withdrawal rate assumption is 76% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.

(10)The range reflects the mortality rates for the vast majority of business with living benefits, with policyholders ranging from 45 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age, and duration. A mortality improvement assumption is also incorporated into the overall mortality table.

Interrelationships Between Unobservable Inputs – In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another, or multiple, inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:

Corporate Securities – The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors. During weaker economic cycles, as the expectations of default increases, credit spreads widen, which results in a decrease in fair value.

Future Policy Benefits (Predecessor Company)/Insurance Liabilities, at fair value (Successor Company) – The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent that more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money.

Updated Fair Value Methods and Assumptions

The following represents the updated methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis subsequent to the election of the fair value option:

Secured receivable - Fair value for the underlying commercial mortgage loans is based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate or foreign government bond rate (for non-U.S. dollar-denominated loans) plus an appropriate credit spread for loans of similar quality, average life and currency. The quality ratings for these loans, a primary determinant of the credit spreads and a significant component of the pricing process, are based on an internally-developed methodology. Certain commercial mortgage loans are valued incorporating other factors, including the terms of the loans, the principal exit strategies for the loans, prevailing interest rates and credit risk.

The fair values of the underlying private credit fixed maturities, which are originated by internal private asset managers, are primarily determined using discounted cash flow models. These models primarily use observable inputs that include Treasury or similar base rates plus estimated credit spreads to value each security. The credit spreads are obtained through a survey of private market intermediaries who are active in both primary and secondary transactions, and consider, among other factors, the credit quality and the reduced liquidity associated with private placements. Internal adjustments are made to reflect variation in observed sector spreads. Since most private placements are valued using standard market observable inputs and inputs derived from, or corroborated by, market observable data including, but not limited to observed prices and spreads for similar publicly or privately traded issues. For certain private fixed maturities, the discounted cash flow model may incorporate significant unobservable inputs, which reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset.

Residential mortgage loans - Fair value for residential mortgage loans is based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate or foreign government bond rate (for non-U.S. dollar-denominated loans) plus an appropriate credit spread for loans of similar quality, average life, and currency. The quality ratings for these loans, a primary determinant of the credit spreads and a significant component of the pricing process, are based on an internally-developed methodology. Certain residential mortgage loans are valued incorporating other factors, including the terms of the loans, the principal exit strategies for the loans, prevailing interest rates and credit risk.

Deposit asset - The deposit asset represents assets, held in trust by the reinsurer, that back the insurance liabilities under the reinsurance agreement regarding our fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal income. The deposit is recorded to match the associated insurance liabilities, which are recorded at fair value. Accordingly, the fair value of our deposit asset is determined by the fair value calculation of our insurance liabilities. See discussion of the fair value determination for insurance liabilities below.

Reinsurance recoverable - The reinsurance recoverable represents a recoverable that backs the insurance liabilities under the reinsurance agreement regarding the business reinsured to Prudential Insurance. The reinsurance recoverable is recorded to match the associated insurance liabilities, which are recorded at fair value. Accordingly, the fair value of our reinsurance recoverable is determined by the fair value calculation of our insurance liabilities. See discussion of the fair value determination for insurance liabilities below.

Modified coinsurance agreement receivables and payables - The modified coinsurance receivable represents the reserve credits for the insurance liabilities covered under the reinsurance agreements regarding our variable annuity base contracts, along with guaranteed benefits. The modified coinsurance receivable is recorded to match the associated insurance liabilities, which are recorded at fair value. Accordingly, the fair value of our modified coinsurance receivable is determine by the fair value calculation of our insurance liabilities. See our discussion of the fair value determination for insurance liabilities below. Similarly, the modified coinsurance payable primarily represents the fair value of the cession of assets backing the ceded insurance liabilities under the reinsurance agreement. Accordingly, the fair value of the modified coinsurance payable is calculated to match the fair value of the assets under the reinsurance agreement. See our discussion of the fair value determination for the respective assets within the modified coinsurance portfolio, which are included in our discussion of fair value herein as well as Note 5 of the Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Insurance liabilities - Our insurance liabilities are comprised of guarantees primarily associated with the living benefit features of certain variable annuity contracts, including guaranteed minimum accumulation benefits ("GMAB"), guaranteed withdrawal benefits ("GMWB"), guaranteed minimum death benefits ("GMDB") and guaranteed minimum income and withdrawal benefits ("GMIWB"). These are optional riders that are added to the base variable annuity contract, which includes Mortality and Expense charges (M&E) and contract charges. The fair values of these liabilities are calculated as the present value of future expected benefit payments to customers, anticipated future trail commissions paid to agents and certain administrative expenses less the present value of future expected rider fees, M&E charges, contract charges and the anticipated future reimbursement of certain asset management fees. This methodology could result in either a liability or asset balance, given changing capital market conditions and various actuarial assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management's judgment.

The significant inputs to the valuation models include capital market assumptions, such as interest rate levels and volatility assumptions, as well as actuarially determined assumptions, including contractholder behavior, such as lapse rates, benefit utilization rates, withdrawal rates, and mortality rates. Since many of these assumptions are unobservable and are considered to be significant inputs to the liability valuation, the insurance liabilities have been reflected within Level 3 in the fair value hierarchy.

Changes in Level 3 Assets and Liabilities – The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate.

	Successor Company
	Three Months Ended September 30, 2022
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturity securities
Corporate securities(3)	$	314	$	(22)	$	232	$	—	$	—	$	(44)	$	(114)	$	—	$	—	$	366	$	—
Structured securities(4)	25		(2)		150		—		—		(18)		—		—		—		155		—
Other assets:
Other invested assets	—		—		71		—		—		—		—		—		—		71
Secured receivable	1,555		(9)		22		(60)		—		—		(1,508)		—		—		—		—
Deposit asset	2,158		(3)		—		—		—		—		(1,296)		—		—		859		—
Reinsurance recoverables	378		(158)		—		—		—		—		—		—		—		220		—
Net modified coinsurance receivable	215		(145)		—		—		—		—		—		—		—		70		—

	Successor Company
	Six Months Ended September 30, 2022
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturity securities
Corporate securities(3)	$	190	$	(38)	$	439	$	—	$	—	$	(55)	$	(117)	$	—	$	(53)	$	366	$	—
Structured securities(4)	33		(2)		175		(10)		—		(18)		(10)		—		(13)		155		—
Other assets:
Other invested assets	—		—		71		—		—		—		—		—		—		71
Secured receivable	1,622		(59)		22		(75)		—		—		(1,510)		—		—		—		—
Deposit asset	2,615		(144)		—		—		—		—		(1,612)		—		—		859		—
Reinsurance recoverables	344		(124)		—		—		—		—		—		—		—		220		—
Net modified coinsurance receivable	5		65		—		—		—		—		—		—		—		70		—

	Successor Company
	Three Months Ended September 30, 2022
			Incurred losses
	Fair Value, beginning of period		Reduction in estimates of ultimate losses		Increase in estimates of ultimate losses		Change in fair value (discount rate)		Paid losses		Other		Fair Value, end of period
	(in millions)
Insurance Liabilities	$	11,257	$	(4,615)	$	393	$	(808)	$	111	$	(34)	$	6,304

	Successor Company
	Six Months Ended September 30, 2022
			Incurred losses
	Fair Value, beginning of period		Reduction in estimates of ultimate losses		Increase in estimates of ultimate losses		Change in fair value (discount rate)		Paid losses		Other		Fair Value, end of period
	(in millions)
Insurance Liabilities	$	13,611	$	(6,269)	$	1,599	$	(2,328)	$	209	$	(518)	$	6,304

"Total realized and unrealized gains (losses)" related to our level 3 assets are included in earnings in Investment gains (losses). In addition, all activity related to our level 3 liabilities are recognized in earnings within change in Policyholders' benefits and changes in fair value of insurance liabilities.

	Predecessor Company
	Three Months Ended March 31, 2022
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Corporate securities(3)	190		(9)		5		(4)		—		(2)		—		—		—		180		(9)
Structured securities(4)	76		(4)		—		(10)		—		(2)		—		—		(13)		47		(4)
Other assets:
Equity securities	1		—		—		—		—		—		—		—		—		1		—
Short term investments	13		—		—		—		—		(13)		—		—		—		—		—
Cash equivalents	8		—		—		—		—		(8)		—		—		—		—		—
Other assets	400		(21)		13		—		—		(16)		—		—		—		376		(6)
Reinsurance recoverables	1,881		201		4		—		—		19		(239)		—		—		1,866		222
Liabilities:
Future policy benefits	(4,060)		715		—		—		(48)		—		—		—		—		(3,393)		686
Policyholders' account balances(5)	(2,041)		124		—		—		—		(17)		—		—		—		(1,934)		89

	Predecessor Company
	Three Months Ended March 31, 2022
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (loss)
	(in millions)
Fixed maturities, available-for-sale	$	—	$	—	$	(12)	$	—	$	—	$	—	$	(12)
Other assets:
Other assets	(21)		—		—		—		(6)		—		—
Reinsurance recoverables	201		—		—		—		222		—		—
Liabilities:
Future policy benefits	715		—		—		—		686		—		—
Policyholders' account balances	124		—		—		—		89		—		—

	Predecessor Company
	Three Months Ended September 30, 2021
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	15	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	15	$	—
Corporate securities(3)	232		(6)		143		(11)		—		(14)		(122)		2		—		224		(5)
Structured securities(4)	216		—		32		—		—		(1)		(20)		—		(172)		55		—
Other assets:
Fixed maturities, trading	5		—		2		—		—		—		—		—		(5)		2		—
Equity securities	5		—		—		—		—		—		(4)		—		—		1		—
Short term investments	23		—		6		—		—		(17)		—		—		—		12		—
Cash equivalents	—		—		—		—		—		—		—		—		—		—		—
Other assets	68		1		1		—		—		(1)		—		—		—		69		—
Reinsurance recoverables	302		(4)		4		—		—		—		—		—		—		302		(1)
Liabilities:
Future policy benefits	(12,530)		8,380		—		—		(49)		—		—		—		—		(4,199)		14
Policyholders' account balances(5)	(1,361)		(8)		—		—		(88)		—		—		—		—		(1,457)		543

	Predecessor Company
	Three Months Ended September 30, 2021
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (loss)
	(in millions)
Fixed maturities, available-for-sale	$	—	$	—	$	(6)	$	—	$	(2)	$	—	$	(3)
Other assets:
Fixed maturities, trading	—		—		—		—		—		—		—
Equity securities	—		—		—		—		—		—		—
Short term investments	—		—		—		—		—		—		—
Cash equivalents	—		—		—		—		—		—		—
Other assets	1		—		—		—		—		—		—
Reinsurance recoverables	(4)		—		—		—		(1)		—		—
Liabilities:
Future policy benefits	8,380		—		—		—		14		—		—
Policyholders' account balances	(8)		—		—		—		543		—		—

	Predecessor Company
	Nine Months Ended September 30, 2021
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	15	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	15	$	—
Corporate securities(3)	149		(5)		249		(11)		—		(45)		(122)		17		(8)		224		(6)
Structured securities(4)	19		(1)		235		—		—		(6)		(20)		—		(172)		55		(1)
Other assets:
Fixed maturities, trading	5		—		2		—		—		—		—		—		(5)		2		—
Equity securities	4		1		—		—		—		—		(4)		—		—		1		1
Short term investments	10		—		30		—		—		(29)		—		1		—		12		—
Cash equivalents	—		—		—		—		—		—		—		—		—		—		—
Other assets	54		14		7		—		—		(6)		—		—		—		69		8
Reinsurance recoverables	409		(120)		13		—		—		—		—		—		—		302		(106)
Liabilities:
Future policy benefits	(17,314)		13,746		—		—		(631)		—		—		—		—		(4,199)		1,281
Policyholders' account balances(5)	(580)		(516)		—		—		(361)		—		—		—		—		(1,457)		79

	Predecessor Company
	Nine Months Ended September 30, 2021
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (loss)
	(in millions)
Fixed maturities, available-for-sale	$	(3)	$	—	$	(3)	$	—	$	(5)	$	—	$	(2)
Other assets:
Fixed maturities, trading	—		—		—		—		—		—		—
Equity securities	—		1		—		—		—		1		—
Short term investments	—		—		—		—		—		—		—
Cash equivalents	—		—		—		—		—		—		—
Other assets	14		—		—		—		8		—		—
Reinsurance recoverables	(120)		—		—		—		(106)		—		—
Liabilities:
Future policy benefits	13,746		—		—		—		1,281		—		—
Policyholders' account balances	(516)		—		—		—		79		—		—

.

(1)Realized investment gains (losses) on future policy benefits and reinsurance recoverables primarily represent the change in the fair value of the Company's living benefit guarantees on certain of its variable annuity contracts.

(2)Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(3)Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.

(4)Includes asset-backed and residential mortgage-backed securities.

(5)Issuances and settlements for Policyholders' account balances are presented net in the rollforward.

Change in Fair Value of Insurance Contracts

The components of the change in fair value of our insurance contracts are reported in several categories within Revenues and Benefits and expenses in our consolidated statements of operations and comprehensive income (loss). The revenue items include Premiums, Policy charges and fee income, and Asset management and service fees. The Benefits and expenses items include Policyholders' benefits and changes in fair value of insurance liabilities and commission expense. Policyholders' benefits and changes in fair value of insurance liabilities includes the following changes in fair value of the assets and liabilities for which we have elected the fair value option:

	Successor Company
	Three Months Ended		Six Months Ended
	September 30, 2022
	(in millions)
Assets:
Reinsurance recoverables	$	(158)	$	(19)
Net modified coinsurance receivable	(145)		2
Deposit asset	(1,299)		(1,748)
Liabilities:
Insurance liabilities	$	4,953	$	7,307

Fair Value of Financial Instruments

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position. In some cases the carrying amount equals or approximates fair value.

	Successor Company
	September 30, 2022
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Accrued investment income	$	—	$	56	$	—	$	56	$	56
Other invested assets - Policy loans	—		—		11		11		11
Liabilities:
Repurchase agreements	$	—	$	200	$	—	$	200	$	200
Cash collateral for loaned securities	—		169		—		169		169

	Predecessor Company
	December 31, 2021
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Commercial mortgage and other loans	$	—	$	—	$	1,516	$	1,516	$	1,504
Policy loans	—		—		12		12		12
Short-term investments	81		—		—		81		81
Cash and cash equivalents	277		—		—		277		277
Accrued investment income	—		61		—		61		61
Reinsurance recoverables	—		—		9		9		8
Receivables from parent and affiliates	—		5		—		5		5
Other assets	—		4		2,275		2,279		2,279
Total assets	$	358	$	70	$	3,812	$	4,240	$	4,227
Liabilities:
Policyholders’ account balances - investment contracts	$	—	$	—	$	2,391	$	2,391	$	2,381
Payables to parent and affiliates	—		36		—		36		36
Other liabilities	—		105		—		105		105
Separate account liabilities - investment contracts	—		—		—		—		—
Total liabilities	$	—	$	141	$	2,391	$	2,532	$	2,522

(1)Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.

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INCOME TAXES

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXESThe Company uses a full year projected effective tax rate approach to calculate taxes. In addition, certain items impacting total income tax expense are recorded in the periods in which they occur. The projected effective tax rate is the ratio of projected “Income tax expense (benefit)” divided by projected “Income (loss) from operations before income taxes”.

For the three and six months ended September 30, 2022, the Successor Company's income tax provision amounted to an income tax expense (benefit) of $3 million and $(48) million, or (1.9) percent and 12.5 percent of loss from operations before income taxes, respectively. The effective tax rates for the Successor Company differed from the U.S. statutory tax rate of 21 percent primarily due to the establishment of a valuation allowance on deferred tax assets, non-taxable investment income, and tax credits. See below for further information regarding the valuation allowance on deferred tax assets.

The Predecessor Company's income tax provision amounted to an income tax expense of $77 million, $778 million, and $1,247 million, or 17.8 percent, 20.8 percent, and 20.7 percent of income from operations before income tax, for three months ended March 31, 2022, the three months ended September 30, 2021, and the nine months ended September 30, 2021, respectively. The effective tax rates for the Predecessor Company differed from the U.S. statutory tax rate of 21 percent primarily due to non-taxable investment income and tax credits.

Acquisition-Related Tax Elections

In conjunction with the acquisition of FLIAC, FGH and PAI agreed to make a joint election under Section 338(h)(10) of the U.S. Internal Revenue Code and under any similar provisions of state or local law (the “Section 338(h)(10) Election”) with respect to the purchase of the shares of FLIAC. Under this election, the parties agreed to treat the transaction for federal income tax purposes as if it had been structured as an asset sale and purchase. As a result of this election, the tax basis of the Successor Company's assets and liabilities were reset to fair value at the time of the acquisition, which resulted in the elimination of previously established current and deferred income tax balances and the establishment of new balances that reflect the updated tax basis, including tax deductible goodwill. See Note 3 for further information regarding the acquisition and the associated updated income tax balances.

Valuation Allowance on Deferred Tax Assets

The application of U.S. GAAP requires the evaluation of the recoverability of deferred tax assets and establishment of a valuation allowance, if necessary, to reduce the deferred tax asset to an amount that is more likely than not expected to be realized, including an assessment of the character of future income necessary to realize a deferred tax asset. During the third quarter of 2022, the Company established a valuation allowance of $37 million with respect to realized and unrealized capital losses on our fixed maturity securities portfolio. A portion of the deferred tax asset relates to unrealized capital losses for which the carryforward period has not yet begun, and as such, when assessing its recoverability, we consider our ability and intent to hold the underlying securities to recovery. The amount of the deferred tax asset considered realizable may be adjusted if projections of future taxable income, including the character of that taxable income during the requisite carryforward period, are updated or if objective negative evidence exists that outweighs the positive evidence.

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EQUITY

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

EQUITY

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 Consolidated Statements of Operations and Comprehensive Income (Loss).

As discussed in Note 1, we have elected to apply pushdown accounting to FLIAC at the acquisition date, April 1, 2022. As part of this election, accumulated unrealized gains and losses that were previously recorded in AOCI were reset to zero at the acquisition date. In addition, as discussed in Note 2, we have elected to apply the fair value option on our entire portfolio of fixed maturity securities. As a result, all unrealized gains and losses related to our fixed maturity securities are recorded through earnings rather than AOCI. As discussed in Note 6, we have de-designated the hedging relationship for all of our derivative instruments. Accordingly, all changes in our derivative instruments are recorded through earnings.

The balance of and changes in each component of AOCI are as follows:

	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Changes in Own-Credit Risk Related to Insurance Liabilities		Net Unrealized Investment Gains (Losses)(1)		Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2021 (Predecessor Company)	$	(1)	$	—	$	171	$	170
Change in OCI before reclassifications	—		—		(576)		(576)
Amounts reclassified from AOCI	—		—		15		15
Income tax benefit	—		—		118		118
Balance, March 31, 2022 (Predecessor Company)	$	(1)	$	—	$	(272)	$	(273)
Balance,  April 1, 2022 (Successor Company)	$	—	$	—	$	—	$	—
Change in OCI before reclassifications	—		245		—		245
Income tax expense	—		(51)		—		(51)
Balance, June 30, 2022 (Successor Company)	$	—	$	194	$	—	$	194
Change in OCI before reclassifications	—		149		—		149
Income tax expense	—		(32)		—		(32)
Balance, September 30, 2022 (Successor Company)	$	—	$	311	$	—	$	311

(1)Includes cash flow hedges of $29 million and $25 million as of March 31, 2022 and December 31, 2021, respectively.

	Predecessor Company
	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2020	$	(1)	$	1,534	$	1,533
Change in OCI before reclassifications	—		(354)		(354)
Amounts reclassified from AOCI	—		(1,226)		(1,226)
Income tax benefit	—		332		332
Balance, September 30, 2021	$	(1)	$	286	$	285

(1)Includes cash flow hedges of $15 million and $(43) million as of September 30, 2021 and December 31, 2020, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Predecessor Company
	Three Months Ended March 31,		Three Months Ended September 30,		Nine Months Ended September 30,
	2022		2021
	(in millions)
Amounts reclassified from AOCI(1)(2):
Net unrealized investment gains (losses):
Cash flow hedges—Currency/ Interest rate(3)	$	5	$	11	$	29
Net unrealized investment gains (losses) on available-for-sale securities	(20)		141		1,197
Total net unrealized investment gains (losses)(4)	(15)		152		1,226
Total reclassifications for the period	$	(15)	$	152	$	1,226

(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 6 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) (Predecessor Company)

Net unrealized investment gains (losses) on available-for-sale fixed maturity securities and certain other invested assets and other assets were included in the Predecessor Company’s Unaudited Interim Statements of Financial Position as a component of AOCI. Changes in these amounts included reclassification adjustments to exclude from OCI those items that were 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 net unrealized investment gains (losses) on 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:

	Predecessor Company
	Net Unrealized Gains (Losses) on Investments on Available-for-Sale Fixed Maturity Securities on which an allowance for credit losses has been recognized		Net Unrealized Gains (Losses) on All Other  Investments(1)		DAC and Other Costs(2)		Future Policy Benefits and Other Liabilities(3)		Income Tax Benefit (Expense)		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2021	$	—	$	240	$	(16)	$	(7)	$	(46)	$	171
Net investment gains (losses) on investments arising during the period	—		(591)		—		—		125		(466)
Reclassification adjustment for (gains) losses included in net income	—		15		—		—		(4)		11
Impact of net unrealized investment (gains) losses	—		—		9		6		(3)		12
Balance, March 31, 2022	$	—	$	(336)	$	(7)	$	(1)	$	72	$	(272)

	Predecessor Company
	Net Unrealized Gains (Losses) on Investments on Available-for-Sale Fixed Maturity Securities on which an allowance for credit losses has been recognized		Net Unrealized Gains (Losses) on All Other  Investments(1)		DAC and Other Costs(2)		Future Policy Benefits and Other Liabilities(3)		Income Tax Benefit (Expense)		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2020	$	—	$	2,369	$	(363)	$	(63)	$	(409)	$	1,534
Net investment gains (losses) on investments arising during the period	2		(742)		—		—		156		(584)
Reclassification adjustment for (gains) losses included in net income	(2)		(1,224)		—		—		257		(969)
Reclassification due to allowance for credit losses recorded during the period	—		—		—		—		—		—
Impact of net unrealized investment (gains) losses	—		—		325		61		(81)		305
Balance, September 30, 2021	$	—	$	403	$	(38)	$	(2)	$	(77)	$	286

(1)Includes cash flow hedges. See Note 6 for information on cash flow hedges.

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

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

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COMMITMENTS AND CONTINGENT LIABILITIES

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

COMMITMENTS AND CONTINGENT LIABILITIES

Commitments

The Predecessor Company has made commitments to fund commercial mortgage loans. As of December 31, 2021, the outstanding balance on commitments to fund commercial mortgage loans was $21 million. These amounts include unfunded commitments that are not unconditionally cancellable. The Successor Company had no commitments outstanding on commercial mortgage loans as of September 30, 2022 due to the fact that all commercial mortgage loans were transferred out under the novation program discussed in Note 1. The Company has made commitments to purchase or fund investments, mostly private fixed maturity securities and alternative investments. As of September 30, 2022 and December 31, 2021, $261 million and $96 million, respectively, of these commitments were outstanding. These amounts include unfunded commitments that are not unconditionally cancellable. See Note 11 for further information regarding certain commitments to related parties.

Contingent Liabilities

On an ongoing basis, the Company and its regulators review its operations including, but not limited to, sales and other customer interface procedures and practices, and procedures for meeting obligations to its customers and other parties. These reviews may result in the modification or enhancement of processes or the imposition of other action plans, including concerning management oversight, sales and other customer interface procedures and practices, and the timing or computation of payments to customers and other parties. In certain cases, if appropriate, the Company may offer customers or other parties remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “Litigation and Regulatory Matters” below.

It is possible that the results of operations or the cash flows of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flows for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its business. Pending legal and regulatory actions include proceedings specific to the Company and proceedings generally applicable to business practices in the industry in which it operates. The Company is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company’s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if material, is disclosed. The Company estimates that as of September 30, 2022, the aggregate range of reasonably possible losses in excess of accruals and recoveries from unaffiliated indemnitors established for those litigation and regulatory matters for which such an estimate currently can be made is not considered to be material. This estimate is not an indication of expected loss, if any, or the Company’s maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its

litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

The following discussion of litigation and regulatory matters provides an update of those matters discussed in Note 15 to the Company's Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Regulatory

Variable Products

Prior to its acquisition by FGH on April 1, 2022, the Company has received regulatory inquiries and requests for information from state and federal regulators, including a subpoena from the U.S. Securities and Exchange Commission, concerning the appropriateness of variable product sales and replacement activity. The Company is cooperating with regulators and may become subject to additional regulatory inquiries and other actions related to this matter.

Summary

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flows in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flows for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial statements. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial statements.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Successor Company

The Successor Company has transactions and relationships with 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 Successor Company’s expenses are allocations or charges from FGH. These expenses primarily relate to general and administrative expenses which include accounting, actuarial, risk management, and data processing services. FGH also provides the Company with personnel and certain other services. The allocation of costs for other services are based on estimated level of usage, transactions or time incurred in providing the respective services. During the three and six months ended September 30, 2022, FLIAC was allocated $8 million and $15 million, respectively, of costs for these services.

Intercompany Liquidity Agreement

Effective April 1, 2022 FLIAC entered into an intercompany liquidity agreement with FGH that allows the Successor Company to borrow funds of up to $50 million to meet its short-term liquidity and other capital needs. During the third quarter of 2022, the borrowing capacity of the agreement was increased to $150 million. As of September 30, 2022, there were no borrowings under the agreement. In October 2022, FLIAC borrowed $75 million of funds under the agreement and subsequently repaid the amount in full, plus interest. In November 2022, FLIAC borrowed $75 million of funds under the agreement and expects to repay the outstanding amount, plus interest, in full within one month of borrowing.

Affiliated Investment and Advisory Activities

As of April 1, 2022, FLIAC became affiliated with The Carlyle Group Inc. (“Carlyle”), whereby Carlyle, through an affiliated investment fund has a 71.5% equity investment in its parent, FGH. In addition, FLIAC entered into an investment management and consulting services agreement with an affiliate of Carlyle. During the quarter ended June 30, 2022, FLIAC incurred $10 million of costs from this Carlyle affiliate for services provided to the Successor Company in connection with FGH's purchase of the Company from Prudential Financial.

Certain of Carlyle's affiliates also provide investment management services for FLIAC pursuant to investment management agreements. Investment management fees are charged based on a percentage of assets under management and were de minimis for the three and six months ended September 30, 2022. As of September 30, 2022, assets under management had a market value of $623 million and were comprised primarily of private credit fixed income assets and limited partnership interests or investments in limited partnerships. FLIAC recognized $2 million and $3 million of investment income on such assets during the three and six months ended September 30, 2022, respectively.

In connection with the investment management agreements, as of September 30, 2022, FLIAC has committed $42 million to fund private investments where one or more Carlyle entities serves as general partner to the fund.

Affiliated Asset Transfers

The Successor Company may participate in affiliated asset transfers with its parent and affiliates. Book and market value differences for trades with its parent and affiliates are recognized within "Investment gains (losses), net". The table below shows affiliated asset trades for the six months ended September 30, 2022.

Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		Investment Gains (Losses), net
				(in millions)
Fortitude Reinsurance Company, Ltd.	July 2022	Purchase	Fixed Maturity Security	$	37	$	37	$	—
Fortitude Reinsurance Company, Ltd.	July 2022	Purchase	Fixed Maturity Security	15		15		—
Fortitude Reinsurance Company, Ltd.	July 2022	Purchase	Limited Partnership	9		9		—
Fortitude Re Investments, LLC	August 2022	Purchase	Fixed Maturity Security	42		42		—
Fortitude Re Investments, LLC	August 2022	Purchase	Fixed Maturity Security	23		23		—
Fortitude Re Investments, LLC	August 2022	Purchase	Limited Partnership	15		15		—

Predecessor Company

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

Expense Charges and Allocations

The Predecessor Company’s expenses were allocations or charges from Prudential Insurance or other affiliates. These expenses were grouped into general and administrative expenses and agency distribution expenses.

The Predecessor Company’s general and administrative expenses were charged using allocation methodologies based on business production processes. The Predecessor Company operated under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space were provided by Prudential Insurance. The Predecessor Company reviewed its allocation methodology periodically and made adjustments accordingly. General and administrative expenses included 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 Predecessor Company for the stock-based awards program was $0 million for the three months ended March 31, 2022, $0.1 million and $0.4 million for the three and nine months ended September 30, 2021, respectively. The expense charged to the Predecessor Company for the deferred compensation program was $0.3 million and $1.5 million for the three and nine months ended September 30, 2021, respectively.

The Predecessor Company was charged for its share of employee benefit expenses. These expenses included costs for funded and non-funded, non-contributory defined benefit pension plans. Some of these benefits were based on final earnings and length of service while others were based on an account balance, which takes into consideration age, service and earnings during a career. The Predecessor Company’s share of net expense for the pension plans was $0.0 million for the three months ended March 31, 2022 and $2.4 million and $7.1 million for the three and nine months ended September 30, 2021, respectively.

The Predecessor Company was also charged for its share of the costs associated with welfare plans issued by Prudential Insurance. These expenses included costs related to medical, dental, life insurance and disability. The Predecessor Company's share of net expense for the welfare plans was $0.0 million for the three months ended March 31, 2022 and $0.9 million and $2.9 million for the three and nine months ended September 30, 2021, respectively.

Prudential Insurance sponsors voluntary savings plans for its employee 401(k) plans. The plans provided for salary reduction contributions by employees and matching contributions by the Predecessor Company of up to 4% of annual salary. The Predecessor Company's expense for its share of the voluntary savings plan was $0.0 million for the three months ended March 31, 2022 and $0.9 million and $2.7 million for the three and nine months ended September 30, 2021, respectively.

The Predecessor Company paid commissions and certain other fees to Prudential Annuities Distributors, Inc ("PAD"), an affiliate of the Predecessor Company, in consideration for PAD’s marketing and underwriting of the Company’s products. Commissions and fees were paid by PAD to broker-dealers who sold the Predecessor Company’s products. Commissions and fees paid by the Predecessor Company to PAD were $29 million for the three months ended March 31, 2022 and $110 million and $347 million for the three and nine months ended September 30, 2021, respectively.

The Predecessor Company was 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 Predecessor Company’s share of corporate expenses was $9 million for three months ended March 31, 2022 and $7 million and $20 million for the three and nine months ended September 30, 2021, respectively.

Affiliated Investment Management Expenses

The Predecessor Company paid investments management expenses in accordance with an agreement with PGIM, Inc. (“PGIM”), an affiliate of the Predecessor Company and investment manager to certain Predecessor Company general account and separate account assets. Investment management expenses paid to PGIM related to this agreement were $4 million for the three months ended March 31, 2022 and $7 million and $18 million for the three and nine months ended September 30, 2021. These expenses were recorded as “Net investment income” in the Company's Unaudited Consolidated Interim Statements of Operations and Comprehensive Income (Loss).

Derivative Trades

In its ordinary course of business, the Predecessor Company entered into OTC derivative contracts with an affiliate, PGF. For these OTC derivative contracts, PGF had a substantially equal and offsetting position with an external counterparty. See Note 6 for additional information.

Joint Ventures

The Predecessor Company previously made investments in joint ventures with certain subsidiaries of Prudential Financial. "Net investment income" related to these ventures included no gain or loss for the three months ended March 31, 2022 and gains of $8 million and $17 million for the three and nine months ended September 30, 2021, respectively.

Affiliated Asset Management and Service Fees

The Predecessor Company had a revenue sharing agreement with AST Investment Services, Inc. (“ASTISI”) and PGIM Investments LLC (“PGIM Investments”) whereby the Predecessor Company received 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 for the three months ended March 31, 2022 and $24 million and $72 million for the three and nine months ended September 30, 2021, respectively. These revenues were recorded as “Asset management and service fees” in the Company's Unaudited Consolidated Interim Statements of Operations and Comprehensive Income (Loss).

Affiliated Asset Transfers

The Predecessor Company participated in affiliated asset trades with former parent and sister companies. Book and market value differences for trades with a parent and sister were recognized within "Realized investment gains (losses), net". The table below shows affiliated asset trades for the three months ended March 31, 2022 and for the year ended December 31, 2021.

Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		Realized Investment Gain (Loss)
				(in millions)
Prudential Insurance	April 2021	Purchase	Fixed Maturities	$	201	$	201	$	—
Prudential Insurance	April 2021	Purchase	Commercial Mortgage Loan	177		177		—
Vantage Casualty Insurance Co.	June 2021	Purchase	Fixed Maturities	15		15		—
Prudential Insurance	June 2021	Sale	Equities	3		3		—
Pruco Life	June 2021	Sale	Equities	40		38		2
Passaic Fund LLC	June 2021	Transfer Out	Other Invested Assets	12		12		—
Passaic Fund LLC	July 2021	Transfer Out	Other Invested Assets	196		196		—
Prudential Insurance	September 2021	Purchase	Fixed Maturities	2		2		—
Prudential Insurance	September 2021	Sale	Fixed Maturities	12		11		1
Prudential Retirement Insurance and Annuity Company	September 2021	Sale	Fixed Maturities	26		24		2
Prudential Retirement Insurance and Annuity Company	September 2021	Purchase	Fixed Maturities	35		35		—
Prudential Insurance	September 2021	Purchase	Derivatives	—		—		—
Prudential Retirement Insurance and Annuity Company	September 2021	Purchase	Derivatives	(1)		(1)		—
Prudential Financial	October 2021	Sale	Equities	10		10		—
Pruco Life	November 2021	Sale	Derivatives	1		—		1

Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		Realized Investment Gain (Loss)
				(in millions)
Prudential Arizona Reinsurance	November 2021	Purchase	Fixed Maturities	55		55		—
Pruco Life	December 2021	Transfer Out	Fixed Maturities	2,038		1,934		104
Pruco Life	December 2021	Sale	Fixed Maturities	57		57		—
Prudential Financial	December 2021	Dividend	Fixed Maturities	167		167		—
Prudential Financial	December 2021	Sale	Fixed Maturities	144		138		6
Prudential Financial	December 2021	Purchase	Commercial Mortgage Loan	185		185		—
Pruco Life	December 2021	Transfer Out	Commercial Mortgage Loan	538		517		21
Pruco Life	December 2021	Sale	Derivatives	8		2		6
Pruco Life	January 2022	Sale	Fixed Maturities	4		5		(1)
Prudential Financial	January 2022	Sale	Commercial Mortgage Loan	29		30		—
Pruco Life	January 2022	Sale	Derivatives	—		—		—
Pruco Life	February 2022	Sale	Fixed Maturities	129		138		(10)
Prudential Financial	March 2022	Sale	Fixed Maturities	$	33	$	33	$	(1)

Debt Agreements

The Predecessor 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 December 31, 2021, there was no short or long-term debt to affiliates outstanding.

Effective August 2021, $300 million in long-term debt was transferred from the Predecessor 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 incurred by the Predecessor Company related to affiliated loans and cash collateral with PGF was $0 million for the three months ended March 31, 2022 and $1 million and $9 million for the three and nine months ended September 30, 2021, respectively.

Contributed Capital and Dividends

Through March 31, 2022 and December 31, 2021, the Predecessor Company did not receive any capital contributions.

In March 2022, the Predecessor 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 Predecessor Company paid a dividend of $192 million, $188 million, and $451 million respectively, to PAI.

Reinsurance with Affiliates of Predecessor Company

The Predecessor Company used reinsurance as part of its risk management and capital management strategies for certain of its living benefit guarantees and variable annuity base contracts.

Effective April 1, 2016, the Predecessor Company reinsured the variable annuity base contracts, along with the living benefit guarantees, from Pruco Life Insurance Company ("Pruco Life"), excluding the Pruco Life Insurance Company of New Jersey ("PLNJ") business which was reinsured to The Prudential Insurance Company of America (“Prudential Insurance”), in each case under a coinsurance and modified coinsurance agreement. This reinsurance agreement covers new and in force business and excludes business reinsured externally. As of December 31, 2020, Pruco Life discontinued the sales of traditional variable annuities with guaranteed living benefit riders. The discontinuation has no impact on the reinsurance agreement between Pruco Life and the Company.

Effective July 1, 2021, Pruco Life recaptured the risks related to its business, as discussed above, that had previously been reinsured to the Company from April 1, 2016 through June 30, 2021. The product risks related to the previously reinsured business that were being managed in the Predecessor Company, were transferred to Pruco Life. In addition, the living benefit hedging program related to the previously reinsured living benefit riders will be managed within Pruco Life after the recapture. This transaction is referred to as the "2021 Variable Annuities Recapture". See Note 1 to the Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021, for more details.

Effective December 1, 2021, the Company entered into a reinsurance agreement with Pruco Life under which the Company reinsured certain of its variable and fixed indexed annuities and fixed annuities with a guaranteed lifetime withdrawal income feature to Pruco Life.

Effective December 31, 2015, the Company surrendered its New York license and reinsured the majority of its New York business, both the living benefit guarantees and base contracts, to Prudential Insurance. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. The Company believes a material reinsurance liability resulting from such inability of reinsurers to meet their obligations is unlikely.

Realized investment gains and losses include the impact of reinsurance agreements, particularly reinsurance agreements involving living benefit guarantees.

Reinsurance amounts included in the audited Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021 were as follows:

	December 31, 2021
	(in millions)
Reinsurance recoverables	$	8,108
Deferred policy acquisition costs	(530)
Deferred sales inducements	(26)
Value of business acquired	(2)
Other assets	54
Reinsurance payables	7,183
Other liabilities	824

The reinsurance recoverables by counterparty are broken out below:

	December 31, 2021
	(in millions)
Prudential Insurance	$	372
Pruco Life	7,736
Total reinsurance recoverables	$	8,108

Reinsurance amounts, included in the Predecessor Company’s Unaudited Interim Statements of Operations and Comprehensive Income (Loss), were as follows:

	Predecessor Company
	Three Months Ended March 31		Three Months Ended September 30		Nine Months Ended September 30
	2021
	(in millions)
Premiums:
Direct	$	9	$	7	$	19
Assumed	—		—		16
Ceded	(1)		(1)		(3)
Net premiums	8		6		33
Policy charges and fee income:
Direct	102		113		329
Assumed	—		—		819
Ceded(1)	(5)		(7)		(20)
Net policy charges and fee income	97		106		1,128
Asset management and service fees:
Direct	22		25		73
Assumed	—		—		165
Ceded	(2)		(2)		(6)
Net asset management and service fees	20		23		232
Realized investment gains (losses), net:
Direct	312		(3,243)		(4,856)
Assumed	—		8,328		12,350
Ceded	169		(5)		(122)
Realized investment gains (losses), net	481		5,081		7,373
Policyholders' benefits (including change in reserves):
Direct	31		19		44
Assumed	—		(257)		(254)
Ceded(2)	(5)		(4)		(5)
Net policyholders' benefits (including change in reserves)	26		(242)		(216)
Interest credited to policyholders’ account balances:
Direct	91		43		139
Assumed	—		399		476
Ceded	(6)		(2)		(6)
Net interest credited to policyholders’ account balances	85		441		610
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization	(41)		1,193		1,708

(1)Includes $0.0 million, $(0.4) million and $(0.4) million of unaffiliated activity (with respect to the Predecessor Company) for the three months ended March 31, 2022 three month ended September 30, 2021 and the nine months ended September 30, 2021, respectively.

(2) Includes $0.0 million and $(2.9) million, and $(3.3) million of unaffiliated activity (with respect to the Predecessor Company) for the three months ended March 31, 2022, the three month ended September 30, 2021, and the nine months ended September 30, 2021, respectively.

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SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). The accompanying Unaudited Consolidated Financial Statements present the consolidated results of operations, financial condition, and cash flows of the Company and a variable interest entity ("VIE") that meets the requirements for consolidation. All intercompany transactions have been eliminated in consolidation.

Following the acquisition of FLIAC, purchase accounting was applied to FGH's financial statements and we have elected to "push down" the basis to FLIAC in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations. The application of push-down accounting created a new basis of accounting for all assets and liabilities based on fair value at the date of acquisition. As a result, FLIAC's financial position, results of operations, and cash flows subsequent to the acquisition are not comparable with those prior to April 1, 2022, and therefore have been segregated to indicate pre-acquisition and post-acquisition periods. The pre-acquisition period through March 31, 2022 is referred to as the Predecessor Company. The post-acquisition period, April 1, 2022 and forward, includes the impact of push-down accounting and is referred to as the Successor Company. See Note 3 for further information regarding the acquisition and our application of push-down accounting.

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Predecessor Company’s Financial Statements included in the Predecessor Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of 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.

Reclassifications

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

Fair Value Option

Fair Value Option

Following the acquisition, we have elected to prospectively apply the fair value option to several of FLIAC's assets and liabilities. We have made this election as it improves our operational efficiency and better aligns the recognition and measurement of our investments, insurance liabilities, and associated reinsurance activity with how we expect to manage the business.

The following represents the financial statement line items impacted by the fair value election and the changes to such line items from what was previously presented under the Predecessor Company:

	Successor Company	Predecessor Company
	Financial Statement Line Item
STATEMENTS OF FINANCIAL POSITION
Assets
Investments
	"Fixed maturity securities, at fair value"	"Fixed maturity securities, available-for-sale, at fair value" and "Fixed maturity securities, trading, at fair value"
	"Equity securities, at fair value"	"Equity securities, at fair value"
	"Secured Receivable" (1)	"Commercial mortgage and other loans"
Other
	"Reinsurance recoverables" and "Net modified coinsurance receivable, at fair value" (2)	"Reinsurance recoverables" and "Reinsurance payables"
	"Deposit asset at fair value" (3)	"Deposit asset"
Liabilities
	"Insurance liabilities, at fair value"	"Future policy benefits" and "Policyholders' account balances"
STATEMENTS OF OPERATIONS
Revenues
	"Investment gains (losses), net"	"Realized investment gains (losses), net" and "Net unrealized investment gains (losses)" (4)
Benefits and Expenses
	"Policyholder benefits and changes in fair value of insurance liabilities"	"Policyholders' benefits" and "Interest credited to policyholders' account balances"
STATEMENTS OF COMPREHENSIVE INCOME
Other comprehensive income (loss)
	"Changes in own-credit risk related to insurance liabilities"	N/A
(1) Also includes certain fixed maturity securities previously contained in "Fixed maturity securities, available-for-sale" by the Predecessor Company. See "Secured Receivable"section below for further discussion.
(2) Balances unrelated to the modified coinsurance agreement will remain in the respective reinsurance recoverable and payable line items.
(3) Included within "Other assets" by the Predecessor Company.
(4) Represents "Net unrealized investment gains (losses)" included in Other comprehensive income (loss).

Secured Receivable

Secured ReceivableThe economics of commercial mortgage and other loans and certain fixed maturity securities held by the Predecessor Company have been transferred to FLIAC via participation agreements. The legal ownership and control over the participated assets was not transferred and cannot be freely pledged or exchanged by FLIAC. This transfer did not meet the requirements of sale accounting and is therefore accounted for as a secured borrowing. These participated assets are represented on our balance sheet, at fair value, in the form of a secured receivable, all of which is associated with our Ceded Business segment.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of an Accounting Standards Update ("ASU") to the ASC. We consider the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material.

ASU issued but not yet adopted as of September 30, 2022 — ASU 2018-12

ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018, and was amended by ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date, issued in October 2019, and ASU 2020-11, Financial Services-Insurance (Topic 944): Effective Date and Early Application, issued in November 2020. Public business entities that meet the definition of an SEC filer and are not Small Reporting Companies that early adopt ASU 2018-12 are allowed to apply the guidance either as of January 1, 2020 or January 1, 2021 (and record transition adjustments as of January 1, 2020 or January 1, 2021, respectively) in their 2022 financial statements. Companies that do not early adopt ASU 2018-12 will apply the guidance as of January 1, 2021 (and record transition adjustments as of January 1, 2021) in the 2023 financial statements.

As previously discussed, we have elected to apply the fair value option for all of our insurance liabilities. As a result of this election, our insurance liabilities are no longer within the scope of ASU 2018-12.

Other ASUs issued but not yet adopted as of September 30, 2022

Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosure	This ASU eliminates the accounting guidance for Troubled Debt Restructurings (“TDR”) for creditors and adds enhanced disclosure requirements for certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. Following adoption of the ASU, all loan refinancings are subject to the modification guidance in ASC 310-20. This ASU also amends the guidance on the vintage disclosures to require disclosure of current-period gross write-offs by year of origination.	January 1, 2023 using the prospective method with an option to apply a modified retrospective transition method for the recognition and measurement of TDRs which will include a cumulative effect adjustment on the balance sheet in the period of adoption. Early adoption is permitted beginning January 1, 2022, including adoption in an interim period provided guidance is applied as of the beginning of the year.	Following our election of the fair value option for our secured receivable, and the expectation to elect the fair value option on any newly acquired financing receivables, we do not expect the adoption of the ASU to have an impact on the Consolidated Financial Statements or Notes to the Consolidated Financial Statements

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BUSINESS COMBINATION (Tables)

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date and represents amounts recognized for each major class of assets and liabilities, after application of push-down accounting.

	Successor Company
	April 1, 2022
	(in millions)
ASSETS
Total investments	$	10,807
Cash and cash equivalents	1,578
Reinsurance recoverables	239
Net modified coinsurance receivable	68
Income taxes	352
Deposit asset	2,607
Other assets	96
Separate account assets	29,426
TOTAL ASSETS	$	45,173
LIABILITIES
Insurance liabilities	$	13,611
Other liabilities	370
Separate account liabilities	29,426
TOTAL LIABILITIES	43,407
Net assets acquired	1,766
Consideration	1,761
BARGAIN PURCHASE GAIN	$	5

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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following is the Consolidated Statement of Financial Position by segment:

	September 30, 2022
	Retained Business		Ceded Business		Total
	(in millions)
ASSETS
Total investments	$	4,310	$	1,892	$	6,202
Cash and cash equivalents	553		723		1,276
Accrued investment income	45		11		56
Reinsurance recoverables	—		220		220
Net modified coinsurance receivable	—		70		70
Income taxes	90		—		90
Deposit asset	—		859		859
Other assets	117		2		119
Separate account assets	21,024		1,992		23,016
TOTAL ASSETS	$	26,139	$	5,769	$	31,908
LIABILITIES AND EQUITY
LIABILITIES
Insurance liabilities	$	3,019	$	3,285	$	6,304
Other liabilities	356		492		848
Separate account liabilities	21,024		1,992		23,016
TOTAL LIABILITIES	24,399		5,769		30,168
EQUITY	1,740		—		1,740
TOTAL LIABILITIES AND EQUITY	$	26,139	$	5,769	$	31,908

    

The following is comprehensive income (loss) by segment:

	Three Months Ended September 30, 2022
	Retained Business		Ceded Business		Total
	(in millions)
REVENUES
Premiums	$	8	$	—	$	8
Policy charges and fee income	131		—		131
Net investment income	47		45		92
Asset management and service fees	26		—		26
Other losses	(4)		(12)		(16)
Investment gains (losses), net	(463)		8		(455)
TOTAL REVENUES	(255)		41		(214)
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	(145)		41		(104)
Commission expense	27		—		27
General, administrative and other expenses	17		—		17
TOTAL BENEFITS AND EXPENSES	(101)		41		(60)
LOSS FROM OPERATIONS BEFORE INCOME TAXES	(154)		—		(154)
Income tax expense	3		—		3
NET LOSS	$	(157)	$	—	$	(157)
Other comprehensive income, before tax:
Changes in own-credit risk related to insurance liabilities	149		—		149
Less: Income tax expense	32		—		32
Other comprehensive income, net of taxes	117		—		117
Comprehensive loss	$	(40)	$	—	$	(40)

	Six Months Ended September 30, 2022
	Retained Business		Ceded Business		Total
	(in millions)
REVENUES
Premiums	$	11	$	—	$	11
Policy charges and fee income	261		—		261
Net investment income	82		107		189
Asset management and service fees	48		—		48
Other losses	(4)		(11)		(15)
Investment losses, net	(571)		(1,182)		(1,753)
TOTAL REVENUES	(173)		(1,086)		(1,259)
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	112		(1,086)		(974)
Commission expense	45		—		45
General, administrative and other expenses	55		—		55
TOTAL BENEFITS AND EXPENSES	212		(1,086)		(874)
LOSS FROM OPERATIONS BEFORE INCOME TAXES	(385)		—		(385)
Income tax benefit	(48)		—		(48)
NET LOSS	$	(337)	$	—	$	(337)
Other comprehensive income, before tax:
Changes in own-credit risk related to insurance liabilities	394		—		394
Less: Income tax expense	83		—		83
Other comprehensive income, net of taxes	311		—		311
Comprehensive loss	$	(26)	$	—	$	(26)

Reconciliation of Assets from Segment to Consolidated

The following is the Consolidated Statement of Financial Position by segment:

	September 30, 2022
	Retained Business		Ceded Business		Total
	(in millions)
ASSETS
Total investments	$	4,310	$	1,892	$	6,202
Cash and cash equivalents	553		723		1,276
Accrued investment income	45		11		56
Reinsurance recoverables	—		220		220
Net modified coinsurance receivable	—		70		70
Income taxes	90		—		90
Deposit asset	—		859		859
Other assets	117		2		119
Separate account assets	21,024		1,992		23,016
TOTAL ASSETS	$	26,139	$	5,769	$	31,908
LIABILITIES AND EQUITY
LIABILITIES
Insurance liabilities	$	3,019	$	3,285	$	6,304
Other liabilities	356		492		848
Separate account liabilities	21,024		1,992		23,016
TOTAL LIABILITIES	24,399		5,769		30,168
EQUITY	1,740		—		1,740
TOTAL LIABILITIES AND EQUITY	$	26,139	$	5,769	$	31,908

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INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Fixed Maturities, Available-for-sale Securities

The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading) for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	654	$	74	$	1	$	—	$	727
Obligations of U.S. states and their political subdivisions	281		15		—		—		296
Foreign government bonds	106		9		1		—		114
U.S. public corporate securities	2,345		134		18		—		2,461
U.S. private corporate securities	1,635		24		14		1		1,644
Foreign public corporate securities	793		11		9		—		795
Foreign private corporate securities	920		5		34		—		891
Asset-backed securities(1)	1,058		5		1		—		1,062
Commercial mortgage-backed securities	692		22		8		—		706
Residential mortgage-backed securities(2)	72		3		—		—		75
Total fixed maturities, available-for-sale	$	8,556	$	302	$	86	$	1	$	8,771

(1)Includes credit-tranched securities collateralized by loan obligations, auto loans, education loans, equipment leases and sub-prime mortgages.

(2)Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

Gross Unrealized Losses on Fixed Maturity Securities

The following tables set forth the fair value and gross unrealized losses on available-for-sale fixed maturity securities without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross   Unrealized  Losses		Fair Value		Gross   Unrealized  Losses		Fair Value		Gross   Unrealized  Losses
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	74	$	1	$	—	$	—	$	74	$	1
Obligations of U.S. states and their political subdivisions	5		—		—		—		5		—
Foreign government bonds	13		1		7		—		20		1
U.S. public corporate securities	696		12		153		6		849		18
U.S. private corporate securities	855		14		—		—		855		14
Foreign public corporate securities	522		8		50		1		572		9
Foreign private corporate securities	689		34		—		—		689		34
Asset-backed securities	499		1		—		—		499		1
Commercial mortgage-backed securities	157		5		75		3		232		8
Residential mortgage-backed securities	6		—		—		—		6		—
Total fixed maturities, available-for-sale	$	3,516	$	76	$	285	$	10	$	3,801	$	86

Sources of Fixed Maturity Proceeds, Realized Investment Gains (Losses), and Losses on Impairments

The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on write-downs and the allowance for credit losses of fixed maturities, for the Predecessor Company:

	Predecessor Company
	Three months ended September 30		Nine months ended September 30
	2021
	(in millions)
Fixed maturities, available-for-sale:
Proceeds from sales(1)	$	216	$	8,009
Proceeds from maturities/prepayments	196		607
Gross investment gains on sales and maturities	157		1,296
Gross investment losses on sales and maturities	(14)		(75)
Write-downs recognized in earnings (2)	—		(23)
(Addition to) release of allowance for credit losses	(2)		(2)

(1)Includes $(243) million of non-cash related proceeds due to the timing of trade settlements for the nine months ended September 30, 2021.

(2)Amounts represent write-downs on securities actively marketed for sale.

The following tables set forth the activity in the allowance for credit losses for fixed maturity securities, for the Predecessor Company:

	Predecessor Company
	Three Months Ended March 31, 2022
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	—	$	—	$	1	$	—	$	—	$	—	$	1
Additions to allowance for credit losses not previously recorded	—		—		—		—		—		—		—
Reductions for securities sold during the period	—		—		—		—		—		—		—
Additions on securities with previous allowance	—		—		—		—		—		—		—
Balance, end of period	$	—	$	—	$	1	$	—	$	—	$	—	$	1

	Predecessor Company
	Three Months Ended September 30, 2021
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Additions to allowance for credit losses not previously recorded	—		—		2		—		—		—		2
Reductions for securities sold during the period	—		—		—		—		—		—		—
Reductions on securities with previous allowance	—		—		—		—		—		—		—
Balance, end of period	$	—	$	—	$	2	$	—	$	—	$	—	$	2

	Predecessor Company
	Nine Months Ended September 30, 2021
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Bonds		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	—	$	—	$	1	$	—	$	—	$	—	$	1
Additions to allowance for credit losses not previously recorded	—		—		3		—		—		—		3
Reductions for securities sold during the period	—		—		(1)		—		—		—		(1)
Reductions on securities with previous allowance	—		—		(1)		—		—		—		(1)
Balance, end of period	$	—	$	—	$	2	$	—	$	—	$	—	$	2

Schedule of Participating Mortgage Loans

The following table sets forth the composition of “Commercial mortgage and other loans,” for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Amount (in millions)		% of Total
Commercial mortgage and agricultural property loans by property type:
Apartments/Multi-Family	$	385	25.5	%
Hospitality	17		1.1
Industrial	624		41.5
Office	196		13.0
Other	134		8.9
Retail	102		6.7
Total commercial mortgage loans	1,458		96.7	%
Agricultural property loans	51		3.3
Total commercial mortgage and agricultural property loans	1,509		100.0	%
Allowance for credit losses	(5)
Total net commercial mortgage and agricultural property loans	$	1,504

Allowance for Credit Losses

The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans for the Predecessor Company:

	Predecessor Company
	Three Months Ended March 31,
	2022
	Commercial Mortgage Loans		Agricultural Property Loans		Total
	(in millions)
Allowance, beginning of period	$	5	$	—	$	5
Release of allowance for expected losses	(1)		—		(1)
Allowance, end of period	$	4	$	—	$	4

	Predecessor Company
	Three Months Ended September 30						Nine Months Ended September 30
	2021
	Commercial Mortgage Loans		Agricultural Property Loans		Total		Commercial Mortgage Loans		Agricultural Property Loans		Total
	(in millions)
Allowance, beginning of period	$	5	$	—	$	5	$	7	$	—	$	7
Addition to (release of) allowance for expected losses	(1)		—		(1)		(3)		—		(3)
Allowance, end of period	$	4	$	—	$	4	$	4	$	—	$	4

Financing Receivable Credit Quality Indicators

The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, for the Predecessor Company:

	Predecessor Company
	December 31, 2021
	Amortized Cost by Origination Year
	2021		2020		2019		2018		2017		Prior		Total
	(in millions)
Commercial Mortgage Loans
Loan-to-Value Ratio:
0%-59.99%	$	150	$	—	$	21	$	7	$	93	$	232	$	503
60%-69.99%	389		33		10		11		39		28		510
70%-79.99%	317		48		17		—		21		21		424
80% or greater	—		—		—		—		—		21		21
Total	$	856	$	81	$	48	$	18	$	153	$	302	$	1,458
Debt Service Coverage Ratio:
Greater or Equal to 1.2x	$	856	$	81	$	48	$	7	$	120	$	295	$	1,407
1.0 - 1.2x	—		—		—		11		—		—		11
Less than 1.0x	—		—		—		—		33		7		40
Total	$	856	$	81	$	48	$	18	$	153	$	302	$	1,458
Agricultural Property Loans
Loan-to-Value Ratio:
0%-59.99%	$	40	$	1	$	—	$	—	$	3	$	7	$	51
60%-69.99%	—		—		—		—		—		—		—
70%-79.99%	—		—		—		—		—		—		—
80% or greater	—		—		—		—		—		—		—
Total	$	40	$	1	$	—	$	—	$	3	$	7	$	51
Debt Service Coverage Ratio:
Greater or Equal to 1.2x	$	40	$	1	$	—	$	—	$	3	$	3	$	47
1.0 - 1.2x	—		—		—		—		—		—		—
Less than 1.0x	—		—		—		—		—		4		4
Total	$	40	$	1	$	—	$	—	$	3	$	7	$	51

Other Invested Assets

The following table sets forth the composition of “Other invested assets,” as of the dates indicated.

	Successor Company		Predecessor Company
	September 30, 2022		December 31, 2021
	(in millions)
LPs/LLCs:
Equity method:
Private equity	$	14	$	19
Real estate-related	5		62
Subtotal equity method	19		81
Fair value:
Private equity	64		4
Real estate-related	—		6
Subtotal fair value	64		10
Total LPs/LLCs	83		91
Derivative instruments	265		3
Other	82		12
Total other invested assets	$	430	$	106

Accrued Investment Income

The following table sets forth the composition of “Accrued investment income,” as of the dates indicated:

	Successor Company		Predecessor Company
	September 30, 2022		December 31, 2021
	(in millions)
Fixed maturity securities	$	45	$	58
Commercial mortgage and other loans	—		3
Other invested assets	6		—
Short-term investments and cash equivalents	5		—
Total accrued investment income	$	56	$	61

Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:

	Successor Company				Predecessor Company
	Three Months Ended September 30		Six Months Ended September 30		Three Months Ended March 31		Three Months Ended September 30		Nine Months Ended September 30
	2022						2021
	(in millions)
Fixed maturities securities (1)	$	76	$	156	$	61	$	82	$	308
Equity securities	1		2		1		1		3
Secured receivable	7		18		—		—		—
Commercial mortgage and other loans	—		—		11		14		46
Other invested assets	10		14		29		11		50
Short-term investments and cash equivalents	3		5		1		1		1
Gross investment income	97		195		103		109		408
Less: investment expenses	(5)		(6)		(4)		(8)		(22)
Net investment income	$	92	$	189	$	99	$	101	$	386

(1)Includes fixed maturity securities classified as available-for-sale and trading for the three months ended March 31, 2022 and the three and nine months ended, September 30, 2021.

Schedule of Realized Gain (Loss)

The following table sets forth “Investment gains (losses), net” by investment type, for the periods indicated:

	Successor Company				Predecessor Company
	Three Months Ended September 30		Six Months Ended September 30		Three Months Ended March 31		Three Months Ended September 30		Nine Months Ended September 30
	2022						2021
	(in millions)
Fixed maturity securities (1)	$	(458)	$	(1,102)	$	(21)	$	141	$	1,197
Secured receivable	(8)		(59)		—		—		—
Commercial mortgage and other loans	—		—		—		28		28
Derivatives	24		(560)		502		4,906		6,139
Other invested assets and equity securities	(13)		(32)		—		6		9
Investment gains (losses), net	$	(455)	$	(1,753)	$	481	$	5,081	$	7,373

(1)For the Predecessor Company, includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading.

Net Unrealized Gains and (Losses) on Investments

The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:

	Predecessor Company
	December 31, 2021
	(in millions)
Fixed maturity securities, available-for-sale without an allowance	$	216
Derivatives designated as cash flow hedges(1)	25
Net unrealized gains on investments	$	241

(1)For more information on cash flow hedges for the Predecessor Company, see Note 6.

Repurchase Agreements and Securities Lending

In the normal course of business, FLIAC sells securities under agreements to repurchase and enters into securities lending transactions. These balances are recorded within Other liabilities in the unaudited interim consolidated statements of financial position.

The following table sets forth the remaining contractual maturities of the Successor Company's outstanding repurchase agreements by security type.

	Successor Company
	September 30, 2022
	Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 days		30-90 days		Total
	(in millions)
U.S. corporate public securities	$	—	$	—	$	200	$	200

The following table sets forth the remaining contractual maturities of the Successor Company's cash collateral received for securities loaned by security type:

	Successor Company
	September 30, 2022
	Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 days		30-90 days		Total
	(in millions)
Equity securities	$	169	$	—	$	—	$	169

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DERIVATIVES AND HEDGING (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

	Successor Company
	September 30, 2022
Primary Underlying Risk/Instrument Type	Gross Notional Values/Units			Fair Value
				Assets		Liabilities
	(in millions)
Retained Business
Interest Rate
Interest Rate Swaps	$	9,761		$	212	$	(546)
Currency/Interest Rate
Foreign Currency Swaps	97		—	17		—
Credit
Credit Default Swaps	520			1		(1)
Equity
Equity Futures	1,728			180		—
Total Return Swaps	—			94		—
Equity Options	3,686			232		—
Total Derivatives, Retained Business	15,792			736		(547)
Ceded Business
Interest Rate
Interest Rate Swaps	2,693			49		(119)
Currency/Interest Rate
Foreign Currency Swaps	423			88		—
Credit
Credit Default Swaps	71			—		(3)
Equity
Total Return Swaps	4			—		(1)
Equity Options	10,133			232		(571)
Total Derivatives, Ceded Business	13,324			369		(694)
Total Derivatives (1)	$	29,116		$	1,105	$	(1,241)

(1)     Recorded in “Other invested assets” and “Other liabilities” in the Unaudited Interim Consolidated Statements of Financial Position.

	Predecessor Company
	December 31, 2021
Primary Underlying Risk/Instrument Type	Gross Notional		Fair Value
			Assets		Liabilities
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Currency/Interest Rate
Foreign Currency Swaps	$	637	$	29	$	(1)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Futures	$	55	$	—	$	—
Interest Rate Swaps	10,520		339		(255)
Foreign Currency
Foreign Currency Forwards	50		—		(1)
Currency/Interest Rate
Foreign Currency Swaps	208		10		(1)
Credit
Credit Default Swaps	1,746		48		—
Equity
Equity Futures	855		1		(1)
Total Return Swaps	4,803		88		(81)
Equity Options	20,582		963		(1,028)
Total Derivatives Not Qualifying as Hedge Accounting Instruments	$	38,819	$	1,449	$	(1,367)
Total Derivatives (1)(2)	$	39,456	$	1,478	$	(1,368)

(1)Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $4,060 million as of December 31, 2021 included in “Future policy benefits” and $2,041 million as of December 31, 2021 included in “Policyholders’ account balances". Other assets included $400 million as of December 31, 2021. The fair value of the related reinsurance, included in "Reinsurance recoverables" and/or "Reinsurance payables" was an asset of $1,881 million as of December 31, 2021.

(2)Recorded in “Other invested assets”, “Other liabilities”, and "Payables to parent and affiliates" in the Unaudited Interim Consolidated Statements of Financial Position.

Offsetting Assets

The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables) that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	Successor Company
	September 30, 2022
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the  Statements of Financial Position		Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives	$	1,105	$	(840)	$	265	$	(265)	$	—
Offsetting of Financial Liabilities:
Derivatives	$	1,241	$	(956)	$	285	$	—	$	285

	Predecessor Company
	December 31, 2021
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position		Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives	$	1,478	$	(1,475)	$	3	$	—	$	3
Offsetting of Financial Liabilities:
Derivatives	$	1,368	$	(1,154)	$	215	$	(215)	$	—

(1)Amounts exclude the excess of collateral received/pledged from/to the counterparty.

Offsetting Liabilities

The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables) that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	Successor Company
	September 30, 2022
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the  Statements of Financial Position		Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives	$	1,105	$	(840)	$	265	$	(265)	$	—
Offsetting of Financial Liabilities:
Derivatives	$	1,241	$	(956)	$	285	$	—	$	285

	Predecessor Company
	December 31, 2021
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position		Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives	$	1,478	$	(1,475)	$	3	$	—	$	3
Offsetting of Financial Liabilities:
Derivatives	$	1,368	$	(1,154)	$	215	$	(215)	$	—

(1)Amounts exclude the excess of collateral received/pledged from/to the counterparty.

Derivative Instruments, Gain (Loss)

The following tables provide the financial statement classification and impact of derivatives, by segment.

	Successor Company
	Three Months Ended September 30		Six Months Ended September 30
	2022
	Investment gains (losses), net
	(in millions)
Retained Business
Interest Rate	$	(259)	$	(704)
Currency/Interest Rate	12		12
Credit	(2)		(2)
Equity	124		827
Total, Retained Business	(125)		133
Ceded Business
Interest Rate	(36)		(56)
Currency	—		2
Currency/Interest Rate	(36)		94
Credit	2		(4)
Equity	219		(729)
Total, Ceded Business	149		(693)
Total	$	24	$	(560)

	Predecessor Company
	Three Months Ended March 31, 2022
	Realized Investment Gains (Losses)		Net Investment Income		Other Income (Loss)		Change in AOCI
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Currency/Interest Rate	$	1	$	1	$	2	$	4
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(527)		—		—		—
Currency	—		—		—		—
Currency/Interest Rate	(6)		—		—		—
Credit	(12)		—		—		—
Equity	59		—		—		—
Embedded Derivatives	986		—		—		—
Total Derivatives Not Qualifying as Hedge Accounting Instruments:	500		—		—		—
Total	$	501	$	1	$	2	$	4

	Predecessor Company
	Three Months Ended September 30, 2021
	Realized Investment Gains (Losses)		Net Investment Income		Other Income (Loss)		Change in AOCI
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Currency/Interest Rate	$	3	$	2	$	5	$	33
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(63)		—		—		—
Currency	2		—		—		—
Currency/Interest Rate	(9)		—		—		—
Credit	1		—		—		—
Equity	(18)		—		—		—
Embedded Derivatives	4,990		—		—		—
Total Derivatives Not Qualifying as Hedge Accounting Instruments:	4,903		—		—		—
Total	$	4,906	$	2	$	5	$	33

	Predecessor Company
	Nine Months Ended September 30, 2021
	Realized Investment Gains (Losses)		Net Investment Income		Other Income (Loss)		Change in AOCI
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Cash flow hedges
Currency/Interest Rate	$	8	$	11	$	11	$	58
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(1,853)		—		—		—
Currency	2		—		—		—
Currency/Interest Rate	1		—		—		—
Credit	11		—		—		—
Equity	(1,798)		—		—		—
Embedded Derivatives	9,769		—		—		—
Total Derivatives Not Qualifying as Hedge Accounting Instruments:	6,132		—		—		—
Total	$	6,140	$	11	$	11	$	58

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

Presented below is a roll forward of current period cash flow hedges in AOCI before taxes:

	Predecessor Company
	(in millions)
Balance, December 31, 2021	$	25
Amount recorded in AOCI
Currency/Interest Rate	9
Total amount recorded in AOCI	9
Amount reclassified from AOCI to income
Currency/Interest Rate	(5)
Total amount reclassified from AOCI to income	(5)
Balance, March 31, 2022	$	29

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FAIR VALUE OF ASSETS AND LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

	Successor Company
	September 30, 2022
	Level 1		Level 2		Level 3		Netting (1)		Total
	(in millions)
Assets
Fixed Maturity Securities
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	643	$	—	$	—	$	643
Obligations of U.S. states and their political subdivisions	—		167		—		—		167
Foreign government bonds	—		15		—		—		15
U.S. corporate public securities	—		2,681		—		—		2,681
U.S. corporate private securities	—		359		334		—		693
Foreign corporate public securities	—		203		—		—		203
Foreign corporate private securities	—		274		32		—		306
Asset-backed securities(2)	—		507		155		—		662
Commercial mortgage-backed securities	—		162		—		—		162
Residential mortgage-backed securities	—		33		—		—		33
Total Fixed Maturity Securities	—		5,044		521		—		5,565
Equity securities	170		—		—		—		170
Short-term investments	37		—		—		—		37
Cash and cash equivalents	519		757		—		—		1,276
Other invested assets(3)	180		925		71		(840)		336
Deposit asset	—		—		859		—		859
Reinsurance recoverables	—		—		220		—		220
Net modified coinsurance receivable	—		—		70		—		70
Subtotal excluding separate account assets	906		6,726		1,741		(840)		8,533
Separate account assets(4)	—		23,016		—		—		23,016
Total assets	$	906	$	29,742	$	1,741	$	(840)	$	31,549
Liabilities
Insurance Liabilities	$	—	$	—	$	6,304	$	—	$	6,304
Other liabilities	—		1,241		—		(956)		285
Total liabilities	$	—	$	1,241	$	6,304	$	(956)	$	6,589

	Predecessor Company
	December 31, 2021
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Assets
Fixed Maturity Securities, available-for-sale:
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	727	$	—	$	—	$	727
Obligations of U.S. states and their political subdivisions	—		296		—		—		296
Foreign government bonds	—		114		—		—		114
U.S. corporate public securities	—		2,460		—		—		2,460
U.S. corporate private securities	—		1,556		89		—		1,645
Foreign corporate public securities	—		795		—		—		795
Foreign corporate private securities	—		791		101		—		892
Asset-backed securities(2)	—		1,039		23		—		1,062
Commercial mortgage-backed securities	—		674		32		—		706
Residential mortgage-backed securities	—		54		20		—		74
Total Fixed Maturity Securities, available-for-sale	—		8,506		265		—		8,771
Fixed maturities, trading	—		27		—				27
Equity securities	321		—		1				322
Short-term investments	519		263		13				795
Cash equivalents	372		1,359		8				1,739
Other invested assets(3)	1		1,477		—		(1,475)		3
Other assets	—				400				400
Reinsurance recoverables	—				1,881				1,881
Subtotal excluding separate account assets	1,213		11,632		2,568		(1,475)		13,938
Separate account assets(4)	—		32,267		—				32,267
Total assets	$	1,213	$	43,899	$	2,568	$	(1,475)	$	46,205
Liabilities
Future policy benefits(5)	$	—	$	—	$	4,060	$	—	$	4,060
Policyholders' account balances	—		—		2,041		—		2,041
Payables to parent and affiliates	—		1,367		—		(1,152)		215
Other liabilities	1		—		—		(1)		—
Total liabilities	$	1	$	1,367	$	6,101	$	(1,153)	$	6,316

(1)“Netting” amounts represent offsetting considerations as disclosed in Note 6.

(2)Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3)Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value ("NAV") per share (or its equivalent) as a practical expedient. At September 30, 2022 (Successor Company) and December 31, 2021 (Predecessor Company), the fair values of such investments were $64 million and $10 million, respectively.

(4)Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Statements of Financial Position.

(5)As of December 31, 2021, the net embedded derivative liability position of $4,060 million includes $62 million of embedded derivatives in an asset position and $4,122 million of embedded derivatives in a liability position.

	Successor Company
	Three Months Ended		Six Months Ended
	September 30, 2022
	(in millions)
Assets:
Reinsurance recoverables	$	(158)	$	(19)
Net modified coinsurance receivable	(145)		2
Deposit asset	(1,299)		(1,748)
Liabilities:
Insurance liabilities	$	4,953	$	7,307

Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement

The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities.

	Successor Company
	September 30, 2022
	Fair Value		Valuation Techniques	Unobservable     Inputs	Minimum		Maximum		Weighted Average		Impact of Increase in Input on Fair  Value(1)
	(in millions)
Assets:
Retained business
Corporate securities (2)	$	334	Discounted cash flow	Discount rate	3.85	%	8.89	%	6.00	%	Decrease
	32		Discounted cash flow	Discount rate	5.11	%	7.33	%	6.22	%	Decrease
Asset-backed securities	155		Discounted cash flow	Discount rate	3.35	%	8.47	%	4.84	%	Decrease
Other invested assets - Residential mortgage loans	71		Trade price	Trade price	N/A		N/A		N/A		Increase
Deposit asset	859		Fair values are determined using the same unobservable inputs as insurance liabilities.
Reinsurance recoverables	220		Fair values are determined using the same unobservable inputs as insurance liabilities.
Net modified coinsurance receivable	70		Fair values are determined using the same unobservable inputs as insurance liabilities.
Liabilities:
Insurance liabilities
Retained business	$	3,019	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over risk free	0.18	%	2.85	%			Decrease
				Utilization rate(8)	77	%	100	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	16	%			Decrease
				Equity volatility curve	22	%	30	%			Increase
Ceded business	$	3,285	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over SOFR (7)	0.00	%	1.96	%			Decrease
				Utilization rate(8)	77	%	100	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	16	%			Decrease
				Equity volatility curve	22	%	30	%			Increase

	Predecessor Company
	December 31, 2021
	Fair Value		Valuation Techniques	Unobservable     Inputs	Minimum		Maximum		Weighted Average		Impact of Increase in Input on Fair  Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	163	Discounted cash flow	Discount rate	2.34	%	10.17	%	2.82	%	Decrease
			Market Comparables	EBITDA multiples(3)	6.5X		12.4X		8.8X		Increase
			Liquidation	Liquidation value	62.58	%	62.58	%	62.58	%	Increase
Other assets	400		Fair values are determined using the same unobservable inputs as policyholders' account balances.
Reinsurance recoverables	1,881		Fair values are determined using the same unobservable inputs as future policy benefits and policyholders' account balances.
Liabilities:
Future policy benefits(4)	$	4,060	Discounted cash flow	Lapse rate(6)	1	%	20	%			Decrease
				Spread over LIBOR(7)	0.03	%	1.13	%			Decrease
				Utilization rate(8)	39	%	96	%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0	%	15	%			Decrease
				Equity volatility curve	16	%	25	%			Increase
Policyholders' account balances(5)	$	2,041	Discounted cash flow	Lapse rate(6)	1	%	42	%			Decrease
				Spread over LIBOR(7)	0.03	%	1.17	%			Decrease
				Equity volatility curve	6	%	31	%			Increase

(1)Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.

(2)Includes assets classified as fixed maturity securities, at fair value as of September 30, 2022 and fixed maturity securities, available-for-sale and fixed maturity securities, trading as of December 31, 2021.

(3)Represents multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.

(4)Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(5)Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s annuity products that are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(6)Lapse rates for contracts with living benefit guarantees are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these embedded derivatives.

(7)The spread over the SOFR and LIBOR swap curve represents the premium added to the proxy for the risk-free rate (SOFR/LIBOR) to reflect the Company's estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements, living benefit guarantees, and index-linked interest crediting guarantees are insurance liabilities and are therefore senior to debt.

(8)The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration and begin lifetime withdrawals at various time intervals from contract inception.The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

(9)The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of September 30, 2022 and December 31, 2021, the minimum withdrawal rate assumption is 76% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.

(10)The range reflects the mortality rates for the vast majority of business with living benefits, with policyholders ranging from 45 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age, and duration. A mortality improvement assumption is also incorporated into the overall mortality table.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate.

	Successor Company
	Three Months Ended September 30, 2022
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturity securities
Corporate securities(3)	$	314	$	(22)	$	232	$	—	$	—	$	(44)	$	(114)	$	—	$	—	$	366	$	—
Structured securities(4)	25		(2)		150		—		—		(18)		—		—		—		155		—
Other assets:
Other invested assets	—		—		71		—		—		—		—		—		—		71
Secured receivable	1,555		(9)		22		(60)		—		—		(1,508)		—		—		—		—
Deposit asset	2,158		(3)		—		—		—		—		(1,296)		—		—		859		—
Reinsurance recoverables	378		(158)		—		—		—		—		—		—		—		220		—
Net modified coinsurance receivable	215		(145)		—		—		—		—		—		—		—		70		—

	Successor Company
	Six Months Ended September 30, 2022
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturity securities
Corporate securities(3)	$	190	$	(38)	$	439	$	—	$	—	$	(55)	$	(117)	$	—	$	(53)	$	366	$	—
Structured securities(4)	33		(2)		175		(10)		—		(18)		(10)		—		(13)		155		—
Other assets:
Other invested assets	—		—		71		—		—		—		—		—		—		71
Secured receivable	1,622		(59)		22		(75)		—		—		(1,510)		—		—		—		—
Deposit asset	2,615		(144)		—		—		—		—		(1,612)		—		—		859		—
Reinsurance recoverables	344		(124)		—		—		—		—		—		—		—		220		—
Net modified coinsurance receivable	5		65		—		—		—		—		—		—		—		70		—

	Successor Company
	Three Months Ended September 30, 2022
			Incurred losses
	Fair Value, beginning of period		Reduction in estimates of ultimate losses		Increase in estimates of ultimate losses		Change in fair value (discount rate)		Paid losses		Other		Fair Value, end of period
	(in millions)
Insurance Liabilities	$	11,257	$	(4,615)	$	393	$	(808)	$	111	$	(34)	$	6,304

	Successor Company
	Six Months Ended September 30, 2022
			Incurred losses
	Fair Value, beginning of period		Reduction in estimates of ultimate losses		Increase in estimates of ultimate losses		Change in fair value (discount rate)		Paid losses		Other		Fair Value, end of period
	(in millions)
Insurance Liabilities	$	13,611	$	(6,269)	$	1,599	$	(2,328)	$	209	$	(518)	$	6,304

"Total realized and unrealized gains (losses)" related to our level 3 assets are included in earnings in Investment gains (losses). In addition, all activity related to our level 3 liabilities are recognized in earnings within change in Policyholders' benefits and changes in fair value of insurance liabilities.

	Predecessor Company
	Three Months Ended March 31, 2022
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Corporate securities(3)	190		(9)		5		(4)		—		(2)		—		—		—		180		(9)
Structured securities(4)	76		(4)		—		(10)		—		(2)		—		—		(13)		47		(4)
Other assets:
Equity securities	1		—		—		—		—		—		—		—		—		1		—
Short term investments	13		—		—		—		—		(13)		—		—		—		—		—
Cash equivalents	8		—		—		—		—		(8)		—		—		—		—		—
Other assets	400		(21)		13		—		—		(16)		—		—		—		376		(6)
Reinsurance recoverables	1,881		201		4		—		—		19		(239)		—		—		1,866		222
Liabilities:
Future policy benefits	(4,060)		715		—		—		(48)		—		—		—		—		(3,393)		686
Policyholders' account balances(5)	(2,041)		124		—		—		—		(17)		—		—		—		(1,934)		89

	Predecessor Company
	Three Months Ended March 31, 2022
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (loss)
	(in millions)
Fixed maturities, available-for-sale	$	—	$	—	$	(12)	$	—	$	—	$	—	$	(12)
Other assets:
Other assets	(21)		—		—		—		(6)		—		—
Reinsurance recoverables	201		—		—		—		222		—		—
Liabilities:
Future policy benefits	715		—		—		—		686		—		—
Policyholders' account balances	124		—		—		—		89		—		—

	Predecessor Company
	Three Months Ended September 30, 2021
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	15	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	15	$	—
Corporate securities(3)	232		(6)		143		(11)		—		(14)		(122)		2		—		224		(5)
Structured securities(4)	216		—		32		—		—		(1)		(20)		—		(172)		55		—
Other assets:
Fixed maturities, trading	5		—		2		—		—		—		—		—		(5)		2		—
Equity securities	5		—		—		—		—		—		(4)		—		—		1		—
Short term investments	23		—		6		—		—		(17)		—		—		—		12		—
Cash equivalents	—		—		—		—		—		—		—		—		—		—		—
Other assets	68		1		1		—		—		(1)		—		—		—		69		—
Reinsurance recoverables	302		(4)		4		—		—		—		—		—		—		302		(1)
Liabilities:
Future policy benefits	(12,530)		8,380		—		—		(49)		—		—		—		—		(4,199)		14
Policyholders' account balances(5)	(1,361)		(8)		—		—		(88)		—		—		—		—		(1,457)		543

	Predecessor Company
	Three Months Ended September 30, 2021
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (loss)
	(in millions)
Fixed maturities, available-for-sale	$	—	$	—	$	(6)	$	—	$	(2)	$	—	$	(3)
Other assets:
Fixed maturities, trading	—		—		—		—		—		—		—
Equity securities	—		—		—		—		—		—		—
Short term investments	—		—		—		—		—		—		—
Cash equivalents	—		—		—		—		—		—		—
Other assets	1		—		—		—		—		—		—
Reinsurance recoverables	(4)		—		—		—		(1)		—		—
Liabilities:
Future policy benefits	8,380		—		—		—		14		—		—
Policyholders' account balances	(8)		—		—		—		543		—		—

	Predecessor Company
	Nine Months Ended September 30, 2021
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	15	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	15	$	—
Corporate securities(3)	149		(5)		249		(11)		—		(45)		(122)		17		(8)		224		(6)
Structured securities(4)	19		(1)		235		—		—		(6)		(20)		—		(172)		55		(1)
Other assets:
Fixed maturities, trading	5		—		2		—		—		—		—		—		(5)		2		—
Equity securities	4		1		—		—		—		—		(4)		—		—		1		1
Short term investments	10		—		30		—		—		(29)		—		1		—		12		—
Cash equivalents	—		—		—		—		—		—		—		—		—		—		—
Other assets	54		14		7		—		—		(6)		—		—		—		69		8
Reinsurance recoverables	409		(120)		13		—		—		—		—		—		—		302		(106)
Liabilities:
Future policy benefits	(17,314)		13,746		—		—		(631)		—		—		—		—		(4,199)		1,281
Policyholders' account balances(5)	(580)		(516)		—		—		(361)		—		—		—		—		(1,457)		79

	Predecessor Company
	Nine Months Ended September 30, 2021
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (loss)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (loss)
	(in millions)
Fixed maturities, available-for-sale	$	(3)	$	—	$	(3)	$	—	$	(5)	$	—	$	(2)
Other assets:
Fixed maturities, trading	—		—		—		—		—		—		—
Equity securities	—		1		—		—		—		1		—
Short term investments	—		—		—		—		—		—		—
Cash equivalents	—		—		—		—		—		—		—
Other assets	14		—		—		—		8		—		—
Reinsurance recoverables	(120)		—		—		—		(106)		—		—
Liabilities:
Future policy benefits	13,746		—		—		—		1,281		—		—
Policyholders' account balances	(516)		—		—		—		79		—		—

.

(1)Realized investment gains (losses) on future policy benefits and reinsurance recoverables primarily represent the change in the fair value of the Company's living benefit guarantees on certain of its variable annuity contracts.

(2)Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(3)Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.

(4)Includes asset-backed and residential mortgage-backed securities.

(5)Issuances and settlements for Policyholders' account balances are presented net in the rollforward.

Fair Value, by Balance Sheet Grouping

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position. In some cases the carrying amount equals or approximates fair value.

	Successor Company
	September 30, 2022
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Accrued investment income	$	—	$	56	$	—	$	56	$	56
Other invested assets - Policy loans	—		—		11		11		11
Liabilities:
Repurchase agreements	$	—	$	200	$	—	$	200	$	200
Cash collateral for loaned securities	—		169		—		169		169

	Predecessor Company
	December 31, 2021
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Commercial mortgage and other loans	$	—	$	—	$	1,516	$	1,516	$	1,504
Policy loans	—		—		12		12		12
Short-term investments	81		—		—		81		81
Cash and cash equivalents	277		—		—		277		277
Accrued investment income	—		61		—		61		61
Reinsurance recoverables	—		—		9		9		8
Receivables from parent and affiliates	—		5		—		5		5
Other assets	—		4		2,275		2,279		2,279
Total assets	$	358	$	70	$	3,812	$	4,240	$	4,227
Liabilities:
Policyholders’ account balances - investment contracts	$	—	$	—	$	2,391	$	2,391	$	2,381
Payables to parent and affiliates	—		36		—		36		36
Other liabilities	—		105		—		105		105
Separate account liabilities - investment contracts	—		—		—		—		—
Total liabilities	$	—	$	141	$	2,391	$	2,532	$	2,522

(1)Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.

XML

EQUITY (Tables)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Schedule of Stockholders Equity

The balance of and changes in each component of AOCI are as follows:

	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Changes in Own-Credit Risk Related to Insurance Liabilities		Net Unrealized Investment Gains (Losses)(1)		Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2021 (Predecessor Company)	$	(1)	$	—	$	171	$	170
Change in OCI before reclassifications	—		—		(576)		(576)
Amounts reclassified from AOCI	—		—		15		15
Income tax benefit	—		—		118		118
Balance, March 31, 2022 (Predecessor Company)	$	(1)	$	—	$	(272)	$	(273)
Balance,  April 1, 2022 (Successor Company)	$	—	$	—	$	—	$	—
Change in OCI before reclassifications	—		245		—		245
Income tax expense	—		(51)		—		(51)
Balance, June 30, 2022 (Successor Company)	$	—	$	194	$	—	$	194
Change in OCI before reclassifications	—		149		—		149
Income tax expense	—		(32)		—		(32)
Balance, September 30, 2022 (Successor Company)	$	—	$	311	$	—	$	311

(1)Includes cash flow hedges of $29 million and $25 million as of March 31, 2022 and December 31, 2021, respectively.

	Predecessor Company
	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2020	$	(1)	$	1,534	$	1,533
Change in OCI before reclassifications	—		(354)		(354)
Amounts reclassified from AOCI	—		(1,226)		(1,226)
Income tax benefit	—		332		332
Balance, September 30, 2021	$	(1)	$	286	$	285

(1)Includes cash flow hedges of $15 million and $(43) million as of September 30, 2021 and December 31, 2020, respectively.

Reclassification out of Accumulated Other Comprehensive Income

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Predecessor Company
	Three Months Ended March 31,		Three Months Ended September 30,		Nine Months Ended September 30,
	2022		2021
	(in millions)
Amounts reclassified from AOCI(1)(2):
Net unrealized investment gains (losses):
Cash flow hedges—Currency/ Interest rate(3)	$	5	$	11	$	29
Net unrealized investment gains (losses) on available-for-sale securities	(20)		141		1,197
Total net unrealized investment gains (losses)(4)	(15)		152		1,226
Total reclassifications for the period	$	(15)	$	152	$	1,226

(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 6 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.

Other Net Unrealized Investment Gain Loss AOCI Roll Forward

The amounts for the periods indicated below, split between amounts related to net unrealized investment gains (losses) on 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:

	Predecessor Company
	Net Unrealized Gains (Losses) on Investments on Available-for-Sale Fixed Maturity Securities on which an allowance for credit losses has been recognized		Net Unrealized Gains (Losses) on All Other  Investments(1)		DAC and Other Costs(2)		Future Policy Benefits and Other Liabilities(3)		Income Tax Benefit (Expense)		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2021	$	—	$	240	$	(16)	$	(7)	$	(46)	$	171
Net investment gains (losses) on investments arising during the period	—		(591)		—		—		125		(466)
Reclassification adjustment for (gains) losses included in net income	—		15		—		—		(4)		11
Impact of net unrealized investment (gains) losses	—		—		9		6		(3)		12
Balance, March 31, 2022	$	—	$	(336)	$	(7)	$	(1)	$	72	$	(272)

	Predecessor Company
	Net Unrealized Gains (Losses) on Investments on Available-for-Sale Fixed Maturity Securities on which an allowance for credit losses has been recognized		Net Unrealized Gains (Losses) on All Other  Investments(1)		DAC and Other Costs(2)		Future Policy Benefits and Other Liabilities(3)		Income Tax Benefit (Expense)		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2020	$	—	$	2,369	$	(363)	$	(63)	$	(409)	$	1,534
Net investment gains (losses) on investments arising during the period	2		(742)		—		—		156		(584)
Reclassification adjustment for (gains) losses included in net income	(2)		(1,224)		—		—		257		(969)
Reclassification due to allowance for credit losses recorded during the period	—		—		—		—		—		—
Impact of net unrealized investment (gains) losses	—		—		325		61		(81)		305
Balance, September 30, 2021	$	—	$	403	$	(38)	$	(2)	$	(77)	$	286

(1)Includes cash flow hedges. See Note 6 for information on cash flow hedges.

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

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

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RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

Affiliated Asset Transfer

The table below shows affiliated asset trades for the six months ended September 30, 2022.

Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		Investment Gains (Losses), net
				(in millions)
Fortitude Reinsurance Company, Ltd.	July 2022	Purchase	Fixed Maturity Security	$	37	$	37	$	—
Fortitude Reinsurance Company, Ltd.	July 2022	Purchase	Fixed Maturity Security	15		15		—
Fortitude Reinsurance Company, Ltd.	July 2022	Purchase	Limited Partnership	9		9		—
Fortitude Re Investments, LLC	August 2022	Purchase	Fixed Maturity Security	42		42		—
Fortitude Re Investments, LLC	August 2022	Purchase	Fixed Maturity Security	23		23		—
Fortitude Re Investments, LLC	August 2022	Purchase	Limited Partnership	15		15		—

The table below shows affiliated asset trades for the three months ended March 31, 2022 and for the year ended December 31, 2021.

Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		Realized Investment Gain (Loss)
				(in millions)
Prudential Insurance	April 2021	Purchase	Fixed Maturities	$	201	$	201	$	—
Prudential Insurance	April 2021	Purchase	Commercial Mortgage Loan	177		177		—
Vantage Casualty Insurance Co.	June 2021	Purchase	Fixed Maturities	15		15		—
Prudential Insurance	June 2021	Sale	Equities	3		3		—
Pruco Life	June 2021	Sale	Equities	40		38		2
Passaic Fund LLC	June 2021	Transfer Out	Other Invested Assets	12		12		—
Passaic Fund LLC	July 2021	Transfer Out	Other Invested Assets	196		196		—
Prudential Insurance	September 2021	Purchase	Fixed Maturities	2		2		—
Prudential Insurance	September 2021	Sale	Fixed Maturities	12		11		1
Prudential Retirement Insurance and Annuity Company	September 2021	Sale	Fixed Maturities	26		24		2
Prudential Retirement Insurance and Annuity Company	September 2021	Purchase	Fixed Maturities	35		35		—
Prudential Insurance	September 2021	Purchase	Derivatives	—		—		—
Prudential Retirement Insurance and Annuity Company	September 2021	Purchase	Derivatives	(1)		(1)		—
Prudential Financial	October 2021	Sale	Equities	10		10		—
Pruco Life	November 2021	Sale	Derivatives	1		—		1

Affiliate	Date	Transaction	Security Type	Fair Value		Book Value		Realized Investment Gain (Loss)
				(in millions)
Prudential Arizona Reinsurance	November 2021	Purchase	Fixed Maturities	55		55		—
Pruco Life	December 2021	Transfer Out	Fixed Maturities	2,038		1,934		104
Pruco Life	December 2021	Sale	Fixed Maturities	57		57		—
Prudential Financial	December 2021	Dividend	Fixed Maturities	167		167		—
Prudential Financial	December 2021	Sale	Fixed Maturities	144		138		6
Prudential Financial	December 2021	Purchase	Commercial Mortgage Loan	185		185		—
Pruco Life	December 2021	Transfer Out	Commercial Mortgage Loan	538		517		21
Pruco Life	December 2021	Sale	Derivatives	8		2		6
Pruco Life	January 2022	Sale	Fixed Maturities	4		5		(1)
Prudential Financial	January 2022	Sale	Commercial Mortgage Loan	29		30		—
Pruco Life	January 2022	Sale	Derivatives	—		—		—
Pruco Life	February 2022	Sale	Fixed Maturities	129		138		(10)
Prudential Financial	March 2022	Sale	Fixed Maturities	$	33	$	33	$	(1)

Reinsurance Impact On Balance Sheet

Reinsurance amounts included in the audited Financial Statements included in the Predecessor Company's Annual Report on Form 10-K for the year ended December 31, 2021 were as follows:

	December 31, 2021
	(in millions)
Reinsurance recoverables	$	8,108
Deferred policy acquisition costs	(530)
Deferred sales inducements	(26)
Value of business acquired	(2)
Other assets	54
Reinsurance payables	7,183
Other liabilities	824

Reinsurance Table By Affiliate

The reinsurance recoverables by counterparty are broken out below:

	December 31, 2021
	(in millions)
Prudential Insurance	$	372
Pruco Life	7,736
Total reinsurance recoverables	$	8,108

Reinsurance Impact On Income Statement

Reinsurance amounts, included in the Predecessor Company’s Unaudited Interim Statements of Operations and Comprehensive Income (Loss), were as follows:

	Predecessor Company
	Three Months Ended March 31		Three Months Ended September 30		Nine Months Ended September 30
	2021
	(in millions)
Premiums:
Direct	$	9	$	7	$	19
Assumed	—		—		16
Ceded	(1)		(1)		(3)
Net premiums	8		6		33
Policy charges and fee income:
Direct	102		113		329
Assumed	—		—		819
Ceded(1)	(5)		(7)		(20)
Net policy charges and fee income	97		106		1,128
Asset management and service fees:
Direct	22		25		73
Assumed	—		—		165
Ceded	(2)		(2)		(6)
Net asset management and service fees	20		23		232
Realized investment gains (losses), net:
Direct	312		(3,243)		(4,856)
Assumed	—		8,328		12,350
Ceded	169		(5)		(122)
Realized investment gains (losses), net	481		5,081		7,373
Policyholders' benefits (including change in reserves):
Direct	31		19		44
Assumed	—		(257)		(254)
Ceded(2)	(5)		(4)		(5)
Net policyholders' benefits (including change in reserves)	26		(242)		(216)
Interest credited to policyholders’ account balances:
Direct	91		43		139
Assumed	—		399		476
Ceded	(6)		(2)		(6)
Net interest credited to policyholders’ account balances	85		441		610
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization	(41)		1,193		1,708

(1)Includes $0.0 million, $(0.4) million and $(0.4) million of unaffiliated activity (with respect to the Predecessor Company) for the three months ended March 31, 2022 three month ended September 30, 2021 and the nine months ended September 30, 2021, respectively.

(2) Includes $0.0 million and $(2.9) million, and $(3.3) million of unaffiliated activity (with respect to the Predecessor Company) for the three months ended March 31, 2022, the three month ended September 30, 2021, and the nine months ended September 30, 2021, respectively.

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BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended	9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Contracts novated	$ 6,000				$ 6,000
Contracts novated, since acquisition					60.00%
Loss on investment	$ 455	$ (481)	$ (5,081)	$ (481)	$ 1,753	$ (7,373)
Revision of Prior Period, Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Loss on investment		48
Loss from operations		$ 48

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BUSINESS COMBINATION - Consideration Paid (Details) - PAI $ in Millions	Apr. 01, 2022 USD ($)
Business Acquisition [Line Items]
Consideration	$ 1,761
Total purchase consideration	1,748
Cash reimbursement for transaction costs incurred	13
Bargain gain purchase	$ 5

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BUSINESS COMBINATION - Assets Acquired and Liabilities Assumed (Details) - PAI $ in Millions	Apr. 01, 2022 USD ($)
Assets
Total investments	$ 10,807
Cash and cash equivalents	1,578
Reinsurance recoverables	239
Net modified coinsurance receivable	68
Income taxes	352
Deposit asset	2,607
Other assets	96
Separate account assets	29,426
TOTAL ASSETS	45,173
Liabilities:
Insurance liabilities	13,611
Other liabilities	370
Separate account liabilities	29,426
TOTAL LIABILITIES	43,407
Net assets acquired	1,766
Consideration	1,761
BARGAIN PURCHASE GAIN	5
Reinsurance recoverables, decrease	105
Net modified coinsurance receivable, increase	63
Deposit asset, decrease	8
Insurance liabilities, decrease	$ 50

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SEGMENT INFORMATION - Narrative (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2022 USD ($) segment	Sep. 30, 2022 USD ($)
Segment Reporting [Abstract]
Number of reportable segments | segment	2
Amount of assets and labilities fully ceded		1
Modco payable | $	$ 2,136	$ 2,136

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SEGMENT INFORMATION - Balance Sheet by Segment (Details) - USD ($) $ in Millions		Sep. 30, 2022	Dec. 31, 2021
Assets
Total investments		$ 6,202	$ 11,605
Cash and cash equivalents		1,276	2,016
Accrued investment income		56	61
Net modified coinsurance receivable	[1]	70	0
Reinsurance recoverables	[1]	220	8,108
Income taxes		90	909
Deposit asset	[1]	859	2,659
Other assets		119	954
Separate account assets		23,016	32,267
Total assets		31,908	58,579
Liabilities:
Insurance liabilities	[1]	6,304	0
Other liabilities		848	1,192
Separate account liabilities		23,016	32,267
Total liabilities		30,168	56,897
Total equity		1,740	1,682
TOTAL LIABILITIES AND EQUITY		31,908	$ 58,579
Retained Business
Assets
Total investments		4,310
Cash and cash equivalents		553
Accrued investment income		45
Net modified coinsurance receivable		0
Reinsurance recoverables		0
Income taxes		90
Deposit asset		0
Other assets		117
Separate account assets		21,024
Total assets		26,139
Liabilities:
Insurance liabilities		3,019
Other liabilities		356
Separate account liabilities		21,024
Total liabilities		24,399
Total equity		1,740
TOTAL LIABILITIES AND EQUITY		26,139
Ceded Business
Assets
Total investments		1,892
Cash and cash equivalents		723
Accrued investment income		11
Net modified coinsurance receivable		70
Reinsurance recoverables		220
Income taxes		0
Deposit asset		859
Other assets		2
Separate account assets		1,992
Total assets		5,769
Liabilities:
Insurance liabilities		3,285
Other liabilities		492
Separate account liabilities		1,992
Total liabilities		5,769
Total equity		0
TOTAL LIABILITIES AND EQUITY		$ 5,769

[1] As of April 1, 2022 we have elected the fair value option for these financial statement line items. See Note 2 for further discussion.

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SEGMENT INFORMATION - Schedule of Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended						6 Months Ended	9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
REVENUES
Premiums	$ 8		$ 8	$ 6		$ 8	$ 11	$ 33
Policy charges and fee income	131		97	106		97	261	1,128
Net investment income	92		99	101			189	386
Asset management and service fees	26		20	23			48	232
Other losses	(16)		(19)	(42)			(15)	(556)
Investment gains (losses), net	(455)		481	5,081		481	(1,753)	7,373
TOTAL REVENUES	(214)		686	5,275			(1,259)	8,596
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	(104)		0	0			(974)	0
Commission expense	27		35	1,408			45	1,739
General, administrative and other expenses	17		3	(90)			55	38
TOTAL BENEFITS AND EXPENSES	(60)		253	1,536			(874)	2,573
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	(154)		433	3,739			(385)	6,023
Income tax expense (benefit)	3		77	778			(48)	1,247
NET INCOME (LOSS)	(157)		356	2,961			(337)	4,776
Other comprehensive income (loss), before tax:
Changes in own-credit risk related to insurance liabilities	149		0	0			394	0
Income tax benefit	32	$ (51)	(118)	(19)			83	(332)
Other comprehensive loss, net of tax	117	$ 194	(443)	(69)	$ 234	$ (1,413)	311	(1,248)
Comprehensive income (loss)	(40)		$ (87)	$ 2,892			(26)	$ 3,528
Retained Business
REVENUES
Premiums	8						11
Policy charges and fee income	131						261
Net investment income	47						82
Asset management and service fees	26						48
Other losses	(4)						(4)
Investment gains (losses), net	(463)						(571)
TOTAL REVENUES	(255)						(173)
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	(145)						112
Commission expense	27						45
General, administrative and other expenses	17						55
TOTAL BENEFITS AND EXPENSES	(101)						212
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	(154)						(385)
Income tax expense (benefit)	3						(48)
NET INCOME (LOSS)	(157)						(337)
Other comprehensive income (loss), before tax:
Changes in own-credit risk related to insurance liabilities	149						394
Income tax benefit	32						83
Other comprehensive loss, net of tax	117						311
Comprehensive income (loss)	(40)						(26)
Ceded Business
REVENUES
Premiums	0						0
Policy charges and fee income	0						0
Net investment income	45						107
Asset management and service fees	0						0
Other losses	(12)						(11)
Investment gains (losses), net	8						(1,182)
TOTAL REVENUES	41						(1,086)
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	41						(1,086)
Commission expense	0						0
General, administrative and other expenses	0						0
TOTAL BENEFITS AND EXPENSES	41						(1,086)
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	0						0
Income tax expense (benefit)	0						0
NET INCOME (LOSS)	0						0
Other comprehensive income (loss), before tax:
Changes in own-credit risk related to insurance liabilities	0						0
Income tax benefit	0						0
Other comprehensive loss, net of tax	0						0
Comprehensive income (loss)	$ 0						$ 0

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INVESTMENTS - Narrative (Details)	3 Months Ended			6 Months Ended	9 Months Ended
	Sep. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Apr. 01, 2022 USD ($)	Dec. 31, 2021 USD ($)
Debt Securities, Available-for-Sale [Line Items]
Accumulated other comprehensive income	$ 311,000,000			$ 311,000,000		$ 0	$ 170,000,000
Unrealized gains (losses) on equity securities							86,000,000
Unrealized losses of twelve months or more							$ 10,000,000
Total commercial mortgage and agricultural property loans							1.000
Mortgage loans 90 days or more past due							$ 1,509,000,000
Non-Accrual Status							0
Commercial loans acquired other than through direct origination					$ 167,000,000
Commercial mortgage and other loans sold			$ 707,000,000		707,000,000
Accrued investment income, write-down	0	$ 0		0	0
90 Days or More Past Due
Debt Securities, Available-for-Sale [Line Items]
Mortgage loans 90 days or more past due							$ 0
AOCI, Gain (Loss), Debt Securities, Available-for-Sale, without Allowance for Credit Loss, Parent
Debt Securities, Available-for-Sale [Line Items]
Accumulated other comprehensive income	0			0
AOCI, Gain (Loss), Debt Securities, Available-For-Sale, Allowance For Credit Loss, Parent
Debt Securities, Available-for-Sale [Line Items]
Accumulated other comprehensive income	$ 0			$ 0
CALIFORNIA
Debt Securities, Available-for-Sale [Line Items]
Total commercial mortgage and agricultural property loans							0.34
TEXAS
Debt Securities, Available-for-Sale [Line Items]
Total commercial mortgage and agricultural property loans							0.18
NEW YORK
Debt Securities, Available-for-Sale [Line Items]
Total commercial mortgage and agricultural property loans							0.07
Europe
Debt Securities, Available-for-Sale [Line Items]
Total commercial mortgage and agricultural property loans							0.08
AUSTRALIA
Debt Securities, Available-for-Sale [Line Items]
Total commercial mortgage and agricultural property loans							0.01
Equity securities
Debt Securities, Available-for-Sale [Line Items]
Unrealized gains (losses) on investments			(3,000,000)		(12,000,000)
Other income (loss) | Fixed Maturities
Debt Securities, Available-for-Sale [Line Items]
Unrealized gains (losses) on investments			$ 24,000,000		$ (276,000,000)
N A I C Highor Highest Quality Rating | Fixed Maturities
Debt Securities, Available-for-Sale [Line Items]
Unrealized gains (losses) on equity securities							$ 73,000,000
N A I C Other Than Higher Highest Quality Rating | Fixed Maturities
Debt Securities, Available-for-Sale [Line Items]
Unrealized gains (losses) on equity securities							$ 13,000,000

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INVESTMENTS - Fixed Maturities, Available-for-sale Securities (Details) - USD ($) $ in Millions		Sep. 30, 2022	Dec. 31, 2021
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			$ 8,556
Gross Unrealized Gains			302
Gross Unrealized Losses			86
Allowance for Credit Losses			1
Fair Value	[1]	$ 5,565	8,771
U.S Treasury securities and obligations of U.S. government authorities and agencies
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			654
Gross Unrealized Gains			74
Gross Unrealized Losses			1
Allowance for Credit Losses			0
Fair Value			727
Obligations of U.S. states and their political subdivisions
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			281
Gross Unrealized Gains			15
Gross Unrealized Losses			0
Allowance for Credit Losses			0
Fair Value			296
Foreign government bonds
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			106
Gross Unrealized Gains			9
Gross Unrealized Losses			1
Allowance for Credit Losses			0
Fair Value			114
U.S. corporate public securities
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			2,345
Gross Unrealized Gains			134
Gross Unrealized Losses			18
Allowance for Credit Losses			0
Fair Value			2,461
U.S. corporate private securities
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			1,635
Gross Unrealized Gains			24
Gross Unrealized Losses			14
Allowance for Credit Losses			1
Fair Value			1,644
Foreign corporate public securities
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			793
Gross Unrealized Gains			11
Gross Unrealized Losses			9
Allowance for Credit Losses			0
Fair Value			795
Foreign corporate private securities
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			920
Gross Unrealized Gains			5
Gross Unrealized Losses			34
Allowance for Credit Losses			0
Fair Value			891
Asset-backed securities
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			1,058
Gross Unrealized Gains			5
Gross Unrealized Losses			1
Allowance for Credit Losses			0
Fair Value			1,062
Commercial mortgage-backed securities
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			692
Gross Unrealized Gains			22
Gross Unrealized Losses			8
Allowance for Credit Losses			0
Fair Value			706
Residential mortgage-backed securities
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost			72
Gross Unrealized Gains			3
Gross Unrealized Losses			0
Allowance for Credit Losses			0
Fair Value			$ 75

[1] As of April 1, 2022 we have elected the fair value option for these financial statement line items. See Note 2 for further discussion.

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INVESTMENTS - Gross Unrealized Losses On Fixed Maturity Securities (Details) $ in Millions	Dec. 31, 2021 USD ($)
Fair Value
Less Than Twelve Months	$ 3,516
Twelve Months or More	285
Total	3,801
Gross   Unrealized  Losses
Less Than Twelve Months	76
Twelve Months or More	10
Total	86
U.S Treasury securities and obligations of U.S. government authorities and agencies
Fair Value
Less Than Twelve Months	74
Twelve Months or More	0
Total	74
Gross   Unrealized  Losses
Less Than Twelve Months	1
Twelve Months or More	0
Total	1
Obligations of U.S. states and their political subdivisions
Fair Value
Less Than Twelve Months	5
Twelve Months or More	0
Total	5
Gross   Unrealized  Losses
Less Than Twelve Months	0
Twelve Months or More	0
Total	0
Foreign government bonds
Fair Value
Less Than Twelve Months	13
Twelve Months or More	7
Total	20
Gross   Unrealized  Losses
Less Than Twelve Months	1
Twelve Months or More	0
Total	1
U.S. corporate public securities
Fair Value
Less Than Twelve Months	696
Twelve Months or More	153
Total	849
Gross   Unrealized  Losses
Less Than Twelve Months	12
Twelve Months or More	6
Total	18
U.S. corporate private securities
Fair Value
Less Than Twelve Months	855
Twelve Months or More	0
Total	855
Gross   Unrealized  Losses
Less Than Twelve Months	14
Twelve Months or More	0
Total	14
Foreign corporate public securities
Fair Value
Less Than Twelve Months	522
Twelve Months or More	50
Total	572
Gross   Unrealized  Losses
Less Than Twelve Months	8
Twelve Months or More	1
Total	9
Foreign corporate private securities
Fair Value
Less Than Twelve Months	689
Twelve Months or More	0
Total	689
Gross   Unrealized  Losses
Less Than Twelve Months	34
Twelve Months or More	0
Total	34
Asset-backed securities
Fair Value
Less Than Twelve Months	499
Twelve Months or More	0
Total	499
Gross   Unrealized  Losses
Less Than Twelve Months	1
Twelve Months or More	0
Total	1
Commercial mortgage-backed securities
Fair Value
Less Than Twelve Months	157
Twelve Months or More	75
Total	232
Gross   Unrealized  Losses
Less Than Twelve Months	5
Twelve Months or More	3
Total	8
Residential mortgage-backed securities
Fair Value
Less Than Twelve Months	6
Twelve Months or More	0
Total	6
Gross   Unrealized  Losses
Less Than Twelve Months	0
Twelve Months or More	0
Total	0
Fixed Maturities
Gross   Unrealized  Losses
Twelve Months or More	$ 10

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INVESTMENTS - Realized Gains (Losses) on Investments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended	9 Months Ended
	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Debt Securities, Available-for-Sale [Line Items]
Proceeds from maturities/prepayments	$ 422		$ 0	$ 8,859
Fixed Maturities
Debt Securities, Available-for-Sale [Line Items]
Proceeds from sales		$ 216		8,009
Proceeds from maturities/prepayments		196		607
Gross investment gains on sales and maturities		157		1,296
Gross investment losses on sales and maturities		(14)		(75)
Write-downs recognized in earnings		0		(23)
(Addition to) release of allowance for credit losses		$ (2)		(2)
Noncash related proceeds				$ (243)

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INVESTMENTS - Allowance for Credit Losses for Fixed Maturity Securities (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2021
Fixed maturities, available-for-sale:
Balance, beginning of period	$ 1	$ 0	$ 1
Additions to allowance for credit losses not previously recorded	0	2	3
Reductions for securities sold during the period	0	0	(1)
Additions on securities with previous allowance	0	0	(1)
Balance, end of period	1	2	2
U.S Treasury securities and obligations of U.S. government authorities and agencies
Fixed maturities, available-for-sale:
Balance, beginning of period	0	0	0
Additions to allowance for credit losses not previously recorded	0	0	0
Reductions for securities sold during the period	0	0	0
Additions on securities with previous allowance	0	0	0
Balance, end of period	0	0	0
Foreign government bonds
Fixed maturities, available-for-sale:
Balance, beginning of period	0	0	0
Additions to allowance for credit losses not previously recorded	0	0	0
Reductions for securities sold during the period	0	0	0
Additions on securities with previous allowance	0	0	0
Balance, end of period	0	0	0
U.S. and Foreign Corporate Securities
Fixed maturities, available-for-sale:
Balance, beginning of period	1	0	1
Additions to allowance for credit losses not previously recorded	0	2	3
Reductions for securities sold during the period	0	0	(1)
Additions on securities with previous allowance	0	0	(1)
Balance, end of period	1	2	2
Asset-backed securities
Fixed maturities, available-for-sale:
Balance, beginning of period	0	0	0
Additions to allowance for credit losses not previously recorded	0	0	0
Reductions for securities sold during the period	0	0	0
Additions on securities with previous allowance	0	0	0
Balance, end of period	0	0	0
Commercial mortgage-backed securities
Fixed maturities, available-for-sale:
Balance, beginning of period	0	0	0
Additions to allowance for credit losses not previously recorded	0	0	0
Reductions for securities sold during the period	0	0	0
Additions on securities with previous allowance	0	0	0
Balance, end of period	0	0	0
Residential mortgage-backed securities
Fixed maturities, available-for-sale:
Balance, beginning of period	0	0	0
Additions to allowance for credit losses not previously recorded	0	0	0
Reductions for securities sold during the period	0	0	0
Additions on securities with previous allowance	0	0	0
Balance, end of period	$ 0	$ 0	$ 0

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INVESTMENTS - Commercial mortgage and agricultural property loans by property type (Details) $ in Millions	Sep. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Commercial mortgage and agricultural property loans			$ 1,509
Allowance for credit losses	$ (5)	$ (4)	(5)	$ (4)	$ (5)	$ (7)
Total net commercial mortgage and agricultural property loans	$ 0		$ 1,504
Total commercial mortgage and agricultural property loans			1.000
CALIFORNIA
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Total commercial mortgage and agricultural property loans			0.34
TEXAS
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Total commercial mortgage and agricultural property loans			0.18
NEW YORK
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Total commercial mortgage and agricultural property loans			0.07
Europe
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Total commercial mortgage and agricultural property loans			0.08
AUSTRALIA
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Total commercial mortgage and agricultural property loans			0.01
Apartments/Multi-Family
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Commercial mortgage and agricultural property loans			$ 385
Total commercial mortgage and agricultural property loans			0.255
Hospitality
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Commercial mortgage and agricultural property loans			$ 17
Total commercial mortgage and agricultural property loans			0.011
Industrial
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Commercial mortgage and agricultural property loans			$ 624
Total commercial mortgage and agricultural property loans			0.415
Office
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Commercial mortgage and agricultural property loans			$ 196
Total commercial mortgage and agricultural property loans			0.130
Other
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Commercial mortgage and agricultural property loans			$ 134
Total commercial mortgage and agricultural property loans			0.089
Retail
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Commercial mortgage and agricultural property loans			$ 102
Total commercial mortgage and agricultural property loans			0.067
Agricultural Property Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Commercial mortgage and agricultural property loans			$ 51
Allowance for credit losses		0	$ 0	0	0	0
Total commercial mortgage and agricultural property loans			0.033
Total commercial mortgage loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Commercial mortgage and agricultural property loans			$ 1,458
Allowance for credit losses		$ (4)	$ (5)	$ (4)	$ (5)	$ (7)
Total commercial mortgage and agricultural property loans			0.967

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INVESTMENTS - Commercial mortgage and other loans (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2021
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Allowance, beginning of period	$ 5	$ 5	$ 7
Addition to (release of) allowance for expected losses	(1)	(1)	(3)
Allowance, end of period	4	4	4
Total commercial mortgage loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Allowance, beginning of period	5	5	7
Addition to (release of) allowance for expected losses	(1)	(1)	(3)
Allowance, end of period	4	4	4
Agricultural Property Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Allowance, beginning of period	0	0	0
Addition to (release of) allowance for expected losses	0	0	0
Allowance, end of period	$ 0	$ 0	$ 0

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INVESTMENTS - Credit Quality Indicators (Details) $ in Millions	Dec. 31, 2021 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
Total	$ 1,509
Total commercial mortgage loans
Financing Receivable, Credit Quality Indicator [Line Items]
2021	856
2020	81
2019	48
2018	18
2017	153
Prior	302
Total	1,458
Total commercial mortgage loans | 0%-59.99%
Financing Receivable, Credit Quality Indicator [Line Items]
2021	150
2020	0
2019	21
2018	7
2017	93
Prior	232
Total	503
Total commercial mortgage loans | 60%-69.99%
Financing Receivable, Credit Quality Indicator [Line Items]
2021	389
2020	33
2019	10
2018	11
2017	39
Prior	28
Total	510
Total commercial mortgage loans | 70%-79.99%
Financing Receivable, Credit Quality Indicator [Line Items]
2021	317
2020	48
2019	17
2018	0
2017	21
Prior	21
Total	424
Total commercial mortgage loans | 80% or greater
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	0
2017	0
Prior	21
Total	21
Total commercial mortgage loans | Greater or Equal to 1.2x
Financing Receivable, Credit Quality Indicator [Line Items]
2021	856
2020	81
2019	48
2018	7
2017	120
Prior	295
Total	1,407
Total commercial mortgage loans | 1.0 - 1.2x
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	11
2017	0
Prior	0
Total	11
Total commercial mortgage loans | Less than 1.0x
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	0
2017	33
Prior	7
Total	40
Agricultural Property Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2021	40
2020	1
2019	0
2018	0
2017	3
Prior	7
Total	51
Agricultural Property Loans | 0%-59.99%
Financing Receivable, Credit Quality Indicator [Line Items]
2021	40
2020	1
2019	0
2018	0
2017	3
Prior	7
Total	51
Agricultural Property Loans | 60%-69.99%
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	0
2017	0
Prior	0
Total	0
Agricultural Property Loans | 70%-79.99%
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	0
2017	0
Prior	0
Total	0
Agricultural Property Loans | 80% or greater
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	0
2017	0
Prior	0
Total	0
Agricultural Property Loans | Greater or Equal to 1.2x
Financing Receivable, Credit Quality Indicator [Line Items]
2021	40
2020	1
2019	0
2018	0
2017	3
Prior	3
Total	47
Agricultural Property Loans | 1.0 - 1.2x
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	0
2017	0
Prior	0
Total	0
Agricultural Property Loans | Less than 1.0x
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	0
2017	0
Prior	4
Total	$ 4

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INVESTMENTS - Other Invested Assets (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other invested assets	$ 430	$ 106
Partnership Interest
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other invested assets	83	91
Partnership Interest | Fair Value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other invested assets	64	10
Private equity | Partnership Interest | Fair Value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other invested assets	64	4
Real estate-related | Partnership Interest | Fair Value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other invested assets	0	6
Derivative instruments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other invested assets	265	3
Other
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other invested assets	82	12
Equity Method Investments | Partnership Interest
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other invested assets	19	81
Equity Method Investments | Private equity | Partnership Interest
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other invested assets	14	19
Equity Method Investments | Real estate-related | Partnership Interest
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other invested assets	$ 5	$ 62

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INVESTMENTS - Accrued Investment Income (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Net Investment Income [Line Items]
Total accrued investment income	$ 56	$ 61
Fixed maturity securities
Net Investment Income [Line Items]
Total accrued investment income	45	58
Commercial mortgage and other loans
Net Investment Income [Line Items]
Total accrued investment income	0	3
Other invested assets
Net Investment Income [Line Items]
Total accrued investment income	6	0
Short-term investments and cash equivalents
Net Investment Income [Line Items]
Total accrued investment income	$ 5	$ 0

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INVESTMENTS - Net Investment Income (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended	9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Net Investment Income [Line Items]
Gross investment income	$ 97	$ 103	$ 109	$ 195	$ 408
Less: investment expenses	(5)	(4)	(8)	(6)	(22)
Net investment income	92	99	101	189	386
Fixed maturity securities
Net Investment Income [Line Items]
Gross investment income	76	61	82	156	308
Equity securities
Net Investment Income [Line Items]
Gross investment income	1	1	1	2	3
Secured receivable
Net Investment Income [Line Items]
Gross investment income	7	0	0	18	0
Commercial mortgage and other loans
Net Investment Income [Line Items]
Gross investment income	0	11	14	0	46
Other invested assets
Net Investment Income [Line Items]
Gross investment income	10	29	11	14	50
Short-term investments and cash equivalents
Net Investment Income [Line Items]
Gross investment income	$ 3	$ 1	$ 1	$ 5	$ 1

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INVESTMENTS - Realized Investment Gains (Losses), Net (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended	9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Net Investment Income [Line Items]
Investment gains (losses), net	$ (455)	$ 481	$ 5,081	$ 481	$ (1,753)	$ 7,373
Equity securities
Net Investment Income [Line Items]
Investment gains (losses), net	(458)	(21)	141		(1,102)	1,197
Secured receivable
Net Investment Income [Line Items]
Investment gains (losses), net	(8)	0	0		(59)	0
Commercial mortgage and other loans
Net Investment Income [Line Items]
Investment gains (losses), net	0	0	28		0	28
Derivative instruments
Net Investment Income [Line Items]
Investment gains (losses), net	24	502	4,906		(560)	6,139
Other invested assets
Net Investment Income [Line Items]
Investment gains (losses), net	$ (13)	$ 0	$ 6		$ (32)	$ 9

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INVESTMENTS - Net unrealized Gains (Losses) on Investments within AOCI (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($)
Net Investment Income [Line Items]
Net unrealized gains on investments	$ 241
Fixed maturity securities | Fixed Maturity Securities Available For Sale Without An Allowance
Net Investment Income [Line Items]
Net unrealized gains on investments	216
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Net Investment Income [Line Items]
Net unrealized gains on investments	$ 25

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INVESTMENTS - Repurchase Agreements and Securities Lending (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
U.S. corporate public securities
Assets Sold under Agreements to Repurchase [Line Items]
Securities	$ 200,000,000	$ 0
Equity securities
Assets Sold under Agreements to Repurchase [Line Items]
Securities	169,000,000	$ 0
Overnight & Continuous | U.S. corporate public securities
Assets Sold under Agreements to Repurchase [Line Items]
Securities	0
Overnight & Continuous | Equity securities
Assets Sold under Agreements to Repurchase [Line Items]
Securities	169,000,000
Up to 30 days | U.S. corporate public securities
Assets Sold under Agreements to Repurchase [Line Items]
Securities	0
Up to 30 days | Equity securities
Assets Sold under Agreements to Repurchase [Line Items]
Securities	0
30-90 days | U.S. corporate public securities
Assets Sold under Agreements to Repurchase [Line Items]
Securities	200,000,000
30-90 days | Equity securities
Assets Sold under Agreements to Repurchase [Line Items]
Securities	$ 0

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DERIVATIVES AND HEDGING - Primary Risks Managed by Derivatives (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units		$ 39,456
Fair value, assets	$ 1,105	1,478
Fair value, liabilities	(1,241)	(1,368)
Future policy benefits
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net embedded derivative liability position		4,060
Policyholders' account balances
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net embedded derivative liability position		2,041
Other assets
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net embedded derivative liability position		400
Reinsurance recoverables
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net embedded derivative liability position		1,881
Reinsurance Payables
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net embedded derivative liability position		1,881
Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	29,116	38,819
Fair value, assets	1,105	1,449
Fair value, liabilities	(1,241)	(1,367)
Interest Rate Futures | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units		55
Fair value, assets		0
Fair value, liabilities		0
Interest Rate Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units		10,520
Fair value, assets		339
Fair value, liabilities		(255)
Foreign Currency Forwards | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units		50
Fair value, assets		0
Fair value, liabilities		(1)
Foreign Currency Swaps | Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units		637
Fair value, assets		29
Fair value, liabilities		(1)
Foreign Currency Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units		208
Fair value, assets		10
Fair value, liabilities		(1)
Credit Default Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units		1,746
Fair value, assets		48
Fair value, liabilities		0
Equity Futures | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units		855
Fair value, assets		1
Fair value, liabilities		(1)
Total Return Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units		4,803
Fair value, assets		88
Fair value, liabilities		(81)
Equity Options | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units		20,582
Fair value, assets		963
Fair value, liabilities		$ (1,028)
Retained Business | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	15,792
Fair value, assets	736
Fair value, liabilities	(547)
Retained Business | Interest Rate Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	9,761
Fair value, assets	212
Fair value, liabilities	(546)
Retained Business | Foreign Currency Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	97
Fair value, assets	17
Fair value, liabilities	0
Retained Business | Credit Default Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	520
Fair value, assets	1
Fair value, liabilities	(1)
Retained Business | Equity Futures | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	1,728
Fair value, assets	180
Fair value, liabilities	0
Retained Business | Total Return Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	0
Fair value, assets	94
Fair value, liabilities	0
Retained Business | Equity Options | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	3,686
Fair value, assets	232
Fair value, liabilities	0
Ceded Business | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	13,324
Fair value, assets	369
Fair value, liabilities	(694)
Ceded Business | Interest Rate Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	2,693
Fair value, assets	49
Fair value, liabilities	(119)
Ceded Business | Foreign Currency Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	423
Fair value, assets	88
Fair value, liabilities	0
Ceded Business | Credit Default Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	71
Fair value, assets	0
Fair value, liabilities	(3)
Ceded Business | Total Return Swaps | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	4
Fair value, assets	0
Fair value, liabilities	(1)
Ceded Business | Equity Options | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross Notional Values/Units	10,133
Fair value, assets	232
Fair value, liabilities	$ (571)

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DERIVATIVES AND HEDGING - Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Offsetting Derivative Assets [Abstract]
Gross Amounts of Recognized Financial Instruments	$ 1,105	$ 1,478
Gross Amounts Offset in the Statements of Financial Position	(840)	(1,475)
Net Amounts Presented in the Statements of Financial Position	265	3
Financial Instruments/Collateral	(265)	0
Net Amount	0	3
Offsetting Derivative Liabilities [Abstract]
Gross Amounts of Recognized Financial Instruments	1,241	1,368
Gross Amounts Offset in the Statements of Financial Position	(956)	(1,154)
Net Amounts Presented in the Statements of Financial Position	285	215
Financial Instruments/Collateral	0	(215)
Net Amount	$ 285	$ 0

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DERIVATIVES AND HEDGING - Impact of Derivatives by Operating Segment (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended	9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	$ 24			$ (560)
Investment gains (losses), net
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		$ 501	$ 4,906		$ 6,140
Investment gains (losses), net | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		500	4,903		6,132
Net Investment Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		1	2		11
Net Investment Income | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Other income (loss)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		2	5		11
Other income (loss) | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Change in AOCI
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		4	33		58
Change in AOCI | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Interest Rate | Investment gains (losses), net | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		(527)	(63)		(1,853)
Interest Rate | Net Investment Income | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Interest Rate | Other income (loss) | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Interest Rate | Change in AOCI | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Currency | Investment gains (losses), net | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	2		2
Currency | Net Investment Income | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Currency | Other income (loss) | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Currency | Change in AOCI | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Currency/Interest Rate | Investment gains (losses), net | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		(6)	(9)		1
Currency/Interest Rate | Investment gains (losses), net | Designated as Hedging Instrument | Cash Flow Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		1	3		8
Currency/Interest Rate | Net Investment Income | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Currency/Interest Rate | Net Investment Income | Designated as Hedging Instrument | Cash Flow Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		1	2		11
Currency/Interest Rate | Other income (loss) | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Currency/Interest Rate | Other income (loss) | Designated as Hedging Instrument | Cash Flow Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		2	5		11
Currency/Interest Rate | Change in AOCI | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Currency/Interest Rate | Change in AOCI | Designated as Hedging Instrument | Cash Flow Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		4	33		58
Credit | Investment gains (losses), net | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		(12)	1		11
Credit | Net Investment Income | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Credit | Other income (loss) | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Credit | Change in AOCI | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Equity | Investment gains (losses), net | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		59	(18)		(1,798)
Equity | Net Investment Income | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Equity | Other income (loss) | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Equity | Change in AOCI | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Embedded Derivatives | Investment gains (losses), net | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		986	4,990		9,769
Embedded Derivatives | Net Investment Income | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Embedded Derivatives | Other income (loss) | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		0	0		0
Embedded Derivatives | Change in AOCI | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)		$ 0	$ 0		$ 0
Retained Business
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	(125)			133
Retained Business | Interest Rate
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	(259)			(704)
Retained Business | Currency/Interest Rate
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	12			12
Retained Business | Credit
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	(2)			(2)
Retained Business | Equity
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	124			827
Ceded Business
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	149			(693)
Ceded Business | Interest Rate
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	(36)			(56)
Ceded Business | Currency
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	0			2
Ceded Business | Currency/Interest Rate
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	(36)			94
Ceded Business | Credit
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	2			(4)
Ceded Business | Equity
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, gain (loss)	$ 219			$ (729)

XML

DERIVATIVES AND HEDGING - Cash Flow Hedges in AOCI (Details) - Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Derivatives Used in Cash Flow Hedge [Roll Forward]
Cash flow hedges in AOCI, beginning balance	$ 25
Other comprehensive income (loss), amount recorded in AOCI	9
Gain (loss) reclassified from AOCI into income	(5)
Cash flow hedges in AOCI, ending balance	29
Currency/Interest Rate
Derivatives Used in Cash Flow Hedge [Roll Forward]
Other comprehensive income (loss), amount recorded in AOCI	9
Gain (loss) reclassified from AOCI into income	$ (5)

XML

FAIR VALUE OF ASSETS AND LIABILITIES - Assets and Liabilities by Hierarchy Level (Details) - USD ($) $ in Millions		Sep. 30, 2022	Dec. 31, 2021
Fixed Maturity Securities
Asset-backed securities	[1]	$ 5,565	$ 8,771
Fixed maturities, trading		0	27
Equity securities	[1]	170	322
Short-term investments		37	875
Other invested assets		430	106
Other assets		119	954
Separate account assets		23,016	32,267
Liabilities:
Policyholders' account balances		0	11,750
Other liabilities		848	1,192
Embedded derivatives in an asset position			62
Embedded derivatives in a liability position			4,122
U.S Treasury securities and obligations of U.S. government authorities and agencies
Fixed Maturity Securities
Asset-backed securities			727
Obligations of U.S. states and their political subdivisions
Fixed Maturity Securities
Asset-backed securities			296
U.S. corporate public securities
Fixed Maturity Securities
Asset-backed securities			2,461
U.S. corporate private securities
Fixed Maturity Securities
Asset-backed securities			1,644
Foreign corporate public securities
Fixed Maturity Securities
Asset-backed securities			795
Foreign corporate private securities
Fixed Maturity Securities
Asset-backed securities			891
Asset-backed securities
Fixed Maturity Securities
Asset-backed securities			1,062
Commercial mortgage-backed securities
Fixed Maturity Securities
Asset-backed securities			706
Residential mortgage-backed securities
Fixed Maturity Securities
Asset-backed securities			75
Recurring
Fixed Maturity Securities
Asset-backed securities		5,565	8,771
Fixed maturities, trading			27
Equity securities		170	322
Short-term investments		37	795
Cash and cash equivalents		1,276	1,739
Other invested assets		336	3
Other invested assets, Netting		(840)	(1,475)
Deposit asset		859
Other assets			400
Reinsurance recoverables		220	1,881
Net modified coinsurance receivable		70
Subtotal excluding separate account assets		8,533	13,938
Separate account assets		23,016	32,267
Total assets		31,549	46,205
Liabilities:
Future policy benefits			4,060
Policyholders' account balances			2,041
Liabilities, Netting		(956)	(1,153)
Payables to parent and affiliates			215
Retained business		6,304
Other liabilities		285	0
Total liabilities		6,589	6,316
Recurring | U.S Treasury securities and obligations of U.S. government authorities and agencies
Fixed Maturity Securities
Asset-backed securities		643	727
Recurring | Obligations of U.S. states and their political subdivisions
Fixed Maturity Securities
Asset-backed securities		167	296
Recurring | Foreign government bonds
Fixed Maturity Securities
Asset-backed securities		15	114
Recurring | U.S. corporate public securities
Fixed Maturity Securities
Asset-backed securities		2,681	2,460
Recurring | U.S. corporate private securities
Fixed Maturity Securities
Asset-backed securities		693	1,645
Recurring | Foreign corporate public securities
Fixed Maturity Securities
Asset-backed securities		203	795
Recurring | Foreign corporate private securities
Fixed Maturity Securities
Asset-backed securities		306	892
Recurring | Asset-backed securities
Fixed Maturity Securities
Asset-backed securities		662	1,062
Recurring | Commercial mortgage-backed securities
Fixed Maturity Securities
Asset-backed securities		162	706
Recurring | Residential mortgage-backed securities
Fixed Maturity Securities
Asset-backed securities		33	74
Recurring | Level 1
Fixed Maturity Securities
Asset-backed securities		0	0
Fixed maturities, trading			0
Equity securities		170	321
Short-term investments		37	519
Cash and cash equivalents		519	372
Other invested assets		180	1
Deposit asset		0
Other assets			0
Reinsurance recoverables		0	0
Net modified coinsurance receivable		0
Subtotal excluding separate account assets		906	1,213
Separate account assets		0	0
Total assets		906	1,213
Liabilities:
Future policy benefits			0
Policyholders' account balances			0
Payables to parent and affiliates			0
Retained business		0
Other liabilities		0	1
Total liabilities		0	1
Recurring | Level 1 | U.S Treasury securities and obligations of U.S. government authorities and agencies
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 1 | Obligations of U.S. states and their political subdivisions
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 1 | Foreign government bonds
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 1 | U.S. corporate public securities
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 1 | U.S. corporate private securities
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 1 | Foreign corporate public securities
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 1 | Foreign corporate private securities
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 1 | Asset-backed securities
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 1 | Commercial mortgage-backed securities
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 1 | Residential mortgage-backed securities
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 2
Fixed Maturity Securities
Asset-backed securities		5,044	8,506
Fixed maturities, trading			27
Equity securities		0	0
Short-term investments		0	263
Cash and cash equivalents		757	1,359
Other invested assets		925	1,477
Deposit asset		0
Reinsurance recoverables		0
Net modified coinsurance receivable		0
Subtotal excluding separate account assets		6,726	11,632
Separate account assets		23,016	32,267
Total assets		29,742	43,899
Liabilities:
Future policy benefits			0
Policyholders' account balances			0
Payables to parent and affiliates			1,367
Retained business		0
Other liabilities		1,241	0
Total liabilities		1,241	1,367
Recurring | Level 2 | U.S Treasury securities and obligations of U.S. government authorities and agencies
Fixed Maturity Securities
Asset-backed securities		643	727
Recurring | Level 2 | Obligations of U.S. states and their political subdivisions
Fixed Maturity Securities
Asset-backed securities		167	296
Recurring | Level 2 | Foreign government bonds
Fixed Maturity Securities
Asset-backed securities		15	114
Recurring | Level 2 | U.S. corporate public securities
Fixed Maturity Securities
Asset-backed securities		2,681	2,460
Recurring | Level 2 | U.S. corporate private securities
Fixed Maturity Securities
Asset-backed securities		359	1,556
Recurring | Level 2 | Foreign corporate public securities
Fixed Maturity Securities
Asset-backed securities		203	795
Recurring | Level 2 | Foreign corporate private securities
Fixed Maturity Securities
Asset-backed securities		274	791
Recurring | Level 2 | Asset-backed securities
Fixed Maturity Securities
Asset-backed securities		507	1,039
Recurring | Level 2 | Commercial mortgage-backed securities
Fixed Maturity Securities
Asset-backed securities		162	674
Recurring | Level 2 | Residential mortgage-backed securities
Fixed Maturity Securities
Asset-backed securities		33	54
Recurring | Level 3
Fixed Maturity Securities
Asset-backed securities		521	265
Fixed maturities, trading			0
Equity securities		0	1
Short-term investments		0	13
Cash and cash equivalents		0	8
Other invested assets		71	0
Deposit asset		859
Other assets			400
Reinsurance recoverables		220	1,881
Net modified coinsurance receivable		70
Subtotal excluding separate account assets		1,741	2,568
Separate account assets		0	0
Total assets		1,741	2,568
Liabilities:
Future policy benefits			4,060
Policyholders' account balances			2,041
Payables to parent and affiliates			0
Retained business		6,304
Other liabilities		0	0
Total liabilities		6,304	6,101
Recurring | Level 3 | U.S Treasury securities and obligations of U.S. government authorities and agencies
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 3 | Obligations of U.S. states and their political subdivisions
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 3 | Foreign government bonds
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 3 | U.S. corporate public securities
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 3 | U.S. corporate private securities
Fixed Maturity Securities
Asset-backed securities		334	89
Recurring | Level 3 | Foreign corporate public securities
Fixed Maturity Securities
Asset-backed securities		0	0
Recurring | Level 3 | Foreign corporate private securities
Fixed Maturity Securities
Asset-backed securities		32	101
Recurring | Level 3 | Asset-backed securities
Fixed Maturity Securities
Asset-backed securities		155	23
Recurring | Level 3 | Commercial mortgage-backed securities
Fixed Maturity Securities
Asset-backed securities		0	32
Recurring | Level 3 | Residential mortgage-backed securities
Fixed Maturity Securities
Asset-backed securities		0	20
Recurring | Fair Value Measured at Net Asset Value Per Share
Liabilities:
Other invested assets excluded from fair value hierarchy		64	10
Other | Recurring
Fixed Maturity Securities
Other invested assets, Netting		(840)	(1,475)
Subtotal excluding separate account assets		840	1,475
Netting | Recurring
Liabilities:
Liabilities, Netting			(1,152)
Other liabilities | Recurring
Liabilities:
Liabilities, Netting		$ (956)	$ (1)

[1] As of April 1, 2022 we have elected the fair value option for these financial statement line items. See Note 2 for further discussion.

XML

FAIR VALUE OF ASSETS AND LIABILITIES - Quantitative Information Regarding Internally-Prices Level 3 Assets and Liabilities (Details) $ in Millions		3 Months Ended	9 Months Ended	12 Months Ended
		Mar. 31, 2022	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Assets
Asset-backed securities	[1]		$ 5,565	$ 8,771
Liabilities:
Policyholders' account balances			$ 0	11,750
Asset-backed securities
Assets
Asset-backed securities				1,062
Level 3 | Minimum
Liabilities:
Policyholder age			45 years
Level 3 | Minimum     | Future policy benefits
Liabilities:
Mortality rate			0
Level 3 | Maximum
Liabilities:
Policyholder age			90 years
Level 3 | Valuation, income approach | Minimum     | Internal pricing | Retained business
Liabilities:
Lapse rate			0.01
Spread over SOFR			0.0018
Utilization rate			0.77
Mortality rate			0
Equity volatility curve			0.22
Level 3 | Valuation, income approach | Minimum     | Internal pricing | Ceded business
Liabilities:
Lapse rate			0.01
Spread over SOFR			0.0000
Utilization rate			0.77
Mortality rate			0
Equity volatility curve			0.22
Level 3 | Valuation, income approach | Minimum     | Internal pricing | Future policy benefits
Liabilities:
Lapse rate		0.01
Spread over Libor		0.0003
Utilization rate		0.39
Mortality rate		0
Equity volatility curve		0.16
Level 3 | Valuation, income approach | Minimum     | Internal pricing | Policyholders' account balances
Liabilities:
Lapse rate		0.01
Spread over Libor		0.0003
Equity volatility curve		0.06
Level 3 | Valuation, income approach | Minimum     | Corporate Securities | Internal pricing
Assets
Discount rate		0.0234
Level 3 | Valuation, income approach | Minimum     | Corporate Securities | Internal pricing | Corporate Debt Securities, One
Assets
Discount rate			0.0385
Level 3 | Valuation, income approach | Minimum     | Corporate Securities | Internal pricing | Corporate Debt Securities, Two
Assets
Discount rate			0.0511
Level 3 | Valuation, income approach | Minimum     | Asset-backed securities | Internal pricing
Assets
Discount rate			0.0335
Level 3 | Valuation, income approach | Maximum     | Internal pricing | Retained business
Liabilities:
Lapse rate			0.20
Spread over SOFR			0.0285
Utilization rate			1
Mortality rate			0.16
Equity volatility curve			0.30
Level 3 | Valuation, income approach | Maximum     | Internal pricing | Ceded business
Liabilities:
Lapse rate			0.20
Spread over SOFR			0.0196
Utilization rate			1
Mortality rate			0.16
Equity volatility curve			0.30
Level 3 | Valuation, income approach | Maximum     | Internal pricing | Future policy benefits
Liabilities:
Lapse rate		0.20
Spread over Libor		0.0113
Utilization rate		0.96
Mortality rate		0.15
Equity volatility curve		0.25
Level 3 | Valuation, income approach | Maximum     | Internal pricing | Policyholders' account balances
Liabilities:
Lapse rate		0.42
Spread over Libor		0.0117
Equity volatility curve		0.31
Level 3 | Valuation, income approach | Maximum     | Corporate Securities | Internal pricing
Assets
Discount rate		0.1017
Level 3 | Valuation, income approach | Maximum     | Corporate Securities | Internal pricing | Corporate Debt Securities, One
Assets
Discount rate			0.0889
Level 3 | Valuation, income approach | Maximum     | Corporate Securities | Internal pricing | Corporate Debt Securities, Two
Assets
Discount rate			0.0733
Level 3 | Valuation, income approach | Maximum     | Asset-backed securities | Internal pricing
Assets
Discount rate			0.0847
Level 3 | Valuation, income approach | Weighted Average | Corporate Securities | Internal pricing
Assets
Discount rate		0.0282
Level 3 | Valuation, income approach | Weighted Average | Corporate Securities | Internal pricing | Corporate Debt Securities, One
Assets
Discount rate			0.0600
Level 3 | Valuation, income approach | Weighted Average | Corporate Securities | Internal pricing | Corporate Debt Securities, Two
Assets
Discount rate			0.0622
Level 3 | Valuation, income approach | Weighted Average | Asset-backed securities | Internal pricing
Assets
Discount rate			0.0484
Level 3 | Valuation, market approach | Minimum     | Corporate Securities | Internal pricing
Assets
EBITDA multiplier		6.5
Level 3 | Valuation, market approach | Maximum     | Corporate Securities | Internal pricing
Assets
EBITDA multiplier		12.4
Level 3 | Valuation, market approach | Weighted Average | Corporate Securities | Internal pricing
Assets
EBITDA multiplier		8.8
Level 3 | Valuation, cost approach | Minimum     | Corporate Securities | Internal pricing
Assets
Liquidation value		0.6258
Level 3 | Valuation, cost approach | Maximum     | Corporate Securities | Internal pricing
Assets
Liquidation value		0.6258
Level 3 | Valuation, cost approach | Weighted Average | Corporate Securities | Internal pricing
Assets
Liquidation value		0.6258
Recurring
Assets
Asset-backed securities			$ 5,565	8,771
Deposit asset			859
Net modified coinsurance receivable			70
Liabilities:
Retained business			6,304
Future policy benefits				4,060
Policyholders' account balances				2,041
Recurring | Asset-backed securities
Assets
Asset-backed securities			662	1,062
Recurring | Level 3
Assets
Asset-backed securities			521	265
Deposit asset			859
Net modified coinsurance receivable			70
Liabilities:
Retained business			6,304
Future policy benefits				4,060
Policyholders' account balances				2,041
Recurring | Level 3 | Asset-backed securities
Assets
Asset-backed securities			155	23
Recurring | Level 3 | Internal pricing
Assets
Other invested assets - Residential mortgage loans			71
Deposit asset			859
Net modified coinsurance receivable			70
Recurring | Level 3 | Internal pricing | Asset-backed securities
Assets
Asset-backed securities			155
Recurring | Level 3 | Internal pricing | Retained business
Liabilities:
Retained business			3,019
Recurring | Level 3 | Internal pricing | Ceded business
Liabilities:
Ceded business			3,285
Recurring | Level 3 | Internal pricing | Future policy benefits
Liabilities:
Future policy benefits				4,060
Recurring | Level 3 | Internal pricing | Policyholders' account balances
Liabilities:
Policyholders' account balances				2,041
Recurring | Level 3 | Corporate Securities | Internal pricing
Assets
Marketable securities				163
Recurring | Level 3 | Corporate Securities | Internal pricing | Corporate Debt Securities, One
Assets
Marketable securities			334
Recurring | Level 3 | Corporate Securities | Internal pricing | Corporate Debt Securities, Two
Assets
Marketable securities			32
Recurring | Level 3 | Other assets | Internal pricing
Assets
Other assets				400
Recurring | Level 3 | Reinsurance recoverables | Internal pricing
Assets
Reinsurance recoverables			$ 220	$ 1,881
Recurring | Level 3 | Minimum     | Internal pricing | Future policy benefits
Liabilities:
Withdrawal rate assumption			0.76	0.76
Recurring | Level 3 | Maximum     | Internal pricing | Future policy benefits
Liabilities:
Withdrawal rate assumption			1	1

[1] As of April 1, 2022 we have elected the fair value option for these financial statement line items. See Note 2 for further discussion.

XML

FAIR VALUE OF ASSETS AND LIABILITIES - Changes in Level 3 Assets and Liabilities (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended		9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Insurance Liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	$ (11,257)				$ (13,611)
Total realized and unrealized gains (losses)	4,953			$ 7,307
Reduction in estimates of ultimate losses	(4,615)				(6,269)
Increase in estimates of ultimate losses	393				1,599
Change in fair value (discount rate)	(808)				(2,328)
Paid losses	111				209
Other	(34)				(518)
Fair Value, end of period	(6,304)			(6,304)	(6,304)
Other invested assets
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	0				0
Total realized and unrealized gains (losses)	0				0
Purchases	71				71
Sales	0				0
Issuances	0				0
Settlements	0				0
Other	0				0
Transfers into Level 3	0				0
Transfers out of Level 3	0				0
Fair Value, end of period	71			71	71
Unrealized gains (losses) for assets still held
Secured receivable
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	1,555				1,622
Total realized and unrealized gains (losses)	(9)				(59)
Purchases	22				22
Sales	(60)				(75)
Issuances	0				0
Settlements	0				0
Other	(1,508)				(1,510)
Transfers into Level 3	0				0
Transfers out of Level 3	0				0
Fair Value, end of period	0			0	0
Unrealized gains (losses) for assets still held	0				0
Short term investments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	215	$ 13	$ 23	0	5	$ 10
Total realized and unrealized gains (losses)	(145)	0	0		65	0
Purchases	0	0	6		0	30
Sales	0	0	0		0	0
Issuances	0	0	0		0	0
Settlements	0	(13)	(17)		0	(29)
Other	0	0	0		0	0
Transfers into Level 3	0	0	0		0	1
Transfers out of Level 3	0	0	0		0	0
Fair Value, end of period	70	0	12	70	70	12
Unrealized gains (losses) for assets still held	0	0	0		0	0
Short term investments | Realized investment gains (losses), net
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Short term investments | Other income (loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Short term investments | Included in other comprehensive income (loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Short term investments | Net investment income
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Cash equivalents
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period		8	0	0		0
Total realized and unrealized gains (losses)		0	0			0
Purchases		0	0			0
Sales		0	0			0
Issuances		0	0			0
Settlements		(8)	0			0
Other		0	0			0
Transfers into Level 3		0	0			0
Transfers out of Level 3		0	0			0
Fair Value, end of period		0	0			0
Unrealized gains (losses) for assets still held		0	0			0
Cash equivalents | Realized investment gains (losses), net
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Cash equivalents | Other income (loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Cash equivalents | Included in other comprehensive income (loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Cash equivalents | Net investment income
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Other assets
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period		400	68	376		54
Total realized and unrealized gains (losses)		(21)	1			14
Purchases		13	1			7
Sales		0	0			0
Issuances		0	0			0
Settlements		(16)	(1)			(6)
Other		0	0			0
Transfers into Level 3		0	0			0
Transfers out of Level 3		0	0			0
Fair Value, end of period		376	69			69
Unrealized gains (losses) for assets still held		(6)	0			8
Other assets | Realized investment gains (losses), net
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		(21)	1			14
Unrealized gains (losses) for assets still held		(6)	0			8
Other assets | Other income (loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for assets still held		0	0			0
Other assets | Included in other comprehensive income (loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for assets still held		0	0			0
Other assets | Net investment income
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Asset-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	2,158				2,615
Total realized and unrealized gains (losses)	(3)				(144)
Purchases	0				0
Sales	0				0
Issuances	0				0
Settlements	0				0
Other	(1,296)				(1,612)
Transfers into Level 3	0				0
Transfers out of Level 3	0				0
Fair Value, end of period	859			859	859
Unrealized gains (losses) for assets still held	0				0
Reinsurance recoverables
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	378	1,881	302	1,866	344	409
Total realized and unrealized gains (losses)	(158)	201	(4)		(124)	(120)
Purchases	0	4	4		0	13
Sales	0	0	0		0	0
Issuances	0	0	0		0	0
Settlements	0	19	0		0	0
Other	0	(239)	0		0	0
Transfers into Level 3	0	0	0		0	0
Transfers out of Level 3	0	0	0		0	0
Fair Value, end of period	220	1,866	302	220	220	302
Unrealized gains (losses) for assets still held	0	222	(1)		0	(106)
Reinsurance recoverables | Realized investment gains (losses), net
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		201	(4)			(120)
Unrealized gains (losses) for assets still held		222	(1)			(106)
Reinsurance recoverables | Other income (loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for assets still held		0	0			0
Reinsurance recoverables | Included in other comprehensive income (loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for assets still held		0	0			0
Reinsurance recoverables | Net investment income
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Future policy benefits
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period		(4,060)	(12,530)	(3,393)		(17,314)
Total realized and unrealized gains (losses)		715	8,380			13,746
Purchases		0	0			0
Sales		0	0			0
Issuances		(48)	(49)			(631)
Settlements		0	0			0
Other		0	0			0
Transfers into Level 3		0	0			0
Transfers out of Level 3		0	0			0
Fair Value, end of period		(3,393)	(4,199)			(4,199)
Unrealized gains (losses) for liabilities still held		686	14			1,281
Future policy benefits | Realized investment gains (losses), net
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		715	8,380			13,746
Unrealized gains (losses) for liabilities still held		686	14			1,281
Future policy benefits | Other income (loss)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for liabilities still held		0	0			0
Future policy benefits | Included in other comprehensive income (loss)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for liabilities still held		0	0			0
Future policy benefits | Net investment income
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Policyholders' account balances
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period		(2,041)	(1,361)	(1,934)		(580)
Total realized and unrealized gains (losses)		124	(8)			(516)
Purchases		0	0			0
Sales		0	0			0
Issuances		0	(88)			(361)
Settlements		(17)	0			0
Other		0	0			0
Transfers into Level 3		0	0			0
Transfers out of Level 3		0	0			0
Fair Value, end of period		(1,934)	(1,457)			(1,457)
Unrealized gains (losses) for liabilities still held		89	543			79
Policyholders' account balances | Realized investment gains (losses), net
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		124	(8)			(516)
Unrealized gains (losses) for liabilities still held		89	543			79
Policyholders' account balances | Other income (loss)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for liabilities still held		0	0			0
Policyholders' account balances | Included in other comprehensive income (loss)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for liabilities still held		0	0			0
Policyholders' account balances | Net investment income
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Fixed maturity securities | Fixed maturities, trading
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period			5			5
Total realized and unrealized gains (losses)			0			0
Purchases			2			2
Sales			0			0
Issuances			0			0
Settlements			0			0
Other			0			0
Transfers into Level 3			0			0
Transfers out of Level 3			(5)			(5)
Fair Value, end of period			2			2
Unrealized gains (losses) for assets still held			0			0
Fixed maturity securities | Realized investment gains (losses), net | Fixed Maturity, Available-For Sale
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			(3)
Unrealized gains (losses) for assets still held		0	(2)			(5)
Fixed maturity securities | Realized investment gains (losses), net | Fixed maturities, trading
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Fixed maturity securities | Other income (loss) | Fixed Maturity, Available-For Sale
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for assets still held		0	0			0
Fixed maturity securities | Other income (loss) | Fixed maturities, trading
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Fixed maturity securities | Included in other comprehensive income (loss) | Fixed Maturity, Available-For Sale
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		(12)	(6)			(3)
Unrealized gains (losses) for assets still held		(12)	(3)			(2)
Fixed maturity securities | Included in other comprehensive income (loss) | Fixed maturities, trading
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Fixed maturity securities | Net investment income | Fixed Maturity, Available-For Sale
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)		0	0			0
Fixed maturity securities | Net investment income | Fixed maturities, trading
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Fixed maturity securities | U.S Treasury securities and obligations of U.S. government authorities and agencies
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period		0	15	0		15
Total realized and unrealized gains (losses)		0	0			0
Purchases		0	0			0
Sales		0	0			0
Issuances		0	0			0
Settlements		0	0			0
Other		0	0			0
Transfers into Level 3		0	0			0
Transfers out of Level 3		0	0			0
Fair Value, end of period		0	15			15
Unrealized gains (losses) for assets still held		0	0			0
Fixed maturity securities | Corporate Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	314	190	232	180	190	149
Total realized and unrealized gains (losses)	(22)	(9)	(6)		(38)	(5)
Purchases	232	5	143		439	249
Sales	0	(4)	(11)		0	(11)
Issuances	0	0	0		0	0
Settlements	(44)	(2)	(14)		(55)	(45)
Other	(114)	0	(122)		(117)	(122)
Transfers into Level 3	0	0	2		0	17
Transfers out of Level 3	0	0	0		(53)	(8)
Fair Value, end of period	366	180	224	366	366	224
Unrealized gains (losses) for assets still held	0	(9)	(5)		0	(6)
Fixed maturity securities | Structured securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	25	76	216	47	33	19
Total realized and unrealized gains (losses)	(2)	(4)	0		(2)	(1)
Purchases	150	0	32		175	235
Sales	0	(10)	0		(10)	0
Issuances	0	0	0		0	0
Settlements	(18)	(2)	(1)		(18)	(6)
Other	0	0	(20)		(10)	(20)
Transfers into Level 3	0	0	0		0	0
Transfers out of Level 3	0	(13)	(172)		(13)	(172)
Fair Value, end of period	155	47	55	155	155	55
Unrealized gains (losses) for assets still held	$ 0	(4)	0		$ 0	(1)
Equity securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period			5			4
Total realized and unrealized gains (losses)			0			1
Purchases			0			0
Sales			0			0
Issuances			0			0
Settlements			0			0
Other			(4)			(4)
Transfers into Level 3			0			0
Transfers out of Level 3			0			0
Fair Value, end of period			1			1
Unrealized gains (losses) for assets still held			0			1
Equity securities | Realized investment gains (losses), net
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Equity securities | Other income (loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			1
Unrealized gains (losses) for assets still held			0			1
Equity securities | Included in other comprehensive income (loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Equity securities | Net investment income
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total realized and unrealized gains (losses)			$ 0			$ 0
Equity securities | Equity securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period		1		$ 1
Total realized and unrealized gains (losses)		0
Purchases		0
Sales		0
Issuances		0
Settlements		0
Other		0
Transfers into Level 3		0
Transfers out of Level 3		0
Fair Value, end of period		1
Unrealized gains (losses) for assets still held		$ 0

XML

FAIR VALUE OF ASSETS AND LIABILITIES - Gains and Losses Resulting from Changes in Fair Value (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended		9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Equity securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			$ 0			$ 1
Unrealized gains (losses) for assets still held			0			1
Insurance Liabilities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)	$ 4,953			$ 7,307
Realized investment gains (losses), net | Equity securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Total Accumulated Other Comprehensive Income (Loss) | Equity securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Net investment income | Equity securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Fixed maturity securities | Fixed maturities, trading
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Fixed maturity securities | Realized investment gains (losses), net | Fixed Maturity, Available-For Sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		$ 0	0			(3)
Unrealized gains (losses) for assets still held		0	(2)			(5)
Fixed maturity securities | Realized investment gains (losses), net | Fixed maturities, trading
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Fixed maturity securities | Total Accumulated Other Comprehensive Income (Loss) | Fixed Maturity, Available-For Sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		(12)	(6)			(3)
Unrealized gains (losses) for assets still held		(12)	(3)			(2)
Fixed maturity securities | Total Accumulated Other Comprehensive Income (Loss) | Fixed maturities, trading
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Fixed maturity securities | Net investment income | Fixed Maturity, Available-For Sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		0	0			0
Fixed maturity securities | Net investment income | Fixed maturities, trading
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Net modified coinsurance receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)	(145)	0	0		$ 65	0
Unrealized gains (losses) for assets still held	0	0	0		0	0
Net modified coinsurance receivable | Realized investment gains (losses), net
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Net modified coinsurance receivable | Total Accumulated Other Comprehensive Income (Loss)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Net modified coinsurance receivable | Net investment income
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Cash equivalents
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for assets still held		0	0			0
Cash equivalents | Realized investment gains (losses), net
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Cash equivalents | Total Accumulated Other Comprehensive Income (Loss)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Unrealized gains (losses) for assets still held			0			0
Cash equivalents | Net investment income
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)			0			0
Other assets
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		(21)	1			14
Unrealized gains (losses) for assets still held		(6)	0			8
Other assets | Realized investment gains (losses), net
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		(21)	1			14
Unrealized gains (losses) for assets still held		(6)	0			8
Other assets | Total Accumulated Other Comprehensive Income (Loss)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for assets still held		0	0			0
Other assets | Net investment income
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		0	0			0
Reinsurance recoverables
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)	(158)	201	(4)		(124)	(120)
Unrealized gains (losses) for assets still held	0	222	(1)		$ 0	(106)
Reinsurance recoverables | Realized investment gains (losses), net
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		201	(4)			(120)
Unrealized gains (losses) for assets still held		222	(1)			(106)
Reinsurance recoverables | Total Accumulated Other Comprehensive Income (Loss)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for assets still held		0	0			0
Reinsurance recoverables | Net investment income
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		0	0			0
Future policy benefits
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		715	8,380			13,746
Unrealized gains (losses) for liabilities still held		686	14			1,281
Future policy benefits | Realized investment gains (losses), net
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		715	8,380			13,746
Unrealized gains (losses) for liabilities still held		686	14			1,281
Future policy benefits | Total Accumulated Other Comprehensive Income (Loss)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for liabilities still held		0	0			0
Future policy benefits | Net investment income
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		0	0			0
Policyholders' account balances
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		124	(8)			(516)
Unrealized gains (losses) for liabilities still held		89	543			79
Policyholders' account balances | Realized investment gains (losses), net
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		124	(8)			(516)
Unrealized gains (losses) for liabilities still held		89	543			79
Policyholders' account balances | Total Accumulated Other Comprehensive Income (Loss)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		0	0			0
Unrealized gains (losses) for liabilities still held		0	0			0
Policyholders' account balances | Net investment income
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)		$ 0	$ 0			$ 0
Reinsurance recoverables
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)	(158)			(19)
Net Modified Coinsurance Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)	(145)			2
Deposit asset
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Total realized and unrealized gains (losses)	$ (1,299)			$ (1,748)

XML

FAIR VALUE OF ASSETS AND LIABILITIES - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions		Sep. 30, 2022	Dec. 31, 2021
Assets
Accrued investment income		$ 56	$ 61
Reinsurance recoverables	[1]	220	8,108
Fair Value
Assets
Commercial mortgage and other loans			1,516
Policy loans			12
Short-term investments			81
Cash and cash equivalents			277
Accrued investment income		56	61
Other invested assets - Policy loans		11
Reinsurance recoverables			9
Receivables from parent and affiliates			5
Other assets			2,279
Total assets			4,240
Liabilities:
Repurchase agreements		200
Cash collateral for loaned securities		169
Policyholders’ account balances - investment contracts			2,391
Payables to parent and affiliates			36
Other liabilities			105
Separate account liabilities - investment contracts			0
Total liabilities			2,532
Fair Value | Level 1
Assets
Commercial mortgage and other loans			0
Policy loans			0
Short-term investments			81
Cash and cash equivalents			277
Accrued investment income		0	0
Other invested assets - Policy loans		0
Reinsurance recoverables			0
Receivables from parent and affiliates			0
Other assets			0
Total assets			358
Liabilities:
Repurchase agreements		0
Cash collateral for loaned securities		0
Policyholders’ account balances - investment contracts			0
Payables to parent and affiliates			0
Other liabilities			0
Separate account liabilities - investment contracts			0
Total liabilities			0
Fair Value | Level 2
Assets
Commercial mortgage and other loans			0
Policy loans			0
Short-term investments			0
Cash and cash equivalents			0
Accrued investment income		56	61
Other invested assets - Policy loans		0
Reinsurance recoverables			0
Receivables from parent and affiliates			5
Other assets			4
Total assets			70
Liabilities:
Repurchase agreements		200
Cash collateral for loaned securities		169
Policyholders’ account balances - investment contracts			0
Payables to parent and affiliates			36
Other liabilities			105
Separate account liabilities - investment contracts			0
Total liabilities			141
Fair Value | Level 3
Assets
Commercial mortgage and other loans			1,516
Policy loans			12
Short-term investments			0
Cash and cash equivalents			0
Accrued investment income		0	0
Other invested assets - Policy loans		11
Reinsurance recoverables			9
Receivables from parent and affiliates			0
Other assets			2,275
Total assets			3,812
Liabilities:
Repurchase agreements		0
Cash collateral for loaned securities		0
Policyholders’ account balances - investment contracts			2,391
Payables to parent and affiliates			0
Other liabilities			0
Separate account liabilities - investment contracts			0
Total liabilities			2,391
Carrying Amount
Assets
Commercial mortgage and other loans			1,504
Policy loans			12
Short-term investments			81
Cash and cash equivalents			277
Accrued investment income		56	61
Other invested assets - Policy loans		11
Reinsurance recoverables			8
Receivables from parent and affiliates			5
Other assets			2,279
Total assets			4,227
Liabilities:
Repurchase agreements		200
Cash collateral for loaned securities		$ 169
Policyholders’ account balances - investment contracts			2,381
Payables to parent and affiliates			36
Other liabilities			105
Separate account liabilities - investment contracts			0
Total liabilities			$ 2,522

[1] As of April 1, 2022 we have elected the fair value option for these financial statement line items. See Note 2 for further discussion.

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INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended	9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 3	$ 77	$ 778	$ (48)	$ 1,247
Effective income tax rate reconciliation	(1.90%)	17.80%	20.80%	12.50%	20.70%
Deferred tax assets, valuation allowance	$ 37			$ 37

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EQUITY - Narrative (Details) - USD ($)	Sep. 30, 2022	Apr. 01, 2022	Dec. 31, 2021
Equity [Abstract]
Accumulated other comprehensive income	$ 311,000,000	$ 0	$ 170,000,000

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EQUITY - Components of AOCI (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended	9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
AOCI
Beginning Balance	$ 1,780	$ 1,766	$ 1,682	$ 2,958	$ 2,987	$ 2,702
Change in OCI before reclassifications		245	(576)
Amounts reclassified from AOCI			15
Income tax benefit	(32)	51	118	19	(83)	332
Ending Balance	1,740	1,780	2,987	2,058	1,740	2,058
Foreign Currency Translation Adjustment
AOCI
Beginning Balance	0	0	(1)		(1)	(1)
Change in OCI before reclassifications	0	0	0			0
Amounts reclassified from AOCI			0			0
Income tax benefit	0	0	0			0
Ending Balance	0	0	(1)	(1)	0	(1)
Changes in Own-Credit Risk Related to Insurance Liabilities
AOCI
Beginning Balance	194	0	0		0
Change in OCI before reclassifications	149	245	0
Amounts reclassified from AOCI			0
Income tax benefit	32	51	0
Ending Balance	311	194	0		311
Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
AOCI
Beginning Balance	0	0	171		(272)	1,534
Change in OCI before reclassifications	0	0	(576)			(354)
Amounts reclassified from AOCI			15			(1,226)
Income tax benefit	0	0	118			332
Ending Balance	0	0	(272)	286	0	286
Total Accumulated Other Comprehensive Income (Loss)
AOCI
Beginning Balance	194	0	170		(273)	1,533
Change in OCI before reclassifications						(354)
Amounts reclassified from AOCI						(1,226)
Income tax benefit						332
Ending Balance		$ 194	(273)	285		285
Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest
AOCI
Beginning Balance			25		29	(43)
Change in OCI before reclassifications	149
Income tax benefit	32
Ending Balance	$ 311		$ 29	$ 15	$ 311	$ 15

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EQUITY - Reclassification out of Accumulated Other Comprehensive Income (Details) - Reclassification out of Accumulated Other Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Sep. 30, 2021	Sep. 30, 2021
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) including portion attributable to noncontrolling interest, before tax	$ (15)	$ 152	$ 1,226
Total Accumulated Other Comprehensive Income (Loss)
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) including portion attributable to noncontrolling interest, before tax	(15)	152	1,226
Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) including portion attributable to noncontrolling interest, before tax	5	11	29
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-Sale, Including Noncontrolling Interest
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) including portion attributable to noncontrolling interest, before tax	$ (20)	$ 141	$ 1,197

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EQUITY - Other Net Unrealized Investment Gain Loss AOCI (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Mar. 31, 2022	Sep. 30, 2021
AOCI
Beginning Balance	$ 1,682	$ 2,702
Ending Balance	2,987	2,058
Net Unrealized Gains (Losses) on Investments on Available-for-Sale Fixed Maturity Securities on which an allowance for credit losses has been recognized
AOCI
Beginning Balance	0	0
Net investment gains (losses) on investments arising during the period	0	2
Reclassification adjustment for (gains) losses included in net income	0	(2)
Reclassification due to allowance for credit losses recorded during the period		0
Impact of net unrealized investment (gains) losses	0	0
Ending Balance	0	0
Net Unrealized Investment Gains Losses On All Other Investments
AOCI
Beginning Balance	240	2,369
Net investment gains (losses) on investments arising during the period	(591)	(742)
Reclassification adjustment for (gains) losses included in net income	15	(1,224)
Reclassification due to allowance for credit losses recorded during the period		0
Impact of net unrealized investment (gains) losses	0	0
Ending Balance	(336)	403
DAC and Other Costs
AOCI
Beginning Balance	(16)	(363)
Net investment gains (losses) on investments arising during the period	0	0
Reclassification adjustment for (gains) losses included in net income	0	0
Reclassification due to allowance for credit losses recorded during the period		0
Impact of net unrealized investment (gains) losses	9	325
Ending Balance	(7)	(38)
Future Policy Benefits and Other Liabilities
AOCI
Beginning Balance	(7)	(63)
Net investment gains (losses) on investments arising during the period	0	0
Reclassification adjustment for (gains) losses included in net income	0	0
Reclassification due to allowance for credit losses recorded during the period		0
Impact of net unrealized investment (gains) losses	6	61
Ending Balance	(1)	(2)
Income Tax Benefit (Expense)
AOCI
Beginning Balance	(46)	(409)
Net investment gains (losses) on investments arising during the period	125	156
Reclassification adjustment for (gains) losses included in net income	(4)	257
Reclassification due to allowance for credit losses recorded during the period		0
Impact of net unrealized investment (gains) losses	(3)	(81)
Ending Balance	72	(77)
Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
AOCI
Beginning Balance	171	1,534
Net investment gains (losses) on investments arising during the period	(466)	(584)
Reclassification adjustment for (gains) losses included in net income	11	(969)
Reclassification due to allowance for credit losses recorded during the period		0
Impact of net unrealized investment (gains) losses	12	305
Ending Balance	$ (272)	$ 286

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COMMITMENTS AND CONTINGENT LIABILITIES (Details) - Commitments - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Total commercial mortgage loans
Other Commitments [Line Items]
Commitments to fund underlying commercial mortgage loans		$ 21
Investments
Other Commitments [Line Items]
Purchase obligation	$ 261	$ 96

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RELATED PARTY TRANSACTIONS - Successor Company (Details) - USD ($)	3 Months Ended				6 Months Ended	9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Nov. 10, 2022	Oct. 31, 2022	Apr. 01, 2022
Related Party Transaction [Line Items]
Intercompany liquidity agreement, maximum borrowing capacity	$ 150,000,000				$ 150,000,000				$ 50,000,000
Intercompany liquidity agreement, outstanding	0				0
Net investment income	92,000,000		$ 99,000,000	$ 101,000,000	189,000,000	$ 386,000,000
Funding commitment	42,000,000				42,000,000
Subsequent Event
Related Party Transaction [Line Items]
Intercompany liquidity agreement, outstanding							$ 75,000,000	$ 75,000,000
Fortitude Group Holdings
Related Party Transaction [Line Items]
Allocation of costs	8,000,000				15,000,000
Carlyle Investment Management L.L.C.
Related Party Transaction [Line Items]
Allocation of costs		$ 10,000,000
Assets under management, market value	623,000,000				623,000,000
Net investment income	$ 2,000,000				$ 3,000,000
Fortitude Group Holdings | Carlyle Investment Management L.L.C.
Related Party Transaction [Line Items]
Ownership									71.50%

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RELATED PARTY TRANSACTIONS - Successor Schedule of Affiliated Asset Transfers (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended	9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction [Line Items]
Investment gains (losses), net	$ (455)	$ 481	$ 5,081	$ 481	$ (1,753)		$ 7,373
Fortitude Reinsurance Company, Ltd. | Affiliated Entity
Related Party Transaction [Line Items]
Fair Value	37				37	$ 37
Book Value	37				37	37
Investment gains (losses), net						0
Fortitude Reinsurance Company, Ltd. | Affiliated Entity
Related Party Transaction [Line Items]
Fair Value	15				15	15
Book Value	15				15	15
Investment gains (losses), net						0
Fortitude Reinsurance Company, Ltd. | Affiliated Entity
Related Party Transaction [Line Items]
Fair Value	9				9	9
Book Value	9				9	9
Investment gains (losses), net						0
Fortitude Re Investments, LLC | Affiliated Entity
Related Party Transaction [Line Items]
Fair Value	42				42	42
Book Value	42				42	42
Investment gains (losses), net						0
Fortitude Re Investments, LLC | Affiliated Entity
Related Party Transaction [Line Items]
Fair Value	23				23	23
Book Value	23				23	23
Investment gains (losses), net						0
Fortitude Re Investments, LLC | Affiliated Entity
Related Party Transaction [Line Items]
Fair Value	15				15	15
Book Value	$ 15				$ 15	15
Investment gains (losses), net						$ 0

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RELATED PARTY TRANSACTIONS - Predecessor Company (Details) - USD ($)	1 Months Ended						3 Months Ended						6 Months Ended	9 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Aug. 31, 2021	Jul. 31, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction [Line Items]
Policy charges and fee income							$ 131,000,000		$ 97,000,000	$ 106,000,000		$ 97,000,000	$ 261,000,000		$ 1,128,000,000
Corporate expenses										7,000,000					20,000,000
Investment management expenses							5,000,000		4,000,000	8,000,000			6,000,000		22,000,000
Other invested assets		$ 106,000,000					430,000,000						430,000,000	$ 430,000,000
Net Investment Income							$ 92,000,000		99,000,000	101,000,000			$ 189,000,000		386,000,000
Income										23,000,000		20,000,000			232,000,000
Dividend to parent											$ 188,000,000	$ 192,000,000
Prudential Annuities Inc.
Related Party Transaction [Line Items]
Return of capital	$ 306,000,000			$ 3,813,000,000
Dividend to parent		$ 451,000,000			$ 188,000,000	$ 192,000,000
Pruco Life
Related Party Transaction [Line Items]
Long-term debt			$ 300,000,000
Long-term debt, fair value			326,000,000
Loss on debt transfer			$ 24,000,000
Subsidiary of Common Parent
Related Party Transaction [Line Items]
Stock based program expense									0	100,000					400,000
Deferred compensation program, compensation expense										300,000					1,500,000
Pension expense, net									0	2,400,000					7,100,000
Welfare plans, expense									0	900,000					2,900,000
401(k), Employer matching contribution														4.00%
Voluntary savings plan, expense									0	900,000					2,700,000
Parent Company
Related Party Transaction [Line Items]
Corporate expenses									9,000,000
Parent Company | Line of Credit
Related Party Transaction [Line Items]
Funds borrowed								$ 9,000,000,000
Affiliated Entity
Related Party Transaction [Line Items]
Funds borrowed, interest expense								$ 0		1,000,000					9,000,000
Affiliated Entity | Prudential Annuities Distributors
Related Party Transaction [Line Items]
Policy charges and fee income									29,000,000	110,000,000					347,000,000
Affiliated Entity | P G I M
Related Party Transaction [Line Items]
Investment management expenses									4,000,000	7,000,000					18,000,000
Affiliated Entity | ASTISI And PGIM Investments
Related Party Transaction [Line Items]
Income									22,000,000	24,000,000					72,000,000
Corporate Joint Venture
Related Party Transaction [Line Items]
Net Investment Income									$ 0	$ 8,000,000					$ 17,000,000

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RELATED PARTY TRANSACTIONS - Schedule of Affiliated Asset Transfers (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended	9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction [Line Items]
Investment gains (losses), net	$ (455)	$ 481	$ 5,081	$ 481	$ (1,753)	$ 7,373
Affiliated Entity | Prudential Insurance
Related Party Transaction [Line Items]
Fair Value		201
Book Value		201
Investment gains (losses), net		0
Affiliated Entity | Prudential Insurance
Related Party Transaction [Line Items]
Fair Value		177
Book Value		177
Investment gains (losses), net		0
Affiliated Entity | Vantage Casualty Insurance Co.
Related Party Transaction [Line Items]
Fair Value		15
Book Value		15
Investment gains (losses), net		0
Affiliated Entity | Prudential Insurance
Related Party Transaction [Line Items]
Fair Value		3
Book Value		3
Investment gains (losses), net		0
Affiliated Entity | Pruco Life
Related Party Transaction [Line Items]
Fair Value		40
Book Value		38
Investment gains (losses), net		2
Affiliated Entity | Passaic Fund LLC
Related Party Transaction [Line Items]
Fair Value		12
Book Value		12
Investment gains (losses), net		0
Affiliated Entity | Passaic Fund LLC
Related Party Transaction [Line Items]
Fair Value		196
Book Value		196
Investment gains (losses), net		0
Affiliated Entity | Prudential Insurance
Related Party Transaction [Line Items]
Fair Value		2
Book Value		2
Investment gains (losses), net		0
Affiliated Entity | Prudential Insurance
Related Party Transaction [Line Items]
Fair Value		12
Book Value		11
Investment gains (losses), net		1
Affiliated Entity | Prudential Retirement Insurance and Annuity Company
Related Party Transaction [Line Items]
Fair Value		26
Book Value		24
Investment gains (losses), net		2
Affiliated Entity | Prudential Retirement Insurance and Annuity Company
Related Party Transaction [Line Items]
Fair Value		35
Book Value		35
Investment gains (losses), net		0
Affiliated Entity | Prudential Insurance
Related Party Transaction [Line Items]
Fair Value		0
Book Value		0
Investment gains (losses), net		0
Affiliated Entity | Prudential Retirement Insurance and Annuity Company
Related Party Transaction [Line Items]
Fair Value		(1)
Book Value		(1)
Investment gains (losses), net		0
Affiliated Entity | Prudential Financial
Related Party Transaction [Line Items]
Fair Value		10
Book Value		10
Investment gains (losses), net		0
Affiliated Entity | Pruco Life
Related Party Transaction [Line Items]
Fair Value		1
Book Value		0
Investment gains (losses), net		1
Affiliated Entity | Prudential Arizona Reinsurance
Related Party Transaction [Line Items]
Fair Value		55
Book Value		55
Investment gains (losses), net		0
Affiliated Entity | Pruco Life
Related Party Transaction [Line Items]
Fair Value		2,038
Book Value		1,934
Investment gains (losses), net		104
Affiliated Entity | Pruco Life
Related Party Transaction [Line Items]
Fair Value		57
Book Value		57
Investment gains (losses), net		0
Affiliated Entity | Prudential Financial
Related Party Transaction [Line Items]
Fair Value		167
Book Value		167
Investment gains (losses), net		0
Affiliated Entity | Prudential Financial
Related Party Transaction [Line Items]
Fair Value		144
Book Value		138
Investment gains (losses), net		6
Affiliated Entity | Prudential Financial
Related Party Transaction [Line Items]
Fair Value		185
Book Value		185
Investment gains (losses), net		0
Affiliated Entity | Pruco Life
Related Party Transaction [Line Items]
Fair Value		538
Book Value		517
Investment gains (losses), net		21
Affiliated Entity | Pruco Life
Related Party Transaction [Line Items]
Fair Value		8
Book Value		2
Investment gains (losses), net		6
Affiliated Entity | Pruco Life
Related Party Transaction [Line Items]
Fair Value		4
Book Value		5
Investment gains (losses), net		(1)
Affiliated Entity | Prudential Financial
Related Party Transaction [Line Items]
Fair Value		29
Book Value		30
Investment gains (losses), net		0
Affiliated Entity | Pruco Life
Related Party Transaction [Line Items]
Fair Value		0
Book Value		0
Investment gains (losses), net		0
Affiliated Entity | Pruco Life
Related Party Transaction [Line Items]
Fair Value		129
Book Value		138
Investment gains (losses), net		(10)
Affiliated Entity | Prudential Financial
Related Party Transaction [Line Items]
Fair Value		33
Book Value		33
Investment gains (losses), net		$ (1)

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RELATED PARTY TRANSACTIONS - Schedule of Reinsurance Amounts (Details) - USD ($) $ in Millions		Sep. 30, 2022	Dec. 31, 2021
Related Party Transaction [Line Items]
Reinsurance recoverables	[1]	$ 220	$ 8,108
Other assets		119	954
Reinsurance payables		0	7,183
Other liabilities		$ 848	1,192
Items Effected By Reinsurance
Related Party Transaction [Line Items]
Reinsurance recoverables			8,108
Deferred policy acquisition costs			(530)
Deferred sales inducements			(26)
Value of business acquired			(2)
Other assets			54
Reinsurance payables			7,183
Other liabilities			$ 824

[1] As of April 1, 2022 we have elected the fair value option for these financial statement line items. See Note 2 for further discussion.

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RELATED PARTY TRANSACTIONS - Schedule of Reinsurance By Counterparty (Details) - USD ($) $ in Millions		Sep. 30, 2022	Dec. 31, 2021
Related Party Transaction [Line Items]
Reinsurance recoverables	[1]	$ 220	$ 8,108
Prudential Insurance
Related Party Transaction [Line Items]
Reinsurance recoverables			372
Pruco Life
Related Party Transaction [Line Items]
Reinsurance recoverables			$ 7,736

[1] As of April 1, 2022 we have elected the fair value option for these financial statement line items. See Note 2 for further discussion.

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RELATED PARTY TRANSACTIONS - Schedule of Reinsurance Impact on Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended	9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Premiums:
Direct			$ 7.0	$ 9.0		$ 19.0
Assumed			0.0	0.0		16.0
Ceded			(1.0)	(1.0)		(3.0)
Net premiums	$ 8.0	$ 8.0	6.0	8.0	$ 11.0	33.0
Policy charges and fee income:
Direct			113.0	102.0		329.0
Assumed			0.0	0.0		819.0
Ceded			(7.0)	(5.0)		(20.0)
Policy charges and fee income	131.0	97.0	106.0	97.0	261.0	1,128.0
Asset management and service fees:
Direct			25.0	22.0		73.0
Assumed			0.0	0.0		165.0
Ceded			(2.0)	(2.0)		(6.0)
Net asset management and service fees			23.0	20.0		232.0
Realized investment gains (losses), net:
Direct			(3,243.0)	312.0		(4,856.0)
Assumed			8,328.0	0.0		12,350.0
Ceded			(5.0)	169.0		(122.0)
Investment gains (losses), net	(455.0)	481.0	5,081.0	481.0	(1,753.0)	7,373.0
Policyholders' benefits (including change in reserves):
Direct			19.0	31.0		44.0
Assumed			(257.0)	0.0		(254.0)
Ceded			(4.0)	(5.0)		(5.0)
Policyholders’ benefits	0.0	26.0	(242.0)	26.0	0.0	(216.0)
Interest credited to policyholders’ account balances:
Direct			43.0	91.0		139.0
Assumed			399.0	0.0		476.0
Ceded			(2.0)	(6.0)		(6.0)
Interest credited to policyholders’ account balances	$ 0.0	85.0	441.0	85.0	$ 0.0	610.0
Net interest credited to policyholders’ account balances			1,193.0	$ (41.0)		1,708.0
Unaffiliated
Policy charges and fee income:
Ceded		0.0	2.9			3.3
Interest credited to policyholders’ account balances:
Unaffiliated activity		$ 0.0	$ (0.4)			$ (0.4)