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 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. The Company’s Level 2 assets and liabilities include: fixed maturity securities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities (mutual funds, which do not trade in active markets because they are not publicly available), short-term investments, and certain OTC derivatives.

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. The Company’s Level 3 assets and liabilities primarily include: certain private fixed maturities and equity securities, and certain manually priced public fixed maturities. Also included, for the Predecessor company only, were certain highly structured OTC derivatives and embedded derivatives resulting from reinsurance or certain products with guaranteed benefits.


	Successor Company
	December 31, 2022
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Total Business
Assets
Fixed Maturity Securities
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	696	$	—	$	—	$	696
Obligations of U.S. states and their political subdivisions	—		166		—		—		166
Foreign government bonds	—		5		—		—		5
U.S. corporate public securities	—		2,796		—		—		2,796
U.S. corporate private securities	—		144		146		—		290
Foreign corporate public securities	—		211		—		—		211
Foreign corporate private securities	—		31		36		—		67
Asset-backed securities(2)	—		377		155		—		532
Commercial mortgage-backed securities	—		43		—		—		43
Residential mortgage-backed securities	—		218		—		—		218
Total Fixed Maturity Securities	$	—	$	4,687	$	337	$	—	$	5,024
Equity securities	175		—		—		—		175
Mortgage and other loans	—		—		196		—		196
Short-term investments	—		42		—		—		42
Cash and cash equivalents	872		—		—		—		872
Other invested assets(3)	46		621		—		(582)		85
Deposit asset	—		—		607		—		607
Reinsurance recoverables	—		—		235		—		235
Net modified coinsurance receivable	—		—		18		—		18
Subtotal excluding separate account assets	1,093		5,350		1,393		(582)		7,254
Separate account assets	—		23,601		—		—		23,601
Total assets	$	1,093	$	28,951	$	1,393	$	(582)	$	30,855
Liabilities
Insurance liabilities	—		—		5,546		—		5,546
Other liabilities - derivatives	—		1,076		—		(875)		201
Separate account liabilities	—		23,601		—		—		23,601
Total liabilities	$	—	$	24,677	$	5,546	$	(875)	$	29,348

(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 December 31, 2022, the fair values of such investments were $345 million. See Note 4 for further details.


	Successor Company
	December 31, 2022
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Retained Business
Assets
Fixed Maturity Securities
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	582	$	—	$	—	$	582
Obligations of U.S. states and their political subdivisions	—		136		—		—		136
Foreign government bonds	—		—		—		—		—
U.S. corporate public securities	—		2,018		—		—		2,018
U.S. corporate private securities	—		—		146		—		146
Foreign corporate public securities	—		122		—		—		122
Foreign corporate private securities	—		—		36		—		36
Asset-backed securities(2)	—		358		155		—		513
Commercial mortgage-backed securities	—		43		—		—		43
Residential mortgage-backed securities	—		20		—		—		20
Total Fixed Maturity Securities	$	—	$	3,279	$	337	$	—	$	3,616
Mortgage and other loans	—		—		196		—		196
Short-term investments	—		3		—		—		3
Cash and cash equivalents	433		—		—		—		433
Other invested assets(3)	46		386		—		(347)		85
Subtotal excluding separate account assets	479		3,668		533		(347)		4,333
Separate account assets	—		21,558		—		—		21,558
Total assets	$	479	$	25,226	$	533	$	(347)	$	25,891
Liabilities
Insurance liabilities	—		—		2,941		—		2,941
Other liabilities - derivatives	—		602		—		(602)		—
Separate account liabilities	—		21,558		—		—		21,558
Total liabilities	$	—	$	22,160	$	2,941	$	(602)	$	24,499

(3)Other invested assets within the above chart are comprised of derivatives. Excluded from the above chart are private equity funds for which fair value is measured at net asset value (“NAV”) per share (or its equivalent) as a practical expedient. At December 31, 2022, the fair values of such investments were $344 million. See Note 4 for further details.


	Successor Company
	December 31, 2022
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Ceded Business
Assets
Fixed Maturity Securities
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	114	$	—	$	—	$	114
Obligations of U.S. states and their political subdivisions	—		30		—		—		30
Foreign government bonds	—		5		—		—		5
U.S. corporate public securities	—		778		—		—		778
U.S. corporate private securities	—		144		—		—		144
Foreign corporate public securities	—		89		—		—		89
Foreign corporate private securities	—		31		—		—		31
Asset-backed securities(2)	—		19		—		—		19
Commercial mortgage-backed securities	—		—		—		—		—
Residential mortgage-backed securities	—		198		—		—		198
Total Fixed Maturity Securities	$	—	$	1,408	$	—	$	—	$	1,408
Equity securities	175		—		—		—		175
Short-term investments	—		39		—		—		39
Cash and cash equivalents	439		—		—		—		439
Other invested assets(3)	—		235		—		(235)		—
Deposit asset	—		—		607		—		607
Reinsurance recoverables	—		—		235		—		235
Net modified coinsurance receivable	—		—		18		—		18
Subtotal excluding separate account assets	614		1,682		860		(235)		2,921
Separate account assets	—		2,043		—		—		2,043
Total assets	$	614	$	3,725	$	860	$	(235)	$	4,964
Liabilities
Insurance liabilities	—		—		2,605		—		2,605
Other liabilities - derivatives	—		473		—		(272)		201
Separate account liabilities	—		2,043		—		—		2,043
Total liabilities	$	—	$	2,516	$	2,605	$	(272)	$	4,849

Fixed Maturity Securities – Whenever available, we obtain quoted prices in active markets for identical assets at the balance sheet date to measure fixed maturity securities at fair value. Market price data is generally obtained from dealer markets. We employ multiple independent third-party valuation service providers that gather, analyze, and interpret market information to derive fair value estimates for individual investments, based upon market-accepted methodologies and assumptions. The methodologies used by these independent third-party valuation service providers are reviewed and understood by management, through periodic discussion with and information provided by the independent third-party valuation service providers, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. The pricing hierarchy is updated for new financial products and recent pricing experience with various vendors. In addition, control processes are applied to the fair values received from independent third-party valuation service providers to determine the accuracy of these values.

These control processes are designed to assess whether the fair values received from independent third-party valuation service providers are accurately recorded, that their data inputs and valuation techniques are appropriate and consistently applied and that the assumptions used appear reasonable and consistent with the objective of determining fair value. We assess the reasonableness of individual security values received from independent third-party valuation service providers through various analytical techniques, review of various pricing integrity reports and pricing trends, back testing, and have procedures to escalate related questions internally and to the independent third-party valuation service providers for resolution. To assess the degree of pricing consensus among various valuation service providers for specific asset types, we conduct comparisons of prices received from available sources. We use these comparisons to establish a hierarchy for the fair values received from independent third-party valuation service providers to be used for particular security classes. We also validate prices for selected securities through reviews by members of management who have relevant expertise and who are independent of those charged with executing investing transactions.

When observable price quotations are not available, internally-developed valuations or indicative broker quotes are also used to determine fair value in circumstances, or where the Company ultimately concludes that pricing information received from the independent pricing services is not reflective of market activity. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may override the information with an internally developed valuation. Fair value is determined based on discounted cash flow models using discount rates based on credit spreads, yields or price levels of comparable securities, adjusted for illiquidity and structure. Fair values determined internally are also subject to management review to determine whether the valuation models and related inputs are reasonable. Pricing service overrides, internally-developed valuations and indicative broker quotes are generally included in Level 3 in the fair value hierarchy.

Equity Securities – Equity securities consist principally of investments in common and preferred stock of publicly traded companies, privately traded securities, as well as mutual fund shares. The fair values of most publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy.

The majority of the Company’s derivative positions are traded in the OTC derivative market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models that utilize actively quoted or observable market input from external market data providers, third-party pricing vendors and/or recent trading activity. The Company’s policy is to use mid-market pricing in determining its best estimate of fair value. The fair values of most OTC derivatives, including interest rate and cross-currency swaps, currency forward contracts and credit default swaps are determined using discounted cash flow models. The fair values of European style option contracts are determined using Black-Scholes option pricing models. These models’ key inputs include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, currency rates, credit spreads, equity prices, index dividend yields, NPR, volatility and other factors.

The Company’s cleared interest rate swaps and credit derivatives linked to an index are valued using models that utilize actively quoted or observable market inputs, including the secured overnight financing rate ("SOFR"), obtained from external market data providers, third-party pricing vendors, and/or recent trading activity. These derivatives are classified as Level 2 in the fair value hierarchy.

Mortgage and other loans – Fair value for mortgage and other loans is primarily 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 mortgage and other 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 difference in the aggregate fair value and unpaid principal balance of mortgage and other loans was de minimis at December 31, 2022. There were no mortgage and other loans that were 90 days or more past due or were in nonaccrual status at December 31, 2022.

Cash and cash equivalents and Short-term investments – Cash equivalents and short-term investments include money market instruments and other highly liquid debt instruments. Certain money market instruments are valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1.

Separate account assets and liabilities – Separate account assets include fixed maturity securities, treasuries, equity securities, mutual funds and commercial mortgage loans for which values are determined consistent with similar instruments described above under “Fixed Maturity Securities” and “Equity Securities”. Separate account liabilities are recorded at the amount credited to the contractholder, which reflects the change in fair value of the corresponding separate account assets including contractholder deposits less withdrawals and fees.

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 determined 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.

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.

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.


	Successor Company
	December 31, 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
U.S. corporate private securities	$	146	Discounted cash flow	Discount rate	4.75	%	8.03	%	6.56	%	Decrease
Foreign corporate public securities	36		Discounted cash flow	Discount rate	4.33	%	6.38	%	5.36	%	Decrease
Asset-backed securities	155		Discounted cash flow	Discount rate	7.19	%	8.51	%	7.94	%	Decrease
Mortgage and other loans
Residential mortgage loans	161		Level yield	Market yield	5.75		9.97		8.40		Increase
Commercial mortgage loans	35		Trade price	Trade price	N/A		N/A		N/A		Increase
Ceded business
Deposit asset	607		Fair values are determined using the same unobservable inputs as insurance liabilities.
Reinsurance recoverables	235		Fair values are determined using the same unobservable inputs as insurance liabilities.
Net modified coinsurance receivable	18		Fair values are determined using the same unobservable inputs as insurance liabilities.

Liabilities:
Retained business
Insurance liabilities (1)	$	2,941	Discounted cash flow	Lapse rate	1	%	20	%			Decrease
				Spread over risk-free	0.00	%	2.43	%			Decrease
				Utilization rate	92.5	%	100	%			Increase
				Withdrawal rate	See table footnote (2) below
				Mortality rate	0	%	16	%			Decrease
Ceded business				Equity volatility curve	19.5	%	26	%			Increase
Insurance liabilities (1)	$	2,605	Discounted cash flow	Lapse rate	1	%	20	%			Decrease
				Spread over risk-free	0.00	%	2.21	%			Decrease
				Utilization rate	92.5	%	100	%			Increase
				Withdrawal rate	See table footnote (2) below
				Mortality rate	0	%	16	%			Decrease
				Equity volatility curve	19.5	%	26	%			Increase

(2) 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 December 31, 2022, the minimum withdrawal rate assumption is 77% 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%.

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.

Insurance Liabilities, at fair value – 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.

Changes in Level 3 Assets and Liabilities – The following tables describe changes in fair values of Level 3 assets and liabilities, by business segment, and in the aggregate. In addition, the following tables include 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
	Nine Months Ended December 31, 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(3)
	(in millions)
Retained Business
Fixed maturity securities
U.S. corporate private securities	$	—	$	(6)	$	152	$	—	$	—	$	—	$	—	$	—	$	—	$	146	$	(6)
Foreign corporate private securities	—		(10)		46		—		—		—		—		—		—		36		(10)
Asset-backed securities	—		(5)		160		—		—		—		—		—		—		155		(5)
Mortgage and other loans
Residential mortgage loans	—		—		168		—		—		(7)		—		—		—		161		—
Commercial mortgage loans	—		—		35		—		—		—		—		—		—		35		—
Ceded Business
Secured receivable	1,622		(59)		22		(75)		—		—		(1,510)		—		—		—		—
Deposit asset	2,596		(117)		—		—		—		—		(1,872)		—		—		607		—
Reinsurance recoverables	250		(15)		—		—		—		—		—		—		—		235		—
Net modified coinsurance receivable	68		(50)		—		—		—		—		—		—		—		18		—


	Successor Company
	Nine Months Ended December 31, 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
Retained Business	$	3,362	$	(632)	$	1,759	$	(1,863)	$	282	$	33	$	2,941
Ceded Business	10,249		(7,463)		177		(403)		33		12		2,605
Total Insurance liabilities	$	13,611	$	(8,095)	$	1,936	$	(2,266)	$	315	$	45	$	5,546

The components of the change in fair value of our insurance contracts are reported in several line items 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:

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 Consolidated Statements of Financial Position. In some cases the carrying amount equals or approximates fair value.

Securities Sold Under Agreements to Repurchase - The Company receives collateral for selling securities under agreements to repurchase, or pledges collateral under agreements to resell. Repurchase and resale agreements are also generally short-term in nature and, therefore, the carrying amounts of these instruments approximate fair value.

Cash Collateral for Loaned Securities - Cash collateral for loaned securities represents the collateral received or paid in connection with loaning or borrowing securities, similar to the securities sold under agreement to repurchase above. Due to the short-term nature of these transactions, the carrying value approximates fair value.


	Predecessor Company
	December 31, 2021
	Level 1		Level 2		Level 3		Netting (1)		Total

	(in millions)
Assets
Fixed maturities, 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

(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 Statements of Financial Position.

The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below. For discussion regarding fixed maturity securities, equity securities, derivative instruments, cash and cash equivalents, short-term investments and separate account assets/liabilities see Note 6.

Receivable from Parent and Affiliates (Predecessor Company only) – Receivables from parent and affiliates carried at fair value include affiliated bonds within the Company’s legal entity where fair value is determined consistent with similar securities described above under “Fixed Maturity Securities” managed by affiliated asset managers.

Other assets – Other assets consists primarily of deposit assets related to reinsurance agreements using deposit accounting under U.S. GAAP, which include amounts representing the fair value of embedded derivative instruments associated with the index-linked features of certain annuity products. The methods and assumptions used to estimate the fair value are consistent with those described below in “Policyholders' account balances”.

Reinsurance Recoverables – Reinsurance recoverables carried at fair value include the reinsurance of the Company’s living benefit guarantees on certain variable annuity contracts as well as variable indexed annuities. Living benefit guarantees are accounted for as embedded derivatives and are recorded in “Reinsurance recoverables” or “Reinsurance payables” when fair value is in an asset or liability position, respectively, whereas the variable indexed annuities are presented on a net basis. The methods and assumptions used to estimate the fair value are consistent with those described below in “Future policy benefits”. The reinsurance agreements covering these guarantees are derivatives with fair value determined in the same manner as the living benefit guarantee.

Future Policy Benefits – The liability for future policy benefits is related to guarantees primarily associated with the living benefit features of certain variable annuity contracts, including guaranteed minimum accumulation benefits (“GMAB”), guaranteed withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”), accounted for as embedded derivatives. The fair values of these liabilities are calculated as the present value of future expected benefit payments to customers less the present value of future expected rider fees attributable to the embedded derivative feature. 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 for these embedded derivatives include capital market assumptions, such as interest rate levels and volatility assumptions, the Company’s market-perceived NPR, 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 liability included in future policy benefits has been reflected within Level 3 in the fair value hierarchy.

Capital market inputs and actual policyholders’ account values are updated each quarter based on capital market conditions as of the end of the quarter, including interest rates, equity markets and volatility. In the risk neutral valuation, the initial swap curve drives the total return used to grow the policyholders’ account values. The Company’s discount rate assumption is based on the LIBOR swap curve adjusted for an additional spread relative to LIBOR to reflect NPR.

Actuarial assumptions, including contractholder behavior and mortality, are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data. These assumptions are generally updated annually unless a material change that the Company feels is indicative of a long-term trend is observed in an interim period.

Policyholders' Account Balances - The liability for policyholders’ account balances is related to certain embedded derivative instruments associated with certain annuity products that provide the policyholders with the index-linked interest credited over contract specified term periods. The fair values of these liabilities are determined using discounted cash flow models which include capital market assumptions such as interest rates and equity index volatility assumptions, the Company’s market-perceived NPR and actuarially determined assumptions for mortality, lapses and projected hedge costs.

As there is no observable active market for these liabilities, the fair value is determined as the present value of account balances paid to policyholders in excess of contractually guaranteed minimums using option pricing techniques for index term periods that contain deposits as of the valuation date, and the expected option budget for future index term periods, where the terms of index crediting rates have not yet been declared by the Company. Premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows are also incorporated in the fair value of these liabilities. Since the valuation of these liabilities require the use of management’s judgment to determine these risk premiums and the use of unobservable inputs, these liabilities are reflected within Level 3 in the fair value hierarchy.

Capital market inputs, including interest rates and equity markets volatility, and actual policyholders’ account values are updated each quarter. Actuarial assumptions are reviewed at least annually and updated based upon emerging experience, future expectations and other data, including any observable market data. Aside from these annual updates, assumptions are generally updated only if a material change is observed in an interim period that the Company believes is indicative of a long-term trend.



	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)	6.5	X	12.4	X	8.8	X	Increase
			Liquidation	Liquidation rate	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(6)	$	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

(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 a 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

(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 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.

Future Policy Benefits – 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.

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.


	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(3)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Corporate securities(4)	190		(9)		5		(4)		—		(2)		—		—		—		180		(9)
Structured securities(5)	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(6)	(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(3)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (losses)		Net investment income			Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (losses)
	(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
	Year Ended December 31, 2021
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other(2)		Transfers into Level 3		Transfers out of Level 3		Fair Value, end of period		Unrealized gains (losses) for assets still held(3)
	(in millions)
Fixed maturities, available-for-sale:
U.S. Government	$	15	$	—	$	—	$	(15)	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Corporate Securities(4)	149		(4)		260		(11)		—		(55)		(158)		17		(8)		190		(5)
Structured Securities(5)	19		1		261		—		—		(8)		(33)		31		(195)		76		1
Other assets:
Fixed maturities, trading	5		—		2		—		—		—		—		—		(7)		—		—
Equity securities	4		—		—		—		—		—		(3)		—		—		1		1

Short-term investments	10		—		35		—		—		(32)		(1)		1		—		13		—
Cash equivalents	—		—		8		—		—		—		—		—		—		8		—
Other assets	54		(38)		15		—		—		(13)		382		—		—		400		12
Reinsurance recoverables	409		(153)		17		—		245		—		1,363		—		—		1,881		(136)

Liabilities:
Future policy benefits	(17,314)		13,934		—		—		(680)		—		—		—		—		(4,060)		1,425
Policyholders' account balances(6)	(580)		(1,075)		—		—		(386)		—		—		—		—		(2,041)		39


	Predecessor Company
	Year Ended December 31, 2021
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(3)
	Realized investment gains (losses), net(1)		Other income (loss)		Included in other comprehensive income (losses)		Net investment income			Realized investment gains (losses), net		Other income (loss)		Included in other comprehensive income (losses)
	(in millions)
Fixed maturities, available-for-sale	$	(5)	$	—	$	1	$	—		$	(6)	$	—	$	1
Other assets:
Fixed maturities, trading	—		—		—		—			—		—		—
Equity securities	—		—		—		—			—		1		—

Short-term investments	—		—		—		—			—		—		—
Cash equivalents	—		—		—		—			—		—		—
Other assets	(38)		—		—		—			12		—		—
Reinsurance recoverables	(153)		—		—		—			(136)		—		—

Liabilities:
Future policy benefits	13,934		—		—		—			1,425		—		—
Policyholders' account balances	(1,075)		—		—		—			39		—		—


	Predecessor Company
	Year Ended December 31, 2020
	Total realized and unrealized gains (losses)								Unrealized gains (losses) for assets still held(3)
	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	$	—	$	—	$	(2)	$	—		$	(1)	$	—	$	(7)
Other assets:
Fixed maturities, trading	—		1		—		—			—		1		—
Equity securities	—		—		—		—			—		1		—

Other assets	14		—		—		—			13		—		—
Reinsurance recoverables	89		—		—		—			97		—		—

Liabilities:
Future policy benefits	(4,340)		—		—		—			(4,711)		—		—
Policyholders' account balances	(202)		—		—		—			(168)		—		—

(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. Refer to Note 20 for impacts to Realized investments gains (losses), net related to the 2021 Variable Annuities Recapture and the Affiliated Reinsurance Agreement.



	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 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.

The fair value of most 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.

Other assets for the current year consists primarily of deposit assets related to the reinsurance agreement with Pruco Life. For the prior year, other assets consisted primarily of deposit assets related to the reinsurance agreement with a third-party reinsurer. Both reinsurance agreements are using deposit accounting under U.S. GAAP. Also included are other assets that meet the definition of financial instruments, including receivables such as unsettled trades and accounts receivable.

Only the portion of policyholders’ account balances related to products that are investment contracts (those without significant mortality or morbidity risk) are reflected in the table above. For fixed deferred annuities, payout annuities and other similar contracts without life contingencies, fair values are generally derived using discounted projected cash flows based on interest rates that are representative of the Company’s financial strength ratings, and hence reflect the Company’s own NPR. For those balances that can be withdrawn by the customer at any time without prior notice or penalty, the fair value is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value.

The fair value of short-term and long-term debt is generally determined by either prices obtained from independent pricing services, which are validated by the Company, or discounted cash flow models. Discounted cash flow models predominately use market observable inputs such as the borrowing rates currently available to the Company for debt and financial instruments with similar terms and remaining maturities. For debt with a maturity of less than 90 days, the carrying value approximates fair value.

Other liabilities primarily consists of unsettled trades, drafts and escrow deposits. For the prior year other liabilities includes the funds withheld liability for assets retained under the reinsurance agreement with a third-party reinsurer that corresponds to the deposit assets above in “Other Assets”. Payables to parent and affiliates is primarily related to accrued expense payables. Due to the short term until settlement of most of these liabilities, the Company believes that carrying value approximates fair value.

Only the portion of separate account liabilities related to products that are investment contracts are reflected in the table above. Separate account liabilities are recorded at the amount credited to the contractholder, which reflects the change in fair value of the corresponding separate account assets including contractholder deposits less withdrawals and fees; therefore, carrying value approximates fair value.