REINUSRANCE - SUCCESSOR COMPANY (Tables)

12 Months Ended

Dec. 31, 2022

SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract]

Reinsurance amounts included in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the Successor Company were as follows:


	Nine Months Ended December 31, 2022
		Total Business
	(in millions)
Premiums:
Direct		$	22
Ceded		(3)
Net premiums		19
Policy charges and fee income:
Direct		398
Ceded		(33)
Net policy charges and fee income		365
Asset management and service fees
Direct		71
Ceded		—
Net asset management and service fees		71




Policyholders benefits and changes in fair value of insurance liabilities
Direct		247
Ceded		(62)
Net policyholders benefits		185
Changes in fair value of insurance liabilities		(1,195)
Net policyholders benefits and changes in fair value of insurance liabilities		(1,010)

Reinsurance amounts, included in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the Predecessor Company, were as follows:


	Three Months Ended March 31		Twelve Months Ended December 31		Twelve Months Ended December 31
	2022		2021		2020
	(in millions)
Premiums:
Direct	$	9	$	24	$	26
Assumed	—		16		38
Ceded	(1)		(3)		(3)
Net premiums	8		37		61
Policy charges and fee income:
Direct	102		439		409
Assumed	—		819		1,566
Ceded(1)	(5)		(26)		(31)
Net policy charges and fee income	97		1,232		1,944
Asset management and service fees:
Direct	22		98		91
Assumed	—		165		308
Ceded	(2)		(8)		(8)
Net asset management and service fees	20		255		391
Realized investment gains (losses), net:
Direct	312		(4,689)		(2,208)
Assumed	—		12,351		(3,131)
Ceded	169		(173)		78
Realized investment gains (losses), net	481		7,489		(5,261)
Policyholders' benefits (including change in reserves):
Direct	31		49		72
Assumed	—		(253)		157
Ceded(2)	(5)		(16)		(6)
Net policyholders' benefits (including change in reserves)	26		(220)		223
Interest credited to policyholders’ account balances:
Direct	91		175		85
Assumed	—		477		98
Ceded	(6)		(12)		(3)
Net interest credited to policyholders’ account balances	85		640		180
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization	(41)		1,694		1,036

(1)Includes $0.4 million and $2.6 million, of unaffiliated activity for the twelve months ended December 31, 2021 and 2020, respectively. There was no unaffiliated activity for the three months ended March 31, 2022

(2)Includes $0.0 million, $(13.8) million and $0.1 million, of unaffiliated activity for (with respect to the Predecessor Company) for three months ended March 31, 2022, twelve months ended December 31, 2021 and 2020 respectively. There was no unaffiliated activity for the three months ended March 31, 2022

Interim Statement of Operations and Comprehensive Income (Loss)


Day 1 Impact of 2021 Variable Annuities Recapture	Impacts of Recapture
	(in millions)
REVENUES
Other income (loss)	$	1
Realized investment gains (losses), net	5,142
TOTAL REVENUES	5,143
BENEFITS AND EXPENSES
Policyholders’ benefits	(257)
Interest credited to policyholders’ account balances	399
Commission expense	1,362
General, administrative and other expenses	(191)
TOTAL BENEFITS AND EXPENSES	1,313
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	3,830
Income tax expense (benefit)	804
NET INCOME (LOSS)	$	3,026

Reinsurance Impact On Balance Sheet

Reinsurance amounts included in the Consolidated Statements of Financial Position for the Successor Company are as follows:


	December 31, 2022
	Registered Index-linked Annuities			New York Variable Annuities		Fixed Annuities (1)		Single Premium Immediate Annuities		Total
	(in millions)
ASSETS
Total investments	$	1,566		$	64	$	—	$	—	$	1,630
Cash and cash equivalents	439			—		—		—		439
Accrued investment income	11			—		—		—		11
Reinsurance recoverables	—			210		—		25		235
Net modified coinsurance receivable	18			—		—		—		18
Deposit asset	—			—		607		—		607
Other assets	14			—		—		—		14
Separate account assets	32			2,011		—		—		2,043
TOTAL ASSETS	$	2,080		$	2,285	$	607	$	25	$	4,997

LIABILITIES
Insurance liabilities	$	1,699		$	274	$	607	$	25	$	2,605
Other liabilities	349			—		—		—		349
Separate account liabilities	32		`	2,011		—		—		2,043
TOTAL LIABILITIES	$	2,080		$	2,285	$	607	$	25	$	4,997

(1) Includes fixed-indexed and fixed-deferred annuities.

Reinsurance amounts included in the Consolidated Statements of Financial Position for the Predecessor Company 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 related to the Predecessor Company are broken out below:


	December 31, 2021
	(in millions)
Prudential Insurance	$	372
Pruco Life	7,736

Total reinsurance recoverables	$	8,108

The financial statement impacts of the 2021 Variable Annuities Recapture for the Predecessor Company are as follows:

Interim Statement of Financial Position


Day 1 Impact of 2021 Variable Annuities Recapture	Impacts of Recapture
	(in millions)
ASSETS
Total investments(1)(2)	$	(8,327)
Cash and cash equivalents	(409)
Deferred policy acquisition costs	(3,286)
Accrued investment income	(42)
Reinsurance recoverables	(181)
Income tax receivable	(787)
Value of business acquired	—
Deferred sales inducements	(388)
Receivables from parent and affiliates	(41)
Other assets	—
Separate account assets	—
TOTAL ASSETS	$	(13,461)
LIABILITIES AND EQUITY
LIABILITIES
Future policy benefits	$	(9,048)
Policyholders’ account balances	(3,199)
Payables to parent and affiliates	—
Long-term debt	—
Reinsurance payable	(115)
Other liabilities	(245)
Separate account liabilities	—
Total liabilities	(12,607)
EQUITY
Common stock	—
Additional paid-in capital(3)	(3,786)
Retained earnings	3,026
Accumulated other comprehensive income	(94)
Total equity	(854)
TOTAL LIABILITIES AND EQUITY	$	(13,461)

Significant non-cash transactions

(1) The decrease in total investments includes non-cash activities of $8.3 billion related to the recapture transaction.

(2) The Company incurred an increase related to ceding commissions of $2.0 billion received from Pruco Life.

(3) The decrease in Additional paid-in capital includes non-cash activities of $3.4 billion in invested assets related to return of capital to PAI.