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 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.

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.

The Company purchases credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. The Company also sells credit protection using credit derivatives in order to generate a credit spread for the benefit of the Company’s investment portfolio.

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. 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.



	March 31, 2023						December 31, 2022
Primary Underlying Risk/Instrument Type	Gross Notional Values/Units		Fair Value				Gross Notional Values/Units		Fair Value
			Assets		Liabilities				Assets		Liabilities
	(in millions)
Retained Business
Interest Rate
Interest Rate Swaps	$	16,005	$	237	$	(409)	$	12,131	$	228	$	(553)
Currency/Interest Rate
Foreign Currency Swaps	102		11		—		100		11		—
Credit
Credit Default Swaps	520		7		—		520		5		—
Equity
Equity Futures	(2,086)		—		(111)		(1,737)		46		—
Total Return Swaps	366		16		(14)		—		24		(49)
Equity Options	2,949		76		—		3,286		118		—
Total Derivatives, Retained Business	17,856		347		(534)		14,300		432		(602)

Ceded Business
Interest Rate
Interest Rate Swaps	1,300		40		(41)		2,517		48		(117)
Currency/Interest Rate
Foreign Currency Swaps	48		6		—		48		6		—
Credit
Credit Default Swaps	71		1		—		71		1		—
Equity
Total Return Swaps	22		—		—		—		—		—
Equity Options	5,357		147		(207)		7,139		180		(356)
Total Derivatives, Ceded Business	6,798		194		(248)		9,775		235		(473)
Total Derivatives (1)	$	24,654	$	541	$	(782)	$	24,075	$	667	$	(1,075)

The following table presents recognized derivative instruments that are offset in the 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 Consolidated Statements of Financial Position.



	March 31, 2023
	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
Retained Business	$	78	$	(4)	$	74	$	(74)	$	—
Ceded Business	194		(194)		—		—		—
Total	$	272	$	(198)	$	74	$	(74)	$	—
Offsetting of Financial Liabilities:
Derivatives
Retained Business	$	265	$	(265)	$	—	$	—	$	—
Ceded Business	248		(194)		54		—		54
Total	$	513	$	(459)	$	54	$	—	$	54
Repurchase agreements	$	301	$	—	$	301	$	(301)	$	—
Securities lending transactions	$	164	$	—	$	164	$	(162)	$	2


	December 31, 2022
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives
Retained Business	$	183	$	(98)	$	85	$	(85)	$	—
Ceded Business	235		(235)		—		—		—
Total	$	418	$	(333)	$	85	$	(85)	$	—

Offsetting of Financial Liabilities:
Derivatives
Retained Business	$	353	$	(353)	$	—	$	—	$	—
Ceded Business	473		(272)		201		—		201
Total	$	826	$	(625)	$	201	$	—	$	201
Repurchase agreements	311		—		311		(311)		—
Securities lending transactions	106		—		106		(103)		3

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.

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 Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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.


	Successor Company
	Three Months Ended March 31, 2023
	Investment gains, net
	(in millions)
Retained Business
Interest Rate	$	115


Equity	(215)
Total, Retained Business	(100)
Ceded Business
Interest Rate	31



Equity	76
Total, Ceded Business	107
Total	$	7


	Predecessor Company
	Three Months Ended March 31, 2022
	Investment Gains, net		Net Investment Income		Other Income		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/Interest Rate	(6)		—		—		—
Credit	(12)		—		—		—
Equity	59		—		—		—
Embedded Derivatives	986		—		—		—
Total Derivatives Not Qualifying as Hedge Accounting Instruments	500		—		—		—
Total	$	501	$	1	$	2	$	4