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FAIR VALUE OF ASSETS AND LIABILITIES
 6 Months Ended
Jun. 30, 2023
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 Note 6 to the Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Fair Value Option Election

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. See Notes 2 and 6 to the Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 for further information.

•Fixed maturity securities
•Equity securities
•Mortgage and other loans
•Reinsurance recoverable
•Separate account assets and liabilities
•Net modified coinsurance receivable/payable
•Deposit asset
•Insurance liabilities
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
 June 30, 2023
 Level 1Level 2Level 3Netting (1)Total
 (in millions)
Total Business
Assets
Fixed maturity securities
U.S Treasury securities and obligations of U.S. government authorities and agencies$— $527 $— $— $527 
Obligations of U.S. states and their political subdivisions— 142 — — 142 
Foreign government bonds— 5 — — 5 
U.S. corporate public securities— 2,745 — — 2,745 
U.S. corporate private securities— 144 210 — 354 
Foreign corporate public securities— 195 — — 195 
Foreign corporate private securities— 31 37 — 68 
Asset-backed securities (2)— 472 208 — 680 
Commercial mortgage-backed securities— 17 — — 17 
Residential mortgage-backed securities— 233 — — 233 
Total fixed maturity securities— 4,511 455 — 4,966 
Mortgage and other loans (3)— — 229 — 229 
Short-term investments— 39 — — 39 
Cash and cash equivalents649 — — — 649 
Other invested assets (4)— 739 — (460)279 
Deposit asset— — 476 — 476 
Reinsurance recoverables— — 200 — 200 
Subtotal excluding separate account assets649 5,289 1,360 (460)6,838 
Separate account assets— 24,065 — — 24,065 
Total assets$649 $29,354 $1,360 $(460)$30,903 
Liabilities
Insurance liabilities$— $— $4,984 $— $4,984 
Other liabilities - derivatives57 702 — (759)— 
Net modified coinsurance payable— — 81 — 81 
Separate account liabilities— 24,065 — — 24,065 
Total liabilities$57 $24,767 $5,065 $(759)$29,130 
(1)“Netting” amounts represent offsetting considerations as disclosed in Note 5.
(2)Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
(3)As of June 30, 2023, the difference between the aggregate fair value and the aggregate unpaid principal of mortgage and other loans was de minimis.
(4)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 June 30, 2023 the fair values of such investments were $341 million. See Note 4 for further details.
Successor Company
June 30, 2023
Level 1Level 2Level 3Netting (1)Total
(in millions)
Retained Business
Assets
Fixed maturity securities
U.S Treasury securities and obligations of U.S. government authorities and agencies$— $454 $— $— $454 
Obligations of U.S. states and their political subdivisions— 142 — — 142 
U.S. corporate public securities— 2,046 — — 2,046 
U.S. corporate private securities— — 210 — 210 
Foreign corporate public securities— 138 — — 138 
Foreign corporate private securities— — 34 — 34 
Asset-backed securities (2)— 472 208 — 680 
Commercial mortgage-backed securities— 17 — — 17 
Residential mortgage-backed securities— 28 — — 28 
Total fixed maturity securities— 3,297 452 — 3,749 
Mortgage and other loans— — 229 — 229 
Cash and cash equivalents351 — — — 351 
Other invested assets(3)— 515 — (359)156 
Subtotal excluding separate account assets351 3,812 681 (359)4,485 
Separate account assets— 21,981 — — 21,981 
Total assets$351 $25,793 $681 $(359)$26,466 
Liabilities
Insurance liabilities$— $— $2,711 $— $2,711 
Other liabilities - derivatives57 601 — (658)— 
Separate account liabilities— 21,981 — — 21,981 
Total liabilities$57 $22,582 $2,711 $(658)$24,692 

(1)“Netting” amounts represent offsetting considerations as disclosed in Note 5.
(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 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 June 30, 2023 the fair values of such investments were $340 million. See Note 4 for further details.
Successor Company
June 30, 2023
Level 1Level 2Level 3Netting (1)Total
(in millions)
Ceded Business
Assets
Fixed maturity securities
U.S Treasury securities and obligations of U.S. government authorities and agencies$— $73 $— $— $73 
Foreign government bonds— 5 — — 5 
U.S. corporate public securities— 699 — — 699 
U.S. corporate private securities— 144 — — 144 
Foreign corporate public securities— 57 — — 57 
Foreign corporate private securities— 31 3 — 34 
Residential mortgage-backed securities— 205 — — 205 
Total fixed maturity securities— 1,214 3 — 1,217 
Short-term investments— 39 — — 39 
Cash and cash equivalents298 — — — 298 
Other invested assets(3)— 224 — (101)123 
Deposit asset— — 476 — 476 
Reinsurance recoverables— — 200 — 200 
Subtotal excluding separate account assets298 1,477 679 (101)2,353 
Separate account assets— 2,084 — — 2,084 
Total assets$298 $3,561 $679 $(101)$4,437 
Liabilities
Insurance liabilities$— $— $2,273 $— $2,273 
Other liabilities - derivatives— 101 — (101)— 
Net modified coinsurance payable— — 81 — 81 
Separate account liabilities— 2,084 — — 2,084 
Total liabilities$— $2,185 $2,354 $(101)$4,438 

(1)“Netting” amounts represent offsetting considerations as disclosed in Note 5.
(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 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 June 30, 2023 the fair values of such investments were $1 million. See Note 4 for further details.
Successor Company
 December 31, 2022
 Level 1Level 2Level 3Netting(1)Total
 (in millions)
Total Business
Assets
Fixed Maturity Securities
U.S Treasury securities and obligations of U.S. government authorities and agencies$— $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 securities175 — — 175 
Mortgage and other loans (3)— — 196 — 196 
Short-term investments— 42 — — 42 
Cash and cash equivalents872 — — — 872 
Other invested assets(4)46 621 — (582)85 
Deposit asset— — 607 — 607 
Reinsurance recoverables— — 235 — 235 
Net modified coinsurance receivable— — 18 — 18 
Subtotal excluding separate account assets1,093 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 

(1)“Netting” amounts represent offsetting considerations as disclosed in Note 5.
(2)Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
(3)As of December 31, 2022, the difference between the aggregate fair value and the aggregate unpaid principal of mortgage and other loans was de minimis.
(4)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 $345 million, respectively. See Note 4 for further details.
Successor Company
 December 31, 2022
 Level 1Level 2Level 3Netting(1)Total
 (in millions)
Retained Business
Assets
Fixed Maturity Securities
U.S Treasury securities and obligations of U.S. government authorities and agencies$— $582 $— $— $582 
Obligations of U.S. states and their political subdivisions— 136 — — 136 
U.S. corporate public securities— 2,018 — — 2,018 
U.S. corporate private securities— — 146 — 146 
Foreign corporate public securities— 122 — — 122 
Foreign corporate private securities— — 36 — 36 
Asset-backed securities(2)— 358 155 — 513 
Commercial mortgage-backed securities— 43 — — 43 
Residential mortgage-backed securities— 20 — — 20 
Total Fixed Maturity Securities$— $3,279 $337 $— $3,616 
Mortgage and other loans— — 196 — 196 
Short-term investments— 3 — — 3 
Cash and cash equivalents433 — — — 433 
Other invested assets(3)46 386 — (347)85 
Subtotal excluding separate account assets479 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 

(1)“Netting” amounts represent offsetting considerations as disclosed in Note 5.
(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 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 $344 million. See Note 4 for further details.
Successor Company
December 31, 2022
Level 1Level 2Level 3Netting(1)Total
(in millions)
Ceded Business
Assets
Fixed maturity securities
U.S Treasury securities and obligations of U.S. government authorities and agencies$— $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 securities175 — — — 175 
Short-term investments— 39 — — 39 
Cash and cash equivalents439 — — — 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 assets614 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 

(1)“Netting” amounts represent offsetting considerations as disclosed in Note 5.
(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 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 $1 million. See Note 4 for further details.
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
 June 30, 2023
 Fair ValueValuation TechniquesUnobservable    
Inputs		MinimumMaximum Weighted AverageImpact of
Increase in
Input on Fair 
Value(1)
 (in millions)
Assets:
Retained business
Fixed maturity securities
U.S. corporate private securities$178 Discounted cash flowDiscount rate4.84 %9.25 %6.95 %Decrease
32 Trade priceTrade priceN/AN/AN/AIncrease
Total U.S. corporate private securities210 
Foreign corporate private securities34 Discounted cash flowDiscount rate5.11 %7.16 %5.38 %Decrease
Asset-backed securities80 Discounted cash flowDiscount rate7.14 %8.64 %8.04 %Decrease
128 Trade priceTrade priceN/AN/AN/AIncrease
Total asset-backed securities208 
Mortgage and other loans
Residential mortgage loans131 Level yieldMarket yield7.05 %9.98 %8.54 %Decrease
20 Trade priceTrade priceN/AN/AN/AIncrease
Commercial mortgage loans78 Trade priceTrade priceN/AN/AN/AIncrease
Total Mortgage and other loans229 
Ceded business
Foreign corporate private securities3 Discounted cash flowDiscount rate7.81 %7.81 %7.81 %Decrease
Deposit asset476 Fair values are determined using the same unobservable inputs as insurance liabilities.
Reinsurance recoverables200 Fair values are determined using the same unobservable inputs as insurance liabilities.
Liabilities:
Insurance liabilities
Retained business$2,711 Discounted cash flowEquity volatility curve (2)16 %25 %Increase
Lapse rate(3)1 %20 %Decrease
Spread over risk free (4)0.00 %2.28 %Decrease
Utilization rate(5)77 %100 %Increase
Withdrawal rate (6)See table footnote (6) below.
 Mortality rate(7)0 %16 %Decrease
Ceded business2,273 Discounted cash flowEquity volatility curve (2)16 %25 %Increase
Lapse rate(3)1 %20 %Decrease
Spread over risk free (4)0.00 %2.00 %Decrease
Utilization rate(5)77 %100 %Increase
Withdrawal rate (6)See table footnote (6) below.
Mortality rate(7)0 %16 %Decrease
Net modified coinsurance payable81 Fair values are determined using the same unobservable inputs as insurance liabilities.
 
Successor Company
 December 31, 2022
 Fair ValueValuation TechniquesUnobservable    
Inputs		MinimumMaximumWeighted AverageImpact of
Increase in
Input on Fair Value(1)
 (in millions)
Assets:
Retained business
U.S. corporate private securities$146 Discounted cash flowDiscount rate4.75 %8.03 %6.56 %Decrease
Foreign corporate public securities36Discounted cash flowDiscount rate4.33 %6.38 %5.36 %Decrease
Asset-backed securities155Discounted cash flowDiscount rate7.19 %8.51 %7.94 %Decrease
Mortgage and other loans
Residential mortgage loans161Level yieldMarket yield5.75 %9.97 %8.40 %Increase
Commercial mortgage loans35Trade priceTrade priceN/AN/AN/AIncrease
Total Mortgage and other loans196
Ceded business
Deposit asset607 Fair values are determined using the same unobservable inputs as insurance liabilities.
Reinsurance recoverables235 Fair values are determined using the same unobservable inputs as insurance liabilities.
Net modified coinsurance receivable18 Fair values are determined using the same unobservable inputs as insurance liabilities.
Liabilities:
Retained business
Insurance liabilities$2,941 Discounted cash flowEquity volatility curve (2)19.5 %26 %Increase
Lapse rate(3)1 %20 %Decrease
Spread over risk free (4)0.00 %2.43 %Decrease
Utilization rate(5)92.5 %100 %Increase
Withdrawal rate (6)See table footnote (6) below.
 Mortality rate(7)0 %16 %Decrease
Ceded business
Insurance liabilities$2,605 Discounted cash flowEquity volatility curve (2)19.5 %26 %Increase
Lapse rate(3)1 %20 %Decrease
Spread over risk free (4)0.00 %2.21 %Decrease
Utilization rate(5)92.5 %100 %Increase
Withdrawal rate (6)See table footnote (6) below.
Mortality rate(7)0 %16 %Decrease

(1)Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.
(2)    The equity volatility curve assumption is based on 1 year and 2 year index-specific at-the-money implied volatilities grading to 10 year total variance. Increased volatility increases the fair value of the liability.
(3)    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.
(4)    The spread over the risk-free rate swap curve represents the premium added to the proxy for the risk-free rate 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.
(5)    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. 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.
(6)    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 June 30, 2023 and 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%.
(7)    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.

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 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 June 30, 2023
Fair Value, beginning of periodTotal realized and unrealized gains (losses)PurchasesSalesIssuancesSettlementsOtherTransfers into Level 3Transfers out of Level 3Fair Value, end of periodUnrealized gains (losses) for assets still held(2)
(in millions)
Retained Business
Fixed maturity securities
U.S. corporate private securities$182 $1 $27 $— $— $— $— $18 $(18)$210 $2 
Foreign corporate private securities36 (2)— — — — — — — 34 (3)
Asset-backed securities191 — 18 — — (1)— — — 208 1 
Mortgage and other loans
Residential mortgage loans158 — 31 — — (38)— — — 151 — 
Commercial mortgage loans48 — 30 — — — — — — 78 — 
Ceded Business
Foreign corporate private securities— — 5 — — (2)— — — 3 — 
Deposit asset608 (10)— — — — (122)— — 476 — 
Reinsurance recoverables247 (47)— — — — — — — 200 — 
Net modified coinsurance payable(45)(36)— — — — — — — (81)— 
Successor Company
Six Months Ended June 30, 2023
Fair Value, beginning of periodTotal realized and unrealized gains (losses)PurchasesSalesIssuancesSettlementsOtherTransfers into Level 3Transfers out of Level 3Fair Value, end of periodUnrealized gains (losses) for assets still held(2)
(in millions)
Retained Business
Fixed maturity securities
U.S. corporate private securities$146 $1 $46 $— $— $(1)$— $18 $— $210 $1 
Foreign corporate private securities36 (2)— — — — — — — 34 (2)
Asset-backed securities155 (2)56 — — (1)— — — 208 (1)
Mortgage and other loans
Residential mortgage loans161 — 44 — — (54)— — — 151 — 
Commercial mortgage loans35 — 43 — — — — — — 78 — 
Ceded Business
Foreign corporate private securities— — 5 — — (2)— — — 3 — 
Deposit asset607 (8)— — — — (123)— — 476 — 
Reinsurance recoverables235 (35)— — — — — — — 200 — 
Net modified coinsurance receivable (payable)18 (99)— — — — — — — (81)— 

Successor Company
Three Months Ended June 30, 2022
Fair Value, beginning of periodTotal realized and unrealized gains (losses)PurchasesSalesIssuancesSettlementsOtherTransfers into Level 3Transfers out of Level 3Fair Value, end of periodUnrealized gains (losses) for assets still held(2)
(in millions)
Fixed maturities
Corporate securities(3)$190 $(16)$207 $— $— $(11)$(3)$— $(53)$314 $(13)
Structured securities(4)33 — 25 (10)— — (10)— (13)25 — 
Other assets:
Secured receivable1,622 (50)— (15)— — (2)— — 1,555 — 
Deposit asset2,615 (457)— — — — — — — 2,158 — 
Reinsurance recoverables344 34 — — — — — — — 378 — 
Net modified coinsurance receivable5 210 — — — — — — — 215 — 
Successor Company
Three Months Ended June 30, 2023
Incurred losses
Fair Value, beginning of periodReduction in estimates of ultimate lossesIncrease in estimates of ultimate lossesChange in fair value (discount rate)Paid lossesOtherFair Value, end of period
(in millions)
Insurance Liabilities
Retained Business$3,056 $(354)$103 $(189)$96 $(1)$2,711 
Ceded Business2,695 (559)143 (20)14 — 2,273 

Successor Company
Six Months Ended June 30, 2023
Incurred losses
Fair Value, beginning of periodReduction in estimates of ultimate lossesIncrease in estimates of ultimate lossesChange in fair value (discount rate)Paid lossesOtherFair Value, end of period
(in millions)
Insurance Liabilities
Retained Business$2,941 $(702)$235 $46 $196 $(5)$2,711 
Ceded Business2,605 (625)210 56 27 — 2,273 

Successor Company
Three Months Ended June 30, 2022
Incurred losses
Fair Value, beginning of periodReduction in estimates of ultimate lossesIncrease in estimates of ultimate lossesChange in fair value (discount rate)Paid lossesOtherFair Value, end of period
(in millions)
Insurance Liabilities$13,661 $(1,654)$1,206 $(1,520)$98 $(534)$11,257 

"Total realized and unrealized gains (losses)" related to our level 3 assets are included in earnings in Investment gains (losses). Activity related to our level 3 liabilities is primarily recognized in earnings within change in Policyholder benefits and changes in fair value of insurance liabilities with the exception of changes related to the Company's own-credit risk, which are included in "Change in fair value (discount rate)" above and recorded in other comprehensive income (loss).
Predecessor Company
Three Months Ended March 31, 2022
Fair Value, beginning of periodTotal realized and unrealized gains (losses)(1)PurchasesSalesIssuancesSettlementsOtherTransfers into Level 3Transfers out of Level 3Fair Value, end of periodUnrealized 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 securities1 — — — — — — — — 1 — 
Short term investments13 — — — — (13)— — — — — 
Cash equivalents8 — — — — (8)— — — — — 
Other assets400 (21)13 — — (16)— — — 376 (6)
Reinsurance recoverables1,881 201 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 incomeRealized investment gains (losses), netOther income (loss)Included in other comprehensive income (loss)
(in millions)
Fixed maturities, available-for-sale$— $— $(12)$— $— $— $(12)
Other assets:
Other assets(21)— — — (6)— — 
Reinsurance recoverables201 — — — 222 — — 
Liabilities:
Future policy benefits715 — — — 686 — — 
Policyholders' account balances124 — — — 89 — — 

(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 line items within Revenues and Benefits and expenses in our consolidated statements of income 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. Policyholder 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
June 30, 2023December 31, 2022
Retained BusinessCeded BusinessTotalRetained BusinessCeded BusinessTotal
(in millions)
Assets:
Reinsurance recoverables$— $(35)$(35)$— $(15)$(15)
Modified coinsurance receivable— (166)(166)— (5,640)(5,640)
Deposit asset— (131)(131)— (1,989)(1,989)
Liabilities:
Insurance liabilities$(230)$(332)$(562)$(421)$(7,644)$(8,065)

Changes in insurance liabilities attributable to the Company's own-credit risk are recorded in other comprehensive income (loss). Changes in the modified coinsurance payable are reported in Policyholder benefits and changes in fair value of insurance liabilities, however, they are not included in the above chart as they relate to the investment portfolio within the modified coinsurance agreement.

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

Successor Company
 June 30, 2023
Fair ValueCarrying
Amount
Level 1Level 2Level 3TotalTotal
 (in millions)
Assets:
Accrued investment income$— $55 $— $55 $55 
Other invested assets - Policy loans— — 11 11 11 
Liabilities:
Repurchase agreements$— $403 $— $403 $403 

Successor Company
 December 31, 2022
Fair Value Carrying
Amount
Level 1Level 2Level 3TotalTotal
 (in millions)
Assets:
Accrued investment income$— $52 $— $52 $52 
Other invested assets - Policy loans— — 11 11 11 
Liabilities:
Repurchase agreements$— $311 $— $311 $311 
Cash collateral for loaned securities— 106 — 106 106