SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

FLIAC has two reportable segments, which we refer to as the "Retained Business" and the "Ceded Business."

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

The Ceded Business represents certain business (primarily registered index-linked annuities and fixed annuities, which includes fixed indexed and fixed deferred annuities, and other variable annuities) where 100 percent of the assets and liabilities have been fully ceded to Prudential Insurance and Pruco Life under existing coinsurance and modified coinsurance agreements. At September 30, 2023 and December 31, 2022, we had a modified coinsurance payable of $1,493 million and $1,745 million, respectively, equal to the assets held in the Ceded Business, and are included in the net modified coinsurance receivable/payable. Information prior to acquisition has not been revised for the segment presentation and is not comparable following the election of push-down accounting as of April 1, 2022.

During the third quarter of 2023, the Company determined that the goodwill associated with its Retained Business was fully impaired. Accordingly, the Company recorded a non-cash goodwill impairment of $93 million through the Consolidated Statement of Operations. Following this impairment, there was no remaining goodwill as of September 30, 2023. See Note 1 contained herein for further information.

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

	September 30, 2023
	Retained Business		Ceded Business		Total
	(in millions)
ASSETS
Total investments	$	4,674	$	1,234	$	5,908
Cash and cash equivalents	335		257		592
Accrued investment income	50		7		57
Reinsurance recoverables	—		179		179
Deposit asset	—		430		430
Income tax	86		—		86
Other assets	93		13		106
Separate account assets	20,600		1,957		22,557
TOTAL ASSETS	$	25,838	$	4,077	$	29,915
LIABILITIES AND EQUITY
LIABILITIES
Insurance liabilities	$	2,542	$	2,032	$	4,574
Net modified coinsurance payable	—		68		68
Cash collateral for repurchase agreements and securities lending transactions	1,009		—		1,009
Other liabilities	311		20		331
Separate account liabilities	20,600		1,957		22,557
TOTAL LIABILITIES	24,462		4,077		28,539
EQUITY	1,376		—		1,376
TOTAL LIABILITIES AND EQUITY	$	25,838	$	4,077	$	29,915

    

	December 31, 2022
	Retained Business		Ceded Business		Total
	(in millions)
ASSETS
Total investments	$	4,257	$	1,630	$	5,887
Cash and cash equivalents	433		439		872
Accrued investment income	41		11		52
Reinsurance recoverables	—		235		235
Net modified coinsurance receivable	—		18		18
Deposit asset	—		607		607
Goodwill	93		—		93
Income tax	50		—		50
Other assets	113		14		127
Separate account assets	21,558		2,043		23,601
TOTAL ASSETS	$	26,545	$	4,997	$	31,542
LIABILITIES AND EQUITY
LIABILITIES
Insurance liabilities	$	2,941	$	2,605	$	5,546
Cash collateral for repurchase agreements and securities lending transactions	311		106		417
Other liabilities	148		243		391
Separate account liabilities	21,558		2,043		23,601
TOTAL LIABILITIES	24,958		4,997		29,955
EQUITY	1,587		—		1,587
TOTAL LIABILITIES AND EQUITY	$	26,545	$	4,997	$	31,542

The following is comprehensive income by segment:

	Three Months Ended September 30, 2023
	Retained Business		Ceded Business		Total
	(in millions)
REVENUES
Premiums	$	8	$	—	$	8
Policy charges and fee income	113		—		113
Net investment income	56		17		73
Asset management and service fees	23		—		23
Other income	1		—		1
Investment losses, net	(433)		(49)		(482)
TOTAL REVENUES	(232)		(32)		(264)
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	(145)		(32)		(177)
Commission expense	22		—		22
Goodwill impairment	93		—		93
General, administrative and other expenses	21		—		21
TOTAL BENEFITS AND EXPENSES	(9)		(32)		(41)
LOSS FROM OPERATIONS BEFORE INCOME TAXES	(223)		—		(223)
Income tax benefit	(29)		—		(29)
NET LOSS	$	(194)	$	—	$	(194)
Other comprehensive loss, before tax:
Changes in own-credit risk related to insurance liabilities	(45)		—		(45)
Less: Income tax benefit	(9)		—		(9)
Other comprehensive loss, net of taxes	(36)		—		(36)
COMPREHENSIVE LOSS	$	(230)	$	—	$	(230)

	Nine Months Ended September 30, 2023
	Retained Business		Ceded Business		Total
	(in millions)
REVENUES
Premiums	$	22	$	—	$	22
Policy charges and fee income	345		—		345
Net investment income	170		57		227
Asset management and service fees	68		—		68
Other income	4		1		5
Investment gains (losses), net	(806)		202		(604)
TOTAL REVENUES	(197)		260		63
BENEFITS AND EXPENSES
Policyholder benefits and changes in fair value of insurance liabilities	(352)		260		(92)
Commission expense	68		—		68
Goodwill impairment	93		—		93
General, administrative and other expenses	55		—		55
TOTAL BENEFITS AND EXPENSES	(136)		260		124
LOSS FROM OPERATIONS BEFORE INCOME TAXES	(61)		—		(61)
Income tax benefit	(4)		—		(4)
NET LOSS	$	(57)	$	—	$	(57)
Other comprehensive loss, before tax:
Changes in own-credit risk related to insurance liabilities	(138)		—		(138)
Less: Income tax benefit	(29)		—		(29)
Other comprehensive loss, net of taxes	(109)		—		(109)
COMPREHENSIVE LOSS	$	(166)	$	—	$	(166)

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