Variable Annuity Account Five

American General Life Insurance Company

2022

Annual Report

December 31, 2022

Report of Independent Registered Public Accounting Firm

To the Board of Directors of American General Life Insurance Company and the Contract Owners of Variable Annuity Account Five.

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of portfolio investments, of each of the sub-accounts of Variable Annuity Account Five indicated in the table below as of December 31, 2022, and the related statements of operations and changes in net assets for each of the two years in the period ended December 31, 2022 or each of the periods indicated in the table below, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the sub-accounts of Variable Annuity Account Five as of December 31, 2022, and the results of each of their operations and the changes in each of their net assets for the two years in the period ended December 31 2022, in conformity with accounting principles generally accepted in the United States of America.

Fidelity VIP Contrafund Portfolio Service Class 2	Fidelity VIP Equity-Income Portfolio Service Class 2
Fidelity VIP Investment Grade Bond Portfolio Service Class 2	Fidelity VIP Mid Cap Portfolio Service Class 2
Fidelity VIP Overseas Portfolio Service Class 2	Goldman Sachs VIT Government Money Market Fund Service Share
SAST SA AB Growth Portfolio Class 1	SAST SA AB Growth Portfolio Class 2
SAST SA AB Growth Portfolio Class 3	SAST SA American Funds Global Growth Portfolio Class 3
SAST SA American Funds Growth Portfolio Class 3	SAST SA American Funds Growth-Income Portfolio Class 3
SAST SA DFA Ultra Short Bond Portfolio Class 1	SAST SA DFA Ultra Short Bond Portfolio Class 2
SAST SA DFA Ultra Short Bond Portfolio Class 3	SAST SA VCP Dynamic Allocation Portfolio Class 3
SAST SA VCP Dynamic Strategy Portfolio Class 3	SST Balanced Growth Strategy Class 1
SST Balanced Growth Strategy Class 2	SST Balanced Growth Strategy Class 3
SST Conservative Growth Strategy Class 1	SST Conservative Growth Strategy Class 2
SST Conservative Growth Strategy Class 3	SST Growth Strategy Class 1
SST Growth Strategy Class 2	SST Growth Strategy Class 3
SST Moderate Growth Strategy Class 1	SST Moderate Growth Strategy Class 2
SST Moderate Growth Strategy Class 3	SST SA Allocation Balanced Portfolio Class 3
SST SA Allocation Growth Portfolio Class 3	SST SA Allocation Moderate Growth Portfolio Class 3
SST SA Allocation Moderate Portfolio Class 3	SST SA Columbia Focused Value Portfolio Class 2
SST SA Columbia Focused Value Portfolio Class 3	SST SA Multi-Managed Diversified Fixed Income Portfolio Class 1
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 2	SST SA Multi-Managed Diversified Fixed Income Portfolio Class 3
SST SA Multi-Managed International Equity Portfolio Class 1	SST SA Multi-Managed International Equity Portfolio Class 2
SST SA Multi-Managed International Equity Portfolio Class 3	SST SA Multi-Managed Large Cap Growth Portfolio Class 1
SST SA Multi-Managed Large Cap Growth Portfolio Class 2	SST SA Multi-Managed Large Cap Growth Portfolio Class 3
SST SA Multi-Managed Large Cap Value Portfolio Class 1	SST SA Multi-Managed Large Cap Value Portfolio Class 2
SST SA Multi-Managed Large Cap Value Portfolio Class 3	SST SA Multi-Managed Mid Cap Growth Portfolio Class 1
SST SA Multi-Managed Mid Cap Growth Portfolio Class 2	SST SA Multi-Managed Mid Cap Growth Portfolio Class 3
SST SA Multi-Managed Mid Cap Value Portfolio Class 1	SST SA Multi-Managed Mid Cap Value Portfolio Class 2
SST SA Multi-Managed Mid Cap Value Portfolio Class 3	SST SA Multi-Managed Small Cap Portfolio Class 1
SST SA Multi-Managed Small Cap Portfolio Class 2	SST SA Multi-Managed Small Cap Portfolio Class 3
SST SA American Century Inflation Protection Portfolio Class 3	T Rowe Price Blue Chip Growth Portfolio II Class
T Rowe Price Equity Income Portfolio II Class

PricewaterhouseCoopers LLP, 1000 Louisiana Street, Suite 5800, Houston, TX 77002

T: (713) 356 4000, F: (713) 356 4717, www.pwc.com/us

Basis for Opinions

These financial statements are the responsibility of American General Life Insurance Company management. Our responsibility is to express an opinion on the financial statements of each of the sub-accounts of Variable Annuity Account Five based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to each of the sub-accounts of Variable Annuity Account Five in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of investments owned as of December 31, 2022 by correspondence with the transfer agents of the investee mutual funds and the custodians. We believe that our audits provide a reasonable basis for our opinions.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

April 25, 2023

We have served as the auditor of one or more of the sub-accounts of AIG Life and Retirement Separate Account Group since at least 1994. We have not been able to determine the specific year we began serving as auditor.

2

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2022

Sub-accounts		Investments at Fair Value			Due from (to) General Account, Net			Net Assets			Contract Owners - Annuity Reserves			Contract Owners - Accumulation Reserves			Net Assets Attributable to Contract Owner Reserves
Fidelity VIP Contrafund Portfolio Service Class 2	$		3,381,761	$		—	$		3,381,761	$		24,918	$		3,356,843	$		3,381,761
Fidelity VIP Equity-Income Portfolio Service Class 2			4,708,240			—			4,708,240			26,531			4,681,709			4,708,240
Fidelity VIP Investment Grade Bond Portfolio Service Class 2			9,745,422			—			9,745,422			14,708			9,730,714			9,745,422
Fidelity VIP Mid Cap Portfolio Service Class 2			5,576,258			—			5,576,258			24,734			5,551,524			5,576,258
Fidelity VIP Overseas Portfolio Service Class 2			3,464,824			—			3,464,824			20,028			3,444,796			3,464,824
Goldman Sachs VIT Government Money Market Fund Service Shares			4,127,635			—			4,127,635			—			4,127,635			4,127,635
SST Balanced Growth Strategy Class 1			7,748,900			—			7,748,900			185,322			7,563,578			7,748,900
SST Balanced Growth Strategy Class 2			33,359,276			—			33,359,276			609,259			32,750,017			33,359,276
SST Balanced Growth Strategy Class 3			21,368,020			—			21,368,020			73,899			21,294,121			21,368,020
SST Conservative Growth Strategy Class 1			4,775,594			—			4,775,594			—			4,775,594			4,775,594
SST Conservative Growth Strategy Class 2			26,929,736			—			26,929,736			205,402			26,724,334			26,929,736
SST Conservative Growth Strategy Class 3			15,064,713			—			15,064,713			316,450			14,748,263			15,064,713
SST Growth Strategy Class 1			13,745,514			—			13,745,514			329,287			13,416,227			13,745,514
SST Growth Strategy Class 2			25,392,871			—			25,392,871			12,269			25,380,602			25,392,871
SST Growth Strategy Class 3			23,713,421			—			23,713,421			30,176			23,683,245			23,713,421
SST Moderate Growth Strategy Class 1			11,349,001			—			11,349,001			55,048			11,293,953			11,349,001
SST Moderate Growth Strategy Class 2			49,608,659			—			49,608,659			170,361			49,438,298			49,608,659
SST Moderate Growth Strategy Class 3			39,072,209			—			39,072,209			447,669			38,624,540			39,072,209
SST SA Allocation Balanced Portfolio Class 3			41,978,188			—			41,978,188			133,147			41,845,041			41,978,188
SST SA Allocation Growth Portfolio Class 3			29,211,996			—			29,211,996			20,776			29,191,220			29,211,996
SST SA Allocation Moderate Growth Portfolio Class 3			164,025,576			—			164,025,576			1,321,515			162,704,061			164,025,576
SST SA Allocation Moderate Portfolio Class 3			58,266,059			—			58,266,059			193,824			58,072,235			58,266,059
SST SA American Century Inflation Protection Portfolio Class 3			3,479,066			—			3,479,066			17,645			3,461,421			3,479,066
SST SA Columbia Focused Value Portfolio Class 2			12,682,009			—			12,682,009			74,603			12,607,406			12,682,009
SST SA Columbia Focused Value Portfolio Class 3			7,304,303			—			7,304,303			18,917			7,285,386			7,304,303
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 1			1,386,012			—			1,386,012			—			1,386,012			1,386,012
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 2			14,250,409			—			14,250,409			54,911			14,195,498			14,250,409
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 3			6,674,855			—			6,674,855			71,457			6,603,398			6,674,855
SST SA Multi-Managed International Equity Portfolio Class 1			835,319			—			835,319			—			835,319			835,319
SST SA Multi-Managed International Equity Portfolio Class 2			13,438,551			—			13,438,551			57,974			13,380,577			13,438,551
SST SA Multi-Managed International Equity Portfolio Class 3			8,309,253			—			8,309,253			23,055			8,286,198			8,309,253
SST SA Multi-Managed Large Cap Growth Portfolio Class 1			3,578,030			—			3,578,030			137,330			3,440,700			3,578,030
SST SA Multi-Managed Large Cap Growth Portfolio Class 2			22,747,262			—			22,747,262			19,360			22,727,902			22,747,262
SST SA Multi-Managed Large Cap Growth Portfolio Class 3			12,124,410			—			12,124,410			145,803			11,978,607			12,124,410
SST SA Multi-Managed Large Cap Value Portfolio Class 1			3,672,110			—			3,672,110			—			3,672,110			3,672,110
SST SA Multi-Managed Large Cap Value Portfolio Class 2			20,262,703			—			20,262,703			364,748			19,897,955			20,262,703
SST SA Multi-Managed Large Cap Value Portfolio Class 3			8,956,399			—			8,956,399			177,029			8,779,370			8,956,399
SST SA Multi-Managed Mid Cap Growth Portfolio Class 1			2,335,372			—			2,335,372			298,518			2,036,854			2,335,372
SST SA Multi-Managed Mid Cap Growth Portfolio Class 2			17,727,309			—			17,727,309			75,521			17,651,788			17,727,309
SST SA Multi-Managed Mid Cap Growth Portfolio Class 3			10,261,678			—			10,261,678			124,610			10,137,068			10,261,678
SST SA Multi-Managed Mid Cap Value Portfolio Class 1			2,613,961			—			2,613,961			266,760			2,347,201			2,613,961
SST SA Multi-Managed Mid Cap Value Portfolio Class 2			18,187,439			—			18,187,439			89,442			18,097,997			18,187,439
SST SA Multi-Managed Mid Cap Value Portfolio Class 3			9,818,114			—			9,818,114			109,209			9,708,905			9,818,114
SST SA Multi-Managed Small Cap Portfolio Class 1			1,250,385			—			1,250,385			806			1,249,579			1,250,385
SST SA Multi-Managed Small Cap Portfolio Class 2			12,124,081			—			12,124,081			54,116			12,069,965			12,124,081
SST SA Multi-Managed Small Cap Portfolio Class 3			7,540,314			—			7,540,314			59,333			7,480,981			7,540,314
SAST SA AB Growth Portfolio Class 1			1,289,800			—			1,289,800			167,389			1,122,411			1,289,800
SAST SA AB Growth Portfolio Class 2			26,082,122			—			26,082,122			153,982			25,928,140			26,082,122
SAST SA AB Growth Portfolio Class 3			16,479,362			—			16,479,362			30,780			16,448,582			16,479,362
SAST SA American Funds Global Growth Portfolio Class 3			4,932,373			—			4,932,373			13,190			4,919,183			4,932,373
SAST SA American Funds Growth Portfolio Class 3			3,071,123			—			3,071,123			6,847			3,064,276			3,071,123
SAST SA American Funds Growth-Income Portfolio Class 3			5,690,408			—			5,690,408			8,429			5,681,979			5,690,408
SAST SA DFA Ultra Short Bond Portfolio Class 1			118,782			—			118,782			—			118,782			118,782
SAST SA DFA Ultra Short Bond Portfolio Class 2			3,411,858			—			3,411,858			196,541			3,215,317			3,411,858
SAST SA DFA Ultra Short Bond Portfolio Class 3			8,287,325			—			8,287,325			446,956			7,840,369			8,287,325
SAST SA VCP Dynamic Allocation Portfolio Class 3			37,711,728			—			37,711,728			—			37,711,728			37,711,728
SAST SA VCP Dynamic Strategy Portfolio Class 3			34,665,117			—			34,665,117			—			34,665,117			34,665,117
T Rowe Price Blue Chip Growth Portfolio II Class			3,151,569			—			3,151,569			24,977			3,126,592			3,151,569
T Rowe Price Equity Income Portfolio II Class			4,229,193			—			4,229,193			14,779			4,214,414			4,229,193

  The accompanying Notes to Financial Statements are an integral part of this statement.

3

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

SCHEDULE OF PORTFOLIO INVESTMENTS

December 31, 2022

Sub-accounts	Shares			Net Asset Value per Share			Shares at Fair Value			Cost of Shares Held		Level*
Fidelity VIP Contrafund Portfolio Service Class 2		92,550	$		36.54	$		3,381,761	$		3,487,375	1
Fidelity VIP Equity-Income Portfolio Service Class 2		207,320			22.71			4,708,240			4,534,506	1
Fidelity VIP Investment Grade Bond Portfolio Service Class 2		930,795			10.47			9,745,422			11,860,163	1
Fidelity VIP Mid Cap Portfolio Service Class 2		178,726			31.20			5,576,258			5,422,500	1
Fidelity VIP Overseas Portfolio Service Class 2		161,606			21.44			3,464,824			3,393,908	1
Goldman Sachs VIT Government Money Market Fund Service Shares		4,127,635			1.00			4,127,635			4,127,635	1
SST Balanced Growth Strategy Class 1		161,435			48.00			7,748,900			3,914,596	1
SST Balanced Growth Strategy Class 2		718,485			46.43			33,359,276			25,297,034	1
SST Balanced Growth Strategy Class 3		469,420			45.52			21,368,020			15,585,296	1
SST Conservative Growth Strategy Class 1		111,475			42.84			4,775,594			3,126,983	1
SST Conservative Growth Strategy Class 2		650,634			41.39			26,929,736			18,794,400	1
SST Conservative Growth Strategy Class 3		371,235			40.58			15,064,713			13,276,346	1
SST Growth Strategy Class 1		233,212			58.94			13,745,514			4,923,873	1
SST Growth Strategy Class 2		445,724			56.97			25,392,871			11,827,407	1
SST Growth Strategy Class 3		424,743			55.83			23,713,421			15,582,924	1
SST Moderate Growth Strategy Class 1		209,006			54.30			11,349,001			4,230,082	1
SST Moderate Growth Strategy Class 2		944,747			52.51			49,608,659			23,126,314	1
SST Moderate Growth Strategy Class 3		759,126			51.47			39,072,209			22,930,981	1
SST SA Allocation Balanced Portfolio Class 3		4,869,859			8.62			41,978,188			49,518,389	1
SST SA Allocation Growth Portfolio Class 3		2,228,222			13.11			29,211,996			28,034,978	1
SST SA Allocation Moderate Growth Portfolio Class 3		17,985,261			9.12			164,025,576			190,166,513	1
SST SA Allocation Moderate Portfolio Class 3		6,438,239			9.05			58,266,059			67,980,779	1
SST SA American Century Inflation Protection Portfolio Class 3		398,975			8.72			3,479,066			3,884,764	1
SST SA Columbia Focused Value Portfolio Class 2		645,395			19.65			12,682,009			12,192,580	1
SST SA Columbia Focused Value Portfolio Class 3		371,342			19.67			7,304,303			7,158,224	1
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 1		142,594			9.72			1,386,012			1,675,072	1
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 2		1,464,585			9.73			14,250,409			17,235,642	1
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 3		689,551			9.68			6,674,855			8,057,511	1
SST SA Multi-Managed International Equity Portfolio Class 1		109,478			7.63			835,319			916,141	1
SST SA Multi-Managed International Equity Portfolio Class 2		1,754,380			7.66			13,438,551			15,365,671	1
SST SA Multi-Managed International Equity Portfolio Class 3		1,089,024			7.63			8,309,253			9,308,946	1
SST SA Multi-Managed Large Cap Growth Portfolio Class 1		420,450			8.51			3,578,030			5,763,559	1
SST SA Multi-Managed Large Cap Growth Portfolio Class 2		2,818,744			8.07			22,747,262			38,136,974	1
SST SA Multi-Managed Large Cap Growth Portfolio Class 3		1,544,511			7.85			12,124,410			20,085,462	1
SST SA Multi-Managed Large Cap Value Portfolio Class 1		271,004			13.55			3,672,110			4,106,567	1
SST SA Multi-Managed Large Cap Value Portfolio Class 2		1,496,507			13.54			20,262,703			22,876,096	1
SST SA Multi-Managed Large Cap Value Portfolio Class 3		660,989			13.55			8,956,399			10,134,630	1
SST SA Multi-Managed Mid Cap Growth Portfolio Class 1		230,768			10.12			2,335,372			3,795,010	1
SST SA Multi-Managed Mid Cap Growth Portfolio Class 2		2,012,180			8.81			17,727,309			30,421,413	1
SST SA Multi-Managed Mid Cap Growth Portfolio Class 3		1,270,010			8.08			10,261,678			17,897,851	1
SST SA Multi-Managed Mid Cap Value Portfolio Class 1		170,402			15.34			2,613,961			2,825,240	1
SST SA Multi-Managed Mid Cap Value Portfolio Class 2		1,189,499			15.29			18,187,439			19,297,624	1
SST SA Multi-Managed Mid Cap Value Portfolio Class 3		643,389			15.26			9,818,114			10,404,794	1
SST SA Multi-Managed Small Cap Portfolio Class 1		127,201			9.83			1,250,385			1,643,952	1
SST SA Multi-Managed Small Cap Portfolio Class 2		1,292,546			9.38			12,124,081			16,095,964	1
SST SA Multi-Managed Small Cap Portfolio Class 3		829,517			9.09			7,540,314			9,946,072	1
SAST SA AB Growth Portfolio Class 1		29,508			43.71			1,289,800			1,377,915	1
SAST SA AB Growth Portfolio Class 2		609,111			42.82			26,082,122			28,022,926	1
SAST SA AB Growth Portfolio Class 3		394,999			41.72			16,479,362			18,584,779	1
SAST SA American Funds Global Growth Portfolio Class 3		467,523			10.55			4,932,373			5,245,974	1
SAST SA American Funds Growth Portfolio Class 3		275,190			11.16			3,071,123			3,454,856	1
SAST SA American Funds Growth-Income Portfolio Class 3		513,575			11.08			5,690,408			5,910,187	1
SAST SA DFA Ultra Short Bond Portfolio Class 1		11,566			10.27			118,782			123,350	1
SAST SA DFA Ultra Short Bond Portfolio Class 2		337,140			10.12			3,411,858			3,510,801	1
SAST SA DFA Ultra Short Bond Portfolio Class 3		828,732			10.00			8,287,325			8,970,124	1
SAST SA VCP Dynamic Allocation Portfolio Class 3		3,682,786			10.24			37,711,728			46,365,522	1
SAST SA VCP Dynamic Strategy Portfolio Class 3		3,070,427			11.29			34,665,117			39,387,663	1
T Rowe Price Blue Chip Growth Portfolio II Class		107,820			29.23			3,151,569			4,031,827	1
T Rowe Price Equity Income Portfolio II Class		157,512			26.85			4,229,193			3,977,039	1

  * Represents the level within the fair value hierarchy under which the portfolio is classified as defined in ASC 820 and described in Note 3 to the financial statements.

  The accompanying Notes to Financial Statements are an integral part of this statement.

4

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	Fidelity VIP Contrafund   Portfolio Service   Class 2			Fidelity VIP Equity- Income Portfolio Service Class 2			Fidelity VIP Investment Grade Bond Portfolio Service Class 2			Fidelity VIP Mid   Cap Portfolio Service Class 2			Fidelity VIP Overseas Portfolio Service Class 2
For the Year Ended December 31, 2022
From operations:
Dividends	$	9,973		$	85,488		$	214,790		$	15,940		$	32,877
Mortality and expense risk and administrative charges		(60,898	)		(75,057	)		(167,828	)		(94,596	)		(58,038	)
Net investment income (loss)		(50,925	)		10,431			46,962			(78,656	)		(25,161	)
Net realized gain (loss)		274,678			179,227			(284,388	)		(4,381	)		103,870
Capital gain distribution from mutual funds		193,547			171,156			634,363			418,195			34,343
Change in unrealized appreciation (depreciation) of investments		(1,877,224	)		(715,597	)		(2,235,778	)		(1,538,980	)		(1,340,363	)
Increase (decrease) in net assets from operations		(1,459,924	)		(354,783	)		(1,838,841	)		(1,203,822	)		(1,227,311	)
From contract transactions:
Payments received from contract owners		105,318			414,959			203,146			517			71,138
Payments for contract benefits or terminations		(930,427	)		(578,262	)		(1,458,751	)		(649,784	)		(358,860	)
Transfers between sub-accounts (including fixed account), net		143,881			(248,567	)		(250,643	)		(125,482	)		216,544
Contract maintenance charges		(26,026	)		(45,408	)		(111,669	)		(71,996	)		(43,279	)
Adjustments to net assets allocated to contracts in payout period		6,679			3,958			1,027			2,425			1,861
Increase (decrease) in net assets from contract transactions		(700,575	)		(453,320	)		(1,616,890	)		(844,320	)		(112,596	)
Increase (decrease) in net assets		(2,160,499	)		(808,103	)		(3,455,731	)		(2,048,142	)		(1,339,907	)
Net assets at beginning of period		5,542,260			5,516,343			13,201,153			7,624,400			4,804,731
Net assets at end of period	$	3,381,761		$	4,708,240		$	9,745,422		$	5,576,258		$	3,464,824
Beginning units		161,333			243,162			926,022			273,365			313,069
Units issued		16,503			31,759			47,430			14,015			52,991
Units redeemed		(42,381	)		(53,836	)		(174,934	)		(48,771	)		(61,922	)
Ending units		135,455			221,085			798,518			238,609			304,138
For the Year Ended December 31, 2021
From operations:
Dividends	$	1,422		$	90,427		$	241,433		$	27,029		$	15,299
Mortality and expense risk and administrative charges		(80,677	)		(86,317	)		(209,360	)		(123,512	)		(74,719	)
Net investment income (loss)		(79,255	)		4,110			32,073			(96,483	)		(59,420	)
Net realized gain (loss)		382,670			244,415			210,757			636,706			319,849
Capital gain distribution from mutual funds		661,657			625,910			374,164			1,228,724			359,446
Change in unrealized appreciation (depreciation) of investments		243,861			252,389			(956,053	)		(79,566	)		166,890
Increase (decrease) in net assets from operations		1,208,933			1,126,824			(339,059	)		1,689,381			786,765
From contract transactions:
Payments received from contract owners		212,383			176,189			5,730			167,561			176,143
Payments for contract benefits or terminations		(473,086	)		(585,208	)		(1,886,937	)		(1,368,904	)		(553,385	)
Transfers between sub-accounts (including fixed account), net		(209,736	)		(396,857	)		926,327			(740,519	)		(237,201	)
Contract maintenance charges		(28,128	)		(47,244	)		(115,763	)		(78,271	)		(46,961	)
Adjustments to net assets allocated to contracts in payout period		(515	)		(42,128	)		529			3,119			1,604
Increase (decrease) in net assets from contract transactions		(499,082	)		(895,248	)		(1,070,114	)		(2,017,014	)		(659,800	)
Increase (decrease) in net assets		709,851			231,576			(1,409,173	)		(327,633	)		126,965
Net assets at beginning of period		4,832,409			5,284,767			14,610,326			7,952,033			4,677,766
Net assets at end of period	$	5,542,260		$	5,516,343		$	13,201,153		$	7,624,400		$	4,804,731
Beginning units		177,023			286,155			999,272			352,792			359,045
Units issued		13,351			10,473			99,408			11,231			17,824
Units redeemed		(29,041	)		(53,466	)		(172,658	)		(90,658	)		(63,800	)
Ending units		161,333			243,162			926,022			273,365			313,069

 The accompanying Notes to Financial Statements are an integral part of this statement.

5

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	Goldman Sachs VIT Government Money Market Fund Service Shares			SST Balanced Growth Strategy Class 1			SST Balanced Growth Strategy Class 2			SST Balanced Growth Strategy Class 3			SST Conservative Growth Strategy Class 1
For the Year Ended December 31, 2022
From operations:
Dividends	$	52,164		$	—		$	—		$	—		$	—
Mortality and expense risk and administrative charges		(52,093	)		(131,942	)		(626,535	)		(372,742	)		(79,229	)
Net investment income (loss)		71			(131,942	)		(626,535	)		(372,742	)		(79,229	)
Net realized gain (loss)		—			1,358,628			3,502,421			2,522,639			553,409
Change in unrealized appreciation (depreciation) of investments		—			(4,920,695	)		(18,166,688	)		(11,749,124	)		(2,243,991	)
Increase (decrease) in net assets from operations		71			(3,694,009	)		(15,290,802	)		(9,599,227	)		(1,769,811	)
From contract transactions:
Payments received from contract owners		13,439			780			17,841			623,692			180
Payments for contract benefits or terminations		(2,654,630	)		(1,262,437	)		(4,144,698	)		(3,341,858	)		(695,236	)
Transfers between sub-accounts (including fixed account), net		4,739,450			(461,746	)		(274,904	)		135,243			20,582
Contract maintenance charges		(12,382	)		(2,966	)		(20,360	)		(68,657	)		(1,930	)
Adjustments to net assets allocated to contracts in payout period		—			(1,057	)		710			25,619			(1,809	)
Increase (decrease) in net assets from contract transactions		2,085,877			(1,727,426	)		(4,421,411	)		(2,625,961	)		(678,213	)
Increase (decrease) in net assets		2,085,948			(5,421,435	)		(19,712,213	)		(12,225,188	)		(2,448,024	)
Net assets at beginning of period		2,041,687			13,170,335			53,071,489			33,593,208			7,223,618
Net assets at end of period	$	4,127,635		$	7,748,900		$	33,359,276		$	21,368,020		$	4,775,594
Beginning units		207,952			276,896			1,197,325			761,144			180,998
Units issued		832,585			700			53,058			50,140			3,467
Units redeemed		(619,718	)		(46,199	)		(178,191	)		(123,665	)		(24,683	)
Ending units		420,819			231,397			1,072,192			687,619			159,782
For the Year Ended December 31, 2021
From operations:
Dividends	$	109		$	—		$	—		$	—		$	—
Mortality and expense risk and administrative charges		(27,284	)		(198,431	)		(912,046	)		(509,999	)		(111,329	)
Net investment income (loss)		(27,175	)		(198,431	)		(912,046	)		(509,999	)		(111,329	)
Net realized gain (loss)		—			1,778,705			9,734,499			2,418,718			1,281,654
Change in unrealized appreciation (depreciation) of investments		—			(820,251	)		(5,897,251	)		(272,021	)		(797,032	)
Increase (decrease) in net assets from operations		(27,175	)		760,023			2,925,202			1,636,698			373,293
From contract transactions:
Payments received from contract owners		373,853			26,648			859,205			1,760,676			180
Payments for contract benefits or terminations		(3,810,848	)		(2,142,398	)		(7,222,140	)		(3,146,088	)		(858,198	)
Transfers between sub-accounts (including fixed account), net		4,735,054			25,038			(3,521,442	)		402,162			(812,073	)
Contract maintenance charges		(10,665	)		(2,851	)		(20,851	)		(68,932	)		(1,850	)
Adjustments to net assets allocated to contracts in payout period		—			7,456			(7,564	)		8,190			2,091
Increase (decrease) in net assets from contract transactions		1,287,394			(2,086,107	)		(9,912,792	)		(1,043,992	)		(1,669,850	)
Increase (decrease) in net assets		1,260,219			(1,326,084	)		(6,987,590	)		592,706			(1,296,557	)
Net assets at beginning of period		781,468			14,496,419			60,059,079			33,000,502			8,520,175
Net assets at end of period	$	2,041,687		$	13,170,335		$	53,071,489		$	33,593,208		$	7,223,618
Beginning units		78,407			320,819			1,423,484			785,566			223,010
Units issued		582,975			1,795			81,827			57,636			768
Units redeemed		(453,430	)		(45,718	)		(307,986	)		(82,058	)		(42,780	)
Ending units		207,952			276,896			1,197,325			761,144			180,998

 The accompanying Notes to Financial Statements are an integral part of this statement.

6

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SST Conservative Growth Strategy Class 2			SST Conservative Growth Strategy Class 3			SST Growth Strategy Class 1			SST Growth Strategy Class 2			SST Growth Strategy Class 3
For the Year Ended December 31, 2022
From operations:
Mortality and expense risk and administrative charges	$	(500,348	)	$	(254,713	)	$	(230,458	)	$	(482,087	)	$	(419,104	)
Net investment income (loss)		(500,348	)		(254,713	)		(230,458	)		(482,087	)		(419,104	)
Net realized gain (loss)		2,258,093			1,208,647			1,144,688			1,709,297			1,841,071
Change in unrealized appreciation (depreciation) of investments		(11,682,618	)		(6,381,221	)		(8,649,267	)		(15,358,524	)		(14,667,774	)
Increase (decrease) in net assets from operations		(9,924,873	)		(5,427,287	)		(7,735,037	)		(14,131,314	)		(13,245,807	)
From contract transactions:
Payments received from contract owners		167,895			1,617,499			17,700			54,542			181,329
Payments for contract benefits or terminations		(3,279,861	)		(3,611,759	)		(1,162,224	)		(1,626,362	)		(2,212,288	)
Transfers between sub-accounts (including fixed account), net		(319,571	)		313			(100,948	)		106,563			556,711
Contract maintenance charges		(9,249	)		(51,836	)		(5,539	)		(10,764	)		(110,125	)
Adjustments to net assets allocated to contracts in payout period		(49,597	)		25,737			244			291			1,378
Increase (decrease) in net assets from contract transactions		(3,490,383	)		(2,020,046	)		(1,250,767	)		(1,475,730	)		(1,582,995	)
Increase (decrease) in net assets		(13,415,256	)		(7,447,333	)		(8,985,804	)		(15,607,044	)		(14,828,802	)
Net assets at beginning of period		40,344,992			22,512,046			22,731,318			40,999,915			38,542,223
Net assets at end of period	$	26,929,736		$	15,064,713		$	13,745,514		$	25,392,871		$	23,713,421
Beginning units		1,086,886			601,991			361,014			700,759			654,934
Units issued		13,294			59,334			833			12,362			34,334
Units redeemed		(126,909	)		(123,069	)		(27,561	)		(45,553	)		(70,551	)
Ending units		973,271			538,256			334,286			667,568			618,717
For the Year Ended December 31, 2021
From operations:
Mortality and expense risk and administrative charges	$	(673,595	)	$	(350,218	)	$	(328,577	)	$	(675,011	)	$	(670,253	)
Net investment income (loss)		(673,595	)		(350,218	)		(328,577	)		(675,011	)		(670,253	)
Net realized gain (loss)		3,331,488			2,218,448			2,100,845			3,074,337			8,679,209
Change in unrealized appreciation (depreciation) of investments		(932,083	)		(882,250	)		195,649			950,865			(4,068,387	)
Increase (decrease) in net assets from operations		1,725,810			985,980			1,967,917			3,350,191			3,940,569
From contract transactions:
Payments received from contract owners		128,947			965,958			234,008			37,695			253,836
Payments for contract benefits or terminations		(4,393,020	)		(3,989,242	)		(2,201,025	)		(2,281,974	)		(11,663,656	)
Transfers between sub-accounts (including fixed account), net		(67,742	)		615,421			(276,347	)		(944,972	)		(938,444	)
Contract maintenance charges		(9,663	)		(57,928	)		(5,304	)		(10,968	)		(148,153	)
Adjustments to net assets allocated to contracts in payout period		1,456			17,402			9,843			—			1,851
Increase (decrease) in net assets from contract transactions		(4,340,022	)		(2,448,389	)		(2,238,825	)		(3,200,219	)		(12,494,566	)
Increase (decrease) in net assets		(2,614,212	)		(1,462,409	)		(270,908	)		149,972			(8,553,997	)
Net assets at beginning of period		42,959,204			23,974,455			23,002,226			40,849,943			47,096,220
Net assets at end of period	$	40,344,992		$	22,512,046		$	22,731,318		$	40,999,915		$	38,542,223
Beginning units		1,206,134			669,065			397,288			756,732			873,456
Units issued		14,910			58,493			4,576			2,737			18,309
Units redeemed		(134,158	)		(125,567	)		(40,850	)		(58,710	)		(236,831	)
Ending units		1,086,886			601,991			361,014			700,759			654,934

 The accompanying Notes to Financial Statements are an integral part of this statement.

7

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SST Moderate Growth Strategy Class 1			SST Moderate Growth Strategy Class 2			SST Moderate Growth Strategy Class 3			SST SA Allocation Balanced Portfolio Class 3			SST SA Allocation Growth Portfolio Class 3
For the Year Ended December 31, 2022
From operations:
Dividends	$	—		$	—		$	—		$	1,200,468		$	733,505
Mortality and expense risk and administrative charges		(190,534	)		(970,417	)		(687,755	)		(721,879	)		(511,879	)
Net investment income (loss)		(190,534	)		(970,417	)		(687,755	)		478,589			221,626
Net realized gain (loss)		1,374,125			6,025,308			3,669,699			(1,253,955	)		1,755,156
Capital gain distribution from mutual funds		—			—			—			2,183,469			1,741,684
Change in unrealized appreciation (depreciation) of investments		(6,877,702	)		(30,578,820	)		(22,066,106	)		(10,810,558	)		(11,269,521	)
Increase (decrease) in net assets from operations		(5,694,111	)		(25,523,929	)		(19,084,162	)		(9,402,455	)		(7,551,055	)
From contract transactions:
Payments received from contract owners		—			41,989			1,694,078			189,315			475,516
Payments for contract benefits or terminations		(1,450,157	)		(6,350,924	)		(5,540,799	)		(5,725,613	)		(4,603,448	)
Transfers between sub-accounts (including fixed account), net		(104,286	)		(932,797	)		210,869			57,092			(26,372	)
Contract maintenance charges		(4,444	)		(22,794	)		(126,907	)		(509,780	)		(125,063	)
Adjustments to net assets allocated to contracts in payout period		(1,311	)		567			946			25,999			674
Increase (decrease) in net assets from contract transactions		(1,560,198	)		(7,263,959	)		(3,761,813	)		(5,962,987	)		(4,278,693	)
Increase (decrease) in net assets		(7,254,309	)		(32,787,888	)		(22,845,975	)		(15,365,442	)		(11,829,748	)
Net assets at beginning of period		18,603,310			82,396,547			61,918,184			57,343,630			41,041,744
Net assets at end of period	$	11,349,001		$	49,608,659		$	39,072,209		$	41,978,188		$	29,211,996
Beginning units		336,291			1,605,065			1,205,603			2,946,629			1,664,174
Units issued		1,606			26,513			58,102			95,180			22,889
Units redeemed		(38,318	)		(216,094	)		(150,897	)		(446,157	)		(229,518	)
Ending units		299,579			1,415,484			1,112,808			2,595,652			1,457,545
For the Year Ended December 31, 2021
From operations:
Dividends	$	—		$	—		$	—		$	523,854		$	834,272
Mortality and expense risk and administrative charges		(274,139	)		(1,372,933	)		(972,563	)		(900,239	)		(640,050	)
Net investment income (loss)		(274,139	)		(1,372,933	)		(972,563	)		(376,385	)		194,222
Net realized gain (loss)		2,041,847			7,709,249			6,218,766			(668,541	)		2,899,719
Capital gain distribution from mutual funds		—			—			—			1,793,223			3,291,922
Change in unrealized appreciation (depreciation) of investments		(278,446	)		(200,994	)		(587,407	)		2,592,956			(979,998	)
Increase (decrease) in net assets from operations		1,489,262			6,135,322			4,658,796			3,341,253			5,405,865
From contract transactions:
Payments received from contract owners		32,019			213,619			468,799			1,665,350			254,277
Payments for contract benefits or terminations		(2,144,563	)		(8,097,715	)		(7,017,917	)		(9,519,100	)		(5,618,326	)
Transfers between sub-accounts (including fixed account), net		(134,182	)		77,417			(248,006	)		(12,537	)		(676	)
Contract maintenance charges		(4,331	)		(22,161	)		(136,320	)		(523,936	)		(135,277	)
Adjustments to net assets allocated to contracts in payout period		3,817			4,647			31,447			6,003			1,669
Increase (decrease) in net assets from contract transactions		(2,247,240	)		(7,824,193	)		(6,901,997	)		(8,384,220	)		(5,498,333	)
Increase (decrease) in net assets		(757,978	)		(1,688,871	)		(2,243,201	)		(5,042,967	)		(92,468	)
Net assets at beginning of period		19,361,288			84,085,418			64,161,385			62,386,597			41,134,212
Net assets at end of period	$	18,603,310		$	82,396,547		$	61,918,184		$	57,343,630		$	41,041,744
Beginning units		377,156			1,758,783			1,341,391			3,394,123			1,899,241
Units issued		770			25,370			30,698			159,448			25,489
Units redeemed		(41,635	)		(179,088	)		(166,486	)		(606,942	)		(260,556	)
Ending units		336,291			1,605,065			1,205,603			2,946,629			1,664,174

 The accompanying Notes to Financial Statements are an integral part of this statement.

8

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SST SA Allocation Moderate Growth Portfolio Class 3			SST SA Allocation Moderate Portfolio Class 3			SST SA American Century Inflation Protection Portfolio Class 3			SST SA Columbia Focused Value Portfolio Class 2			SST SA Columbia Focused Value Portfolio Class 3
For the Year Ended December 31, 2022
From operations:
Dividends	$	4,935,841		$	1,769,124		$	85,053		$	216,594		$	117,763
Mortality and expense risk and administrative charges		(2,817,624	)		(1,016,822	)		(64,632	)		(212,565	)		(121,075	)
Net investment income (loss)		2,118,217			752,302			20,421			4,029			(3,312	)
Net realized gain (loss)		(3,159,404	)		(1,532,530	)		9,801			848,698			530,001
Capital gain distribution from mutual funds		11,584,612			4,009,801			54,759			1,400,819			828,598
Change in unrealized appreciation (depreciation) of investments		(49,881,202	)		(16,930,067	)		(640,863	)		(2,735,499	)		(1,677,710	)
Increase (decrease) in net assets from operations		(39,337,777	)		(13,700,494	)		(555,882	)		(481,953	)		(322,423	)
From contract transactions:
Payments received from contract owners		886,863			230,852			10,757			4,653			252,039
Payments for contract benefits or terminations		(17,603,575	)		(7,819,907	)		(904,668	)		(1,635,775	)		(984,081	)
Transfers between sub-accounts (including fixed account), net		(1,867,739	)		(418,652	)		(116,917	)		(313,119	)		(704,316	)
Contract maintenance charges		(2,046,476	)		(714,622	)		(21,202	)		(6,800	)		(20,339	)
Adjustments to net assets allocated to contracts in payout period		72,364			2,266			2,015			54			135
Increase (decrease) in net assets from contract transactions		(20,558,563	)		(8,720,063	)		(1,030,015	)		(1,950,987	)		(1,456,562	)
Increase (decrease) in net assets		(59,896,340	)		(22,420,557	)		(1,585,897	)		(2,432,940	)		(1,778,985	)
Net assets at beginning of period		223,921,916			80,686,616			5,064,963			15,114,949			9,083,288
Net assets at end of period	$	164,025,576		$	58,266,059		$	3,479,066		$	12,682,009		$	7,304,303
Beginning units		10,146,786			3,813,706			408,540			343,592			207,436
Units issued		152,923			65,293			19,907			5,199			11,229
Units redeemed		(1,235,803	)		(538,337	)		(108,051	)		(50,081	)		(46,021	)
Ending units		9,063,906			3,340,662			320,396			298,710			172,644
For the Year Ended December 31, 2021
From operations:
Dividends	$	3,813,458		$	1,502,650		$	150,054		$	558,856		$	335,441
Mortality and expense risk and administrative charges		(3,505,002	)		(1,285,539	)		(84,975	)		(232,102	)		(142,671	)
Net investment income (loss)		308,456			217,111			65,079			326,754			192,770
Net realized gain (loss)		3,963,170			1,078,967			64,685			1,161,144			781,133
Capital gain distribution from mutual funds		20,769,946			7,203,031			164,360			1,580,220			1,002,185
Change in unrealized appreciation (depreciation) of investments		(1,732,603	)		(1,487,226	)		(160,662	)		(8,860	)		(18,035	)
Increase (decrease) in net assets from operations		23,308,969			7,011,883			133,462			3,059,258			1,958,053
From contract transactions:
Payments received from contract owners		423,267			163,424			767			5,895			165,842
Payments for contract benefits or terminations		(25,080,959	)		(9,960,881	)		(1,313,298	)		(1,365,813	)		(1,502,344	)
Transfers between sub-accounts (including fixed account), net		2,011,680			(41,757	)		405,634			(78,587	)		(255,195	)
Contract maintenance charges		(2,145,034	)		(745,874	)		(22,920	)		(7,047	)		(19,710	)
Adjustments to net assets allocated to contracts in payout period		91,778			2,596			98			425			1,190
Increase (decrease) in net assets from contract transactions		(24,699,268	)		(10,582,492	)		(929,719	)		(1,445,127	)		(1,610,217	)
Increase (decrease) in net assets		(1,390,299	)		(3,570,609	)		(796,257	)		1,614,131			347,836
Net assets at beginning of period		225,312,215			84,257,225			5,861,220			13,500,818			8,735,452
Net assets at end of period	$	223,921,916		$	80,686,616		$	5,064,963		$	15,114,949		$	9,083,288
Beginning units		11,301,685			4,332,444			484,126			378,859			247,112
Units issued		294,821			62,711			47,622			19,776			13,102
Units redeemed		(1,449,720	)		(581,449	)		(123,208	)		(55,043	)		(52,778	)
Ending units		10,146,786			3,813,706			408,540			343,592			207,436

 The accompanying Notes to Financial Statements are an integral part of this statement.

9

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SST SA Multi- Managed Diversified Fixed Income Portfolio Class 1			SST SA Multi- Managed Diversified Fixed Income Portfolio Class 2			SST SA Multi- Managed Diversified Fixed Income Portfolio Class 3			SST SA Multi- Managed International Equity Portfolio Class 1			SST SA Multi- Managed International Equity Portfolio Class 2
For the Year Ended December 31, 2022
From operations:
Dividends	$	33,022		$	312,078		$	136,914		$	17,671		$	260,315
Mortality and expense risk and administrative charges		(21,974	)		(258,064	)		(117,924	)		(12,195	)		(238,226	)
Net investment income (loss)		11,048			54,014			18,990			5,476			22,089
Net realized gain (loss)		(44,749	)		(298,646	)		(240,874	)		21,574			(44,534	)
Capital gain distribution from mutual funds		—			—			—			56,472			922,269
Change in unrealized appreciation (depreciation) of investments		(244,966	)		(2,644,449	)		(1,200,030	)		(271,893	)		(4,159,576	)
Increase (decrease) in net assets from operations		(278,667	)		(2,889,081	)		(1,421,914	)		(188,371	)		(3,259,752	)
From contract transactions:
Payments received from contract owners		17,500			4,137			208,836			5,000			23,755
Payments for contract benefits or terminations		(210,521	)		(2,061,609	)		(1,500,370	)		(80,976	)		(1,693,340	)
Transfers between sub-accounts (including fixed account), net		1,616			789,594			(261,335	)		32,097			(296,584	)
Contract maintenance charges		(447	)		(13,137	)		(27,523	)		(191	)		(16,568	)
Adjustments to net assets allocated to contracts in payout period		—			(1,277	)		1,347			(295	)		506
Increase (decrease) in net assets from contract transactions		(191,852	)		(1,282,292	)		(1,579,045	)		(44,365	)		(1,982,231	)
Increase (decrease) in net assets		(470,519	)		(4,171,373	)		(3,000,959	)		(232,736	)		(5,241,983	)
Net assets at beginning of period		1,856,531			18,421,782			9,675,814			1,068,055			18,680,534
Net assets at end of period	$	1,386,012		$	14,250,409		$	6,674,855		$	835,319		$	13,438,551
Beginning units		104,488			1,124,466			594,912			66,962			1,262,321
Units issued		1,609			82,646			27,311			3,493			22,312
Units redeemed		(13,890	)		(175,615	)		(135,487	)		(7,016	)		(181,247	)
Ending units		92,207			1,031,497			486,736			63,439			1,103,386
For the Year Ended December 31, 2021
From operations:
Dividends	$	81,225		$	786,882		$	399,600		$	35,331		$	510,213
Mortality and expense risk and administrative charges		(26,683	)		(316,441	)		(157,256	)		(15,571	)		(310,343	)
Net investment income (loss)		54,542			470,441			242,344			19,760			199,870
Net realized gain (loss)		7,037			135,056			100,934			105,157			767,526
Capital gain distribution from mutual funds		82,930			854,716			458,414			68,343			1,142,497
Change in unrealized appreciation (depreciation) of investments		(201,971	)		(2,127,232	)		(1,146,871	)		(87,522	)		(418,692	)
Increase (decrease) in net assets from operations		(57,462	)		(667,019	)		(345,179	)		105,738			1,691,201
From contract transactions:
Payments received from contract owners		—			89,671			175,535			—			36,759
Payments for contract benefits or terminations		(98,943	)		(2,588,322	)		(1,769,975	)		(162,483	)		(2,028,905	)
Transfers between sub-accounts (including fixed account), net		86,995			741,769			309,923			(119,077	)		637,197
Contract maintenance charges		(577	)		(14,093	)		(29,849	)		(231	)		(20,838	)
Adjustments to net assets allocated to contracts in payout period		—			2,128			2,027			339			2,025
Increase (decrease) in net assets from contract transactions		(12,525	)		(1,768,847	)		(1,312,339	)		(281,452	)		(1,373,762	)
Increase (decrease) in net assets		(69,987	)		(2,435,866	)		(1,657,518	)		(175,714	)		317,439
Net assets at beginning of period		1,926,518			20,857,648			11,333,332			1,243,769			18,363,095
Net assets at end of period	$	1,856,531		$	18,421,782		$	9,675,814		$	1,068,055		$	18,680,534
Beginning units		105,276			1,232,636			672,825			85,603			1,355,544
Units issued		5,043			123,426			64,091			310			119,214
Units redeemed		(5,831	)		(231,596	)		(142,004	)		(18,951	)		(212,437	)
Ending units		104,488			1,124,466			594,912			66,962			1,262,321

 The accompanying Notes to Financial Statements are an integral part of this statement.

10

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SST SA Multi- Managed International Equity Portfolio Class 3			SST SA Multi- Managed Large Cap Growth Portfolio Class 1			SST SA Multi- Managed Large Cap Growth Portfolio Class 2			SST SA Multi- Managed Large Cap Growth Portfolio Class 3			SST SA Multi- Managed Large Cap Value Portfolio Class 1
For the Year Ended December 31, 2022
From operations:
Dividends	$	154,719		$	—		$	—		$	—		$	71,144
Mortality and expense risk and administrative charges		(142,008	)		(60,064	)		(440,419	)		(216,731	)		(51,696	)
Net investment income (loss)		12,711			(60,064	)		(440,419	)		(216,731	)		19,448
Net realized gain (loss)		(29,246	)		(27,413	)		(280,258	)		(361,072	)		55,322
Capital gain distribution from mutual funds		589,269			659,125			4,297,225			2,312,710			622,815
Change in unrealized appreciation (depreciation) of investments		(2,586,594	)		(2,896,798	)		(18,499,992	)		(9,406,314	)		(885,500	)
Increase (decrease) in net assets from operations		(2,013,860	)		(2,325,150	)		(14,923,444	)		(7,671,407	)		(187,915	)
From contract transactions:
Payments received from contract owners		142,849			11,000			33,994			455,866			10,000
Payments for contract benefits or terminations		(1,141,437	)		(211,771	)		(2,393,676	)		(1,641,008	)		(119,711	)
Transfers between sub-accounts (including fixed account), net		(253,496	)		1,116			800,788			870,129			48,918
Contract maintenance charges		(39,736	)		(774	)		(17,237	)		(23,718	)		(473	)
Adjustments to net assets allocated to contracts in payout period		2,579			(2,131	)		921			12,822			—
Increase (decrease) in net assets from contract transactions		(1,289,241	)		(202,560	)		(1,575,210	)		(325,909	)		(61,266	)
Increase (decrease) in net assets		(3,303,101	)		(2,527,710	)		(16,498,654	)		(7,997,316	)		(249,181	)
Net assets at beginning of period		11,612,354			6,105,740			39,245,916			20,121,726			3,921,291
Net assets at end of period	$	8,309,253		$	3,578,030		$	22,747,262		$	12,124,410		$	3,672,110
Beginning units		787,347			132,412			918,248			471,457			103,957
Units issued		37,754			2,872			45,598			53,888			2,246
Units redeemed		(139,215	)		(8,682	)		(93,298	)		(60,078	)		(3,975	)
Ending units		685,886			126,602			870,548			465,267			102,228
For the Year Ended December 31, 2021
From operations:
Dividends	$	302,994		$	11,112		$	30,184		$	—		$	124,272
Mortality and expense risk and administrative charges		(187,886	)		(84,685	)		(653,232	)		(308,264	)		(53,206	)
Net investment income (loss)		115,108			(73,573	)		(623,048	)		(308,264	)		71,066
Net realized gain (loss)		492,723			248,556			2,543,006			1,220,532			147,360
Capital gain distribution from mutual funds		719,318			2,147,997			14,703,440			7,235,060			398,609
Change in unrealized appreciation (depreciation) of investments		(251,096	)		(1,492,370	)		(11,199,133	)		(5,421,939	)		142,652
Increase (decrease) in net assets from operations		1,076,053			830,610			5,424,265			2,725,389			759,687
From contract transactions:
Payments received from contract owners		23,915			1,000			41,463			957,874			—
Payments for contract benefits or terminations		(1,671,738	)		(672,088	)		(4,982,682	)		(2,964,176	)		(377,235	)
Transfers between sub-accounts (including fixed account), net		151,793			26,469			(1,752,763	)		(323,514	)		(6,555	)
Contract maintenance charges		(40,937	)		(808	)		(22,382	)		(27,626	)		(529	)
Adjustments to net assets allocated to contracts in payout period		2,184			(262	)		4,597			15,516			—
Increase (decrease) in net assets from contract transactions		(1,534,783	)		(645,689	)		(6,711,767	)		(2,341,926	)		(384,319	)
Increase (decrease) in net assets		(458,730	)		184,921			(1,287,502	)		383,463			375,368
Net assets at beginning of period		12,071,084			5,920,819			40,533,418			19,738,263			3,545,923
Net assets at end of period	$	11,612,354		$	6,105,740		$	39,245,916		$	20,121,726		$	3,921,291
Beginning units		894,719			147,529			1,085,444			530,738			115,136
Units issued		31,448			2,826			19,887			30,437			782
Units redeemed		(138,820	)		(17,943	)		(187,083	)		(89,718	)		(11,961	)
Ending units		787,347			132,412			918,248			471,457			103,957

 The accompanying Notes to Financial Statements are an integral part of this statement.

11

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SST SA Multi- Managed Large Cap Value Portfolio Class 2			SST SA Multi- Managed Large Cap Value Portfolio Class 3			SST SA Multi- Managed Mid Cap Growth Portfolio Class 1			SST SA Multi- Managed Mid Cap Growth Portfolio Class 2			SST SA Multi- Managed Mid Cap Growth Portfolio Class 3
For the Year Ended December 31, 2022
From operations:
Dividends	$	365,472		$	154,501		$	—		$	—		$	—
Mortality and expense risk and administrative charges		(348,854	)		(151,875	)		(36,714	)		(315,463	)		(169,392	)
Net investment income (loss)		16,618			2,626			(36,714	)		(315,463	)		(169,392	)
Net realized gain (loss)		21,562			68,596			(35,339	)		(346,037	)		(457,470	)
Capital gain distribution from mutual funds		3,519,347			1,603,686			672,987			5,597,769			3,426,451
Change in unrealized appreciation (depreciation) of investments		(4,787,693	)		(2,251,500	)		(1,675,349	)		(12,885,317	)		(7,281,096	)
Increase (decrease) in net assets from operations		(1,230,166	)		(576,592	)		(1,074,415	)		(7,949,048	)		(4,481,507	)
From contract transactions:
Payments received from contract owners		58,532			367,948			2,500			35,964			490,544
Payments for contract benefits or terminations		(2,037,396	)		(1,203,585	)		(161,366	)		(1,435,782	)		(1,090,530	)
Transfers between sub-accounts (including fixed account), net		(573,257	)		(871,765	)		(70,995	)		(36,559	)		340,966
Contract maintenance charges		(16,307	)		(16,820	)		(448	)		(8,084	)		(16,069	)
Adjustments to net assets allocated to contracts in payout period		402			6,953			(1,397	)		667			18,731
Increase (decrease) in net assets from contract transactions		(2,568,026	)		(1,717,269	)		(231,706	)		(1,443,794	)		(256,358	)
Increase (decrease) in net assets		(3,798,192	)		(2,293,861	)		(1,306,121	)		(9,392,842	)		(4,737,865	)
Net assets at beginning of period		24,060,895			11,250,260			3,641,493			27,120,151			14,999,543
Net assets at end of period	$	20,262,703		$	8,956,399		$	2,335,372		$	17,727,309		$	10,261,678
Beginning units		691,710			324,580			46,272			371,767			205,345
Units issued		12,369			17,418			382			11,207			18,453
Units redeemed		(90,593	)		(69,916	)		(4,375	)		(35,335	)		(23,129	)
Ending units		613,486			272,082			42,279			347,639			200,669
For the Year Ended December 31, 2021
From operations:
Dividends	$	726,136		$	315,981		$	—		$	—		$	—
Mortality and expense risk and administrative charges		(392,560	)		(175,783	)		(52,064	)		(448,098	)		(238,137	)
Net investment income (loss)		333,576			140,198			(52,064	)		(448,098	)		(238,137	)
Net realized gain (loss)		1,145,225			420,813			195,558			1,690,213			813,164
Capital gain distribution from mutual funds		2,544,573			1,193,306			1,404,628			11,148,376			6,419,274
Change in unrealized appreciation (depreciation) of investments		728,384			463,354			(1,264,796	)		(10,338,521	)		(5,857,416	)
Increase (decrease) in net assets from operations		4,751,758			2,217,671			283,326			2,051,970			1,136,885
From contract transactions:
Payments received from contract owners		31,098			383,703			—			25,992			304,935
Payments for contract benefits or terminations		(3,152,634	)		(1,869,873	)		(343,704	)		(2,661,937	)		(2,181,609	)
Transfers between sub-accounts (including fixed account), net		(663,637	)		(320,968	)		7,635			(153,217	)		206,493
Contract maintenance charges		(17,565	)		(16,576	)		(461	)		(9,848	)		(18,108	)
Adjustments to net assets allocated to contracts in payout period		4,274			9,150			(11,079	)		2,290			19,866
Increase (decrease) in net assets from contract transactions		(3,798,464	)		(1,814,564	)		(347,609	)		(2,796,720	)		(1,668,423	)
Increase (decrease) in net assets		953,294			403,107			(64,283	)		(744,750	)		(531,538	)
Net assets at beginning of period		23,107,601			10,847,153			3,705,776			27,864,901			15,531,081
Net assets at end of period	$	24,060,895		$	11,250,260		$	3,641,493		$	27,120,151		$	14,999,543
Beginning units		809,710			381,632			50,828			410,821			228,856
Units issued		31,702			16,176			538			13,336			10,799
Units redeemed		(149,702	)		(73,228	)		(5,094	)		(52,390	)		(34,310	)
Ending units		691,710			324,580			46,272			371,767			205,345

 The accompanying Notes to Financial Statements are an integral part of this statement.

12

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SST SA Multi- Managed Mid Cap Value Portfolio Class 1			SST SA Multi- Managed Mid Cap Value Portfolio Class 2			SST SA Multi- Managed Mid Cap Value Portfolio Class 3			SST SA Multi- Managed Small Cap Portfolio Class 1			SST SA Multi- Managed Small Cap Portfolio Class 2
For the Year Ended December 31, 2022
From operations:
Dividends	$	22,516		$	125,505		$	55,416		$	5,537		$	31,277
Mortality and expense risk and administrative charges		(38,670	)		(319,996	)		(171,407	)		(18,780	)		(216,806	)
Net investment income (loss)		(16,154	)		(194,491	)		(115,991	)		(13,243	)		(185,529	)
Net realized gain (loss)		12,058			212,270			281,045			4,687			(66,396	)
Capital gain distribution from mutual funds		381,918			2,715,011			1,504,290			227,859			2,324,558
Change in unrealized appreciation (depreciation) of investments		(686,448	)		(5,038,745	)		(2,991,805	)		(501,898	)		(4,995,490	)
Increase (decrease) in net assets from operations		(308,626	)		(2,305,955	)		(1,322,461	)		(282,595	)		(2,922,857	)
From contract transactions:
Payments received from contract owners		2,500			34,311			208,965			2,500			31,565
Payments for contract benefits or terminations		(134,717	)		(1,393,575	)		(1,553,661	)		(67,556	)		(1,170,349	)
Transfers between sub-accounts (including fixed account), net		(8,598	)		(955,390	)		(724,297	)		10,761			(662,291	)
Contract maintenance charges		(501	)		(11,675	)		(22,927	)		(225	)		(11,332	)
Adjustments to net assets allocated to contracts in payout period		49			620			4,635			(1,104	)		582
Increase (decrease) in net assets from contract transactions		(141,267	)		(2,325,709	)		(2,087,285	)		(55,624	)		(1,811,825	)
Increase (decrease) in net assets		(449,893	)		(4,631,664	)		(3,409,746	)		(338,219	)		(4,734,682	)
Net assets at beginning of period		3,063,854			22,819,103			13,227,860			1,588,604			16,858,763
Net assets at end of period	$	2,613,961		$	18,187,439		$	9,818,114		$	1,250,385		$	12,124,081
Beginning units		47,711			387,664			226,454			49,454			564,362
Units issued		138			1,594			6,791			617			3,529
Units redeemed		(2,602	)		(44,845	)		(45,830	)		(2,704	)		(72,630	)
Ending units		45,247			344,413			187,415			47,367			495,261
For the Year Ended December 31, 2021
From operations:
Dividends	$	57,336		$	395,668		$	205,309		$	6,832		$	32,376
Mortality and expense risk and administrative charges		(41,129	)		(373,190	)		(206,008	)		(22,597	)		(278,775	)
Net investment income (loss)		16,207			22,478			(699	)		(15,765	)		(246,399	)
Net realized gain (loss)		117,070			231,123			234,750			109,084			1,124,642
Capital gain distribution from mutual funds		221,796			1,753,272			1,018,091			357,688			3,962,585
Change in unrealized appreciation (depreciation) of investments		298,240			3,111,903			1,743,072			(135,107	)		(1,530,845	)
Increase (decrease) in net assets from operations		653,313			5,118,776			2,995,214			315,900			3,309,983
From contract transactions:
Payments received from contract owners		—			34,931			233,904			—			27,371
Payments for contract benefits or terminations		(211,527	)		(2,669,984	)		(1,927,812	)		(215,301	)		(2,065,853	)
Transfers between sub-accounts (including fixed account), net		(7,962	)		(1,184,681	)		(633,705	)		(7,928	)		(495,883	)
Contract maintenance charges		(427	)		(12,461	)		(22,744	)		(212	)		(13,492	)
Adjustments to net assets allocated to contracts in payout period		3,563			2,652			6,992			1,168			2,307
Increase (decrease) in net assets from contract transactions		(216,353	)		(3,829,543	)		(2,343,365	)		(222,273	)		(2,545,550	)
Increase (decrease) in net assets		436,960			1,289,233			651,849			93,627			764,433
Net assets at beginning of period		2,626,894			21,529,870			12,576,011			1,494,977			16,094,330
Net assets at end of period	$	3,063,854		$	22,819,103		$	13,227,860		$	1,588,604		$	16,858,763
Beginning units		51,376			458,619			269,876			56,778			654,588
Units issued		61			13,743			6,813			45			35,641
Units redeemed		(3,726	)		(84,698	)		(50,235	)		(7,369	)		(125,867	)
Ending units		47,711			387,664			226,454			49,454			564,362

 The accompanying Notes to Financial Statements are an integral part of this statement.

13

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SST SA Multi- Managed Small Cap Portfolio Class 3			SAST SA AB Growth Portfolio Class 1			SAST SA AB Growth Portfolio Class 2			SAST SA AB Growth Portfolio Class 3			SAST SA American Funds Global Growth Portfolio Class 3
For the Year Ended December 31, 2022
From operations:
Dividends	$	10,944		$	—		$	—		$	—		$	—
Mortality and expense risk and administrative charges		(126,580	)		(20,266	)		(469,756	)		(276,257	)		(83,699	)
Net investment income (loss)		(115,636	)		(20,266	)		(469,756	)		(276,257	)		(83,699	)
Net realized gain (loss)		(161,059	)		15,896			716,779			539,813			(147,816	)
Capital gain distribution from mutual funds		1,488,838			225,192			4,626,918			3,008,809			32,907
Change in unrealized appreciation (depreciation) of investments		(2,995,404	)		(777,798	)		(16,545,103	)		(10,486,893	)		(1,710,477	)
Increase (decrease) in net assets from operations		(1,783,261	)		(556,976	)		(11,671,162	)		(7,214,528	)		(1,909,085	)
From contract transactions:
Payments received from contract owners		265,876			1,360			42,591			319,763			48,555
Payments for contract benefits or terminations		(834,647	)		(49,185	)		(2,314,114	)		(1,458,553	)		(707,388	)
Transfers between sub-accounts (including fixed account), net		(178,705	)		2,294			273,026			203,100			187,283
Contract maintenance charges		(14,226	)		(156	)		(9,520	)		(36,095	)		(40,400	)
Adjustments to net assets allocated to contracts in payout period		10,366			27			60			6,156			1,339
Increase (decrease) in net assets from contract transactions		(751,336	)		(45,660	)		(2,007,957	)		(965,629	)		(510,611	)
Increase (decrease) in net assets		(2,534,597	)		(602,636	)		(13,679,119	)		(8,180,157	)		(2,419,696	)
Net assets at beginning of period		10,074,911			1,892,436			39,761,241			24,659,519			7,352,069
Net assets at end of period	$	7,540,314		$	1,289,800		$	26,082,122		$	16,479,362		$	4,932,373
Beginning units		337,991			93,694			1,989,646			1,234,437			202,440
Units issued		14,250			246			35,498			66,940			16,722
Units redeemed		(43,572	)		(3,239	)		(164,898	)		(125,706	)		(35,501	)
Ending units		308,669			90,701			1,860,246			1,175,671			183,661
For the Year Ended December 31, 2021
From operations:
Dividends	$	2,136		$	—		$	—		$	—		$	4,457
Mortality and expense risk and administrative charges		(159,687	)		(24,337	)		(589,242	)		(350,959	)		(111,553	)
Net investment income (loss)		(157,551	)		(24,337	)		(589,242	)		(350,959	)		(107,096	)
Net realized gain (loss)		295,692			71,097			2,140,047			1,871,258			209,982
Capital gain distribution from mutual funds		2,418,093			136,667			2,935,550			1,853,397			578,593
Change in unrealized appreciation (depreciation) of investments		(570,908	)		234,730			4,340,069			2,100,527			308,146
Increase (decrease) in net assets from operations		1,985,326			418,157			8,826,424			5,474,223			989,625
From contract transactions:
Payments received from contract owners		35,695			1,360			102,854			966,282			85,576
Payments for contract benefits or terminations		(1,300,485	)		(148,946	)		(4,177,370	)		(3,127,511	)		(694,061	)
Transfers between sub-accounts (including fixed account), net		(201,386	)		51,380			(623,076	)		(826,234	)		(162,942	)
Contract maintenance charges		(14,625	)		(104	)		(10,942	)		(38,414	)		(44,296	)
Adjustments to net assets allocated to contracts in payout period		8,393			2,895			1,526			3,115			1,454
Increase (decrease) in net assets from contract transactions		(1,472,408	)		(93,415	)		(4,707,008	)		(3,022,762	)		(814,269	)
Increase (decrease) in net assets		512,918			324,742			4,119,416			2,451,461			175,356
Net assets at beginning of period		9,561,993			1,567,694			35,641,825			22,208,058			7,176,713
Net assets at end of period	$	10,074,911		$	1,892,436		$	39,761,241		$	24,659,519		$	7,352,069
Beginning units		389,916			98,580			2,257,611			1,407,647			226,180
Units issued		13,931			3,508			19,716			80,995			4,843
Units redeemed		(65,856	)		(8,394	)		(287,681	)		(254,205	)		(28,583	)
Ending units		337,991			93,694			1,989,646			1,234,437			202,440

 The accompanying Notes to Financial Statements are an integral part of this statement.

14

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA American Funds Growth Portfolio Class 3			SAST SA American Funds Growth- Income Portfolio Class 3			SAST SA DFA Ultra Short Bond Portfolio Class 1			SAST SA DFA Ultra Short Bond Portfolio Class 2			SAST SA DFA Ultra Short Bond Portfolio Class 3
For the Year Ended December 31, 2022
From operations:
Dividends	$	17,436		$	55,038		$	—		$	—		$	—
Mortality and expense risk and administrative charges		(55,625	)		(93,610	)		(1,742	)		(57,986	)		(123,256	)
Net investment income (loss)		(38,189	)		(38,572	)		(1,742	)		(57,986	)		(123,256	)
Net realized gain (loss)		236,823			(30,910	)		(534	)		(23,573	)		(98,901	)
Capital gain distribution from mutual funds		460,467			188,544			—			—			—
Change in unrealized appreciation (depreciation) of investments		(2,213,366	)		(1,529,779	)		(1,505	)		(41,640	)		(60,920	)
Increase (decrease) in net assets from operations		(1,554,265	)		(1,410,717	)		(3,781	)		(123,199	)		(283,077	)
From contract transactions:
Payments received from contract owners		19,503			20,107			—			127,371			289,656
Payments for contract benefits or terminations		(463,115	)		(699,730	)		(12,176	)		(772,568	)		(1,680,612	)
Transfers between sub-accounts (including fixed account), net		(282,428	)		(222,607	)		(608	)		120,029			954,332
Contract maintenance charges		(20,135	)		(30,575	)		(246	)		(4,331	)		(86,937	)
Adjustments to net assets allocated to contracts in payout period		1,086			777			—			4,130			(1,194	)
Increase (decrease) in net assets from contract transactions		(745,089	)		(932,028	)		(13,030	)		(525,369	)		(524,755	)
Increase (decrease) in net assets		(2,299,354	)		(2,342,745	)		(16,811	)		(648,568	)		(807,832	)
Net assets at beginning of period		5,370,477			8,033,153			135,593			4,060,426			9,095,157
Net assets at end of period	$	3,071,123		$	5,690,408		$	118,782		$	3,411,858		$	8,287,325
Beginning units		109,626			247,733			14,346			439,189			985,080
Units issued		8,713			4,461			5			40,157			261,199
Units redeemed		(27,247	)		(38,576	)		(1,408	)		(97,656	)		(317,880	)
Ending units		91,092			213,618			12,943			381,690			928,399
For the Year Ended December 31, 2021
From operations:
Dividends	$	1,169		$	73,545		$	70		$	—		$	—
Mortality and expense risk and administrative charges		(80,594	)		(110,700	)		(1,974	)		(71,455	)		(161,388	)
Net investment income (loss)		(79,425	)		(37,155	)		(1,904	)		(71,455	)		(161,388	)
Net realized gain (loss)		436,453			69,933			(187	)		(53,878	)		(125,572	)
Capital gain distribution from mutual funds		196,749			254,550			—			—			—
Change in unrealized appreciation (depreciation) of investments		424,759			1,177,550			(607	)		24,124			42,586
Increase (decrease) in net assets from operations		978,536			1,464,878			(2,698	)		(101,209	)		(244,374	)
From contract transactions:
Payments received from contract owners		480,045			1,104,143			—			192,780			480,118
Payments for contract benefits or terminations		(993,838	)		(614,283	)		(7,743	)		(2,421,596	)		(1,756,390	)
Transfers between sub-accounts (including fixed account), net		(281,636	)		(348,085	)		400			800,213			(3,098,753	)
Contract maintenance charges		(23,869	)		(32,711	)		(255	)		(6,710	)		(111,614	)
Adjustments to net assets allocated to contracts in payout period		588			590			—			83			2,531
Increase (decrease) in net assets from contract transactions		(818,710	)		109,654			(7,598	)		(1,435,230	)		(4,484,108	)
Increase (decrease) in net assets		159,826			1,574,532			(10,296	)		(1,536,439	)		(4,728,482	)
Net assets at beginning of period		5,210,651			6,458,621			145,889			5,596,865			13,823,639
Net assets at end of period	$	5,370,477		$	8,033,153		$	135,593		$	4,060,426		$	9,095,157
Beginning units		128,323			244,621			15,142			592,509			1,466,883
Units issued		14,153			37,246			227			255,834			182,447
Units redeemed		(32,850	)		(34,134	)		(1,023	)		(409,154	)		(664,250	)
Ending units		109,626			247,733			14,346			439,189			985,080

  The accompanying Notes to Financial Statements are an integral part of this statement.

15

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA VCP Dynamic Allocation Portfolio Class 3			SAST SA VCP Dynamic Strategy Portfolio Class 3			T Rowe Price Blue Chip Growth Portfolio II Class			T Rowe Price Equity Income Portfolio II Class
For the Year Ended December 31, 2022
From operations:
Dividends	$	1,010,634		$	843,097		$	—		$	79,597
Mortality and expense risk and administrative charges		(659,817	)		(603,127	)		(55,101	)		(74,387	)
Net investment income (loss)		350,817			239,970			(55,101	)		5,210
Net realized gain (loss)		(335,100	)		144,392			188,333			28,665
Capital gain distribution from mutual funds		3,409,629			2,152,524			169,972			229,729
Change in unrealized appreciation (depreciation) of investments		(12,644,526	)		(9,747,187	)		(2,410,104	)		(514,126	)
Increase (decrease) in net assets from operations		(9,219,180	)		(7,210,301	)		(2,106,900	)		(250,522	)
From contract transactions:
Payments received from contract owners		65,762			15,043			83,077			25,702
Payments for contract benefits or terminations		(3,546,798	)		(3,182,268	)		(563,851	)		(654,821	)
Transfers between sub-accounts (including fixed account), net		(26,152	)		(936,068	)		193,853			(663,508	)
Contract maintenance charges		(922,012	)		(836,575	)		(17,546	)		(47,448	)
Adjustments to net assets allocated to contracts in payout period		—			—			9,331			647
Increase (decrease) in net assets from contract transactions		(4,429,200	)		(4,939,868	)		(295,136	)		(1,339,428	)
Increase (decrease) in net assets		(13,648,380	)		(12,150,169	)		(2,402,036	)		(1,589,950	)
Net assets at beginning of period		51,360,108			46,815,286			5,553,605			5,819,143
Net assets at end of period	$	37,711,728		$	34,665,117		$	3,151,569		$	4,229,193
Beginning units		2,787,038			2,661,427			117,458			257,965
Units issued		69,019			41,958			13,503			9,097
Units redeemed		(347,424	)		(361,505	)		(20,717	)		(69,982	)
Ending units		2,508,633			2,341,880			110,244			197,080
For the Year Ended December 31, 2021
From operations:
Dividends	$	802,323		$	627,131		$	—		$	79,110
Mortality and expense risk and administrative charges		(824,131	)		(745,428	)		(83,720	)		(88,169	)
Net investment income (loss)		(21,808	)		(118,297	)		(83,720	)		(9,059	)
Net realized gain (loss)		1,251,418			1,268,100			643,091			90,621
Capital gain distribution from mutual funds		2,975,723			1,701,204			611,149			416,189
Change in unrealized appreciation (depreciation) of investments		(269,809	)		1,078,877			(318,613	)		700,557
Increase (decrease) in net assets from operations		3,935,524			3,929,884			851,907			1,198,308
From contract transactions:
Payments received from contract owners		6,102			6,102			281,945			176,189
Payments for contract benefits or terminations		(6,137,910	)		(5,557,919	)		(878,963	)		(615,334	)
Transfers between sub-accounts (including fixed account), net		88,474			332,544			(149,371	)		(332,667	)
Contract maintenance charges		(953,510	)		(859,040	)		(21,827	)		(48,735	)
Adjustments to net assets allocated to contracts in payout period		—			—			555			2,309
Increase (decrease) in net assets from contract transactions		(6,996,844	)		(6,078,313	)		(767,661	)		(818,238	)
Increase (decrease) in net assets		(3,061,320	)		(2,148,429	)		84,246			380,070
Net assets at beginning of period		54,421,428			48,963,715			5,469,359			5,439,073
Net assets at end of period	$	51,360,108		$	46,815,286		$	5,553,605		$	5,819,143
Beginning units		3,177,750			3,016,818			134,264			297,567
Units issued		74,932			97,931			9,944			20,504
Units redeemed		(465,644	)		(453,322	)		(26,750	)		(60,106	)
Ending units		2,787,038			2,661,427			117,458			257,965

 The accompanying Notes to Financial Statements are an integral part of this statement.

16

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

1. Organization

Variable Annuity Account Five (“the Separate Account”) is a segregated investment account established by American General Life Insurance Company (“AGL”) to receive and invest premium payments from variable annuity contracts issued by AGL. AGL is a wholly owned subsidiary of AGC Life Insurance Company, a wholly owned subsidiary of Corebridge Financial, Inc. (“Corebridge”). On September 19, 2022, Corebridge completed an initial public offering (the “IPO”) in which American International Group, Inc. (“AIG Parent”) sold 80,000,000 shares of Corebridge Parent common stock to the public. As of December 31, 2022, AIG owns 77.7% of the outstanding common stock of Corebridge Parent. AIG Parent is a publicly traded entity, listed on the New York Stock Exchange (NYSE:AIG). The term “AIG” means AIG Parent and its consolidated subsidiaries, unless the context refers to AIG Parent only.

The Separate Account includes the following variable annuity products:

Seasons	Seasons Elite
Seasons Advantage	Seasons Preferred Solution
Seasons Advisor	Seasons Select
Seasons Advisor II	Seasons Select II
Seasons Advisor III	Seasons Triple Elite

The Separate Account contracts are sold through AGL’s affiliated broker-dealers, independent broker-dealers, full-service securities firms, and financial institutions. The distributor of the Separate Account is AIG Capital Services, Inc., an affiliate of AGL. No underwriting fees are paid in connection with the distribution of these contracts.

The Separate Account is registered with the Securities and Exchange Commission as a Unit Investment Trust under the Investment Company Act of 1940, as amended. The Separate Account consists of various sub-accounts. Each sub-account invests all its invertible assets in a corresponding eligible mutual fund, which is registered under the 1940 Act as an open-ended management investment company. The names in bold in the table below are the diversified, open-ended management investment companies and the names below them are the names of the sub-accounts/ corresponding eligible mutual funds. Collectively, all of the mutual funds are referred to as “Funds” throughout these financial statements.

For each sub-account, the financial statements are comprised of a Statement of Assets and Liabilities, including a Schedule of Portfolio Investments, as of December 31, 2022 and related Statements of Operations and Changes in Net Assets for each of the years in the period then ended.

Fidelity Variable Insurance Products (Fidelity VIP)
Fidelity VIP Contrafund Portfolio Service Class 2	Fidelity VIP Mid Cap Portfolio Service Class 2
Fidelity VIP Equity-Income Portfolio Service Class 2	Fidelity VIP Overseas Portfolio Service Class 2
Fidelity VIP Investment Grade Bond Portfolio Service Class 2
Goldman Sachs Variable Insurance Trust (Goldman Sachs VIT)
Goldman Sachs VIT Government Money Market Fund Service Shares
Seasons Series Trust (SST)(a)(b)
SST Balanced Growth Strategy Class 1	SST SA Multi-Managed Diversified Fixed Income Portfolio Class 2
SST Balanced Growth Strategy Class 2	SST SA Multi-Managed Diversified Fixed Income Portfolio Class 3
SST Balanced Growth Strategy Class 3	SST SA Multi-Managed International Equity Portfolio Class 1
SST Conservative Growth Strategy Class 1	SST SA Multi-Managed International Equity Portfolio Class 2
SST Conservative Growth Strategy Class 2	SST SA Multi-Managed International Equity Portfolio Class 3
SST Conservative Growth Strategy Class 3	SST SA Multi-Managed Large Cap Growth Portfolio Class 1
SST Growth Strategy Class 1	SST SA Multi-Managed Large Cap Growth Portfolio Class 2
SST Growth Strategy Class 2	SST SA Multi-Managed Large Cap Growth Portfolio Class 3
SST Growth Strategy Class 3	SST SA Multi-Managed Large Cap Value Portfolio Class 1
SST Moderate Growth Strategy Class 1	SST SA Multi-Managed Large Cap Value Portfolio Class 2
SST Moderate Growth Strategy Class 2	SST SA Multi-Managed Large Cap Value Portfolio Class 3
SST Moderate Growth Strategy Class 3	SST SA Multi-Managed Mid Cap Growth Portfolio Class 1
SST SA Allocation Balanced Portfolio Class 3	SST SA Multi-Managed Mid Cap Growth Portfolio Class 2

17

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Seasons Series Trust (SST))a)(b)
SST SA Allocation Growth Portfolio Class 3	SST SA Multi-Managed Mid Cap Growth Portfolio Class 3
SST SA Allocation Moderate Growth Portfolio Class 3	SST SA Multi-Managed Mid Cap Value Portfolio Class 1
SST SA Allocation Moderate Portfolio Class 3	SST SA Multi-Managed Mid Cap Value Portfolio Class 2
SST SA American Century Inflation Protection Portfolio Class 3(c)	SST SA Multi-Managed Mid Cap Value Portfolio Class 3
SST SA Columbia Focused Value Portfolio Class 2	SST SA Multi-Managed Small Cap Portfolio Class 1
SST SA Columbia Focused Value Portfolio Class 3	SST SA Multi-Managed Small Cap Portfolio Class 2
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 1	SST SA Multi-Managed Small Cap Portfolio Class 3
SunAmerica Series Trust (SAST)(a)
SAST SA AB Growth Portfolio Class 1	SAST SA DFA Ultra Short Bond Portfolio Class 1
SAST SA AB Growth Portfolio Class 2	SAST SA DFA Ultra Short Bond Portfolio Class 2
SAST SA AB Growth Portfolio Class 3	SAST SA DFA Ultra Short Bond Portfolio Class 3
SAST SA American Funds Global Growth Portfolio Class 3	SAST SA VCP Dynamic Allocation Portfolio Class 3
SAST SA American Funds Growth Portfolio Class 3	SAST SA VCP Dynamic Strategy Portfolio Class 3
SAST SA American Funds Growth-Income Portfolio Class 3
T. Rowe Price Equity Series, Inc. (T. Rowe Price)
T Rowe Price Blue Chip Growth Portfolio II Class	T Rowe Price Equity Income Portfolio II Class
T Rowe Price Blue Chip Growth Portfolio II Class	T Rowe Price Equity Income Portfolio II Class

(a) These are affiliated investment companies. SunAmerica Asset Management LLC., an affiliate of AGL, serves as the investment advisor to Seasons Series Trust and SunAmerica Series Trust.

(b) Consists of multi-managed variable investment strategies (Seasons Strategies), Select Portfolios, Focused Portfolios and Managed Allocation Portfolios each with a distinct investment objective. The Seasons Strategies are comprised of Growth, Moderate Growth, Balanced Growth, and Conservative Growth. Each strategy invests in the shares of a designated multi-managed portfolio as well as in the shares of the two other portfolios of the Seasons Trust. Each of the Select Portfolios, Managed Allocation Portfolios and Focused Portfolios is invested solely in the shares of designated portfolio of Seasons Series Trust.

(c) Formerly SST SA Wellington Real Return Portfolio.

In addition to the sub-accounts above, a contract owner may allocate contract funds to a fixed account, which is part of AGL’s General Account and not included in these financial statements. Contract owners should refer to the product prospectus for the available Funds and fixed account.

The assets of each of the sub-accounts of the Separate Account are registered in the name of AGL. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from AGL’s other assets and liabilities. The Separate Account assets are not chargeable with liabilities arising out of any other business of AGL may conduct. Net premiums from the contracts are allocated to the sub-accounts and invested in the Funds in accordance with contract owner instructions and are recorded as contract transactions in the Statements of Operations and Changes in Net Assets.

We are continually assessing the impact on our business, operations and investments and separate account assets of COVID-19 and the resulting ongoing economic and societal disruption. These impacts initially included a global economic contraction, disruptions in financial markets, increased market volatility and declines in certain equity and other asset prices that had negative effects on our investments, our access to liquidity, our ability to generate new sales and the costs associated with claims. Further, significant legislative and regulatory activity has occurred at both the U.S. federal and state levels, as well as globally. We cannot predict what form future legal and regulatory responses to concerns about COVID-19 and related public health issues will take, or how such responses will impact our business.

2. Summary of Significant Accounting Policy

The financial statements of the Separate Account have been prepared in conformity with accounting principles generally accepted in the United States (GAAP). The Separate Account is an Investment Company and follows accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946 Financial Services – Investment Companies. The following is a summary of significant accounting policies consistently followed by the Separate Account in the preparation of its financial statements.

Use of Estimates: The preparation of financial statements in conformity with GAAP requires the application of accounting policies that often involve a significant degree of judgment. These accounting estimates require the use of

18

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

assumptions about matters, some of which are highly uncertain at the time of estimation. To the extent actual experience differs from assumptions used, the financial statements of the Separate Account could be materially affected.

Investments: Investments in mutual funds are valued at their closing net asset value per share as determined by the respective mutual funds, which generally value their securities at fair value. Purchases and sales of shares of the Funds are made at the net asset values of such Funds. Transactions are recorded on a trade date basis. Realized gains and losses on the sales of investments are recognized at the date of sale and are determined on a first-in, first-out basis. Dividends and capital gain distributions from the Funds are recorded on the ex-dividend date and reinvested upon receipt.

Reserves for Annuity Contracts in Payout: Net assets allocated to contracts in the payout period are based on industry standard mortality tables depending on the calendar year of annuitization as well as other assumptions, including provisions for the risk of adverse deviation from assumptions.

An assumed interest rate of 3.50 percent is used in determining annuity payments for all products.

At each reporting period, the assumptions must be evaluated based on current experience, and the reserves must be adjusted accordingly. To the extent additional reserves are established due to mortality risk experience, AGL makes payments to the Separate Account. If there are excess reserves remaining at the time annuity payments cease, the assets supporting those reserves are transferred from the Separate Account to the General Account. Transfers between the General Account and the Separate Account, if any, are disclosed as adjustments to net assets allocated to contracts in payout period in the Statements of Operations and Changes in Net Assets. Annuity benefit payments are recorded as payments for contract benefits or terminations in the Statements of Operations and Changes in Net Assets.

Accumulation Unit: This is the basic valuation unit used to calculate the contract owner’s interest. Such units are valued daily to reflect investment performance and the prorated daily deduction for expense charges.

Income Taxes: The operations of the Separate Account are included in the federal income tax return of AGL, which is taxed as a life insurance company under the provision of the Internal Revenue Code (the Code). Under the current provisions of the Code, AGL does not expect to incur federal income taxes on the earnings of the Separate Account to the extent that the earnings are credited under the contracts. As a result, no charge is currently made to the Separate Account for federal income taxes. The Separate Account is not treated as a regulated investment company under the Code. AGL will periodically review changes in the tax law. AGL retains the right to charge for any federal income tax incurred which is applicable to the Separate Account if the law is changed.

3. Fair Value Measurements

Assets recorded at fair value in the Separate Account’s Statement of Assets and Liabilities are measured and classified in a hierarchy for disclosure purposes consisting of three “levels” based on the observability of valuation inputs:

• Level 1— Fair value measurements based on quoted prices (unadjusted) in active markets that the Separate Account has the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. The Separate Account does not adjust the quoted price for such instruments.

• Level 2— Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

• Level 3— Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair value positions in Level 3. The circumstances in which there is little, if any, market activity for the asset or liability. Therefore, the Separate Account makes certain assumptions about the inputs a hypothetical market participant would use to value that asset or liability.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The Separate Account assets measured at fair value as of December 31, 2022 consist of investments in registered mutual funds that generally trade daily and are measured at fair value using quoted prices in active markets for

19

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

identical assets, which are classified as Level 1 throughout the year. As such, no transfers between fair value hierarchy levels occurred during the year. See the Schedule of Portfolio Investments for the table presenting information about assets measured at fair value on a recurring basis at December 31, 2022, and respective hierarchy levels.

4. Expenses

Expense charges are applied against the current value of the Separate Account and are paid to AGL as follows:

Separate Account Annual Charges: Deductions for the mortality and expense risk charges and distribution charges are calculated daily, at an annual rate, on the actual prior day’s net asset value of the underlying Funds comprising the sub-accounts attributable to the contract owners and are paid to AGL. The mortality risk charge represents compensation to AGL for the mortality risks assumed under the contract, which is the obligation to provide payments during the payout period for the life of the contract and to provide the standard death benefit. The expense risk charge represents compensation to AGL for assuming the risk that the current contract administration charges will be insufficient to cover the cost of administering the contract in the future. The distribution expense charge covers all expenses associated with the distribution of the contract. These charges are included on the mortality and expense risk and administrative charges line in the Statements of Operations and Changes in Net Assets.

The exact rate depends on the particular product issued and the death benefits elected for each product. Expense charges for each product are as follows:

Products	Separate Account Annual Charges*
Seasons	1.40%
Seasons Advantage	1.65%, 1.90% or 2.30%
Seasons Advisor	1.40% or 1.65%
Seasons Advisor II	1.55%, 1.70% or 1.95%
Seasons Advisor III	1.65%, 1.85%, or 2.30%
Seasons Elite	1.55%, 1.75%, 2.00% or 2.20%
Seasons Preferred Solution	1.15%, 1.40%, 1.55%, 1.65%, 1.80%, 2.05% or 2.20%
Seasons Select	1.40% or 1.52%
Seasons Select II	1.40%, 1.55%, 1.65%, 1.80% or 2.05%
Seasons Triple Elite	1.55%, 1.70% or 1.95%

* The distribution charge is deducted at an annual rate of 0.15 percent of the net asset value of each portfolio and is included in the respective separate account annual charge rate.

Contract Maintenance Charge: During the accumulation phase, an annual contract maintenance charge is assessed by AGL on the contract anniversary. In the event of a full surrender, a contract maintenance charge is assessed at the date of surrender and deducted from the withdrawal proceeds. The contract maintenance charge represents a reimbursement of administrative expenses incurred by AGL related to the establishment and maintenance of the record keeping function for the sub-accounts. These charges are included as part of the contract maintenance charges line in the Statements of Operations and Changes in Net Assets.

The contract maintenance charge ranges from $30 to $35 for certain contracts. No contract maintenance charge is assessed under the Seasons Advisor and Seasons Advisor II contracts.

Withdrawal Charge: A withdrawal charge is applicable to certain contract withdrawals pursuant to the contract and is payable to AGL. The withdrawal charges are included as part of the payments for contract benefits or terminations line in the Statements of Operations and Changes in Net Assets.

Withdrawal charges may be assessed for withdrawals in excess of the free withdrawal amount as defined in the contracts. Withdrawal amounts in excess of the free withdrawal amount are assessed withdrawal charges based on tables of charges applicable to specific contracts.

The maximum withdrawal charge of 9 percent is assessed on amount withdrawn in excess of free withdrawals. There are no withdrawal charges under the Seasons Advisor, Seasons Advisor II and Seasons Advisor III contracts.

Transfer Fee: A transfer fee may be assessed on each transfer of funds in excess of the maximum transactions allowed within a contract year depending on the contract provision. The transfer fee is included as part of the payments for contract benefits or terminations line in the Statements of Operations and Changes in Net Assets.

20

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

A transfer fee of $25 ($10 in Pennsylvania and Texas) is assessed on each transfer in excess of the maximum transactions allowed for the product.

Premium Tax Charge: Certain states charge taxes on purchase payments up to a maximum of 3.50 percent. Some states assess premium taxes at the time of purchase payments, while some other states assess premium taxes when annuity payments begin or upon surrender. There are certain states that do not assess premium taxes. If the law of the state requires premium taxes to be paid when purchase payments are made, AGL will deduct the tax from such payments prior to depositing the payments into the Separate Account. Otherwise, such tax will be deducted from the account value when annuity payments begin. Premium taxes are included as part of the payments received from contract owners line in the Statements of Operations and Changes in Net Assets.

AGL currently deducts premium taxes upon annuitization; however, it reserves the right to deduct premium taxes upon receipt of a purchase payment or upon surrender of the contract.

Income Protector Fee: The optional Income Protector Program provides a guaranteed fixed minimum retirement income upon annuitization. The fee is calculated as a percentage of the income benefit base, as defined in the prospectus, and is deducted annually from the contract value. The income benefit base is calculated using the contract value on the effective date of the enrollment in the program and then each subsequent contract anniversary, adjusted for the applicable growth rates, purchase payments, proportional withdrawals, fees, and charges. The income protector fee is included as part of the payments for contract benefits or terminations line in the Statements of Operations and Changes in Net Assets.

The fee for the Income Protector Program is 0.10 percent and is offered under the Seasons Select, Seasons Select II and Seasons Triple Elite contracts.

MarketLock, Marketlock for Two, MarketLock for Life Plus, MarketLock Income Plus, MarketLock for Life and Seasons Income Rewards Fee: These optional features provide a guaranteed withdrawal stream by locking in market gains during an applicable evaluation period.

• MarketLock, MarketLock for Two and Season Income Rewards

The annual fee is calculated as a percentage of the maximum anniversary value benefit base and deducted quarterly from the contract value. The maximum anniversary value benefit base is calculated as the greater of eligible purchase payments received during the first two years, adjusted for withdrawals, or the maximum anniversary date contract value occurring in the first ten contract years, adjusted for withdrawals. The annual fee is included as part of the payments for contract benefits or terminations line in the Statements of Operations and Changes in Net Assets.

The withdrawal benefit base for Seasons Income Rewards is calculated as eligible purchase payments adjusted for withdrawals received during the first 90 days.

• MarketLock for Life, MarketLock for Life Plus and MarketLock Income Plus

The annual fee is calculated as a percentage of the income base and deducted quarterly from the contract value. The income base is calculated as the greater of purchase payments made in the first contract year and purchase payments made in contract years 2-5, capped at 100 percent of purchase payments made in the first year plus a bonus, if eligible, or the highest anniversary date contract value less purchase payments made in years 2-5 greater than the purchase payments received in the first year. The annual fee is included as part of the payments for contract benefits or terminations line in the Statements of Operations and Changes in Net Assets.

21

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The annual fees for the optional features discussed above are as follows (Note: If extension of the evaluation period is elected, an additional 0.10% - 0.25% is added to the Annual Fee):

Optional Features	Products Offered	Annual Fees
MarketLock	Seasons Advantage Seasons Elite Season Preferred Solution Seasons Select II Seasons Triple Elite	0.65%
MarketLock for Two	Seasons Elite Season Preferred Solution Seasons Select II Seasons Triple Elite	0.40% prior to the first withdrawal 0.80% after the first withdrawal
Seasons Income Rewards	Seasons Elite Season Preferred Solution Seasons Select II Seasons Triple Elite	0.65% in years zero to seven 0.45% in years eight to ten
MarketLock for Life	Seasons Advantage Seasons Elite Season Preferred Solution Seasons Select II	0.70% for one covered person 0.95% for two covered persons
MarketLock for Life Plus	Seasons Advantage Seasons Advisor III Seasons Elite Season Preferred Solution Seasons Select II	0.65% to 0.95% for one covered person 0.90% to 1.25% for two covered persons
MarketLock Income Plus	Seasons Advantage Seasons Advisor III Seasons Elite Season Preferred Solution Seasons Select II	0.95% to 1.10% for one covered person 1.20% to 1.35% for two covered persons

Seasons Promise Fee: The optional Seasons Promise Program provides a guaranteed minimum contract value at the end of ten full contract years. The fee is calculated as a percentage of the contract value minus purchase payments received after the 90^th day from the date of contract issuance and deducted quarterly from the contract value during the first ten full contract years. This optional feature is included as part of the payments for contract benefits or terminations line in the Statements of Operations and Changes in Net Assets.

The fee for the Seasons Promise Program ranges from 0.10 percent to 0.65 percent. This optional feature is offered under the offered under the Seasons Select II, Seasons Triple Elite, Seasons Preferred Solution, and Seasons Elite contracts.

22

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. Purchases and Sales of Investments

For the year ended December 31, 2022, the aggregate cost of purchases and proceeds from the sales of investments were:

Sub-accounts	Cost of Purchases		Proceeds from Sales
Fidelity VIP Contrafund Portfolio Service Class 2	$	617,803	$	1,175,754
Fidelity VIP Equity-Income Portfolio Service Class 2		926,690		1,198,423
Fidelity VIP Investment Grade Bond Portfolio Service Class 2		1,380,836		2,316,401
Fidelity VIP Mid Cap Portfolio Service Class 2		735,165		1,239,946
Fidelity VIP Overseas Portfolio Service Class 2		658,514		761,927
Goldman Sachs VIT Government Money Market Fund Service Shares		8,024,804		5,938,855
SST Balanced Growth Strategy Class 1		15,706		1,875,075
SST Balanced Growth Strategy Class 2		1,710,366		6,758,312
SST Balanced Growth Strategy Class 3		1,553,898		4,552,601
SST Conservative Growth Strategy Class 1		112,449		869,892
SST Conservative Growth Strategy Class 2		207,338		4,198,068
SST Conservative Growth Strategy Class 3		1,743,884		4,018,643
SST Growth Strategy Class 1		12,900		1,494,125
SST Growth Strategy Class 2		433,784		2,391,602
SST Growth Strategy Class 3		1,370,862		3,372,961
SST Moderate Growth Strategy Class 1		76,737		1,827,469
SST Moderate Growth Strategy Class 2		528,100		8,762,474
SST Moderate Growth Strategy Class 3		2,116,114		6,565,680
SST SA Allocation Balanced Portfolio Class 3		4,730,620		8,031,549
SST SA Allocation Growth Portfolio Class 3		2,978,659		5,294,042
SST SA Allocation Moderate Growth Portfolio Class 3		18,391,971		25,247,706
SST SA Allocation Moderate Portfolio Class 3		6,533,734		10,491,694
SST SA American Century Inflation Protection Portfolio Class 3		343,022		1,297,858
SST SA Columbia Focused Value Portfolio Class 2		1,801,400		2,347,540
SST SA Columbia Focused Value Portfolio Class 3		1,415,142		2,046,418
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 1		57,522		238,326
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 2		1,479,606		2,707,883
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 3		475,469		2,035,524
SST SA Multi-Managed International Equity Portfolio Class 1		119,322		101,740
SST SA Multi-Managed International Equity Portfolio Class 2		1,372,979		2,410,853
SST SA Multi-Managed International Equity Portfolio Class 3		1,099,830		1,787,092
SST SA Multi-Managed Large Cap Growth Portfolio Class 1		740,175		343,673
SST SA Multi-Managed Large Cap Growth Portfolio Class 2		5,546,048		3,264,452
SST SA Multi-Managed Large Cap Growth Portfolio Class 3		3,816,154		2,046,084
SST SA Multi-Managed Large Cap Value Portfolio Class 1		773,911		192,914
SST SA Multi-Managed Large Cap Value Portfolio Class 2		4,172,795		3,204,855
SST SA Multi-Managed Large Cap Value Portfolio Class 3		2,309,140		2,420,097
SST SA Multi-Managed Mid Cap Growth Portfolio Class 1		686,105		281,538
SST SA Multi-Managed Mid Cap Growth Portfolio Class 2		6,066,465		2,227,953
SST SA Multi-Managed Mid Cap Growth Portfolio Class 3		4,370,057		1,369,356
SST SA Multi-Managed Mid Cap Value Portfolio Class 1		411,679		187,181
SST SA Multi-Managed Mid Cap Value Portfolio Class 2		2,858,364		2,663,554
SST SA Multi-Managed Mid Cap Value Portfolio Class 3		1,866,901		2,565,887
SST SA Multi-Managed Small Cap Portfolio Class 1		249,896		90,903
SST SA Multi-Managed Small Cap Portfolio Class 2		2,378,858		2,051,655
SST SA Multi-Managed Small Cap Portfolio Class 3		1,816,943		1,195,077
SAST SA AB Growth Portfolio Class 1		225,192		65,925
SAST SA AB Growth Portfolio Class 2		5,117,184		2,967,979
SAST SA AB Growth Portfolio Class 3		3,972,403		2,205,479
SAST SA American Funds Global Growth Portfolio Class 3		482,476		1,043,880
SAST SA American Funds Growth Portfolio Class 3		775,921		1,098,732
SAST SA American Funds Growth-Income Portfolio Class 3		350,515		1,132,571
SAST SA DFA Ultra Short Bond Portfolio Class 1		39		14,811
SAST SA DFA Ultra Short Bond Portfolio Class 2		240,486		823,841
SAST SA DFA Ultra Short Bond Portfolio Class 3		2,074,317		2,722,327
SAST SA VCP Dynamic Allocation Portfolio Class 3		5,280,245		5,948,998
SAST SA VCP Dynamic Strategy Portfolio Class 3		3,511,984		6,059,358
T Rowe Price Blue Chip Growth Portfolio II Class		572,587		752,853
T Rowe Price Equity Income Portfolio II Class		493,295		1,597,785

23

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6.   Financial Highlights

The summary of unit values and units outstanding for sub-accounts, investment income ratios, total return and expense ratios, excluding expenses of the underlying mutual funds, for each of the five years in the period ended December 31, 2022, follows:

	December 31, 2022								For the Year Ended December 31, 2022
			Unit Value ($)(a)(f)				Net		Investment Income		Expense Ratio (%)(d)(f)				Total Return (%)(e)(f)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
Fidelity VIP Contrafund Portfolio Service Class 2		135,455		23.02		26.25		3,381,761		0.22		1.15		2.05		-27.98		-27.33
Fidelity VIP Equity-Income Portfolio Service Class 2		221,085		19.80		22.45		4,708,240		1.67		1.15		2.00		-7.12		-6.33
Fidelity VIP Investment Grade Bond Portfolio Service Class 2		798,518		11.38		12.90		9,745,422		1.87		1.15		2.00		-14.93		-14.20
Fidelity VIP Mid Cap Portfolio Service Class 2		238,609		21.79		24.76		5,576,258		0.24		1.15		2.00		-16.65		-15.94
Fidelity VIP Overseas Portfolio Service Class 2		304,138		10.62		12.03		3,464,824		0.80		1.15		2.00		-26.17		-25.54
Goldman Sachs VIT Government Money Market Fund Service Shares		420,819		9.75		9.88		4,127,635		1.69		1.15		1.75		-0.38		0.22
SST Balanced Growth Strategy Class 1		231,397				33.49		7,748,900		0.00				1.40				-29.60
SST Balanced Growth Strategy Class 2		1,072,192		28.92		32.39		33,359,276		0.00		1.40		1.95		-30.08		-29.69
SST Balanced Growth Strategy Class 3		687,619		28.09		33.11		21,368,020		0.00		1.15		2.00		-30.18		-29.59
SST Conservative Growth Strategy Class 1		159,782				29.89		4,775,594		0.00				1.40				-25.11
SST Conservative Growth Strategy Class 2		973,271		25.99		28.89		26,929,736		0.00		1.40		1.95		-25.67		-25.26
SST Conservative Growth Strategy Class 3		538,256		25.09		29.47		15,064,713		0.00		1.15		1.95		-25.75		-25.16
SST Growth Strategy Class 1		334,286				41.12		13,745,514		0.00				1.40				-34.70
SST Growth Strategy Class 2		667,568		35.72		39.75		25,392,871		0.00		1.40		1.95		-35.16		-34.81
SST Growth Strategy Class 3		618,717		34.91		40.59		23,713,421		0.00		1.15		2.00		-35.24		-34.69
SST Moderate Growth Strategy Class 1		299,579				37.88		11,349,001		0.00				1.40				-31.52
SST Moderate Growth Strategy Class 2		1,415,484		32.62		36.64		49,608,659		0.00		1.40		1.95		-31.97		-31.60
SST Moderate Growth Strategy Class 3		1,112,808		31.75		37.44		39,072,209		0.00		1.15		2.00		-32.06		-31.48
SST SA Allocation Balanced Portfolio Class 3		2,595,652		14.83		17.19		41,978,188		2.42		1.15		2.00		-17.17		-16.46
SST SA Allocation Growth Portfolio Class 3		1,457,545		18.54		21.44		29,211,996		2.09		1.15		2.00		-19.14		-18.45
SST SA Allocation Moderate Growth Portfolio Class 3		9,063,906		16.52		19.33		164,025,576		2.54		1.15		2.05		-18.43		-17.69
SST SA Allocation Moderate Portfolio Class 3		3,340,662		16.10		18.64		58,266,059		2.55		1.15		2.00		-17.93		-17.23
SST SA American Century Inflation Protection Portfolio Class 3		320,396		9.89		11.65		3,479,066		1.99		1.15		2.05		-12.94		-12.16
SST SA Columbia Focused Value Portfolio Class 2		298,710		39.05		44.11		12,682,009		1.56		1.40		1.95		-3.82		-3.29
SST SA Columbia Focused Value Portfolio Class 3		172,644		37.99		45.04		7,304,303		1.44		1.15		2.00		-3.95		-3.13
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 1		92,207				15.03		1,386,012		2.04				1.40				-15.40
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 2		1,031,497		12.65		14.55		14,250,409		1.91		1.40		1.95		-15.94		-15.48
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 3		486,736		12.25		14.82		6,674,855		1.67		1.15		2.00		-16.18		-15.46
SST SA Multi-Managed International Equity Portfolio Class 1		63,439				13.17		835,319		1.86				1.40				-17.45
SST SA Multi-Managed International Equity Portfolio Class 2		1,103,386		11.41		12.74		13,438,551		1.62		1.40		1.95		-18.02		-17.57
SST SA Multi-Managed International Equity Portfolio Class 3		685,886		11.11		12.99		8,309,253		1.55		1.15		2.00		-18.23		-17.53
SST SA Multi-Managed Large Cap Growth Portfolio Class 1		126,602				28.26		3,578,030		0.00				1.40				-38.71
SST SA Multi-Managed Large Cap Growth Portfolio Class 2		870,548		24.37		27.31		22,747,262		0.00		1.40		1.95		-39.12		-38.78
SST SA Multi-Managed Large Cap Growth Portfolio Class 3		465,267		23.76		27.81		12,124,410		0.00		1.15		2.00		-39.24		-38.73
SST SA Multi-Managed Large Cap Value Portfolio Class 1		102,228				35.92		3,672,110		1.87				1.40				-4.77
SST SA Multi-Managed Large Cap Value Portfolio Class 2		613,486		30.21		34.75		20,262,703		1.65		1.40		1.95		-5.46		-4.94
SST SA Multi-Managed Large Cap Value Portfolio Class 3		272,082		29.46		35.50		8,956,399		1.53		1.15		2.00		-5.57		-4.76
SST SA Multi-Managed Mid Cap Growth Portfolio Class 1		42,279				55.24		2,335,372		0.00				1.40				-29.81
SST SA Multi-Managed Mid Cap Growth Portfolio Class 2		347,639		47.89		53.40		17,727,309		0.00		1.40		1.95		-30.33		-29.95
SST SA Multi-Managed Mid Cap Growth Portfolio Class 3		200,669		46.66		54.61		10,261,678		0.00		1.15		2.00		-30.39		-29.80
SST SA Multi-Managed Mid Cap Value Portfolio Class 1		45,247				57.77		2,613,961		0.79				1.40				-10.04
SST SA Multi-Managed Mid Cap Value Portfolio Class 2		344,413		47.05		55.90		18,187,439		0.61		1.40		1.95		-10.67		-10.18
SST SA Multi-Managed Mid Cap Value Portfolio Class 3		187,415		45.65		56.99		9,818,114		0.48		1.15		2.00		-10.81		-10.05
SST SA Multi-Managed Small Cap Portfolio Class 1		47,367				26.40		1,250,385		0.39				1.40				-17.82
SST SA Multi-Managed Small Cap Portfolio Class 2		495,261		22.86		25.55		12,124,081		0.22		1.40		1.95		-18.38		-17.93
SST SA Multi-Managed Small Cap Portfolio Class 3		308,669		22.12		26.05		7,540,314		0.12		1.15		2.05		-18.54		-17.80
SAST SA AB Growth Portfolio Class 1		90,701				14.22		1,289,800		0.00				1.40				-29.60
SAST SA AB Growth Portfolio Class 2		1,860,246		13.80		14.13		26,082,122		0.00		1.40		1.95		-30.09		-29.71
SAST SA AB Growth Portfolio Class 3		1,175,671		13.69		14.22		16,479,362		0.00		1.15		2.05		-30.23		-29.60
SAST SA American Funds Global Growth Portfolio Class 3		183,661		24.97		28.46		4,932,373		0.00		1.15		2.00		-26.45		-25.82
SAST SA American Funds Growth Portfolio Class 3		91,092		30.69		35.59		3,071,123		0.41		1.15		2.05		-31.50		-30.89
SAST SA American Funds Growth-Income Portfolio Class 3		213,618		24.09		27.91		5,690,408		0.80		1.15		2.05		-18.43		-17.69
SAST SA DFA Ultra Short Bond Portfolio Class 1		12,943				9.18		118,782		0.00				1.40				-2.90
SAST SA DFA Ultra Short Bond Portfolio Class 2		381,690		8.69		9.07		3,411,858		0.00		1.40		1.95		-3.55		-3.02
SAST SA DFA Ultra Short Bond Portfolio Class 3		928,399		8.59		9.18		8,287,325		0.00		1.15		2.00		-3.80		-2.98
SAST SA VCP Dynamic Allocation Portfolio Class 3		2,508,633		14.40		15.71		37,711,728		2.27		1.15		2.00		-18.79		-18.10
SAST SA VCP Dynamic Strategy Portfolio Class 3		2,341,880		14.16		15.43		34,665,117		2.07		1.15		2.00		-16.22		-15.50
T Rowe Price Blue Chip Growth Portfolio II Class		110,244		26.36		29.83		3,151,569		0.00		1.15		2.00		-39.88		-39.36
T Rowe Price Equity Income Portfolio II Class		197,080		19.80		22.70		4,229,193		1.58		1.15		2.05		-5.54		-4.69

24

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2021								For the Year Ended December 31, 2021
			Unit Value ($)(a)(f)				Net		Investment  Income		Expense Ratio (%)(d)(f)				Total Return (%)(e)(f)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
Fidelity VIP Contrafund Portfolio Service Class 2		161,333		31.96		36.12		5,542,260		0.03		1.15		2.05		24.93		26.05
Fidelity VIP Equity-Income Portfolio Service Class 2		243,162		21.32		23.96		5,516,343		1.67		1.15		2.00		22.14		23.18
Fidelity VIP Investment Grade Bond Portfolio Service Class 2		926,022		13.38		15.03		13,201,153		1.74		1.15		2.00		-2.86		-2.03
Fidelity VIP Mid Cap Portfolio Service Class 2		273,365		26.14		29.46		7,624,400		0.35		1.15		2.00		22.83		23.87
Fidelity VIP Overseas Portfolio Service Class 2		313,069		14.39		16.16		4,804,731		0.32		1.15		2.00		17.03		18.03
Goldman Sachs VIT Government Money Market Fund Service Shares		207,952		9.80		9.86		2,041,687		0.01		1.15		1.70		-1.68		-1.14
SST Balanced Growth Strategy Class 1		276,896				47.56		13,170,335		0.00				1.40				5.26
SST Balanced Growth Strategy Class 2		1,197,325		41.36		46.07		53,071,489		0.00		1.40		1.95		4.57		5.15
SST Balanced Growth Strategy Class 3		761,144		40.23		47.02		33,593,208		0.00		1.15		2.00		4.41		5.30
SST Conservative Growth Strategy Class 1		180,998				39.91		7,223,618		0.00				1.40				4.46
SST Conservative Growth Strategy Class 2		1,086,886		34.96		38.65		40,344,992		0.00		1.40		1.95		3.75		4.32
SST Conservative Growth Strategy Class 3		601,991		33.80		39.37		22,512,046		0.00		1.15		1.95		3.68		4.51
SST Growth Strategy Class 1		361,014		62.96		62.97		22,731,318		0.00				1.40				8.75
SST Growth Strategy Class 2		700,759		55.10		60.97		40,999,915		0.00		1.40		1.95		8.01		8.60
SST Growth Strategy Class 3		654,934		53.91		62.15		38,542,223		0.00		1.15		2.00		7.85		8.77
SST Moderate Growth Strategy Class 1		336,291				55.32		18,603,310		0.00				1.40				7.76
SST Moderate Growth Strategy Class 2		1,605,065		47.95		53.57		82,396,547		0.00		1.40		1.95		7.00		7.59
SST Moderate Growth Strategy Class 3		1,205,603		46.74		54.64		61,918,184		0.00		1.15		2.00		6.86		7.77
SST SA Allocation Balanced Portfolio Class 3		2,946,629		17.90		20.58		57,343,630		0.88		1.15		2.00		5.19		6.08
SST SA Allocation Growth Portfolio Class 3		1,664,174		22.93		26.30		41,041,744		2.03		1.15		2.00		13.40		14.37
SST SA Allocation Moderate Growth Portfolio Class 3		10,146,786		20.25		23.48		223,921,916		1.70		1.15		2.05		10.18		11.18
SST SA Allocation Moderate Portfolio Class 3		3,813,706		19.62		22.53		80,686,616		1.82		1.15		2.00		8.24		9.16
SST SA American Century Inflation Protection Portfolio Class 3		408,540		11.36		13.26		5,064,963		2.75		1.15		2.05		2.12		3.05
SST SA Columbia Focused Value Portfolio Class 2		343,592		40.61		45.61		15,114,949		3.91		1.40		1.95		23.00		23.68
SST SA Columbia Focused Value Portfolio Class 3		207,436		39.55		46.50		9,083,288		3.77		1.15		2.00		22.82		23.87
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 1		104,488				17.77		1,856,531		4.29				1.40				-2.91
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 2		1,124,466		15.05		17.22		18,421,782		4.01		1.40		1.95		-3.51		-2.98
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 3		594,912		14.61		17.54		9,675,814		3.80		1.15		2.00		-3.64		-2.81
SST SA Multi-Managed International Equity Portfolio Class 1		66,962				15.95		1,068,055		3.06				1.40				9.57
SST SA Multi-Managed International Equity Portfolio Class 2		1,262,321		13.92		15.45		18,680,534		2.75		1.40		1.95		8.85		9.45
SST SA Multi-Managed International Equity Portfolio Class 3		787,347		13.59		15.75		11,612,354		2.56		1.15		2.00		8.73		9.65
SST SA Multi-Managed Large Cap Growth Portfolio Class 1		132,412				46.11		6,105,740		0.18				1.40				14.89
SST SA Multi-Managed Large Cap Growth Portfolio Class 2		918,248		40.03		44.61		39,245,916		0.08		1.40		1.95		14.01		14.64
SST SA Multi-Managed Large Cap Growth Portfolio Class 3		471,457		39.11		45.38		20,121,726		0.00		1.15		2.00		13.91		14.88
SST SA Multi-Managed Large Cap Value Portfolio Class 1		103,957				37.72		3,921,291		3.33				1.40				22.23
SST SA Multi-Managed Large Cap Value Portfolio Class 2		691,710		31.95		36.56		24,060,895		3.08		1.40		1.95		21.39		22.05
SST SA Multi-Managed Large Cap Value Portfolio Class 3		324,580		31.20		37.27		11,250,260		2.86		1.15		2.00		21.12		22.16
SST SA Multi-Managed Mid Cap Growth Portfolio Class 1		46,272				78.70		3,641,493		0.00				1.40				7.94
SST SA Multi-Managed Mid Cap Growth Portfolio Class 2		371,767		68.75		76.23		27,120,151		0.00		1.40		1.95		7.17		7.76
SST SA Multi-Managed Mid Cap Growth Portfolio Class 3		205,345		67.03		77.79		14,999,543		0.00		1.15		2.00		7.00		7.92
SST SA Multi-Managed Mid Cap Value Portfolio Class 1		47,711				64.22		3,063,854		2.02				1.40				25.60
SST SA Multi-Managed Mid Cap Value Portfolio Class 2		387,664		52.67		62.24		22,819,103		1.78		1.40		1.95		24.74		25.43
SST SA Multi-Managed Mid Cap Value Portfolio Class 3		226,454		51.18		63.35		13,227,860		1.59		1.15		2.00		24.58		25.64
SST SA Multi-Managed Small Cap Portfolio Class 1		49,454				32.12		1,588,604		0.44				1.40				21.83
SST SA Multi-Managed Small Cap Portfolio Class 2		564,362		28.00		31.13		16,858,763		0.20		1.40		1.95		20.99		21.65
SST SA Multi-Managed Small Cap Portfolio Class 3		337,991		27.15		31.69		10,074,911		0.02		1.15		2.05		20.79		21.89
SAST SA AB Growth Portfolio Class 1		93,694				20.20		1,892,436		0.00				1.40				27.01
SAST SA AB Growth Portfolio Class 2		1,989,646		19.74		20.10		39,761,241		0.00		1.40		1.95		26.11		26.81
SAST SA AB Growth Portfolio Class 3		1,234,437		19.62		20.20		24,659,519		0.00		1.15		2.05		25.86		27.00
SAST SA American Funds Global Growth Portfolio Class 3		202,440		33.95		38.36		7,352,069		0.06		1.15		2.00		13.81		14.78
SAST SA American Funds Growth Portfolio Class 3		109,626		44.81		51.49		5,370,477		0.02		1.15		2.05		19.22		20.30
SAST SA American Funds Growth-Income Portfolio Class 3		247,733		29.54		33.91		8,033,153		1.01		1.15		2.05		21.17		22.27
SAST SA DFA Ultra Short Bond Portfolio Class 1		14,346				9.45		135,593		0.05				1.40				-1.90
SAST SA DFA Ultra Short Bond Portfolio Class 2		439,189		9.01		9.36		4,060,426		0.00		1.40		1.95		-2.59		-2.06
SAST SA DFA Ultra Short Bond Portfolio Class 3		985,080		8.93		9.46		9,095,157		0.00		1.15		2.00		-2.74		-1.91
SAST SA VCP Dynamic Allocation Portfolio Class 3		2,787,038		17.73		19.18		51,360,108		1.52		1.15		2.00		7.15		8.06
SAST SA VCP Dynamic Strategy Portfolio Class 3		2,661,427		16.91		18.26		46,815,286		1.31		1.15		2.00		7.91		8.83
T Rowe Price Blue Chip Growth Portfolio II Class		117,458		43.84		49.20		5,553,605		0.00		1.15		2.00		15.01		15.99
T Rowe Price Equity Income Portfolio II Class		257,965		20.96		23.82		5,819,143		1.41		1.15		2.05		22.68		23.78

25

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2020								For the Year Ended December 31, 2020
			Unit Value ($)(a)(f)				Net		Investment  Income		Expense Ratio (%)(d)(f)				Total Return (%)(e)(f)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
Fidelity VIP Contrafund Portfolio Service Class 2		177,023		25.58		28.65		4,832,409		0.08		1.15		2.05		27.59		28.75
Fidelity VIP Equity-Income Portfolio Service Class 2		286,155		17.45		19.45		5,284,767		1.52		1.15		2.00		4.33		5.22
Fidelity VIP Investment Grade Bond Portfolio Service Class 2		999,272		13.77		15.34		14,610,326		1.93		1.15		2.00		7.00		7.92
Fidelity VIP Mid Cap Portfolio Service Class 2		352,792		21.29		23.78		7,952,033		0.36		1.15		2.00		15.53		16.52
Fidelity VIP Overseas Portfolio Service Class 2		359,045		12.30		13.69		4,677,766		0.20		1.15		2.00		13.05		14.01
Goldman Sachs VIT Government Money Market Fund Service Shares		78,407		9.96		9.97		781,468		0.00		1.15		1.80		-0.39		-0.25
SST Balanced Growth Strategy Class 1		320,819				45.19		14,496,419		0.00				1.40				25.85
SST Balanced Growth Strategy Class 2		1,423,484		39.55		43.81		60,059,079		0.00		1.40		1.95		24.96		25.65
SST Balanced Growth Strategy Class 3		785,566		38.54		44.65		33,000,502		0.00		1.15		2.00		24.76		25.83
SST Conservative Growth Strategy Class 1		223,010		38.20		38.21		8,520,175		0.00				1.40				19.72
SST Conservative Growth Strategy Class 2		1,206,134		33.70		37.05		42,959,204		0.00		1.40		1.95		18.92		19.57
SST Conservative Growth Strategy Class 3		669,065		32.60		37.67		23,974,455		0.00		1.15		1.95		18.72		19.68
SST Growth Strategy Class 1		397,288				57.90		23,002,226		0.00				1.40				33.68
SST Growth Strategy Class 2		756,732		51.01		56.14		40,849,943		0.00		1.40		1.95		32.73		33.46
SST Growth Strategy Class 3		873,456		49.99		57.14		47,096,220		0.00		1.15		2.00		32.55		33.68
SST Moderate Growth Strategy Class 1		377,156		51.33		51.34		19,361,288		0.00				1.40				29.99
SST Moderate Growth Strategy Class 2		1,758,783		44.81		49.79		84,085,418		0.00		1.40		1.95		29.04		29.75
SST Moderate Growth Strategy Class 3		1,341,391		43.74		50.71		64,161,385		0.00		1.15		2.00		28.83		29.93
SST SA Allocation Balanced Portfolio Class 3		3,394,123		17.02		19.40		62,386,597		1.10		1.15		2.00		9.60		10.54
SST SA Allocation Growth Portfolio Class 3		1,899,241		20.22		22.99		41,134,212		0.00		1.15		2.00		13.82		14.79
SST SA Allocation Moderate Growth Portfolio Class 3		11,301,685		18.38		21.12		225,312,215		0.00		1.15		2.05		12.39		13.41
SST SA Allocation Moderate Portfolio Class 3		4,332,444		18.12		20.63		84,257,225		0.00		1.15		2.00		11.39		12.34
SST SA American Century Inflation Protection Portfolio Class 3		484,126		11.12		12.87		5,861,220		0.00		1.15		2.05		4.62		5.56
SST SA Columbia Focused Value Portfolio Class 2		378,859		33.01		36.88		13,500,818		0.00		1.40		1.95		5.38		5.96
SST SA Columbia Focused Value Portfolio Class 3		247,112		32.20		37.54		8,735,452		0.00		1.15		2.00		5.22		6.12
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 1		105,276				18.30		1,926,518		0.00				1.40				6.37
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 2		1,232,636		15.59		17.75		20,857,648		0.00		1.40		1.95		5.54		6.13
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 3		672,825		15.16		18.04		11,333,332		0.00		1.15		2.00		5.45		6.35
SST SA Multi-Managed International Equity Portfolio Class 1		85,603		13.26		14.56		1,243,769		0.00		1.40		1.52		9.95		10.09
SST SA Multi-Managed International Equity Portfolio Class 2		1,355,544		12.79		14.12		18,363,095		0.00		1.40		1.95		9.35		9.95
SST SA Multi-Managed International Equity Portfolio Class 3		894,719		12.50		14.37		12,071,084		0.00		1.15		2.00		9.10		10.03
SST SA Multi-Managed Large Cap Growth Portfolio Class 1		147,529		35.45		40.14		5,920,819		0.00		1.40		1.52		46.59		46.77
SST SA Multi-Managed Large Cap Growth Portfolio Class 2		1,085,444		35.11		38.91		40,533,418		0.00		1.40		1.95		45.75		46.56
SST SA Multi-Managed Large Cap Growth Portfolio Class 3		530,738		34.34		39.50		19,738,263		0.00		1.15		2.00		45.52		46.76
SST SA Multi-Managed Large Cap Value Portfolio Class 1		115,136		28.89		30.86		3,545,923		0.00		1.40		1.52		-0.08		0.04
SST SA Multi-Managed Large Cap Value Portfolio Class 2		809,710		26.32		29.95		23,107,601		0.00		1.40		1.95		-0.63		-0.08
SST SA Multi-Managed Large Cap Value Portfolio Class 3		381,632		25.76		30.51		10,847,153		0.00		1.15		2.00		-0.74		0.10
SST SA Multi-Managed Mid Cap Growth Portfolio Class 1		50,828				72.91		3,705,776		0.00				1.40				41.47
SST SA Multi-Managed Mid Cap Growth Portfolio Class 2		410,821		64.15		70.74		27,864,901		0.00		1.40		1.95		40.46		41.24
SST SA Multi-Managed Mid Cap Growth Portfolio Class 3		228,856		62.64		72.08		15,531,081		0.00		1.15		2.00		40.27		41.47
SST SA Multi-Managed Mid Cap Value Portfolio Class 1		51,376				51.13		2,626,894		0.00				1.40				4.26
SST SA Multi-Managed Mid Cap Value Portfolio Class 2		458,619		42.22		49.62		21,529,870		0.00		1.40		1.95		3.52		4.09
SST SA Multi-Managed Mid Cap Value Portfolio Class 3		269,876		41.08		50.43		12,576,011		0.00		1.15		2.00		3.35		4.24
SST SA Multi-Managed Small Cap Portfolio Class 1		56,778		24.78		26.37		1,494,977		0.00		1.40		1.52		10.53		10.66
SST SA Multi-Managed Small Cap Portfolio Class 2		654,588		23.14		25.59		16,094,330		0.00		1.40		1.95		9.88		10.49
SST SA Multi-Managed Small Cap Portfolio Class 3		389,916		22.48		26.00		9,561,993		0.00		1.15		2.05		9.62		10.61
SAST SA AB Growth Portfolio Class 1		98,580				15.90		1,567,694		0.00				1.40				33.73
SAST SA AB Growth Portfolio Class 2		2,257,611		15.66		15.85		35,641,825		0.00		1.40		1.95		32.82		33.56
SAST SA AB Growth Portfolio Class 3		1,407,647		15.59		15.90		22,208,058		0.00		1.15		2.05		32.54		33.74
SAST SA American Funds Global Growth Portfolio Class 3		226,180		29.83		33.42		7,176,713		0.05		1.15		2.00		27.51		28.60
SAST SA American Funds Growth Portfolio Class 3		128,323		37.58		42.80		5,210,651		0.73		1.15		2.05		48.64		49.98
SAST SA American Funds Growth-Income Portfolio Class 3		244,621		24.37		27.74		6,458,621		1.50		1.15		2.05		10.95		11.95
SAST SA DFA Ultra Short Bond Portfolio Class 1		15,142				9.63		145,889		0.77				1.40				-1.19
SAST SA DFA Ultra Short Bond Portfolio Class 2		592,509		9.25		9.55		5,596,865		1.69		1.40		1.95		-1.87		-1.33
SAST SA DFA Ultra Short Bond Portfolio Class 3		1,466,883		9.18		9.64		13,823,639		1.66		1.15		2.00		-1.87		-1.03
SAST SA VCP Dynamic Allocation Portfolio Class 3		3,177,750		16.54		17.75		54,421,428		1.10		1.15		2.00		10.86		11.81
SAST SA VCP Dynamic Strategy Portfolio Class 3		3,016,818		15.67		16.78		48,963,715		1.13		1.15		2.00		8.01		8.93
T Rowe Price Blue Chip Growth Portfolio II Class		134,264		38.12		42.42		5,469,359		0.00		1.15		2.00		31.27		32.39
T Rowe Price Equity Income Portfolio II Class		297,567		17.09		19.24		5,439,073		1.91		1.15		2.05		-1.09		-0.20

26

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2019								For the Year Ended December 31, 2019
									Investment		Expense				Total
			Unit Value ($)(a)(f)				Net		Income		Ratio (%)(d)(f)				Return (%)(e)(f)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
Fidelity VIP Contrafund Portfolio Service Class 2		203,195		20.05		22.26		4,329,353		0.22		1.15		2.05		28.61		29.77
Fidelity VIP Equity-Income Portfolio Service Class 2		303,031		16.73		18.49		5,342,026		1.81		1.15		2.00		24.59		25.65
Fidelity VIP Investment Grade Bond Portfolio Service Class 2		1,087,878		12.87		14.22		14,802,985		2.50		1.15		2.00		7.24		8.15
Fidelity VIP Mid Cap Portfolio Service Class 2		398,613		18.42		20.41		7,746,296		0.68		1.15		2.00		20.73		21.76
Fidelity VIP Overseas Portfolio Service Class 2		422,628		10.88		12.01		4,845,911		1.48		1.15		2.00		24.98		26.04
SST Balanced Growth Strategy Class 1		397,254				35.91		14,263,596		0.00				1.40				17.32
SST Balanced Growth Strategy Class 2		1,587,164		31.65		34.87		53,379,206		0.00		1.40		1.95		16.49		17.13
SST Balanced Growth Strategy Class 3		942,290		30.89		35.49		31,542,725		0.00		1.15		2.00		16.30		17.29
SST Conservative Growth Strategy Class 1		262,586				31.91		8,379,544		0.00				1.40				15.03
SST Conservative Growth Strategy Class 2		1,326,540		28.34		30.99		39,595,617		0.00		1.40		1.95		14.19		14.82
SST Conservative Growth Strategy Class 3		783,353		27.46		31.48		23,546,604		0.00		1.15		1.95		14.15		15.07
SST Growth Strategy Class 1		430,601				43.31		18,649,898		0.00				1.40				21.16
SST Growth Strategy Class 2		847,780		38.43		42.07		34,369,371		0.00		1.40		1.95		20.32		20.98
SST Growth Strategy Class 3		1,013,807		37.71		42.74		41,102,008		0.00		1.15		2.00		20.12		21.14
SST Moderate Growth Strategy Class 1		418,757		38.53		39.49		16,537,515		0.00		1.40		1.52		19.23		19.37
SST Moderate Growth Strategy Class 2		1,946,786		34.73		38.37		71,851,287		0.00		1.40		1.95		18.61		19.26
SST Moderate Growth Strategy Class 3		1,532,948		33.95		39.03		56,672,019		0.00		1.15		2.00		18.42		19.43
SST SA Allocation Balanced Portfolio Class 3		3,865,674		15.53		17.55		64,468,447		1.52		1.15		2.00		13.73		14.70
SST SA Allocation Growth Portfolio Class 3		2,124,881		17.77		20.03		40,245,141		0.01		1.15		2.00		21.06		22.09
SST SA Allocation Moderate Growth Portfolio Class 3		12,771,477		16.35		18.62		225,319,262		1.37		1.15		2.05		18.16		19.23
SST SA Allocation Moderate Portfolio Class 3		5,102,218		16.27		18.37		88,580,612		1.42		1.15		2.00		16.39		17.39
SST SA American Century Inflation Protection Portfolio Class 3		494,387		10.63		12.19		5,688,626		0.31		1.15		2.05		3.39		4.33
SST SA Columbia Focused Value Portfolio Class 2		424,548		31.33		34.80		14,293,889		0.47		1.40		1.95		24.13		24.81
SST SA Columbia Focused Value Portfolio Class 3		266,799		30.61		35.38		8,919,778		0.43		1.15		2.00		23.94		24.99
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 1		106,455		16.58		17.20		1,831,181		3.05		1.40		1.52		8.03		8.16
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 2		1,228,843		14.78		16.72		19,633,362		2.90		1.40		1.95		7.39		7.98
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 3		704,960		14.38		16.97		11,230,809		2.73		1.15		2.00		7.16		8.08
SST SA Multi-Managed International Equity Portfolio Class 1		89,560		12.06		13.22		1,182,164		3.13		1.40		1.52		20.79		20.93
SST SA Multi-Managed International Equity Portfolio Class 2		1,502,705		11.70		12.84		18,552,075		3.02		1.40		1.95		20.15		20.81
SST SA Multi-Managed International Equity Portfolio Class 3		1,003,912		11.46		13.06		12,371,089		2.84		1.15		2.00		20.02		21.04
SST SA Multi-Managed Large Cap Growth Portfolio Class 1		157,857		24.18		27.35		4,314,816		0.47		1.40		1.52		28.57		28.73
SST SA Multi-Managed Large Cap Growth Portfolio Class 2		1,253,575		24.09		26.55		32,017,854		0.32		1.40		1.95		27.79		28.49
SST SA Multi-Managed Large Cap Growth Portfolio Class 3		627,058		23.60		26.92		15,971,193		0.20		1.15		2.00		27.59		28.68
SST SA Multi-Managed Large Cap Value Portfolio Class 1		121,297		28.91		30.85		3,733,593		2.51		1.40		1.52		26.80		26.95
SST SA Multi-Managed Large Cap Value Portfolio Class 2		868,176		26.49		29.98		24,836,337		2.27		1.40		1.95		26.08		26.77
SST SA Multi-Managed Large Cap Value Portfolio Class 3		434,388		25.95		30.48		12,444,747		2.15		1.15		2.00		25.87		26.95
SST SA Multi-Managed Mid Cap Growth Portfolio Class 1		57,524		46.32		51.54		2,963,297		0.00		1.40		1.52		34.11		34.27
SST SA Multi-Managed Mid Cap Growth Portfolio Class 2		474,141		45.67		50.08		22,821,877		0.00		1.40		1.95		33.38		34.11
SST SA Multi-Managed Mid Cap Growth Portfolio Class 3		278,587		44.66		50.95		13,448,281		0.00		1.15		2.00		33.07		34.20
SST SA Multi-Managed Mid Cap Value Portfolio Class 1		54,515		47.23		49.04		2,673,085		1.37		1.40		1.52		23.49		23.64
SST SA Multi-Managed Mid Cap Value Portfolio Class 2		497,216		40.79		47.67		22,488,113		1.18		1.40		1.95		22.74		23.42
SST SA Multi-Managed Mid Cap Value Portfolio Class 3		294,060		39.75		48.38		13,211,390		1.05		1.15		2.00		22.59		23.64
SST SA Multi-Managed Small Cap Portfolio Class 1		61,404		22.42		23.83		1,460,894		0.25		1.40		1.52		22.62		22.77
SST SA Multi-Managed Small Cap Portfolio Class 2		699,918		21.06		23.16		15,610,106		0.09		1.40		1.95		21.96		22.63
SST SA Multi-Managed Small Cap Portfolio Class 3		428,213		20.51		23.51		9,534,508		0.00		1.15		2.05		21.72		22.82
SAST SA AB Growth Portfolio Class 1		104,192				11.89		1,238,992		0.00				1.40				33.00
SAST SA AB Growth Portfolio Class 2		2,581,419		11.79		11.87		30,568,128		0.00		1.40		1.95		32.07		32.80
SAST SA AB Growth Portfolio Class 3		1,617,847		11.76		11.89		19,154,124		0.00		1.15		2.05		31.82		33.01
SAST SA American Funds Global Growth Portfolio Class 3		277,937		23.39		25.99		6,877,647		0.80		1.15		2.00		32.26		33.39
SAST SA American Funds Growth Portfolio Class 3		156,600		25.28		28.54		4,248,130		0.00		1.15		2.05		27.75		28.90
SAST SA American Funds Growth-Income Portfolio Class 3		273,534		21.97		24.77		6,476,133		0.00		1.15		2.05		23.20		24.31
SAST SA DFA Ultra Short Bond Portfolio Class 1		48,081				9.75		468,809		1.41				1.40				0.85
SAST SA DFA Ultra Short Bond Portfolio Class 2		461,170		9.43		9.68		4,427,870		1.82		1.40		1.95		0.18		0.73
SAST SA DFA Ultra Short Bond Portfolio Class 3		1,131,597		9.35		9.74		10,834,734		1.96		1.15		2.00		-0.03		0.83
SAST SA VCP Dynamic Allocation Portfolio Class 3		3,459,608		14.92		15.87		53,203,285		0.00		1.15		2.00		18.01		19.02
SAST SA VCP Dynamic Strategy Portfolio Class 3		3,235,829		14.51		15.40		48,397,282		0.00		1.15		2.00		17.04		18.04
T Rowe Price Blue Chip Growth Portfolio II Class		164,769		29.04		32.04		5,088,005		0.00		1.15		2.00		27.01		28.10
T Rowe Price Equity Income Portfolio II Class		300,715		17.28		19.28		5,527,488		2.11		1.15		2.05		23.49		24.60

27

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2018								For the Year Ended December 31, 2018
									Investment		Expense				Total
			Unit Value ($)(a)(f)				Net		Income		Ratio (%)(d)(f)				Return (%)(e)(f)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
Fidelity VIP Contrafund Portfolio Service Class 2		246,482		15.59		17.15		4,060,678		0.43		1.15		2.05		-8.55		-7.71
Fidelity VIP Equity-Income Portfolio Service Class 2		367,481		13.43		14.71		5,175,034		2.01		1.15		2.00		-10.36		-9.59
Fidelity VIP Investment Grade Bond Portfolio Service Class 2		1,160,837		12.00		13.15		14,667,060		2.24		1.15		2.00		-2.76		-1.93
Fidelity VIP Mid Cap Portfolio Service Class 2		467,464		15.26		16.76		7,488,036		0.40		1.15		2.00		-16.47		-15.75
Fidelity VIP Overseas Portfolio Service Class 2		518,402		8.70		9.53		4,732,312		1.30		1.15		2.00		-16.75		-16.03
SST Balanced Growth Strategy Class 1		437,198		29.89		30.61		13,380,409		0.00		1.40		1.52		-4.56		-4.45
SST Balanced Growth Strategy Class 2		1,771,282		27.17		29.77		50,940,870		0.00		1.40		1.95		-5.12		-4.59
SST Balanced Growth Strategy Class 3		995,103		26.56		30.25		28,498,313		0.00		1.15		2.00		-5.24		-4.43
SST Conservative Growth Strategy Class 1		296,749				27.74		8,232,579		0.00				1.40				-4.38
SST Conservative Growth Strategy Class 2		1,527,536		24.82		26.99		39,772,208		0.00		1.40		1.95		-5.05		-4.52
SST Conservative Growth Strategy Class 3		911,489		24.05		27.35		23,879,275		0.00		1.15		1.95		-5.17		-4.40
SST Growth Strategy Class 1		480,623				35.75		17,180,799		0.00				1.40				-5.85
SST Growth Strategy Class 2		971,320		31.94		34.77		32,599,327		0.00		1.40		1.95		-6.50		-5.98
SST Growth Strategy Class 3		1,142,178		31.39		35.28		38,376,995		0.00		1.15		2.00		-6.65		-5.85
SST Moderate Growth Strategy Class 1		462,026		32.31		33.08		15,285,561		0.00		1.40		1.52		-5.75		-5.64
SST Moderate Growth Strategy Class 2		2,168,567		29.28		32.17		67,275,297		0.00		1.40		1.95		-6.34		-5.82
SST Moderate Growth Strategy Class 3		1,711,611		28.67		32.68		53,117,203		0.00		1.15		2.00		-6.48		-5.68
SST SA Allocation Balanced Portfolio Class 3		4,449,453		13.65		15.30		64,953,452		4.28		1.15		2.00		-5.86		-5.05
SST SA Allocation Growth Portfolio Class 3		2,414,824		14.68		16.41		37,630,596		3.09		1.15		2.00		-9.05		-8.27
SST SA Allocation Moderate Growth Portfolio Class 3		14,621,643		13.84		15.62		217,119,370		4.00		1.15		2.05		-7.85		-7.01
SST SA Allocation Moderate Portfolio Class 3		6,031,494		13.98		15.65		89,608,359		3.98		1.15		2.00		-6.85		-6.05
SST SA American Century Inflation Protection Portfolio Class 3		518,892		10.28		11.68		5,742,062		3.07		1.15		2.05		-2.24		-1.35
SST SA Columbia Focused Value Portfolio Class 2		455,312		25.24		27.88		12,312,795		3.60		1.40		1.95		-13.76		-13.28
SST SA Columbia Focused Value Portfolio Class 3		305,705		24.69		28.30		8,204,507		3.04		1.15		2.00		-13.89		-13.16
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 1		118,037		15.34		15.91		1,877,251		2.56		1.40		1.52		-2.61		-2.49
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 2		1,311,904		13.76		15.49		19,454,517		2.21		1.40		1.95		-3.14		-2.60
SST SA Multi-Managed Diversified Fixed Income Portfolio Class 3		800,309		13.42		15.70		11,846,784		2.24		1.15		2.00		-3.25		-2.42
SST SA Multi-Managed International Equity Portfolio Class 1		102,240		9.98		10.93		1,116,218		2.76		1.40		1.52		-15.48		-15.38
SST SA Multi-Managed International Equity Portfolio Class 2		1,631,397		9.74		10.63		16,707,397		2.46		1.40		1.95		-16.07		-15.60
SST SA Multi-Managed International Equity Portfolio Class 3		1,155,602		9.55		10.79		11,814,331		2.33		1.15		2.00		-16.17		-15.45
SST SA Multi-Managed Large Cap Growth Portfolio Class 1		186,733		18.81		21.24		3,965,302		0.64		1.40		1.52		-3.24		-3.13
SST SA Multi-Managed Large Cap Growth Portfolio Class 2		1,436,119		18.85		20.66		28,619,474		0.46		1.40		1.95		-3.77		-3.23
SST SA Multi-Managed Large Cap Growth Portfolio Class 3		759,652		18.49		20.92		15,110,607		0.38		1.15		2.00		-3.91		-3.09
SST SA Multi-Managed Large Cap Value Portfolio Class 1		129,773		22.80		24.30		3,146,990		1.98		1.40		1.52		-11.08		-10.97
SST SA Multi-Managed Large Cap Value Portfolio Class 2		994,768		21.01		23.65		22,512,814		1.76		1.40		1.95		-11.61		-11.12
SST SA Multi-Managed Large Cap Value Portfolio Class 3		515,892		20.61		24.01		11,683,375		1.66		1.15		2.00		-11.75		-10.99
SST SA Multi-Managed Mid Cap Growth Portfolio Class 1		78,512		34.54		38.38		3,012,620		0.00		1.40		1.52		-4.98		-4.87
SST SA Multi-Managed Mid Cap Growth Portfolio Class 2		535,005		34.24		37.34		19,243,732		0.00		1.40		1.95		-5.56		-5.03
SST SA Multi-Managed Mid Cap Growth Portfolio Class 3		330,061		33.56		37.97		11,925,238		0.00		1.15		2.00		-5.64		-4.83
SST SA Multi-Managed Mid Cap Value Portfolio Class 1		61,699		38.24		39.67		2,447,000		0.95		1.40		1.52		-13.18		-13.08
SST SA Multi-Managed Mid Cap Value Portfolio Class 2		557,776		33.23		38.62		20,488,721		0.77		1.40		1.95		-13.65		-13.17
SST SA Multi-Managed Mid Cap Value Portfolio Class 3		339,772		32.42		39.13		12,405,166		0.64		1.15		2.00		-13.82		-13.08
SST SA Multi-Managed Small Cap Portfolio Class 1		73,049		18.28		19.41		1,415,977		0.20		1.40		1.52		-12.88		-12.78
SST SA Multi-Managed Small Cap Portfolio Class 2		771,744		17.27		18.89		14,061,815		0.03		1.40		1.95		-13.41		-12.93
SST SA Multi-Managed Small Cap Portfolio Class 3		504,366		16.85		19.14		9,183,171		0.00		1.15		2.05		-13.57		-12.79
SAST SA AB Growth Portfolio Class 1		110,726				8.94		989,993		0.00		1.40		1.52		-10.62		-10.59
SAST SA AB Growth Portfolio Class 2		2,875,869		8.92		8.94		25,690,672		0.00		1.40		1.95		-10.76		-10.63
SAST SA AB Growth Portfolio Class 3		1,924,007		8.92		8.94		17,187,027		0.00		1.15		2.05		-10.79		-10.59
SAST SA American Funds Global Growth Portfolio Class 3		333,144		17.69		19.48		6,204,935		1.14		1.15		2.00		-11.08		-10.32
SAST SA American Funds Growth Portfolio Class 3		201,590		19.79		22.14		4,263,044		0.99		1.15		2.05		-2.55		-1.67
SAST SA American Funds Growth-Income Portfolio Class 3		299,220		17.83		19.93		5,717,995		2.71		1.15		2.05		-4.05		-3.18
SAST SA DFA Ultra Short Bond Portfolio Class 1		88,876				9.67		859,292		0.72				1.40				0.13
SAST SA DFA Ultra Short Bond Portfolio Class 2		467,350		9.41		9.61		4,461,405		0.96		1.40		1.95		-0.60		-0.05
SAST SA DFA Ultra Short Bond Portfolio Class 3		1,012,678		9.35		9.66		9,651,786		0.79		1.15		2.00		-0.78		0.07
SAST SA VCP Dynamic Allocation Portfolio Class 3		3,942,761		12.64		13.34		51,156,131		3.71		1.15		2.00		-8.68		-7.89
SAST SA VCP Dynamic Strategy Portfolio Class 3		3,727,853		12.39		13.05		47,416,740		3.84		1.15		2.00		-9.03		-8.25
T Rowe Price Blue Chip Growth Portfolio II Class		171,022		22.86		25.01		4,120,370		0.00		1.15		2.00		-0.37		0.48
T Rowe Price Equity Income Portfolio II Class		357,963		13.99		15.47		5,298,397		1.78		1.15		2.05		-11.54		-10.73

(a) Because the unit values are presented as a range of lowest to highest, based on the product grouping representing the minimum and maximum expense ratio amounts, some individual contract unit values are not within the ranges presented.

(b) These amounts represent the net asset value before adjustments allocated to the contracts in payout period.

(c) These amounts represent the dividends, excluding distributions of capital gains, received by the sub-account from the Funds, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the sub-account is affected by the timing of the declaration of dividends by the

28

VARIABLE ANNUITY ACCOUNT FIVE

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Funds in which the sub-account invests. The average net assets are calculated using the net asset balances at the beginning and end of the year.

(d) These amounts represent the annualized contract expenses of the sub-account, consisting of distribution, mortality and expense charges, for each period indicated. The ratios include only those expenses that result in direct reduction to unit values. Charges made directly to the contract owners account through the redemption of units and expenses of the Funds have been excluded. For additional information on charges and deductions, see Note 4.

(e) These amounts represent the total return for the periods indicated, including changes in the value of the Funds, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through redemption of units. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for each of the periods indicated or from the effective date through the end of the reporting period. Because the total return is presented as a range of minimum and maximum values, based on the product grouping representing the minimum and maximum expense ratios, some individual contract total returns are not within the ranges presented.

(f) A blank in the lowest unit value, lowest expense ratio and lowest total return columns indicates that the lowest value is the same as the highest value.

7. Subsequent Events

Management considered Separate Accounts related events and transactions that occurred after the date of the Statement of Assets and Liabilities, but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that required additional disclosures. Management has evaluated events through the date the financial statements were issued.

29

 American General Life Insurance Company

(An indirect wholly owned subsidiary of Corebridge Financial, Inc.)

Statutory Financial Statements and

Supplemental Information and

Report of Independent Auditors

At December 31, 2022 and 2021 and

for each of the three years ended December 31, 2022

AMERICAN GENERAL LIFE INSURANCE COMPANY

TABLE OF CONTENTS TO STATUTORY FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION

	Page
STATUTORY FINANCIAL STATEMENTS
Report of Independent Auditors		2
Statutory Statements of Admitted Assets, Liabilities and Capital and Surplus at December 31, 2022 and 2021		4
Statutory Statements of Operations for the Years Ended December  31, 2022, 2021 and 2020		6
Statutory Statements of Changes in Capital and Surplus for the Years Ended December 31, 2022, 2021 and 2020		7
Statutory Statements of Cash Flows for the Years Ended December  31, 2022, 2021 and 2020		8

NOTES TO STATUTORY FINANCIAL STATEMENTS
1.	Nature of Operations	10
2.	Summary of Significant Accounting Policies	11
3.	Investments	23
4.	Loan-Backed and Structured Security Impairments and Structured Notes Holdings	32
5.	Securities Lending and Repurchase Agreements	37
6.	Restricted Assets	41
7.	Subprime Mortgage Risk Exposure	41
8.	Derivatives	43
9.	Information about Financial Instruments with Off-Balance Sheet Risk and Financial Instruments with Concentrations of Credit Risk	46
10.	Fair Value Measurements	46
11.	Aggregate Policy Reserves and Deposit Fund Liabilities	53
12.	Separate Accounts	55
13.	Reserves for Guaranteed Policy Benefits and Enhancements	58
14.	Participating Policy Contracts	59
15.	Premium and Annuity Considerations Deferred and Uncollected	59
16.	Reinsurance	60
17.	Federal Income Taxes	61
18.	Capital and Surplus	69
19.	Retirement Plans and Share-Based and Deferred Compensation Plans	69
20.	Debt	71
21.	Commitments and Contingencies	72
22.	Related Party Transactions	75
23.	Subsequent Events	81
SUPPLEMENTAL INFORMATION
Supplemental Schedule of Assets and Liabilities		83
Supplemental Investment Risks Interrogatories		83
Supplemental Summary Investment Schedule		89
Supplemental Schedule of Reinsurance Disclosures		90

1

Report of Independent Auditors

To the Board of Directors and Shareholder of American General Life Insurance Company

Opinion

We have audited the accompanying statutory financial statements of American General Life Insurance Company (the “Company”), which comprise the statutory statements of admitted assets, liabilities and capital and surplus as of December 31, 2022 and 2021, and the related statutory statements of operations, of changes in capital and surplus, and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “financial statements”).

Unmodified Opinion on Statutory Basis of Accounting

In our opinion, the accompanying financial statements present fairly, in all material respects, the admitted assets, liabilities and capital and surplus of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in accordance with accounting practices prescribed or permitted by the Texas Department of Insurance described in Note 2.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles section of our report, the accompanying financial statements do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2022 and 2021, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2022.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 2 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the Texas Department of Insurance, which is a basis of accounting other than accounting principles generally accepted in the United States of America.

The effects on the financial statements of the variances between the statutory basis of accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, New York 10017

T: 646 471 3000; F: 813 286 6000, www.pwc.com/us

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting practices prescribed or permitted by the Texas Department of Insurance. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with US GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Supplemental Information

Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental schedule of assets and liabilities, investment risk interrogatories, summary

investment schedule, and schedule of reinsurance disclosures (collectively referred to as the “supplemental schedules”) of the Company as of December 31, 2022 and for the year then ended are presented to comply with the National Association of Insurance Commissioners’ Annual Statement Instructions and Accounting Practices and Procedures Manual and for purposes of additional analysis and are not a required part of the financial statements. The supplemental schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves and other additional procedures, in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental schedules are fairly stated, in all material respects, in relation to the financial statements taken as a whole.

/s/ PricewaterhouseCoopers LLP

New York, New York

April 25, 2023

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND CAPITAL AND SURPLUS

	December 31,
(in millions)	2022		2021
Admitted assets
Cash and investments
Bonds	$	108,455	$	107,774
Preferred stock		93		91
Common stock		927		1,144
Cash, cash equivalents and short-term investments		951		802
Mortgage loans		25,131		22,276
Real estate		9		9
Contract loans		1,138		1,164
Derivatives		466		1,082
Securities lending reinvested collateral assets		—		1,727
Derivative cash collateral		1,574		36
Other invested assets		8,026		6,681
Total cash and investments		146,770		142,786
Amounts recoverable from reinsurers		270		338
Amounts receivable under reinsurance contracts		492		272
Current federal income tax recoverable		232		—
Deferred tax asset		1,087		854
Due and accrued investment income		1,136		1,029
Premiums due, deferred and uncollected		153		152
Receivables from affiliates		263		136
Other assets		1,515		1,239
Separate account assets		59,701		70,298
Total admitted assets	$	211,619	$	217,104
See accompanying Notes to Statutory Financial Statements.

4

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND CAPITAL AND SURPLUS (CONTINUED)

	December 31,
(in millions, except per share data)	2022		2021
Liabilities
Policy reserves and contractual liabilities
Life and annuity reserves	$	108,850	$	104,080
Liabilities for deposit-type contracts		12,316		12,327
Accident and health reserves		711		736
Premiums received in advance		10		9
Policy and contract claims		715		752
Policyholder dividends		17		14
Total policy reserves and contractual liabilities		122,619		117,918
Payable to affiliates		483		333
Interest maintenance reserve		1,804		2,232
Federal income taxes payable		—		201
Derivatives		807		223
Payable for securities lending		—		2,426
Repurchase agreements		1,725		120
Collateral for derivatives program		205		494
Funds held under coinsurance		11,826		11,690
Accrued expenses and other liabilities		2,424		2,230
Net transfers from separate accounts due or accrued		(1,323)		(1,895)
Asset valuation reserve		1,681		2,302
Separate account liabilities		59,618		70,298
Total liabilities		201,869		208,572
Commitments and contingencies (see Note 21)
Capital and surplus
Common stock, $10 par value; 600,000 shares authorized, issued and outstanding		6		6
Preferred stock, $100 par value; 8,500 shares authorized, issued and outstanding		1		1
Gross paid-in and contributed surplus		5,410		3,510
Special surplus funds		916		126
Unassigned surplus		3,417		4,889
Total capital and surplus		9,750		8,532
Total liabilities and capital and surplus	$	211,619	$	217,104
See accompanying Notes to Statutory Financial Statements.

5

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATUTORY STATEMENTS OF OPERATIONS

	December 31,
(in millions)	2022		2021		2020
Revenues
Premiums and annuity considerations	$	39,948	$	15,409	$	10,941
Net investment income		7,172		7,503		6,035
Amortization of interest maintenance reserve		123		162		151
Reserve adjustments on reinsurance ceded		(2,112)		(2,273)		(2,069)
Commissions and expense allowances		779		703		646
Separate account fees		1,648		1,845		1,422
Other income		741		578		503
Total revenues		48,299		23,927		17,629
Benefits and expenses
Death benefits		811		736		811
Annuity benefits		2,652		2,806		2,563
Surrender benefits		9,350		8,453		6,857
Other benefits		692		668		668
Change in reserves		4,769		2,729		3,672
Commissions		2,672		1,099		962
General insurance expenses		928		978		928
Net transfers to (from) separate accounts		1,109		1,682		273
Modco reinsurance assumed		22,366
Other expenses		445		704		602
Total benefits and expenses		45,794		19,855		17,336
Net gain from operations before dividends to policyholders and federal income taxes		2,505		4,072		293
Dividends to policyholders		6		1		3
Net gain from operations after dividends to policyholders and before federal income taxes		2,499		4,071		290
Federal income tax expense		518		1,422		961
Net gain (loss) from operations		1,981		2,649		(671)
Net realized capital (losses) gains, net of tax after transfers to interest maintenance reserves		(1,190)		(405)		640
Net income (loss)	$	791	$	2,244	$	(31)
See accompanying Notes to Statutory Financial Statements.

6

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS

(in millions)	Common & Preferred Stock		Gross Paid- In and Contributed Surplus		Special Surplus Funds			Unassigned Surplus			Total Capital and Surplus
Balance, January 1, 2020	$	7	$	3,510	$	—		$	2,772			6,289
Net loss		—		—		—			(31	)		(31	)
Change in net unrealized capital gains (losses)		—		—		—			155			155
Change in net unrealized foreign exchange capital gains (losses)		—		—		—			351			351
Change in deferred tax		—		—		—			850			850
Change in non-admitted assets		—		—		—			(643	)		(643	)
Change in reserve on account of change in valuation basis		—		—		—			47			47
Change in asset valuation reserve		—		—		—			(139	)		(139	)
Change in surplus from separate accounts		—		—		—			204			204
Other changes in surplus in separate accounts		—		—		—			(204	)		(204	)
Change is surplus as a result of reinsurance		—		—		—			(5	)		(5	)
Prior period corrections (see Note 2)		—		—		—			31			31
Reinsurance permitted practice		—		—		—			353			353
Other changes		—		—		(128	)		381			253
Balance, December 31, 2020	$	7	$	3,510	$	(128	)	$	4,122		$	7,511
Net income		—		—		—			2,244			2,244
Change in net unrealized capital gains (losses)		—		—		—			206			206
Change in net unrealized foreign exchange capital gains (losses)		—		—		—			(267	)		(267	)
Change in deferred tax		—		—		—			853			853
Change in non-admitted assets		—		—		—			(587	)		(587	)
Change in asset valuation reserve		—		—		—			(205	)		(205	)
Change in surplus from separate accounts		—		—		—			450			450
Other changes in surplus in separate accounts		—		—		—			(450	)		(450	)
Change in surplus as a result of reinsurance		—		—		—			(2	)		(2	)
Dividends		—		—		—			(1,045	)		(1,045	)
Prior period corrections (see Note 2)		—		—		—			(161	)		(161	)
Reinsurance permitted practice		—		—		—			(30	)		(30	)
Other changes		—		—		254			(239	)		15
Balance, December 31, 2021	$	7	$	3,510	$	126		$	4,889		$	8,532
Net income		—		—		—			791			791
Change in net unrealized capital gains (losses)		—		—		—			(694	)		(694	)
Change in net unrealized foreign exchange capital gains (losses)		—		—		—			(705	)		(705	)
Change in deferred tax		—		—		—			(40	)		(40	)
Change in non-admitted assets		—		—		—			(84	)		(84	)
Change in liability for reinsurance in unauthorized and certified companies		—		—		—			(22	)		(22	)
Change in asset valuation reserve		—		—		—			621			621
Change in surplus from separate accounts		—		—		—			296			296
Other changes in surplus in separate accounts		—		—		—			(296	)		(296	)
Additional paid in surplus		—		1,900		—			—			1,900
Change in surplus as a result of reinsurance		—		—		—			(256	)		(256	)
Dividends		—		—		—			(800	)		(800	)
Prior period corrections (see Note 2)		—		—		—			73			73
Reinsurance permitted practice		—		—		—			433			433
Other changes		—		—		790			(789	)		1
Balance, December 31, 2022	$	7	$	5,410	$	916		$	3,417		$	9,750
See accompanying Notes to Statutory Financial Statements.

7

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATUTORY STATEMENTS OF CASH FLOWS

	December 31,
(in millions)	2022		2021		2020
Cash from operations
Premium and annuity considerations, collected, net of reinsurance	$	18,180	$	13,618	$	10,930
Net investment income collected		6,547		6,966		5,508
Other income		557		851		298
Total revenue received		25,284		21,435		16,736
Benefits paid		13,473		12,474		10,280
Net transfers to separate accounts		536		2,192		56
Commissions and expenses paid		3,584		2,129		1,984
Dividends paid to policyholders		2		4		3
Federal income taxes paid		1,089		1,227		1,207
Total benefits and expenses paid		18,684		18,026		13,530
Net cash provided by operations		6,600		3,409		3,206
Cash from investments
Proceeds from investments sold, matured or repaid:
Bonds		15,962		23,554		20,811
Stocks		498		233		306
Mortgage loans		3,005		3,082		2,882
Real estate		—		—		168
Other invested assets		1,136		2,057		1,429
Derivatives		—		—		1,576
Securities lending reinvested collateral assets		1,727		—		—
Other, net		124		421		256
Total proceeds from investments sold, matured or repaid		22,452		29,347		27,428
Cost of investments acquired:
Bonds		17,824		24,029		26,051
Stocks		300		643		451
Mortgage loans		6,465		4,066		2,752
Real estate		1		1		12
Derivatives, net		823		407		—
Other invested assets		2,791		2,496		1,537
Securities lending reinvested collateral assets		—		35		409
Other, net		1,878		127		200
Total cost of investments acquired		30,082		31,804		31,412
Net adjustment in contract loans		(26)		(69)		(26)
Net cash provided by (used in) investing activities		(7,604)		(2,388)		(3,958)
Cash from financing and miscellaneous sources
Cash provided (applied):
Capital and paid-in surplus		1,900		—		—
Net deposits on (withdrawals from) deposit-type contracts		(11)		(707)		995
Dividends to parent		(800)		(750)		—
Change in securities lending		(2,426)		747		227
Other, net		2,490		(568)		143
Net cash provided by (used in) provided by financing and miscellaneous activities		1,153		(1,278)		1,365

8

AMERICAN GENERAL LIFE INSURANCE COMPANY

STATUTORY STATEMENTS OF CASH FLOWS

	December 31,
Net increase (decrease) in cash, cash equivalents and short-term investments		149		(257)		613
Cash, cash equivalents and short-term investments at beginning of year		802		1,059		446
Cash, cash equivalents and short-term investments at end of year	$	951	$	802	$	1,059
Non-cash activities, excluded from above:
Non-cash Modco adjustment on assumed reinsurance	$	22,924	$	—	$	—
Non-cash pension risk transfer premiums		1,159		1,809		—
Non-cash Fortitude Re settlement		204		448		—
Non-cash transfer from other invested assets to mortgage loans		12		154		31
Settlement of non-cash dividends payable		—		295		—
Non-cash transfer from mortgage loans to other invested assets		—		—		179
Non-cash transfer from common stocks to other invested assets		—		—		111
Non-cash transfer from other invested assets to bonds		—		—		59
Non-cash transfer from other invested assets to common stocks		—		34		47
See accompanying Notes to Statutory Financial Statements.

9

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS

American General Life Insurance Company (AGL or the Company), including its wholly owned subsidiaries, is a wholly owned subsidiary of AGC Life Insurance Company (AGC Life or the Parent), which is a wholly owned subsidiary of AIG Life Holding, Inc. ( AIG Life Holding ). AIG Life Holding is wholly owned by Corebridge Financial Inc. (Corebridge), which is a direct subsidiary of American International Group, Inc. (AIG). AIG is a holding company, which through its subsidiaries provides a wide range of property casualty insurance, life insurance, retirement products and other financial services to commercial and individual customers in approximately 70 countries and jurisdictions. The term “AIG” means American International Group, Inc. and not any of AIG’s consolidated subsidiaries.

The Company is a stock life insurance company domiciled and licensed under the laws of the State of Texas and is subject to regulation by the Texas Department of Insurance (TDI). The Company is also subject to regulation by the states in which it is authorized to transact business. The Company is licensed in 49 states and the District of Columbia.

The Company is a leading provider in the United States of individual term and universal life insurance solutions to middle-income and high-net-worth customers, as well as a leading provider in the United States of fixed and variable annuities. The Company’s primary products include term life insurance, universal, variable universal and whole life insurance, accident and health insurance, single- and flexible-premium deferred fixed and variable annuities, fixed index deferred annuities, single-premium immediate and delayed-income annuities, private placement variable annuities, private placement variable universal life, structured settlements, corporate- and bank-owned life insurance, terminal funding annuities, guaranteed investment contracts, funding agreements, stable value wrap products and group benefits. The Company distributes its products through a broad multi-channel distribution network, which includes independent marketing organizations, independent insurance agents and financial advisors, banks, broker dealers, structured settlement brokers and benefit consultants and direct-to-consumer through AIG Direct Insurance, Inc. (AIG Direct).

SunAmerica Fund Services, Inc. (SAAMCo), together with its wholly owned distributor, AIG Capital Services, Inc., and its wholly owned servicing agent, SunAmerica Fund Services, Inc., represent the Company’s asset management operations. These companies earn fee income by managing, distributing and administering a diversified family of mutual funds, and variable subaccounts offered within the variable annuity and variable universal life products, and by distributing retail mutual funds and providing professional management of individual, corporate and pension plan portfolios.

The operations of the Company are influenced by many factors, including general economic conditions, financial condition of AIG Parent, monetary and fiscal policies of the United States federal government and policies of state and other regulatory authorities. The level of sales of the Company’s insurance and financial products is influenced by many factors, including general market rates of interest, the strength, weakness and volatility of equity markets and terms and conditions of competing products. The Company is exposed to the risks normally associated with a portfolio of fixed income securities, which include interest rate, option, liquidity and credit risks. The Company controls its exposure to these risks by, among other things, closely monitoring and managing the duration and cash flows of its assets and liabilities, monitoring and limiting prepayments and extension risk in its portfolio, maintaining a large percentage of the Company’s portfolio in highly liquid securities, engaging in a disciplined process of underwriting, and reviewing and monitoring credit risk.

The Company is also exposed to market risk, policyholder behavior risk and mortality/longevity risk. Market volatility and other equity market conditions may affect the Company’s exposure to risks related to guaranteed death benefits and guaranteed living benefits on variable annuity products, and may reduce fee income on variable product assets held in separate accounts. Such guaranteed benefits are sensitive to equity and interest rate market conditions.

Effective October 1, 2022, the Company entered into a modified coinsurance reinsurance agreement with VALIC, pursuant to which certain blocks of VALIC’s variable annuity (VA) business were ceded to the Company. The ceded reserves and assets supporting the reserves remain on VALIC’s balance sheet, pursuant to the modified coinsurance structure. The business covered by the agreement includes substantially all of VALIC’s VA contracts, excluding those issued by VALIC in the State of New York and those that have been previously assumed (through reinsurance) by VALIC. See Affiliate Transactions note for more details.

10

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Company are presented on the basis of accounting practices prescribed or permitted by the TDI. These accounting practices vary in certain respects from accounting principles generally accepted in the United States of America (U.S. GAAP), as described herein.

The TDI recognizes only statutory accounting practices (SAP) prescribed or permitted by the State of Texas for determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under the Texas Insurance Law. The National Association of Insurance Commissioners’ (NAIC) Accounting Practices and Procedures Manual (NAIC SAP) has been adopted as a component of prescribed or permitted practices by the State of Texas.

The Insurance Commissioner of the State of Texas has the right to permit other specific practices that deviate from prescribed practices. Such permitted practices employed by the Company include the following:

At December 31, 2022, 2021 and 2020, the Company used the following permitted practice that resulted in reported statutory surplus or risk-based capital that is significantly different from the statutory surplus or risk based capital that would have been reported had NAIC statutory accounting practices or the prescribed regulatory accounting practices of their respective state regulator been followed in all respects:

The Company received a permitted practice with respect to an excess of loss reinsurance agreement (the “XoL Agreement”) for the reporting period ending December 31, 2020 as follows:

Effective December 31, 2019 and subsequent reporting periods through September 30, 2020, the Company received approval from the TDI to apply a permitted practice in its financial statements allowing the Company to recognize an admitted asset related to the notional value of coverage defined in the XoL Agreement. This asset is reported in Other assets in the balance sheet. The XoL Agreement has a 20 year term and provides coverage to the Company for aggregate claims incurred during the agreement term associated with guaranteed minimum withdrawal benefits on certain fixed index annuities generally issued prior to April 2019 (“Block 1”) exceeding an attachment point defined in the XoL agreement. The permitted practice allows the Company to manage its reserves in a manner more in line with anticipated principle-based reserving requirements under development for fixed index annuities. As a condition for approving the permitted practice, the TDI imposed certain conditions relating to the permitted practice.

Effective October 1, 2020 and subsequent reporting periods through September 30, 2023, the permitted practice above was expanded to similarly recognize an additional admitted asset related to the notional value of coverage defined in a separate excess of loss agreement. This additional reinsurance agreement has a 25 year term and provides coverage to the Company for aggregate excess of loss claims associated with guaranteed minimum withdrawal benefits on a block of fixed index annuities generally issued in April 2019 or later, including certain new business issued after the effective date (“Block 2”). In addition, effective December 31, 2020, this expanded permitted practice also extended the term of the permitted practice for Block 1 from September 30, 2020 to September 30, 2023. The reinsurance agreement covering contracts in Block 1 was also amended to conform certain provisions to be consistent with the Block 2 reinsurance agreement. Effective December 31, 2022, the reinsurance agreement for Block 2 was amended to update certain definitions contained in the agreement related to new business.

Effective October 1, 2022 and periods through September 30, 2023, the Company received approval from the TDI to apply a permitted practice in its financial statements allowing the Company to recognize an admitted asset related to the notional value of coverage defined in an additional excess of loss agreement. This excess of loss agreement has a 20-year term and provides coverage to the Company for aggregate claims associated with the base contract along with the guaranteed living benefits rider on a block of fixed annuities inforce on the treaty effective date and certain new business (“Block 3”).

The value of these assets subject to the above permitted practice was approximately $1,017 million, $584 million and $614 million in total at December 31, 2022, 2021 and 2020 respectively and are reported in Other assets on the balance sheet. The permitted practice allows the Company to manage its reserves in a manner more in line with anticipated

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

principle-based reserving requirements under development for fixed index annuities. As a condition for approving the permitted practice, the TDI imposed certain conditions relating to the permitted practice.    

The following table presents a reconciliation of the Company’s net income and capital and surplus between NAIC SAP basis and the basis including practices prescribed or permitted by the State of Texas:

		December 31,
(in millions)	SSAP#	2022		2021		2020
NET INCOME
State basis		$	791	$	2,244	$	(31)
Net (loss) income, NAIC SAP		$	791	$	2,244	$	(31)
SURPLUS
State basis		$	9,750	$	8,532	$	7,511
State permitted practices that increase (decrease) NAIC SAP:
XoL reinsurance agreement	4		(1,017)		(584)		(614)
Statutory capital and surplus, NAIC SAP		$	8,733	$	7,948	$	6,897

In the event the Company had not employed any or all of these permitted and prescribed practices, the Company’s risk-based capital (RBC) would not have triggered a regulatory event.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting practices prescribed or permitted by the TDI requires management to make estimates and assumptions that affect the reported amounts in the statutory financial statements and the accompanying notes. It also requires disclosure of contingent assets and liabilities at the date of the statutory financial statements and the reported amounts of revenue and expense during the period. The areas of significant judgments and estimates include the following:

• application of other-than-temporary impairments (OTTI);

• estimates with respect to income taxes, including recoverability of deferred tax assets (DTA);

• fair value measurements of certain financial assets; and

• policy reserves for life, annuity and accident and health insurance contracts, including guarantees.

These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of estimation. To the extent actual experience differs from the assumptions used, the Company’s Statutory

Statements of Admitted Assets, Liabilities and Capital and Surplus, Statutory Statements of Operations and Statutory Statements of Cash Flows could be materially affected.

Significant Accounting Policies

Bonds not backed by other loans are carried at amortized cost except for those with a NAIC designation of “6” or “6*”. Bonds with a NAIC 6 designation are carried at the lower of amortized cost or fair value, with unrealized losses charged directly to unassigned surplus. Bonds that have not been filed and have not received a designation in over one year from the NAIC’s Investment Analysis Office (IAO) receive a “6*” designation and are carried at zero, with the unrealized loss charged directly to unassigned surplus. Bonds filed with the IAO which receive a “6*” designation may carry a value greater than zero. Securities are assigned a NAIC 5* designation if the Company certifies that (1) the documentation necessary to permit a full credit analysis does not exist, (2) the issuer or obligor is current on all contracted interest and principal payments and (3) the Company has an actual expectation of ultimate repayment of all contracted interest and principal. Securities with NAIC 5* designations are deemed to possess the credit characteristics of securities assigned a NAIC 5 designation. The discount or premium on bonds is amortized using the effective yield method.

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Loan-backed and structured securities (LBaSS) include residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), asset-backed securities (ABS), pass-thru securities, lease-backed securities, equipment trust certificates, loan-backed securities issued by special purpose corporations or trusts, and securities where there is not direct recourse to the issuer. LBaSS are carried on a basis consistent with that of bonds not backed by loans. Income recognition for LBaSS is determined using the effective yield method and estimated cash flows. Prepayment assumptions for single-class and multi-class mortgage-backed securities (MBS) and ABS were obtained from an outside vendor or internal estimates. The Company uses independent pricing services and broker quotes in determining the fair value of its LBaSS. The Company uses the retrospective adjustment method to account for the effect of unscheduled payments affecting high credit quality securities, while securities with less than high credit quality and securities for which the collection of all contractual cash flows is not probable are both accounted for using the prospective adjustment method.

Reference to “non-rated residual tranches or interests” intends to capture securitization tranches, beneficial interests, interests of structured finance investments, as well as other structures that reflect loss layers without contractual interest or principal payments. Payments to holders of these investments occur after contractual interest and principal payments have been made to other tranches or interests and are based on the remaining available funds. Although payments to holders can occur throughout an investment’s duration (and not just at maturity), such instances still reflect the residual amount permitted to be distributed after other holders have received contractual interest and principal payments.

RBC charges for LBaSS are based on the final NAIC designations, which are determined with a multi-step approach. The initial designation is used to determine the carrying value of the security. The final NAIC designation is used for reporting and affects RBC. The final NAIC designation is determined in one of three ways. NAIC designations are determined through a financial modeling process conducted by BlackRock, direct analysis via the NAIC’s IAO or other protocols prescribed by the NAIC including internal assignment of Z, 5GI or 6*. Residual tranches, as defined in SSAP 43R, are reported as NAIC 6*.

Short sale is the sale of a security which is not owned by the Company at the time of sale. Short sales are normally settled by the delivery of a security borrowed by or on behalf of seller. A short sale as defined in Statement of Statutory Accounting Principle (SSAP) No. 103 “Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” is reported as a contra-asset (negative asset) initially reported at fair value, with changes in fair value recognized as unrealized gains and losses.

Redeemable Preferred stocks with NAIC designations of “1” through “3” are carried at amortized cost. All other preferred stocks are stated at the lower of cost, amortized cost or fair value, with unrealized capital losses charged directly to unassigned surplus. Perpetual preferred stocks shall be valued at fair value, not to exceed any currently effective call price. Provisions made for impairment are recorded as realized capital losses when declines in fair value are determined to be other than temporary.

Unaffiliated common stocks are carried at fair value, with unrealized capital gains and losses credited or charged directly to unassigned surplus. Provisions made for impairment are recorded as realized capital losses when declines in fair value are determined to be other than temporary. For Federal Home Loan Bank (FHLB) capital stock, which is only redeemable at par, the fair value shall be presumed to be par, unless considered other-than-temporarily impaired.

The Company has no investments in insurance subsidiary, controlled, and affiliated (SCA) entities. Investments in non-insurance SCA entities are recorded based on the equity of the investee per audited financial statements prepared pursuant to U.S. GAAP, which is adjusted to a statutory basis of accounting, if applicable. All investments in non-insurance SCA entities for which either audited U.S. GAAP financial statements or audited foreign GAAP basis financial statements that include a footnote reconciling net income and equity on a foreign GAAP basis to U.S. GAAP are not available, are non-admitted as assets. Undistributed equity in earnings of affiliates is included in unassigned surplus as a component of unrealized capital gains or losses. Dividends received from such affiliates are recorded as investment income when declared.

Mortgage and mezzanine real estate loans are carried at unpaid principal balances less allowances for credit losses and plus or minus adjustments for the accretion or amortization of discount or premium. Interest income on performing loans is accrued as earned.

Mortgage and mezzanine real estate loans are considered impaired when collection of all amounts due under contractual terms is not probable. Impairment is measured using either i) the present value of expected future cash

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

flows discounted at the loan’s effective interest rate, ii) the loan’s observable market price, if available, or iii) the fair value of the collateral if the loan is collateral dependent. An allowance is typically established for the difference between the impaired value of the loan and its current carrying amount. Additional allowance is established for incurred but not specifically identified impairments, based on statistical models primarily driven by past due status, debt service coverage, loan-to-value ratio, property occupancy, profile of the borrower and of the major property tenants, and economic trends in the market where the property is located. When all or a portion of a loan is deemed uncollectible, the uncollectible portion of the carrying amount of the loan is charged off against the allowance.

Real estate consists of properties occupied by the Company, properties held for the production of income and properties held for sale. Properties occupied by the Company and held for the production of income are carried at depreciated cost, less encumbrances, unless events or circumstances indicate the carrying amount of the asset (amount prior to reduction for encumbrances) may not be recoverable. Properties held for sale are carried at the lower of its depreciated cost or fair value less estimated costs to sell the property and net of encumbrances. Real estate obtained through foreclosure, in satisfaction of a loan, is recorded at the time of foreclosure at the lower of fair value as determined by acceptable appraisal methodologies, or the carrying amount of the related loan. Land is reported at cost.

Cash, cash equivalents and short-term investments include cash on hand and amounts due from banks and highly liquid debt instruments that have original maturities of three month or less and are carried at amortized cost. Short-term investments include interest-bearing money market funds, investment pools and other investments with original maturities within one year from the date of purchase.

Contract loans are carried at unpaid balances, which include unpaid principal plus accrued interest, including 90 days or more past due. All loan amounts in excess of the contract cash surrender value are considered non-admitted assets.

Derivative instruments used in hedging transactions that meet the criteria of a highly effective hedge are reported in a manner consistent with the hedged asset or liability (hedge accounting). Changes in statement value or cash flow of derivatives that qualify for hedge accounting are recorded consistent with the changes in the statement value or cash flow of the hedged asset or liability. Derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge (ineffective hedges) are accounted for at fair value and the changes in fair value are recorded as unrealized gains or losses.

Starting in 2022 the Company designated, under SSAP 86, certain foreign exchange derivatives as effective hedges of certain invested assets. Hedge accounting was not used for any derivative instruments for the years ending in 2021.

Statement of Statutory Accounting Principles (SSAP) 108, Derivatives Hedging Variable Annuity Guarantees, was used as allowed in 2020 and subsequent years. SSAP 108 allows special accounting treatment for limited derivatives hedging variable annuity guarantee benefits subject to fluctuation as a result of interest rate sensitivity.

Other invested assets principally consist of investments in limited partnerships and limited liability companies. Investments in these assets, except for joint ventures, partnerships and limited liability companies with a minor

ownership interest, are reported using the equity method. Under SAP, such investments are generally reported based on audited U.S. GAAP equity of the investee, with subsequent adjustment to a statutory basis of accounting, if applicable.

Joint ventures, partnerships and limited liability companies in which the Company has a minor ownership interest (i.e., less than 10 percent) or lacks control, are generally recorded based on the underlying audited U.S. GAAP equity of the investee, with some prescribed exceptions. SAP allows the use of (a) the U.S. GAAP equity as set forth in the footnote reconciliation of foreign GAAP equity and income to U.S. GAAP within audited foreign GAAP financial statements or (b) the International Financial Reporting Standards (IFRS) basis equity in audited IFRS financial statements as an acceptable basis for the valuation of minor/non-controlled investments. The audited U.S. tax basis equity may also be used in certain circumstances.

All other investments in entities for which audited U.S. GAAP financial statements, or another acceptable audited basis of accounting as described above were not available have been non-admitted as assets. Undistributed accumulated earnings of such entities are included in unassigned surplus as a component of unrealized capital gains or losses. Distributions received that are not in excess of the undistributed accumulated earnings are recognized as investment income. Impairments that are determined to be other than temporary are recognized as realized capital losses.

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Securities lending and repurchase agreements: The Company has a securities lending program, which was approved by its Board of Directors and lends securities from its investment portfolio to supplement liquidity or for other uses as deemed appropriate by management. Under the program, securities are lent to financial institutions, and in return the Company receives cash as collateral equal to 102 percent of the fair value of the loaned securities. The cash collateral received is invested in short-term investments that may be sold or repledged or partially used for short-term liquidity purposes based on conservative cash flow forecasts. Securities lent by the Company under these transactions may be sold or repledged by the counterparties. The liability for cash collateral received is reported in payable for securities lending in the Statutory Statements of Admitted Assets, Liabilities and Capital and Surplus. The Company monitors the fair value of securities loaned and obtains additional collateral as necessary. At the termination of the transactions, the Company and its counterparties are obligated to return the collateral provided and the securities lent, respectively. These transactions are treated as secured financing arrangements.

In addition, the Company is a party to secured financing transactions involving securities sold under agreements to repurchase (repurchase agreements), in which the Company transfers securities in exchange for cash, with an agreement by the Company to repurchase the same or substantially similar securities on agreed upon dates specified in the agreements.

Investment income due and accrued is non-admitted from investment income for bonds and other invested assets when collection of interest is overdue by more than 90 days, or is uncertain, and for mortgage loans when loans are foreclosed, or delinquent in payment for greater than 90 days, or when collection of interest is uncertain.

Net realized capital gains and losses, which are determined by using the specific identification method, are reflected in income net of applicable federal income taxes and transfers to the interest maintenance reserve.

The Company regularly evaluates its investments for other-than-temporary impairment (OTTI) in value. The determination that a security has incurred an OTTI in value and the amount of any loss recognition requires the judgment of the Company’s management and a continual review of its investments.

For bonds, other than LBaSS, an OTTI shall be considered to have occurred if it is probable that the Company will not be able to collect all amounts due under the contractual terms in effect at the acquisition date of the debt security. If it is determined an OTTI has occurred, the cost basis of bonds are written down to fair value and the amount of the write-down is recognized as a realized capital loss.

For LBaSS, a non-interest related OTTI resulting from a decline in value due to fundamental credit problems of the issuer is recognized when the projected discounted cash flows for a particular security are less than its amortized cost. When a non-interest related OTTI occurs, the LBaSS is written down to the present value of future cash flows expected to be collected. An OTTI is also deemed to have occurred if the Company intends to sell the LBaSS or does not have the intent and ability to retain the LBaSS until recovery. If the decline is interest-related, the LBaSS is written down to fair value.

In periods subsequent to the recognition of an OTTI loss, the Company generally accretes the difference between the new cost basis and the future cash flows expected to be collected, if applicable, as interest income over the remaining life of the security based on the amount and timing of estimated future cash flows.

Non-admitted assets are excluded from admitted assets and the change in the aggregate amount of such assets is reflected as a separate component of unassigned surplus. Non-admitted assets include all assets specifically designated as non-admitted and assets not designated as admitted, such as a net asset IMR, a certain portion of DTAs, prepaid expenses, electronic data processing (EDP) equipment assets, agents’ balances or other receivables over 90 days. Non-admitted assets were $4.6 billion at December 31, 2022 and 2021, respectively.

Interest maintenance reserve (IMR) is calculated based on methods prescribed by the NAIC and was established to prevent large fluctuations in interest-related investment gains and losses resulting from sales (net of taxes) and interest-related OTTI (net of taxes). An OTTI occurs when the Company, at the reporting date, has the intent to sell an investment or does not have the intent and ability to hold the security before recovery of the cost of the investment. For LBaSS, if the Company recognizes an interest-related OTTI, the non-interest-related OTTI is recorded to the asset valuation reserve, and the interest-related portion to IMR. Such gains and losses are deferred into the IMR and amortized into income using the grouped method over the remaining contractual lives of the securities sold.

15

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Asset valuation reserve (AVR) is used to stabilize surplus from fluctuations in the market value of bonds, stocks, mortgage loans, real estate, limited partnerships and other investments. Changes in the AVR are recorded as direct increases or decreases in surplus.

Separate account assets and liabilities generally represent funds for which the contract holder, rather than the Company, bears the investment risk. Separate account contract holders have no claim against the assets of the general account of the Company, except for certain guaranteed products. Separate account assets are generally reported at fair value. In addition, certain products with fixed guarantees and market-value-adjusted (MVA) fixed annuity contracts in which the assets are generally carried at amortized cost are required by certain states to be carried in a separate account. The operations of the separate accounts are excluded from the Statutory Statements of Operations and Statutory Statements of Cash Flows of the Company. The Company receives fees for assuming mortality and certain expense risks. Such fees are included in separate account fees in the Statutory Statements of Operations. Reserves for variable annuity contracts are provided in accordance with the Variable Annuity Commissioners’ Annuity Reserve Valuation Method (VACARVM) under subsection 21 of the Valuation Manual (“VM-21”) for 2020 and subsequent years, and under Actuarial Guideline 43 (AG 43) for prior years. Reserves for variable universal life accounts are provided in accordance with subsection 20 of the Valuation Manual (“VM-20”) for new business issued in 2020 and subsequent ears, and in accordance with the Commissioners’ Reserve Valuation Method (CRVM) for policies issued prior to 2020.

Policy reserves are established according to different methods.

Life, annuity, and health reserves are developed by actuarial methods and are generally determined based on published tables using specified interest rates, mortality or morbidity assumptions, and valuation methods prescribed or permitted by statutes that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed policy cash values or the amounts required by the TDI.

Principle-based reserving (“PBR”) is designed to tailor the reserving process to more closely reflect the risks of specific products, rather than the previous prescribed approach. Reserve requirements for AIG’s life insurance policies issued after January 1, 2020 are contained in subsection 20 of the Valuation Manual (“VM-20”), “Requirements for Principle-Based Reserves for Life Products”, policies issued prior to that date are reserved for using the Commissioners Reserve Valuation Method (“CRVM”). Under VM-20, these reserves are generally more sensitive to changes in actuarial assumptions.

The Company waives the deduction of deferred fractional premiums on the death of the life and annuity policy insured and returns any premium beyond the date of death. The Company reported additional reserves for surrender values in excess of the corresponding policy reserves.

The Company performs annual cash flow testing in accordance with the Actuarial Opinion and Memorandum Regulation to ensure adequacy of the reserves. Additional reserves are established where the results of cash flow testing under various interest rate scenarios indicate the need for such reserves or where the net premiums exceed the gross premiums on any insurance in force. Total cash flow testing reserves were $175 million at December 31, 2022.

A majority of the Company’s variable annuity products are issued with a guaranteed minimum death benefit (GMDB) which provides that, upon the death of a contractholder, the contractholder’s beneficiary will receive the greater of (1) the contractholder’s account value, or (2) a GMDB that varies by product. Depending on the product, the GMDB may equal the principal invested, adjusted for withdrawals; or the greatest contract value, adjusted for withdrawals, at the specified contract anniversaries; or the principal invested, adjusted for withdrawals, accumulated at the specified rate per annum. These benefits have issue age and other restrictions to reduce mortality risk exposure. The Company bears the risk that death claims following a decline in the financial markets may exceed contract holder account balances, and that the fees collected under the contract are insufficient to cover the costs of the benefit to be provided. Death benefits on GMDB policies generally reduce on a proportional basis or on a dollar-for-dollar basis when a partial withdrawal occurs.

Reserves for GMDB benefits are included in the VACARVM reserve. PBR is designed to tailor the reserving process to more closely reflect the risks of specific products, rather than the factor-based approach typically employed historically. Variable Annuity (“VA”) reserving requirements for 2020 and subsequent years are contained in subsection 21 of the Valuation Manual (“VM-21”), “Reserves for Variable Requirements for Principle-Based Annuities”, and replace the previous Actuarial Guideline XLVIII (“AG 43”) requirements, which also employed a principle-based approach. The

16

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Company fully applied VM-21 requirements to reserving for both new and existing VA contracts effective January 1, 2020.    

Life policies underwritten as substandard are charged extra premiums. Reserves are computed for a substandard policy by adding the reserve for an otherwise identical non-substandard policy plus a factor times the extra premium charge for the year. The factor varies by duration, type of plan, and underwriting. In addition, an extra mortality reserve is reported for ordinary life insurance policies classified as group conversions. Substandard structured settlement annuity reserves are determined by making a constant addition to the mortality rate of the applicable valuation mortality table so that the life expectancy on the adjusted table is equal to the life expectancy determined by the Company’s underwriters at issue.

Tabular interest, tabular less actual reserves released, and tabular cost have been determined by formula, except for universal life insurance and deferred annuity reserves, which include fund accumulations for which tabular interest has been determined from basic data. For the determination of tabular interest on funds not involving life contingencies, the actual credited interest is used.

Liabilities for deposit-type contracts, which include supplementary contracts without life contingencies and annuities certain, are based on the discounting of future payments at an annual statutory effective rate. Tabular interest on other funds not involving life contingencies is based on the interest rate at which the liability accrues.

Policy and contract claims represent the ultimate net cost of all reported and unreported claims incurred during the year. Reserves for unpaid claims are estimated using individual case-basis valuations and statistical analyses. Those estimates are subject to the effects of trends in claim severity and frequency. The estimates are continually reviewed and adjusted as necessary, as experience develops or new information becomes known; such adjustments are included in current operations.

Reserves for future policy benefits to be paid on life and accident and health policies, incurred in the statement period, but not yet reported, were established using historical data from claim lag experience. The data is aggregated from product specific studies performed on the Company’s business.

Premiums and annuity considerations and related expenses are recognized over different periods. Life premiums are recognized as income over the premium paying periods of the related policies. Annuity considerations are recognized as revenue when received. Premiums for deposit-type products are credited directly to the respective reserves and are not recorded in the Statutory Statement of Operations. Health premiums are earned ratably over the terms of the related insurance and reinsurance contracts or policies. Acquisition costs such as commissions and other expenses related to the production of new business are charged to the Statutory Statements of Operations as incurred.

Reinsurance premiums and benefits paid or provided are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts.

Annuity and deposit-type contract surrender benefits are reported on a cash basis, and include annuity benefits, payments under supplementary contracts with life contingencies, surrenders and withdrawals. Withdrawals from deposit-type contracts directly reduce the liability for deposit-type contracts and are not reported in the Statutory Statements of Operations.

General insurance expenses include allocated expenses pursuant to a cost allocation agreement. The Company purchases administrative, accounting, marketing and data processing services from AIG Parent or its subsidiaries and is charged based on estimated levels of usage, transactions or time incurred in providing the respective services. The allocation of costs for investment management services purchased from AIG Parent or its subsidiaries and third-party managers is based on the level of assets under management.

Federal income tax expense (benefit) is recognized and computed on a separate company basis pursuant to a tax sharing agreement, because the Company is included in the consolidated federal income tax return of its ultimate parent company filing group. To the extent that benefits for net operating losses, foreign tax credits or net capital losses are utilized on a consolidated basis, the Company would recognize tax benefits based upon the amount of those deductions and credits utilized in the consolidated federal income tax return. The federal income tax expense or benefit reflected in the Statutory Statements of Operations represents income taxes provided on income that is currently taxable, but excludes tax on the net realized capital gains or losses.

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Income taxes on capital gains or losses reflect differences in the recognition of capital gains or losses on a statutory accounting basis versus a tax accounting basis. The most significant of such differences involve impairments of investments, which are recorded as realized losses in the Statutory Statements of Operations but are not recognized for tax purposes, and the deferral of net capital gains and losses into the IMR for statutory income but not for taxable income. Capital gains and losses on certain related-party transactions are recognized for statutory financial reporting purposes but are deferred for income tax reporting purposes until the security is sold to an outside party.

A deferred tax asset (DTA) or deferred tax liability (DTL) is included in the Statutory Statements of Admitted Assets, Liabilities and Capital and Surplus, which reflects the expected future tax consequences of temporary differences between the statement values of assets and liabilities for statutory financial reporting purposes and the amounts used for income tax reporting purposes. The change in the net DTA or DTL is reflected in a separate component of unassigned surplus. Net DTA are limited in their admissibility.

Accounting Changes

Substantive changes were made to SSAP 32R, Preferred Stocks effective January 1, 2021, that required all perpetual preferred stocks to be reported at fair value. Prior to this change, perpetual preferred stocks with NAIC designations of “1” through “3” were carried at amortized cost. All other perpetual preferred stocks were stated at the lower of cost, amortized cost or fair value, with unrealized capital losses charged directly to unassigned surplus.

Actuarial Change / Reserve PBR (VM-20 and VM-21)

Principle-based reserving (“PBR”) is designed to tailor the reserving process to more closely reflect the risks of specific products, rather than the previous prescribed approach. Reserve requirements for Corebridges’s life insurance policies issued after January 1, 2020 are contained in subsection 20 of the Valuation Manual (“VM-20”), “Requirements for Principle-Based Reserves for Life Products”, policies issued prior to that date are reserved for using the Commissioners Reserve Valuation Method (“CRVM”). Under VM-20, these reserves are generally more sensitive to changes in actuarial assumptions.

PBR is designed to tailor the reserving process to more closely reflect the risks of specific products, rather than the factor-based approach typically employed historically. Variable Annuity (“VA”) reserving requirements are contained in subsection 21 of the Valuation Manual (“VM-21”), “Reserves for Variable Requirements for Principle-Based Annuities”, and replace the previous Actuarial Guideline XLVIII (“AG 43”) requirements, which also employed a principle-based approach. The Company fully applied VM-21 requirements to reserving for both new and existing VA contracts effective January 1, 2020. Under VM-21, these reserves are generally more sensitive to changes in interest rates. The impact of the implementation was $47 million.

SSAP 108

The Company adopted Statement of Statutory Accounting Principles (“SSAP”) 108, Derivatives Hedging Variable Annuity Guarantees, on January 1, 2020. The adoption of SSAP 108 coincided with the implementation of the related reserve guidance in VM-21 described above. The TDI approved, in December 2019, the Company’s plan to transition from a permitted practice to SSAP 86 in 2019 and from SSAP 86 to SSAP 108 in January 2020.

SSAP 108 allows special accounting treatment for limited derivatives hedging variable annuity guarantee benefits subject to fluctuation as a result of interest rate sensitivity. Accordingly, the statutory accounting guidance in this standard is considered a special accounting provision, only permitted if all the components in the standard are met. Prior to implementing a hedging program for application within the scope of this standard, a reporting entity must obtain explicit approval from its domiciliary state commissioner. As such, unlike most SSAPs, the guidance in SSAP 108 is not required to be adopted by all reporting entities that account for derivatives. The special accounting provision permits reporting entities to utilize a form of macro-hedging in which a portfolio of variable annuity policies are jointly designated as the host contracts containing the hedge item, in a fair value hedge, pursuant to a Clearly Defined Hedging Strategy defined within VM-21. The Company will dynamically hedge the interest rate risk of guaranteed minimum withdrawal benefits (“GMWB”) cash flows for variable annuities, defined as the fair value of rider claims, net of rider fees.

At inception and on an ongoing basis, the hedging relationship must be highly effective in achieving offsetting changes in fair value attributed to the hedged risk during the period that the hedge is designated. The term “highly effective” describes a fair value hedge relationship where the change in fair value of the derivative instrument is within 80 to 125 percent of the opposite change in fair value of the hedged item attributed to the hedged risk.

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The guidance in this SSAP is required to be applied on a prospective basis for qualifying hedge programs in place on or after the effective date.

In implementing SSAP 108, the Company uses the same fair value definition that is used for its economic hedge target, which enables the Company to leverage the existing modeling and attribution platform currently in place for hedging analysis. In addition, the Company uses the VM-21 interest rate sensitivities measured at the beginning of the quarter to estimate the reserve movement attributed to interest rate movement, which leverages the existing modeling and attribution platform in place for Statutory analysis. These approaches and the overall use of the special accounting provision of SSAP 108 in 2021 and 2022 have received the approval of the TDI.

The Company uses a portfolio of interest rates swaps and swaptions to hedge the interest rate risk associated with a portfolio of GMWB riders on its variable annuities. This hedging relationship was highly effective and complied with the “Clearly Defined Hedging Strategy” of VM-21. Please see Note 7 for further details regarding the financial impact of SSAP 108.

Correction of Errors

SAP requires that corrections of errors related to prior periods be reported as adjustments to unassigned surplus to the extent that they are not material to prior periods.

In 2022, three out-of-period errors were identified and corrected, which increased unassigned surplus by $72 million. This decreased claims reserved as a result of overstated claim reserves from 2019-2021. The Company’s management does not believe these corrections to be material to the Company’s results of operations, financial position, or cash flow for the Company’s previously filed annual statement.

In 2021, five out-of-period errors were identified and corrected, which decreased unassigned surplus by $161 million. The most significant of these was a tax correction related to 2013 - 2018. The Company’s management does not believe these corrections to be material to the Company’s results of operations, financial position, or cash flow for the Company’s previously filed annual statement.

In 2020, five out-of-period errors were identified and corrected, which increased unassigned surplus by $31 million. The most significant of these was an increase in variable annuity reserves due to an incorrect application of incident rates. The Company’s management does not believe these corrections to be material to the Company’s results of operations, financial position, or cash flow for the Company’s previously filed annual statement.

Differences in Statutory Accounting and U.S. GAAP Accounting

The accompanying statutory financial statements have been prepared in accordance with accounting practices prescribed or permitted by the TDI. These accounting practices vary in certain respects from U.S. GAAP. The primary differences between NAIC SAP and U.S. GAAP are as follows.

The objectives of U.S. GAAP differ from the objectives of SAP. U.S. GAAP is designed to measure the entity as a going concern and to produce general purpose financial statements to meet the varying needs of the different users of financial statements. SAP is designed to address the accounting requirements of regulators, who are the primary users of statutory-basis financial statements and whose primary objective is to measure solvency. As a result, U.S. GAAP stresses measurement of earnings and financial condition of a business from period to period, while SAP stresses measurement of the ability of the insurer to pay claims in the future.

Investments. Under SAP, investments in bonds and redeemable preferred stocks are generally reported at amortized cost. However, if bonds are designated category “6” and redeemable preferred stocks are designated categories “4 – 6” by the NAIC, these investments are reported at the lesser of amortized cost or fair value with a credit or charge to unrealized investment gains or losses. For U.S. GAAP, such fixed-maturity investments are designated at purchase as held-to-maturity, trading, or available-for-sale. Held-to-maturity fixed-maturity investments are reported at amortized cost, and the remaining fixed-maturity investments are reported at fair value, with unrealized capital gains and losses reported in operations for those designated as trading and as a component of other comprehensive income for those designated as available-for-sale.

Under SAP, all single- and multi-class MBS or other ABS (e.g., Collateralized Mortgage Obligations (CMO) are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium with respect to such securities using either the retrospective or prospective method. For LBaSS subsequent to July 1,

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

2009, if it is determined that a decline in fair value is other than temporary the cost basis of the security is written down to the discounted estimated future cash flows. Bonds, other than LBaSS, that are other-than-temporarily impaired are written down to fair value. For U.S. GAAP purposes, all securities, purchased or retained, that represent beneficial interests in securitized assets (e.g., CMO, MBS and ABS securities), other than high credit quality securities, would be adjusted using the prospective method when there is a change in estimated future cash flows. If high-credit quality securities must be adjusted, the retrospective method would be used. For all bonds, if it is determined that a decline in fair value is other-than-temporary, the cost basis of the security would be written down to the discounted estimated future cash flows, while the non-credit portion of the impairment would be recorded as an unrealized loss in other comprehensive income.

Under SAP, when it is probable that the insurer will be unable to collect all amounts due according to the contractual terms of the mortgage agreement, valuation allowances are established for temporarily-impaired mortgage loans based on the difference between the unpaid loan balance and the estimated fair value of the underlying real estate, less estimated costs to obtain and sell. The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus rather than as a component of earnings as would be required under U.S. GAAP. If the impairment is other-than-temporary, a direct write down is recognized as a realized loss, and a new cost basis is established. Under U.S. GAAP, effective January 1, 2020, the Company adopted the new accounting standard for current expected credit losses (CECL). This standard requires an allowance for credit losses based on the expectation of lifetime credit losses. Prior to the adoption of CECL, valuation allowances would be established when the insurer determines it is probable that it will be unable to collect principal and interest due according to the contractual terms of the loan agreement. Such U.S. GAAP allowances would be based on the difference between the unpaid loan balance and the present value of expected future cash flows discounted at the loan’s original effective interest rate or, if foreclosure is probable, on the estimated fair value of the underlying real estate.

Under SAP, joint ventures, partnerships and limited liability companies in which the insurer has a minor ownership interest (i.e., less than 10 percent) or lacks control are generally recorded based on the underlying audited U.S. GAAP basis equity of the investee. Under U.S. GAAP, joint ventures, partnerships and limited liability companies in which the insurer has a significant ownership interest or is deemed to have control are accounted for under the equity method, where that is not the case, such investments are carried at fair value with changes in fair value recognized in earnings for equity securities previously designated as available-for-sale and for equity securities measured at fair value at the Company’s election.

Real Estate. Under SAP, investments in real estate are reported net of related obligations; under U.S. GAAP, investments in real estate are reported on a gross basis. Under SAP, real estate owned and occupied by the insurer is included in investments; under U.S. GAAP, real estate owned and occupied by the insurer is reported as an operating asset, and operating income and expenses include rent for the insurer’s occupancy of those properties.

Derivatives. Under SAP, derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge are accounted for at fair value with the changes in fair value recorded as unrealized capital gains or losses. Under U.S. GAAP, such derivative instruments are accounted for at fair value with the changes in fair value recorded as realized capital gains or losses. Under U.S. GAAP, fair value measurement for free standing derivatives incorporate either counterparty’s credit risk for derivative assets or the insurer’s credit risk for derivative liabilities by determining the explicit cost to protect against credit exposure. This credit exposure evaluation takes into consideration observable credit default swap rates. Under SAP, non-performance risk (own credit-risk) is not reflected in the fair value calculations for derivative liabilities. Under U.S. GAAP, index life insurance features in certain variable universal life contracts and certain guaranteed features of variable annuities are bifurcated and accounted for separately as embedded policy derivatives. Under SAP, embedded derivatives are not bifurcated or accounted for separately from the host contract.

Interest Maintenance Reserve. Under SAP, the insurer is required to maintain an IMR. IMR is calculated based on methods prescribed by the NAIC and was established to prevent large fluctuations in interest-related capital gains and losses realized through sales or OTTI. IMR applies to all types of fixed maturity investments, including bonds, preferred stocks, MBS, ABS and mortgage loans. After-tax capital gains or losses realized upon the sale or impairment of such investments resulting from changes in the overall level of interest rates are excluded from current period net income and transferred to the IMR. The transferred after-tax net realized capital gains or losses are then amortized into income over

20

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

the remaining period to maturity of the divested asset. Realized capital gains and losses are reported net of tax and transfers to the IMR, after net gain from operations. Any net asset IMR balance is treated as non-admitted asset. This reserve is not required under U.S. GAAP and pre-tax realized capital gains and losses are reported as component of total revenues, with related taxes included in taxes from operations.

Asset Valuation Reserve. Under SAP, the insurer is required to maintain an AVR, which is computed in accordance with a prescribed formula and represents a provision for possible fluctuations in the value of bonds, equity securities, mortgage loans, real estate, and other invested assets. The level of AVR is based on both the type of investment and its credit rating. Under SAP, AVR is included in total adjusted capital for RBC analysis purposes. Changes to AVR are charged or credited directly to unassigned surplus. This reserve is not required under U.S. GAAP.

Subsidiaries. Under SAP, investments in insurance subsidiaries are recorded based upon the underlying audited statutory equity of a subsidiary with all undistributed earnings or losses shown as an unrealized capital gain or loss in unassigned surplus. Dividends received by the parent company from its subsidiaries are recorded through net investment income. Under U.S. GAAP, subsidiaries’ financial statements are combined with the parent company’s financial statements through consolidation. All intercompany balances and transactions are eliminated under U.S. GAAP. Dividends received by the parent company from its subsidiaries reduce the parent company’s investment in the subsidiaries.

Policy Acquisition Costs and Sales Inducements. Under SAP, policy acquisition costs are expensed when incurred. Under U.S. GAAP, acquisition costs that are incremental and directly related to the successful acquisition of new and renewal of existing insurance and investment-type contracts, are deferred and amortized, generally in proportion to the present value of expected future gross profit margins. For all other insurance contracts, to the extent recoverable from future policy revenues, deferred policy acquisition costs (DAC) are amortized, with interest, over the premium-paying period of the related contracts, using assumptions that are consistent with those used in computing policy benefit reserves. Under SAP, sales inducements are expensed when incurred. Under U.S. GAAP, certain sales inducements on interest-sensitive life insurance contracts and deferred annuities are deferred and amortized over the life of the contract using the same methodology and assumptions used to amortize DAC.

Deferred Premiums. Under SAP, when deferred premiums exist, statutory deferred premiums are held as a statutory asset, while under U.S. GAAP, deferred premiums are held as a contra-liability in the future policy benefits liability.

Non-admitted Assets. Certain assets designated as “non-admitted,” principally any net asset IMR, agents’ balances or unsecured loans or advances to agents, certain DTAs, furniture, equipment and computer software, receivables over 90 days and prepaid expenses, as well as other assets not specifically identified as admitted assets within the NAIC SAP, are excluded from the Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus and are charged directly to unassigned surplus. Under U.S. GAAP, such assets are included in the balance sheet.

Universal Life and Annuity Policies. Under SAP, revenues for universal life and annuity policies containing mortality or morbidity risk considerations consist of the entire premium received, and benefits incurred consist of the total of death benefits paid and the change in policy reserves. Payments received on contracts that do not incorporate any mortality or morbidity risk considerations (deposit-type contracts) are credited directly to an appropriate liability for deposit-type contract account without recognizing premium income. Interest credited to deposit-type contracts is recorded as an expense in the Statutory Statements of Operations as incurred. Payments that represent a return of policyholder balances are recorded as a direct reduction of the liability for deposit-type contracts, rather than a benefit expense. Under U.S. GAAP, premiums received in excess of policy charges are not recognized as premium revenue, and benefits represent the excess of benefits paid over the policy account value and interest credited to the account values.

Benefit Reserves. Under SAP, loading is the difference between the gross and valuation net premium. Valuation net premium is calculated using valuation assumptions which are different for statutory and U.S. GAAP. Statutory valuation assumptions are set by the insurer within limits as defined by statutory law. U.S. GAAP valuation assumptions are set by the insurer based on management’s estimates and judgment.

Policyholder funds not involving life contingencies use different valuation assumptions for SAP and U.S. GAAP. Under SAP, prescribed rates of interest related to payout annuities are used in the discounting of expected benefit payments, while under U.S. GAAP, the insurer’s best estimates of interest rates are used.

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Under SAP, the Commissioners’ Reserve Valuation Method is used for the majority of individual insurance reserves. Under U.S. GAAP, individual insurance policyholder liabilities for traditional forms of insurance are generally established using the net level premium method. For interest-sensitive policies, a liability for policyholder account balances is established under U.S. GAAP based on the contract value that has accrued to the benefit of the policyholder. Policy assumptions used in the estimation of policyholder liabilities are generally prescribed under SAP. Under U.S. GAAP, policy assumptions are based upon best estimates as of the date the policy was issued, with provisions for the risk of adverse deviation.

Under SAP, the CARVM is used for the majority of individual deferred annuity reserves, while under U.S. GAAP, individual deferred annuity policyholder liabilities are generally equal to the contract value that has accrued to the benefit of the policyholder, together with liabilities for certain contractual guarantees, if applicable. Under SAP, reserves for fixed rate deposit-type contracts are based upon their accumulated values, discounted at an annual statutory effective rate, while under U.S. GAAP, reserves for deposit-type contracts are recorded at their accumulated values.

Reinsurance. Under SAP, policy and contract liabilities ceded to reinsurers are reported as reductions of the related reserves rather than as assets as required under U.S. GAAP. Under SAP, a liability for reinsurance balances has been provided for unsecured policy reserves, unearned premiums, and unpaid losses ceded to reinsurers not licensed to assume such business. Changes to these amounts are credited or charged directly to unassigned surplus. Under U.S. GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings. Under SAP, the criteria used to demonstrate risk transfer varies from U.S. GAAP, which may result in transactions that are accounted for as reinsurance for SAP and deposit accounting for U.S. GAAP. Under SAP, the reserve credit permitted for unauthorized reinsurers is less than or equal to the amount of letter of credit or funds held in trust by the reinsurer. Under U.S. GAAP, assumed and ceded reinsurance is reflected on a gross basis in the balance sheet, and certain commissions allowed by reinsurers on ceded business are deferred and amortized on a basis consistent with DAC.

Policyholder Dividend Liabilities. Under SAP, policyholder dividends are recognized when declared. Under U.S. GAAP, policyholder dividends are recognized over the term of the related policies.

Separate Accounts. Under SAP, separate account surplus created through the use of the CRVM, the VACARVM or other reserving methods is reported by the general account as an unsettled transfer from the separate account. The net change on such transfers is included as a part of the net gain from operations in the general account. This is not required under U.S. GAAP.

Separate accounts include certain non-unitized assets which primarily represent MVA fixed options of variable annuity contracts issued in various states. Under SAP, these contracts are accounted for in the separate account financial statements, while under U.S. GAAP, they are accounted for in the general account.

Deferred Income Taxes. Under SAP, statutory DTAs that are more likely than not to be realized are limited to: 1) the amount of federal income taxes paid in prior years that can be recovered through loss carrybacks for existing temporary differences that reverse by the end of the subsequent calendar year, plus 2) the lesser of the remaining gross DTA expected to be realized within a maximum three years of the reporting date or a maximum 15 percent of the capital and surplus excluding any net DTA, EDP equipment and operating software and any net positive goodwill, plus 3) the amount of the remaining gross DTA that can be offset against existing gross DTLs. The remaining DTAs are non-admitted. Deferred taxes do not include amounts for state taxes. Under U.S. GAAP, state taxes are included in the computation of deferred taxes, all DTAs are recorded and a valuation allowance is established if it is more likely than not that some portion of the DTA will not be realized. Under SAP, income tax expense is based upon taxes currently payable. Changes in deferred taxes are reported in surplus and subject to admissibility limits. Under U.S. GAAP, changes in deferred taxes are recorded in income tax expense.

Offsetting of Assets and Liabilities. Under SAP, offsetting of assets and liabilities is not permitted when there are master netting agreements unless four requirements for valid right of offset are met. The requirements include 1) each of the two parties owes the other determinable amounts, 2) the reporting party has the right to set off the amount owed with the amount owed by the other party, 3) the reporting party intends to set off, and 4) the right of setoff is enforceable. The prohibition against offsetting extends to derivatives and collateral posted against derivative positions, repurchase and reverse repurchase agreements, and securities borrowing and lending transactions. Under U.S. GAAP, these amounts under master netting arrangements may be offset and presented on a net basis.

22

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

3. INVESTMENTS

Bonds and Equity Securities

The following table presents the statement value, gross unrealized gain, gross unrealized loss and the estimated fair value of bonds and equity securities by major security type:

(in millions)	Statement Value		Gross     Unrealized Gains		Gross     Unrealized Losses			Fair Value
December 31, 2022
Bonds:
U.S. government obligations	$	1,314	$	4	$	(198	)	$	1,120
All other governments		2,629		20		(385	)		2,264
States, territories and possessions		268		2		(30	)		240
Political subdivisions of states, territories and possessions		332		8		(21	)		319
Special revenue		6,159		35		(710	)		5,484
Industrial and miscellaneous		93,378		1,001		(13,217	)		81,162
Hybrid securities		435		10		(28	)		417
Bank loans		3,580		3		(115	)		3,468
Parent, subsidiaries and affiliates		360		—		—			360
Total bonds		108,455		1,083		(14,704	)		94,834
Preferred stock		93		—		(4	)		89
Common stock*		927		—		—			927
Total equity securities		1,020		—		(4	)		1,016
Total	$	109,475	$	1,083	$	(14,708	)	$	95,850
December 31, 2021
Bonds:
U.S. government obligations	$	1,351	$	203	$	—		$	1,554
All other government		2,960		286		(61	)		3,185
States, territories and possessions		349		60		—			409
Political subdivisions of states, territories and possessions		336		81		—			417
Special revenue		6,820		1,004		(11	)		7,813
Industrial and miscellaneous		92,128		9,011		(587	)		100,552
Hybrid securities		525		125		(2	)		648
Bank loans		2,955		12		(41	)		2,926
Parent, subsidiaries and affiliates		350		—		—			350
Total bonds		107,774		10,782		(702	)		117,854
Preferred stock		91		5		—			96
Common stock*		1,144		—		—			1,144
Total equity securities		1,235		5		—			1,240
Total	$	109,009	$	10,787	$	(702	)	$	119,094

  * Common stock includes $753 million and $979 million of investments in affiliates at December 31, 2022 and 2021, respectively.

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Bonds and Equity Securities in Loss Positions

The following table summarizes the fair value and gross unrealized losses (where fair value is less than amortized cost) on bonds and equity securities, including amounts on NAIC 6 and 6* bonds, aggregated by major investment category and length of time that individual securities have been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or More					Total
(in millions)	Fair       Value		Gross       Unrealized Losses			Fair       Value		Gross       Unrealized Losses			Fair       Value		Gross       Unrealized Losses
December 31, 2022
Bonds:
U.S. government obligations	$	990	$	(197	)	$	1	$	—		$	991	$	(197	)
All other government		1,953		(389	)		—		—			1,953		(389	)
U.S. States, territories and possessions		180		(30	)		—		—			180		(30	)
Political subdivisions of states, territories and possessions		177		(21	)		—		—			177		(21	)
Special revenue		4,565		(694	)		78		(16	)		4,643		(710	)
Industrial and miscellaneous		57,098		(10,308	)		12,196		(2,927	)		69,294		(13,235	)
Hybrid securities		268		(30	)		—		—			268		(30	)
Bank loans		2,184		(71	)		897		(47	)		3,081		(118	)
Total bonds		67,415		(11,740	)		13,172		(2,990	)		80,587		(14,730	)
Preferred stock		84		(6	)		—		—			84		(6	)
Common stock		2		—			—		—			2		—
Total equity securities		86		(6	)		—		—			86		(6	)
Total	$	67,501	$	(11,746	)	$	13,172	$	(2,990	)	$	80,673	$	(14,736	)
December 31, 2021
Bonds:
U.S. government obligations	$	—	$	—		$	—	$	—		$	—	$	—
All other government		482		(27	)		213		(34	)		695		(61	)
U.S States, territories and possessions		6		—			—		—			6		—
Political subdivisions of states, territories and possessions		32		—			—		—			32		—
Special revenue		421		(10	)		18		(1	)		439		(11	)
Industrial and miscellaneous		17,010		(345	)		3,330		(247	)		20,340		(592	)
Hybrid securities		11		—			23		(2	)		34		(2	)
Bank loans		1,067		(13	)		753		(28	)		1,820		(41	)
Total	$	19,029	$	(395	)	$	4,337	$	(312	)	$	23,366	$	(707	)
Preferred stock		4		—			—		—			4		—
Common stock		6		(1	)		—		—			6		(1	)
Total equity securities		10		(1	)		—		—			10		(1	)
Total	$	19,039	$	(396	)	$	4,337	$	(312	)	$	23,376	$	(708	)

As of December 31, 2022 and 2021, the number of bonds and equity securities in an unrealized loss position was 8,092 and 2,507, respectively. Bonds comprised 8,010 of the total, of which 1,189 were in a continuous loss position greater than 12 months at December 31, 2022.Bonds comprised 2,501 of the total, of which 519 were in a continuous loss position greater than 12 months at December 31, 2021.

The Company did not recognize the unrealized losses in earnings on these fixed maturity securities at December 31, 2022 and 2021, respectively, because the Company neither intends to sell the securities nor does the Company believe that it is more likely than not that the Company will be required to sell these securities before recovery of their amortized cost basis. For fixed maturity securities with significant declines, the Company performed fundamental credit analyses on a security-by-security basis, which included consideration of credit enhancements, expected defaults on underlying collateral, review of relevant industry analyst reports and forecasts and other available market data.

24

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Contractual Maturities of Bonds

The following table presents the statement value and fair value of bonds by contractual maturity:

(in millions)	Statement Value		Fair Value
December 31, 2022
Due in one year or less	$	1,449	$	1,446
Due after one year through five years		11,917		11,496
Due after five years through ten years		16,085		14,354
Due after ten years		48,692		39,072
LBaSS		30,699		28,853
Total	$	108,842	$	95,221

Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

Bonds in or near default as to payment of principal or interest had a statement value of $124 million and $102 million at December 31, 2022 and 2021, respectively, which is the fair value. At December 31, 2022 and 2021, the Company had no income excluded from due and accrued for bonds.

December 31, 2022 , the Company’s bond portfolio included bonds totaling $7.0 billion not rated investment grade by the NAIC designations (categories 3-6). These bonds accounted for 3 percent of the Company’s total assets and 5 percent of invested assets. These below investment grade securities, excluding structured securities, span across 14 industries. At December 31, 2021, the Company’s bond portfolio included bonds totaling $7.6 billion not rated investment grade by the NAIC designations (categories 3-6). These bonds accounted for 4 percent of the Company’s total assets and 5 percent of invested assets. These below investment grade securities, excluding structured securities, span across 14 industries.

December 31, 2022 and 2021 The following table presents the industries that constitute more than 10% of the below investment grade securities:

	December 31,
	2022			2021
Consumer cyclical		21.3	%		18.7%
Consumer non-cyclical		16.1			15.7
Capital Goods		8.3			8.9

LBaSS

The Company determines fair value of LBaSS based on the amount at which a security could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The majority of the Company’s ABS, RMBS, CMBS, and collateralized debt obligations (CDO) are priced by approved independent third-party valuation service providers and broker dealer quotations. Small portions of the LBaSS that are not traded in active markets are priced by market standard internal valuation methodologies, which include discounted cash flow methodologies and matrix pricing. The estimated fair values are based on available market information and management’s judgments.

The following table presents the statement value and fair value of LBaSS:

	December 31, 2022				December 31, 2021
(in millions)	Statement Value		Fair Value		Statement Value		Fair Value
Loan-backed and structured securities	$	30,699	$	28,853	$	26,365	$	28,172

Prepayment assumptions for single class, multi-class mortgage-backed and ABS were obtained from independent third-party valuation service providers or internal estimates. These assumptions are consistent with the current interest rate and economic environment.

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

At December 31, 2022 and 2021, the Company had exposure to a variety of LBaSS. These securities could have significant concentrations of credit risk by country, geographical region, property type, servicer or other characteristics. As part of the quarterly surveillance process, the Company takes into account many of these characteristics in making the OTTI assessment.

At December 31, 2022 and 2021, the Company did not have any LBaSS with a recognized OTTI due to the intent to sell or an inability or lack of intent to retain the security for a period of time sufficient to recover the amortized cost basis.

During 2022, 2021 and 2020, the Company recognized total OTTI of $114 million, $13 million and $57 million, respectively, on LBaSS that were still held by the Company. In addition, at December 31, 2022 and 2021, the Company held loan-backed impaired securities (fair value is less than cost or amortized cost) for which an OTTI had not been recognized in earnings as a realized loss. Such impairments include securities with a recognized OTTI for non-interest (credit) related declines that were recognized in earnings, but for which an associated interest-related decline has not been recognized in earnings as a realized capital loss.

The following table summarizes the fair value and aggregate amount of unrealized losses on LBaSS and length of time that individual securities have been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or More					Total
(in millions)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
December 31, 2022
LBaSS	$	16,448	$	(1,565	)	$	6,349	$	(999	)	$	22,797	$	(2,564	)
December 31, 2021
LBaSS	$	7,974	$	(108	)	$	111	$	(10	)	$	8,085	$	(118	)

In its OTTI assessment, the Company considers all information relevant to the collectability of the security, including past history, current conditions and reasonable forecasts when developing an estimate of future cash flows. Relevant analyst reports and forecasts for the asset class also receive appropriate consideration. The Company also considers how credit enhancements affect the expected performance of the security. In addition, the Company generally considers its cash and working capital requirements and expected cash flows in relation to its business plans and how such forecasts affect the intent and ability to hold such securities to recovery of their amortized cost.

The Company does not have any LBaSS for which it is not practicable to estimate fair values.

The following table presents the rollforward of non-interest related OTTI for LBaSS:

	December 31,
(in millions)	2022		2021
Balance, beginning of year	$	1,263	$	1,320
Increases due to:
Credit impairment on new securities subject to impairment losses		42		—
Additional credit impairment on previously impaired investments		71		13
Reduction due to:
Credit impaired securities fully disposed for which there was no prior intent or requirement to sell		120		70
Balance, end of year	$	1,256	$	1,263

See Note 23 for a list with each LBaSS at a CUSIP level where the present value of cash flows expected to be collected is less than the amortized cost basis during the current year and a list of the Company’s structured notes holding at December 31, 2022.

Mortgage Loans

Mortgage loans had outstanding principal balances of $25.8 billion and $22.5 billion at December 31, 2022 and 2021, respectively. Contractual interest rates range from 0.00 percent to 13.00 percent. The mortgage loans at December 31, 2022 had maturity dates ranging from 2022 to 2069.

26

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The Company’s mortgage loans are collateralized by a variety of commercial real estate property types located throughout the U.S. and Canada. The commercial mortgage loans are non-recourse to the borrower.

The following tables present the geographic and property-type distribution of the Company’s mortgage loan portfolio:

	December 31,
	2022			2021
Geographic distribution:
Mid-Atlantic		28.0	%		30.5	%
Foreign		22.5			24.1
Pacific		14.7			12.4
South Atlantic		12.1			11.8
West South Central		6.5			7.0
East North Central		5.8			5.2
New England		4.5			4.9
Mountain		3.9			2.9
East South Central		1.5			0.6
West North Central		0.5			0.6
Total		100.0	%		100.0	%
Property type distribution:
Multi-family		35.9	%		37.1	%
Office		23.8			27.0
Retail		8.3			11.2
Industrial		16.2			10.5
Hotel/Motel		4.8			5.7
Other		11.1			8.5
Total		100.0	%		100.0	%

At December 31, 2022, there were 285 mortgage loans with outstanding balances of $20 million or more, which loans collectively, aggregated approximately 82 percent of this portfolio.

The following table presents the minimum and maximum lending rates for new mortgage loans during 2022 and 2021:

	Years Ended December 31,
	2022						2021
(in millions)	Maximum			Minimum			Maximum			Minimum
Office		12.60	%		3.00	%		8.95	%		2.10	%
Multi-family		15.03			2.98			7.44			1.80
Retail		—			—			7.10			2.25
Industrial		9.34			2.68			6.50			2.35
Hotel/Motel		8.68			4.04			6.00			—
Other		37.35			—			5.91			1.99

The Company reduced the interest rate on three loans during 2022. The Company did not reduce any interest rates during 2021.

The maximum percentage of any one loan to the value of security at the time of the loan, exclusive of insured or guaranteed or purchase money mortgage was 90 percent and 95.0 percent, in 2022 and 2021, respectively.

At December 31, 2022, the Company held $800 million in impaired mortgages with $492 million of related allowances for credit losses and $308 million in impaired loans without a related allowance. At December 31, 2021, the Company held $549 million in impaired mortgages with $231 million of related allowances for credit losses and $318 million in impaired loans without a related allowance. The Company’s average recorded investment in impaired loans was $669 million and $371 million, at December 31, 2022 and 2021, respectively. The Company recognized interest income of $22 million, $14 million and $3 million, in 2022, 2021 and 2020, respectively.

27

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents a rollforward of the changes in the allowance for losses on mortgage loans receivable:

	December 31,
(in millions)	2022		2021		2020
Balance, beginning of year	$	245	$	274	$	197
Additions (reductions) charged to unrealized capital loss		58		(28)		77
Direct write-downs charged against allowance		(9)		(1)		—
Balance, end of year	$	294	$	245	$	274

During 2022, the Company did not derecognized any mortgage loans and did not recognized any real estate collateral as a result of foreclosure.

The mortgage loan portfolio has been originated by the Company under strict underwriting standards. Commercial mortgage loans on properties such as offices, hotels and shopping centers generally represent a higher level of risk than do mortgage loans secured by multi-family residences. This greater risk is due to several factors, including the larger size of such loans and the more immediate effects of general economic conditions on these commercial property types. However, due to the Company’s strict underwriting standards, the Company believes that it has prudently managed the risk attributable to its mortgage loan portfolio while maintaining attractive yields.

The following table presents the age analysis of mortgage loans:

	December 31,
(in millions)	2022		2021
Current	$	24,981	$	22,144
30 - 59 days past due		21		98
60 - 89 days past due		3		3
90 - 179 days past due		125		29
Greater than 180 days past due		1		2
Total	$	25,131	$	22,276

At December 31, 2022 and 2021, the Company had mortgage loans outstanding under participant or co-lender agreements of $21.2 billion and $19.0 billion, respectively.

The Company had $466 million and $404 million in restructured loans at December 31, 2022 and 2021, respectively.

Aggregate mortgage loans having the following loan-to-value ratios as determined from the most current appraisal as of December 31, 2022:

(in millions)	Residential				Commercial			Agricultural
Loan-to-Value	Amount		Percentage of Total Admitted Assets		Amount		Percentage       of Total       Admitted       Assets	Amount		Percentage  of Total  Admitted  Assets
a. above 95%	$	—		— %	$	385	0.30  %	$	—	—  %
b. 91% to 95%		—		—		244	0.20		—	—
c. 81% to 90%		1		—		728	0.50		—	—
d. 71% to 80%		—		—		2,307	1.50		—	—
e. below 70%		2,483		1.60		18,983	12.50		—	—

Troubled Debt Restructuring

The Company held no restructured debt for which impairment was recognized for both December 31, 2022 and 2021. At December 31, 2022, the Company had $4 million of outstanding commitments to debtors that held loans with restructured terms and none in 2021.

28

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Real Estate

The following table presents the components of the Company’s investment in real estate:

	December 31,
(in millions)	2022		2021
Properties occupied by the Company	$	6	$	6
Properties held for production of income		3		3
Total	$	9	$	9

The Company recognized no gains or losses in 2022, 2021 and 2020. The Company did not recognize any impairment write-downs for its investment in real estate during 2022, 2021 and 2020.

Other Invested Assets

The following table presents the components of the Company’s other invested assets:

	December 31,
(in millions)	2022		2021
Investments in limited liability companies	$	972	$	964
Investments in limited partnerships		4,188		3,752
Other unaffiliated investments		2,717		1,836
Receivable for securities		73		197
Initial margin for futures		86		55
Non-admitted assets		(10)		(123)
Total	$	8,026	$	6,681

The Company utilizes the look-through approach in valuing its investments in affiliated joint ventures or partnerships that have the characteristics of real estate investments. These affiliated real estate investments had an aggregate value of $840 million at December 31, 2022. All liabilities, commitments, contingencies, guarantees, or obligations of these holding company entities, which are required to be recorded as liabilities, commitments, contingencies, guarantees or obligations under applicable accounting guidance, are reflected in the Company’s determination of the carrying value of the investment in each of the respective holding company entities, if applicable.

The Company recorded impairment write-downs in joint ventures was $13 million, $15 million and $29 million during 2022, 2021 and 2020, respectively.

29

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Net Investment Income

The following table presents the components of net investment income:

	Years ended December 31,
(in millions)	2022		2021		2020
Bonds	$	4,608	$	4,802	$	4,841
Preferred stocks		10		4		9
Common stocks		2		7		4
Cash and short-term investments		44		15		34
Mortgage loans		1,038		946		898
Real estate*		4		4		5
Contract loans		68		65		78
Derivatives		994		167		90
Investment income from affiliates		399		1,419		119
Other invested assets		320		271		193
Gross investment income		7,487		7,700		6,271
Investment expenses		(315)		(197)		(236)
Net investment income	$	7,172	$	7,503	$	6,035

* Includes amounts for the occupancy of Company-owned property of $2 million in 2022, 2021 and 2020.

Net Realized and Unrealized Capital Gains (Losses)

The following table presents the components of Net realized capital gains (losses):

	Years ended December 31,
(in millions)	2022			2021		2020
Bonds	$	(551	)	$	446	$	566
Preferred stocks		—			14		5
Common stocks		(2)			16		74
Cash and short-term investments		(79)			(1)		5
Mortgage loans		(107)			18		—
Real estate		—			—		7
Derivatives		(1,233)			(659)		649
Other invested assets		80			199		199
Other		—			(49)		—
Realized capital (losses) gains		(1,892)			(16)		1,505
Federal income tax benefit (expense)		397			3		(316)
Net gains transferred to IMR		305			(392)		(549)
Net realized capital (losses) gains	$	(1,190)		$	(405)	$	640

During 2022, 2021 and 2020, the Company recognized $167 million, $42 million and $117 million, respectively, of impairment write-downs in accordance with the impairment policy described in Note 2.

The following table presents the proceeds from sales of bonds and equities and the related gross realized capital gains and gross realized capital losses:

	Years ended December 31,
(in millions)	2022		2021		2020
Proceeds	$	9,787	$	11,495	$	11,460
Gross realized capital gains	$	112	$	823	$	1,076
Gross realized capital losses		(472)		(405)		(334)
Net realized capital (losses) gains	$	(360)	$	418	$	742

30

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents the net change in unrealized capital gains (losses) of investments (including foreign exchange capital gains (losses):

	Years ended December 31,
(in millions)	2022			2021		2020
Bonds	$	(369	)	$	(171)	$	213
Preferred and common stocks		(59	)		(311)		(23	)
Mortgage loans		(523	)		(129)		175
Real estate		—			—		(24	)
Derivatives		(497	)		139		271
Other invested assets		(280	)		502		47
Other		19			25		(29	)
Federal income tax benefit (expense)		310			(116)		(124	)
Net change in unrealized (losses) gains of investments	$	(1,399	)	$	(61)	$	506

5GI Securities Measured at Aggregate Book Adjusted Carrying Value and Fair Value

The following table presents 5GI Securities measured at aggregate book adjusted carrying value (BACV) and aggregate fair value at December 31:

Investment	Number of 5GI Securities				Aggregate BACV (in millions)				Aggregate Fair Value (in millions)
	2022		2021		2022		2021		2022		2021
Bonds - AC		11		6	$	15	$	28	$	13	$	28
LB&SS - AC		14		2		11		7		11		7
Preferred Stock - AC		—		—		—		—		—		—
Preferred Stock - FV		4		3		7		—		7		—
Total		29		11	$	33	$	35	$	31	$	35

AC - Amortized Cost

FV - Fair Value

31

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

4. LOAN-BACKED AND STRUCTURED SECURITY IMPAIRMENTS AND STRUCTURED NOTES HOLDINGS

LBaSS

The following table presents the LBaSS held by the Company at December 31, 2022 for which it had recognized non-interest related OTTI subsequent to the adoption of SSAP 43R:

(in thousands)
CUSIP	Amortized Cost Before Current Period OTTI		Present Value of Projected Cash Flows		Recognized OTTI		Amortized Cost After OTTI		Fair Value at     Time of OTTI		Date of Financial Statement Where Reported
5899296D5	$	15	$	8	$	7	$	8	$	2		3/31/2022
12628LAE0		2,765		2,304		462		2,304		2,045		3/31/2022
94986QAA1		8,915		8,772		142		8,772		8,394		3/31/2022
Quarterly Total	$	11,695	$	11,084	$	611	$	11,084	$	10,441
25151UAD9	$	1,982	$	1,695	$	287	$	1,695	$	1,691		6/30/2022
12669GC82		591		579		12		579		591		6/30/2022
17029PAA3		21,997		19,497		2,500		19,497		19,497		6/30/2022
Quarterly Total	$	24,570	$	21,771	$	2,799	$	21,771	$	21,779
03215PCV9	$	471	$	469	$	2	$	469	$	471		9/30/2022
07386HK26		14,122		12,112		2,010		12,112		11,432		9/30/2022
54910ECU7		1,845		1,530		315		1,530		3,029		9/30/2022
54910EFN0		2,026		1,423		602		1,423		2,818		9/30/2022
07386HSW2		679		651		27		651		651		9/30/2022
004421MR1		1,029		328		701		328		234		9/30/2022
040104SN2		56,451		55,353		1,097		55,353		61,848		9/30/2022
05950GAR4		2,429		2,374		55		2,374		2,618		9/30/2022
007037AB0		9,125		8,936		190		8,936		9,691		9/30/2022
126694JS8		888		884		4		884		811		9/30/2022
02660TJE4		6,352		5,232		1,121		5,232		6,470		9/30/2022
05952FAM5		602		556		46		556		556		9/30/2022
00077BKC6		17		16		1		16		16		9/30/2022
05948XTP6		208		124		84		124		94		9/30/2022
43709XAF8		14,497		14,039		458		14,039		14,789		9/30/2022
073873AA9		9,550		9,127		423		9,127		12,102		9/30/2022
007036UQ7		1,677		1,547		129		1,547		2,106		9/30/2022
02660LAB6		9,541		9,420		121		9,420		10,051		9/30/2022
02146QAD5		37,254		34,470		2,785		34,470		40,405		9/30/2022
073871AE5		16,960		16,302		658		16,302		20,098		9/30/2022
02660BAA0		37,329		35,802		1,526		35,802		44,801		9/30/2022
059469AE6		1,207		1,138		69		1,138		1,121		9/30/2022
05530MAA7		76,993		75,032		1,962		75,032		84,289		9/30/2022
07386HWR8		1,432		1,428		4		1,428		1,428		9/30/2022
02660KAA0		55,261		52,804		2,457		52,804		59,231		9/30/2022
07387RAA6		27,346		24,515		2,832		24,515		34,315		9/30/2022
073875AA4		14,149		12,259		1,890		12,259		15,834		9/30/2022
02660UAA8		14,249		13,789		461		13,789		15,761		9/30/2022
02660LAF7		94,917		90,467		4,450		90,467		93,286		9/30/2022
02150AAF8		10,086		9,772		314		9,772		13,907		9/30/2022
040104RG8		26,269		25,979		290		25,979		29,170		9/30/2022
07383UGB5		3,120		2,480		641		2,480		2,480		9/30/2022
073879CD8		633		605		28		605		605		9/30/2022
02150TAD2		16,292		14,826		1,465		14,826		14,826		9/30/2022
126694PP7	$	2,422	$	2,414	$	7	$	2,414	$	2,029		9/30/2022
17029RAA9		633		4		629		4		4		9/30/2022
02149JBE5		3,986		3,366		620		3,366		4,176		9/30/2022
Quarterly Total	$	572,047	$	541,573	$	30,474	$	541,573	$	617,553

32

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

(in thousands)
CUSIP	Amortized Cost Before Current Period OTTI		Present Value of Projected Cash Flows		Recognized OTTI		Amortized Cost After OTTI		Fair Value at     Time of OTTI		Date of Financial Statement Where Reported
25702@AB2	$	20	$	1	$	18	$	1	$	1		12/31/2022
225458BM9		6,874		6,256		618		6,256		5,812		12/31/2022
12667GMY6		705		684		21		684		690		12/31/2022
86359LQB8		4,962		4,321		641		4,321		4,328		12/31/2022
86361WAA9		549		547		1		547		535		12/31/2022
525221FQ5		5,443		4,636		807		4,636		6,195		12/31/2022
61915YAD3		18,301		17,742		559		17,742		17,596		12/31/2022
12652CBF5		661		559		102		559		559		12/31/2022
69371VBL0		95		94		—		94		110		12/31/2022
69374JBV2		124		118		6		118		168		12/31/2022
69374XBU3		60		59		1		59		62		12/31/2022
693684BV3		87		56		31		56		62		12/31/2022
693650BU6		103		59		44		59		59		12/31/2022
69376DBU5		144		143		1		143		79		12/31/2022
54910EAG0		103,232		93,919		9,312		93,919		143,375		12/31/2022
54910EBW4		47,599		42,563		5,036		42,563		67,309		12/31/2022
54910ECA1		15,003		13,481		1,522		13,481		21,558		12/31/2022
54910EDW2		12,973		10,863		2,110		10,863		16,572		12/31/2022
54910EEL5		3,295		2,566		729		2,566		3,913		12/31/2022
36242DQY2		55		50		5		50		47		12/31/2022
65535VMF2		4,774		4,236		538		4,236		4,266		12/31/2022
12667FM77		8,986		7,845		1,142		7,845		7,112		12/31/2022
55265K2V0		1,091		1,049		42		1,049		1,054		12/31/2022
12667FUZ6		2,554		2,467		87		2,467		2,467		12/31/2022
12667F4S1		1,829		1,740		90		1,740		1,728		12/31/2022
362341S75		325		303		22		303		305		12/31/2022
36242DYH0		268		265		3		265		265		12/31/2022
12667GPW7		2,365		2,279		86		2,279		2,299		12/31/2022
59023PAB9		1,050		1,026		24		1,026		1,031		12/31/2022
004421MW0		21,187		20,993		194		20,993		20,895		12/31/2022
61745MWR0		1		—		—		—		—		12/31/2022
92922F8M3		2,024		2,024		—		2,024		2,345		12/31/2022
45254NRG4		2,416		2,285		132		2,285		2,261		12/31/2022
542512AD0		11,838		11,793		46		11,793		16,722		12/31/2022
31659EAC2		35,713		30,896		4,816		30,896		39,853		12/31/2022
07386HJT9		5,032		4,978		54		4,978		4,978		12/31/2022
362437AD7		1,574		1,424		150		1,424		1,423		12/31/2022
251510NC3		40,983		35,998		4,985		35,998		46,483		12/31/2022
36298NBA1		2,521		2,072		448		2,072		2,083		12/31/2022
125439AA7		18,209		16,641		1,568		16,641		16,034		12/31/2022
761118XU7		20,954		16,870		4,084		16,870		23,609		12/31/2022
92922F6Y9		6,429		6,273		157		6,273		6,647		12/31/2022
456610AA2		9,290		9,193		97		9,193		9,266		12/31/2022
25151RAA2		11,699		11,452		246		11,452		12,003		12/31/2022
362348AS3		9,171		8,218		953		8,218		10,301		12/31/2022
74923WAB4		9,590		9,056		534		9,056		8,650		12/31/2022
54251WAA0		29,346		28,800		546		28,800		38,539		12/31/2022
07384YPN0		169		163		6		163		163		12/31/2022
576433EK8		45		2		44		2		2		12/31/2022
396782CZ5		5		5		—		5		5		12/31/2022
59020UDT9		325		167		158		167		149		12/31/2022
362341EN5		2,177		2,079		98		2,079		2,082		12/31/2022
396782CY8		5		5		—		5		5		12/31/2022
126694CT3		1,681		1,621		60		1,621		1,614		12/31/2022
02660THY2		3,918		3,894		24		3,894		3,758		12/31/2022

33

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

(in thousands)
CUSIP	Amortized Cost Before Current Period OTTI		Present Value of Projected Cash Flows		Recognized OTTI		Amortized Cost After OTTI		Fair Value at     Time of OTTI		Date of Financial Statement Where Reported
361856CV7		395		364		31		364		364		12/31/2022
12559QAG7		29,927		29,531		396		29,531		28,503		12/31/2022
617487AD5		1,976		1,873		102		1,873		1,873		12/31/2022
61750PAC2		804		757		46		757		757		12/31/2022
251510FV0		8,501		8,462		39		8,462		9,169		12/31/2022
69372XBR2		518		518		—		518		415		12/31/2022
69374XBR0		673		673		—		673		495		12/31/2022
693675BR0		698		698		—		698		510		12/31/2022
61748HJY8		6,087		5,904		183		5,904		4,996		12/31/2022
933631AC7		10,494		10,131		363		10,131		12,024		12/31/2022
05952DAB4		674		654		19		654		654		12/31/2022
41162NAC1		3,341		2,872		469		2,872		2,872		12/31/2022
5899295L8		117		115		2		115		115		12/31/2022
75114NAA2		8,698		7,570		1,128		7,570		10,253		12/31/2022
362341CU1		3,435		3,317		118		3,317		3,317		12/31/2022
45254NNP8		1,712		1,499		214		1,499		1,498		12/31/2022
41162DAF6		5,733		5,028		705		5,028		5,028		12/31/2022
74922RAH3		9,542		9,158		384		9,158		12,429		12/31/2022
94984NAA0		1,805		1,720		85		1,720		1,699		12/31/2022
12667GKC6		543		514		29		514		518		12/31/2022
362341WZ8		313		296		17		296		296		12/31/2022
16162TT63		43		41		2		41		41		12/31/2022
05952GAE1		6,288		6,093		195		6,093		6,254		12/31/2022
16163HAE1		1,097		1,053		44		1,053		1,060		12/31/2022
35729PPX2		5,274		5,069		206		5,069		5,069		12/31/2022
61744CXM3		12,493		12,253		240		12,253		13,501		12/31/2022
12566TAD9		11,177		10,964		213		10,964		12,210		12/31/2022
126694H27		319		295		24		295		295		12/31/2022
94984GAD9		467		442		24		442		428		12/31/2022
36242D4W0		1,320		1,254		65		1,254		1,261		12/31/2022
525221GM3		3,850		3,785		65		3,785		3,785		12/31/2022
45661LAF5		360		356		4		356		356		12/31/2022
68389FHT4		432		430		2		430		430		12/31/2022
45669JAC9		2,771		2,728		43		2,728		2,987		12/31/2022
92922F3L0		14,046		13,891		154		13,891		15,724		12/31/2022
68389FHV9		4,338		3,505		833		3,505		3,505		12/31/2022
152314DP2		1,770		1,676		93		1,676		1,688		12/31/2022
41162DAD1		26,620		26,562		58		26,562		27,705		12/31/2022
161546HM1		1,897		1,744		153		1,744		1,744		12/31/2022
86359BUG4		41		40		1		40		40		12/31/2022
126685DB9		2,224		1,949		275		1,949		1,909		12/31/2022
76110VQK7		87		77		10		77		77		12/31/2022
94986DAA0		2,153		1,976		177		1,976		1,950		12/31/2022
126673WJ7		46		—		46		—		—		12/31/2022
576434WN0		391		233		158		233		291		12/31/2022
45662FAD2		2,070		1,945		125		1,945		1,945		12/31/2022
86360BAJ7		5,564		5,492		72		5,492		5,349		12/31/2022
93934FGB2		10,564		10,390		174		10,390		9,890		12/31/2022
059522BG6		3,037		3,030		8		3,030		2,860		12/31/2022
65538NAC7		9,206		8,680		527		8,680		8,942		12/31/2022
86360WAD4		2,830		2,802		28		2,802		3,357		12/31/2022
65535VPY8		16,714		14,676		2,037		14,676		14,542		12/31/2022
45257EAC8		9,016		8,384		632		8,384		10,230		12/31/2022
76112FAA9		24,667		22,586		2,081		22,586		22,942		12/31/2022
65538PAC2		5,534		5,422		112		5,422		9,703		12/31/2022

34

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

(in thousands)
CUSIP	Amortized Cost Before Current Period OTTI		Present Value of Projected Cash Flows		Recognized OTTI		Amortized Cost After OTTI		Fair Value at Time of OTTI		Date of Financial Statement Where Reported
466286AA9		6,895		6,570		325		6,570		6,881		12/31/2022
55028BAA5		1,276		1,219		57		1,219		1,219		12/31/2022
52523MAD2		12,575		10,777		1,798		10,777		13,951		12/31/2022
362480AD7		6,610		6,550		60		6,550		6,336		12/31/2022
05952EAA4		470		464		6		464		462		12/31/2022
17025TBE0		3,865		3,838		28		3,838		3,524		12/31/2022
12667GQG1		7,643		7,483		161		7,483		7,422		12/31/2022
45667QAC5		6,189		6,125		64		6,125		5,783		12/31/2022
933637AE0		4,783		4,661		122		4,661		4,791		12/31/2022
94985JBP4		1,323		1,276		47		1,276		1,281		12/31/2022
45660L6N4		2,679		2,589		90		2,589		3,041		12/31/2022
232434AE0		31,147		30,754		392		30,754		30,984		12/31/2022
93935DAA4		101,328		101,149		179		101,149		110,243		12/31/2022
61745M4M2		19,835		19,342		493		19,342		19,325		12/31/2022
05952GAA9		2,359		2,348		11		2,348		2,333		12/31/2022
65537KAX8		8,292		8,231		61		8,231		8,651		12/31/2022
61749CAA9		2,184		2,115		69		2,115		2,155		12/31/2022
45661XAD4		12,465		12,381		84		12,381		10,853		12/31/2022
456680AE7		10,213		9,348		865		9,348		9,359		12/31/2022
655378AH0		20,080		19,795		285		19,795		17,788		12/31/2022
83611MGV4		18,049		17,431		617		17,431		17,429		12/31/2022
885220DQ3		406		376		30		376		376		12/31/2022
12667F4G7		23,496		22,194		1,302		22,194		22,333		12/31/2022
45669BAA0		50,727		49,417		1,310		49,417		49,405		12/31/2022
45660NS22		8,638		8,205		433		8,205		8,407		12/31/2022
45660LEF2		21,911		21,709		202		21,709		20,319		12/31/2022
576434EC4		561		538		23		538		538		12/31/2022
126694LE6		380		349		30		349		351		12/31/2022
881561VZ4		150		148		1		148		149		12/31/2022
30253MAR3		55		55		—		55		55		12/31/2022
86359BXM8		6		5		—		5		6		12/31/2022
92990GAA1		678		589		89		589		589		12/31/2022
949802AC6		90		88		2		88		88		12/31/2022
79548KPK8		4		3		—		3		3		12/31/2022
92922FEC8		205		155		49		155		155		12/31/2022
07384YNJ1		396		380		16		380		380		12/31/2022
05946XP64		2,011		1,933		78		1,933		1,933		12/31/2022
04541GTN2		1,020		1,016		5		1,016		1,016		12/31/2022
805564PQ8		240		108		132		108		19		12/31/2022
55265WAS2		1,503		1,451		52		1,451		1,451		12/31/2022
22541QQJ4		595		223		372		223		33		12/31/2022
12669GXJ5		9,617		9,349		269		9,349		9,376		12/31/2022
617445CL3		6		1		4		1		1		12/31/2022
939336C92		959		796		163		796		781		12/31/2022
22540AQ35		59		58		—		58		58		12/31/2022
576434EX8		8		1		7		1		—		12/31/2022
12667FHZ1		450		342		108		342		342		12/31/2022
86359B4X6		52		50		3		50		48		12/31/2022
86359DLM7		3,779		3,608		171		3,608		3,607		12/31/2022
94974SAH6		33		18		15		18		18		12/31/2022
86359BWR8		430		414		16		414		414		12/31/2022
64352VMP3		26,389		24,380		2,008		24,380		24,380		12/31/2022
32051GQP3		630		617		14		617		617		12/31/2022
466247BE2		361		360		2		360		360		12/31/2022
12669G4P3		820		811		9		811		823		12/31/2022

35

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

(in thousands)
CUSIP	Amortized Cost Before Current Period OTTI		Present Value of Projected Cash Flows		Recognized OTTI		Amortized Cost After OTTI		Fair Value at Time of OTTI		Date of Financial Statement Where Reported
22541QR79		2,064		1,895		169		1,895		1,905		12/31/2022
64352VGV7		14,818		13,926		892		13,926		13,978		12/31/2022
12669EWF9		529		504		25		504		504		12/31/2022
12667FZF5		3,193		3,160		32		3,160		3,168		12/31/2022
05946XY56		1,966		1,842		124		1,842		1,843		12/31/2022
576433DS2		364		4		361		4		3		12/31/2022
5899296T0		187		143		44		143		141		12/31/2022
12669FTC7		2,834		2,604		230		2,604		2,568		12/31/2022
05951KAM5		320		315		6		315		315		12/31/2022
362341ZV4		2,188		2,099		89		2,099		2,099		12/31/2022
68389FKQ6		154		153		1		153		153		12/31/2022
576433QT6		1,421		1,364		58		1,364		1,364		12/31/2022
02151RAB9		1,896		1,794		102		1,794		1,794		12/31/2022
02660VAG3		5,414		5,240		174		5,240		5,240		12/31/2022
81744FHV2		1,224		1,085		139		1,085		1,085		12/31/2022
61744CZD1		2,113		2,072		41		2,072		2,072		12/31/2022
12666BAE5		2,364		2,325		39		2,325		2,325		12/31/2022
12669GC58		6,689		6,330		360		6,330		6,219		12/31/2022
05946XSQ7		1,939		1,886		53		1,886		1,886		12/31/2022
12667GBC6		11,894		11,320		574		11,320		11,386		12/31/2022
22541QAP7		218		202		16		202		202		12/31/2022
92922FQF8		22		20		2		20		20		12/31/2022
36185MEG3		1,311		1,289		22		1,289		1,292		12/31/2022
57643MCZ5		80		74		5		74		74		12/31/2022
12669GXV8		2,976		2,766		210		2,766		2,780		12/31/2022
05530VAA7		3,250		3,246		4		3,246		3,064		12/31/2022
126673TG7		15		15		—		15		15		12/31/2022
007036DP8		1,029		921		108		921		921		12/31/2022
52523MAC4		10,074		9,940		134		9,940		11,077		12/31/2022
761118WQ7		6,206		5,341		865		5,341		6,663		12/31/2022
5899297K8		3,287		3,208		80		3,208		3,208		12/31/2022
126670NZ7		12,244		11,905		339		11,905		11,905		12/31/2022
17025TAR2		1,072		998		74		998		976		12/31/2022
466247KL6		166		54		113		54		54		12/31/2022
542514SW5		10,496		9,749		747		9,749		9,748		12/31/2022
23247LAD0		12,529		12,213		316		12,213		12,213		12/31/2022
02147HAF9		12,881		12,641		240		12,641		11,735		12/31/2022
466247PE7		4,629		4,344		285		4,344		4,344		12/31/2022
92922FC22		2,814		2,681		133		2,681		2,681		12/31/2022
23243WAD0		8,284		7,491		793		7,491		7,491		12/31/2022
45669FAC7		2,649		2,627		22		2,627		2,853		12/31/2022
63860FAG8		4,383		4,014		368		4,014		4,014		12/31/2022
12667F3X1		4,042		3,982		60		3,982		4,559		12/31/2022
05948K3G2		567		562		5		562		537		12/31/2022
3623413Y3		5,764		5,277		486		5,277		6,475		12/31/2022
32051GPW9		9,230		9,160		70		9,160		9,209		12/31/2022
75409TDB8		4,169		3,266		903		3,266		3,266		12/31/2022
32027EAF8		5,643		5,127		516		5,127		5,127		12/31/2022
86363XAA5		8,134		7,340		794		7,340		7,340		12/31/2022
576434TH7		1		1		—		1		1		12/31/2022
12667FFL4		1		1		—		1		1		12/31/2022
12667FYS8		253		206		47		206		208		12/31/2022
466247VH3		255		233		21		233		234		12/31/2022
576434XG4		5		5		—		5		5		12/31/2022
881561XM1		268		267		1		267		268		12/31/2022

36

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

(in thousands)
CUSIP	Amortized Cost Before Current Period OTTI		Present Value of Projected Cash Flows		Recognized OTTI		Amortized Cost After OTTI		Fair Value at Time of OTTI		Date of Financial Statement Where Reported
12668AL37		203		196		7		196		197		12/31/2022
225458FG8		230		219		11		219		220		12/31/2022
466275AA2		497		486		11		486		486		12/31/2022
74160MEH1		1,561		1,423		138		1,423		1,433		12/31/2022
Quarterly Total	$	1,416,455	$	1,336,050	$	80,404	$	1,336,050	$	1,498,468
				Year-end Total	$	114,287

None of the structured notes held by the Company are defined as a Mortgage-Referenced Security by the IAO.

5. SECURITIES LENDING AND REPURCHASE AGREEMENTS

Securities Lending

At December 31, 2022, the Company had no bonds loaned pursuant to the securities lending program. At December 31, 2021, the Company had bonds loaned with a fair value of approximately $2.3 billion pursuant to the securities lending program.

The following table presents the aggregate fair value of cash collateral received related to the securities lending program and the terms of the contractually obligated collateral positions:

	December 31,
(in millions)	2022		2021
30 days or less	$	—	$	313
31 to 60 days		—		765
61 to 90 days		—		1,348
Subtotal		—		2,426
Securities collateral received		—		—
Total collateral received	$	—	$	2,426

The following table presents the aggregate amortized cost and fair value of cash collateral reinvested related to the securities lending program by maturity date:

	December 31, 2022				December 31, 2021
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Open positions	$	—	$	—	$	1,727	$	1,727
Subtotal		—		—		1,727		1,727
Securities collateral received		—		—		—		—
Total collateral reinvested	$	—	$	—	$	1,727	$	1,727

Repurchase Agreements

At December 31, 2022 and 2021, bonds with a fair value of approximately $1,668 million and $122 million, respectively, were subject to repurchase agreements to secure amounts borrowed by the Company.

37

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents the aggregate fair value of cash collateral received related to the repurchase agreement program and the terms of the contractually obligated collateral positions:

	December 31,
(in millions)	2022		2021
Open positions	$	—	$	—
30 days or less		1,316		—
31 to 60 days		145		—
61 to 90 days		—		—
Greater than 90 days		264		120
Subtotal		1,725		120
Securities collateral received		—		—
Total collateral received	$	1,725	$	120

The following table presents the original (flow) and residual maturity for bi-lateral repurchase agreement transactions for the year ended December 31, 2022:

(in millions)	FIRST       QUARTER		SECOND       QUARTER		THIRD       QUARTER		FOURTH       QUARTER
a. Maximum Amount 1. Open - No Maturity	$	200	$	205	$	273	$	19
2. Overnight		151		158		219		546
3. 2 Days to 1 Week		—		—		—		1,164
4. > 1 Week to 1 Month		—		—		—		1,795
5. > 1 Month to 3 Months		—		—		—		307
6. > 3 Months to 1 Year		—		—		—		—
7. > 1 Year		—		—		—		—
b. Ending Balance 1. Open - No Maturity	$	200	$	180	$	186	$	—
2. Overnight		—		—		—		—
3. 2 Days to 1 Week		—		—		—		591
4. > 1 Week to 1 Month		—		—		—		1,130
5. > 1 Month to 3 Months		—		—		—		—
6. > 3 Months to 1 Year		—		—		—		—
7. > 1 Year		—		—		—		—
The following table presents the Company’s liability to return collateral for the year ended December 31, 2022:
(in millions)	FIRST QUARTER		SECOND QUARTER		THIRD QUARTER		FOURTH QUARTER
a. Maximum Amount 1. Cash (Collateral - All)	$	351	$	364	$	492	$	3,832
2. Securities Collateral (FV)		—		—		—		—
b. Ending Balance 1. Cash (Collateral - All)	$	200	$	180	$	186	$	1,722
2. Securities Collateral (FV)		—		—		—		—

The Company requires a minimum of 95 percent of the fair value of securities sold under the repurchase agreements to be maintained as collateral. Cash collateral received is invested in corporate bonds and the offsetting collateral liability for repurchase agreements is included in other liabilities.

38

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents the aggregate amortized cost and fair value of cash collateral reinvested related to the repurchase agreement program by maturity date:

	December 31, 2022				December 31, 2021
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Open positions	$	1,933	$	1,668	$	117	$	122
Greater than three years		—		—		—		—
Subtotal		1,933		1,668		117		122
Securities collateral received		—		—		—		—
Total collateral reinvested	$	1,933	$	1,668	$	117	$	122

The following table presents the fair value of securities under bi-lateral repurchase agreement transactions for the year ended December 31, 2022:

(in millions)	FIRST       QUARTER		SECOND       QUARTER		THIRD       QUARTER		FOURTH       QUARTER
a. Maximum Amount 1. BACV	$	—	$	—	$	—	$	—
2. Nonadmitted - Subset of BACV		—		—		—		—
3. Fair Value		—		—		—		—
b. Ending Balance 1. BACV	$	217	$	225	$	236	$	1,933
2. Nonadmitted - Subset of BACV		—		—		—		—
3. Fair Value		206		183		176		1,668

39

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents the fair value of securities under bi-lateral repurchase agreement transactions for the year ended December 31, 2022:

(in millions)	1       None		2       NAIC 1		3       NAIC 2		4       NAIC 3
Ending Balance a. Bonds - BACV	$	—	$	801	$	1,132	$	—
b. Bonds - FV		—		657		1,012		—
c. LB & SS - BACV		—		—		—		—
d. LB & SS - FV		—		—		—		—
e. Preferred Stock - BACV		—		—		—		—
f. Preferred Stock - FV		—		—		—		—
g. Common Stock		—		—		—		—
h. Mortgage Loans - BACV		—		—		—		—
i. Mortgage Loans - FV		—		—		—		—
j. Real Estate - BACV		—		—		—		—
k. Real Estate - FV		—		—		—		—
l. Derivatives - BACV		—		—		—		—
m. Derivatives - FV		—		—		—		—
n. Other Invested Assets - BACV		—		—		—		—
o. Other Invested Assets - FV		—		—		—		—
p. Total Assets - BACV		—		801		1,132		—
q. Total Assets - FV		—		657		1,012		—
(in millions)	5       NAIC 4		6       NAIC 5		7       NAIC 6		8       Non-Admitted
Ending Balance a. Bonds - BACV	$	—	$	—	$	—	$	—
b. Bonds - FV		—		—		—		—
c. LB & SS - BACV		—		—		—		—
d. LB & SS - FV		—		—		—		—
e. Preferred Stock - BACV		—		—		—		—
f. Preferred Stock - FV		—		—		—		—
g. Common Stock		—		—		—		—
h. Mortgage Loans - BACV		—		—		—		—
i. Mortgage Loans - FV		—		—		—		—
j. Real Estate - BACV		—		—		—		—
k. Real Estate - FV		—		—		—		—
l. Derivatives - BACV		—		—		—		—
m. Derivatives - FV		—		—		—		—
n. Other Invested Assets - BACV		—		—		—		—
o. Other Invested Assets - FV		—		—		—		—
p. Total Assets - BACV		—		—		—		—
q. Total Assets - FV		—		—		—		—

40

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

6. RESTRICTED ASSETS

The Company has restricted assets as detailed below. Assets under restriction are general account assets and are not part of the Separate Accounts.

The following table presents the carrying value of the Company’s restricted assets:

	December 31,
(in millions)	2022		2021
On deposit with states	$	47	$	48
Securities lending		—		2,107
Collateral held on securities lending		—		2,426
FHLB stock and collateral pledged		5,043		4,265
Subject to repurchase agreements		1,933		117
Collateral for derivatives		1,541		1,010
Guaranteed interest contracts		68		37
Other restricted assets		464		127
Total	$	9,096	$	10,137

7. SUBPRIME MORTGAGE RISK EXPOSURE

The following features are commonly recognized characteristics of subprime mortgage loans:

• An interest rate above prime to borrowers who do not qualify for prime rate loans;

• Borrowers with low credit ratings (FICO scores);

• Interest-only or negative amortizing loans;

• Unconventionally high initial loan-to-value ratios;

• Low initial payments based on a fixed introductory rate that expires after a short initial period, then adjusts to a variable index rate plus a margin for the remaining term of the loan;

• Borrowers with less than conventional documentation of their income and/or net assets;

• Very high or no limits on how much the payment amount or the interest rate may increase at reset periods, potentially causing a substantial increase in the monthly payment amount; and/or,

• Substantial prepayment penalties and/or prepayment penalties that extend beyond the initial interest rate adjustment period.

Non-agency RMBS can belong to one of several different categories depending on the characteristics of the borrower, the property and the loan used to finance the property. Categorization is a function of FICO score, the type of loan, loan-to-value ratio, and property type and loan documentation.

Generally, subprime loans are made to borrowers with low FICO scores, low levels of equity and reduced income/asset documentation. Due to these characteristics, subprime borrowers pay a substantially higher interest rate than prime borrowers. In addition, they often utilize mortgage products that reduce their monthly payments in the near-term. These include adjustable-rate mortgages with low initial rates or interest-only loans. Borrowers in products like this often experience significant “payment shock” when the teaser payment resets upwards after the initial fixed period.

The primary classification mechanism the Company uses for subprime loans is FICO score. Specifically, a pool with an average FICO at origination less than 650 is considered to be subprime. However, the Company may subjectively adjust this classification based on an assessment of the other parameters mentioned above.

To monitor subprime securities, the Company uses a model with vintage-specific assumptions for delinquency roll rates, loss severities and the timing of losses. As and when needed, these vintage-based assumptions are supplemented with deal-specific information including, but not limited to, geographic distribution, realized loss severities, trigger status and scenario analysis.

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AMERICAN GENERAL LIFE INSURANCE COMPANY

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The Company has no direct exposure through investments in subprime mortgage loans. The Company’s exposure is through other investments, primarily in RMBS, as described above.

The following table presents information regarding the Company’s investments with subprime exposures:

(in millions)	Actual Cost		Book Adjusted     Statement Value		Fair Value		OTTI Recognized to Date
December 31, 2022
In general account:
RMBS	$	868	$	842	$	963	$	(14	)
CDOs		74		88		83		—
Total subprime exposure	$	942	$	930	$	1,046	$	(14	)

The Company has no underwriting exposure to subprime mortgage risk through mortgage guaranty or financial guaranty insurance coverage.

42

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

8. DERIVATIVES

The Company has taken positions in certain derivative financial instruments to mitigate or hedge the impact of changes in interest rates, foreign currencies, equity markets, swap spreads, volatility, correlations and yield curve risk on cash flows from investment income, policyholder liabilities and equity. Financial instruments used by the Company for such purposes include interest rate swaps, interest rate swaptions, cross-currency swaps, futures and futures options on equity indices, and futures and futures options on government securities. The Company does not engage in the use of derivative instruments for speculative purposes and is neither a dealer nor trader in derivative instruments.

All derivative instruments are recognized in the financial statements. Effective January 1, 2020 the Company adopted Statement of Statutory Accounting Principles 108, Derivatives Hedging Variable Annuity Guarantees (“SSAP 108”). SSAP 108 allows special accounting treatment for limited derivatives hedging variable annuity guarantee benefits subject to fluctuation as a result of interest rate sensitivity. The special accounting provision permits reporting entities to utilize a form of macro-hedging in which a portfolio of variable annuity policies are jointly designated as the host contracts containing the hedge item, in a fair value hedge, pursuant to a Clearly Defined Hedging Strategy (CDHS) defined within Valuation Manual 21 (VM-21). Under SSAP 108 all derivatives are reported at fair value (“FV”). FV change in hedge instruments attributable to the hedged risk that offset the change in reserve attributable to the hedged risk is recognized as realized gain/loss in the current period there were no excludable components.

At December 31, 2022 and 2021, fair value of the derivatives was a liability of $1.2 billion and $354 million, full contract fair value was a liability of $1.7 billion and $2.4 billion and hedge target fair value was a liability of $841 million and $2.4 billion. For the period ending December 31, 2022 and 2021, FV change in hedge instruments attributable to the hedged risk that offset the change in reserve attributable to the hedged risk was a realized gain of $1 billion and $356 million, respectively. FV change in hedge instruments attributable to the hedged risk that do not offset the change in reserve attributable to the hedged risk are recognized as deferred assets/liabilities in the current period and amortized over projected VA guarantees’ Macaulay Duration within the Standard Projection, but not more than 10 years. At December 31, 2022 and 2021, the FV change in hedge instruments attributable to the hedged risk that do not offset the change in reserve attributable to the hedged risk was a deferred assets of $739 million and deferred liability $76 million, respectively. For the periods ending December 31, 2022 and 2021, amortization was a realized loss of $32 million and a realized gain of $19 million, respectively. FV change in hedge instruments not attributable to the hedged risk are recognized as unrealized gain/loss, if any. All FV changes in hedge instruments were attributable to the hedged risk for the period. Based on the currently liability profile, deferred asset/liabilities are being amortized over 10 years.

The Company has determined that its other derivative financial instruments do not qualify for hedge accounting. As a result, excluding the special accounting treatment for limited derivatives hedging variable annuity guarantees noted above, derivatives are accounted for at fair value and the changes in the fair value recorded in surplus as unrealized gains or losses, net of deferred taxes. The value of the Company’s exchange traded futures contracts relates to the one-day lag in the net cash settlement of these contracts.

The Company recognized a net unrealized capital gain of $478 million in 2022, an unrealized capital gain of $139 million in 2021 and an unrealized capital gain of $271 million in 2020, related to derivatives that did not qualify for hedge accounting.

Net cash collateral received for derivative transactions increased in the year 2022, as a result increases in fair values of derivatives covered by ISDA Master Agreements and Credit Support Annex provisions. At December 31, 2022, the Company held collateral for SSAP 86 and SSAP 108 derivatives of $205 million, which is invested in cash, cash equivalents and/or short-term investments.

Refer to Note 3 for disclosures related to net realized capital gains (losses).

Swaps, Options, and Futures

Interest rate or cross-currency swap agreements are agreements to exchange with a counterparty, at specified intervals, payments of differing character (for example, variable-rate payments exchanged for fixed-rate payments) or in different currencies, based on an underlying principal balance, notional amount. Generally no cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one

43

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

counterparty at each contractual payment due date, and this net payment is included in the Statutory Statement of Operations.

Options are contracts that grant the purchaser, for a premium payment, the right, but not the obligation, either to purchase or sell a financial instrument at a specified price within a specified period of time. The Company purchases call options on the S&P 500 Index to offset the risk of certain guarantees of specific equity-index annuity and universal life policy values. The Company also purchases put options on the S&P 500 Index to offset volatility risk arising from minimum guarantees embedded in variable annuities. The options are carried at fair value, with changes in fair value recognized in unrealized investment gains and losses.

Financial futures are contracts between two parties that commit one party to purchase and the other to sell a particular commodity or financial instrument at a price determined on the final settlement day of the contract. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. The Company uses futures contracts on Euro dollar deposits, U.S. Treasury Notes, U.S. Treasury Bonds, the S&P 500 Index, MidCap 400, Russell 2000, MSCI EAFE, foreign government debt securities, and foreign denominated equity indices to offset the risk of certain guarantees on annuity policy values.

Interest Rate Risk

Interest rate derivatives are used to manage interest rate risk associated with certain guarantees of variable annuities and equity indexed annuities and certain bonds. The Company’s interest rate hedging derivative instruments include (1) interest rate swaps and swaptions; (2) listed futures on government securities; and (3) listed futures options on government securities; and (4) unlisted swaps and swaptions in U.S. Dollar Secured Overnight Financing Rate.

Currency Risk

Foreign exchange contracts used by the Company include cross-currency swaps, which are used to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company holds.

Equity Risk

Equity derivatives are used to mitigate financial risk embedded in certain insurance liabilities.

Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial instruments, but it does not expect any counterparties to fail to meet their obligations given their high credit ratings. For over-the-counter (OTC) derivatives, the Company’s net credit exposure is determined based on master netting agreements, which take into consideration all derivative positions with the counterparty, as well as collateral posted by the counterparty at the balance sheet date. The Company is exposed to credit risk when the net position with a particular counterparty results in an asset that exceeds collateral pledged by that counterparty.

For OTC contracts, the Company generally uses an International Swaps and Derivative Association Master Agreement (ISDA Master Agreement) and Credit Support Annexes with bilateral collateral provisions to reduce counterparty credit exposures. An ISDA Master Agreement is an agreement between two counterparties, which may cover multiple derivative transactions and such ISDA Master Agreement generally provides for the net settlement of all or a specified group of these derivative transactions, as well as transferred collateral, through a single payment, in a single currency, in the event of a default affecting any one derivative transaction or a termination event affecting all or a specified group of the transactions. The Company minimizes the risk that counterparties might be unable to fulfill their contractual obligations by monitoring counterparty credit exposure and collateral value and may require additional collateral to be posted upon the occurrence of certain events or circumstances. In the unlikely event of a failure to perform by any of the counterparties to these derivative transactions, there would not be a material effect on the Company’s admitted assets, liabilities or capital and surplus.

The Company has also entered into exchange-traded options and futures contracts. Under exchange-traded futures contracts, the Company agrees to purchase a specified number of contracts with other parties and to post or receive

44

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The parties with whom the Company enters into exchange-traded futures are regulated futures commission merchants who are members of a trading exchange. The credit risk of exchange-traded futures is partially mitigated because variation margin is settled daily in cash. Exchange-traded option contracts are not subject to daily margin settlements and amounts due to the Company based upon favorable movements in the underlying securities or indices are owed upon exercise.

The following table presents the notional amounts, statement values and fair values of the Company’s derivative instruments:

	December 31, 2022						December 31, 2021
(in millions)	Contract or Notional Amount		Statement Value		Fair Value		Contract or Notional Amount		Statement Value		Fair Value
Assets:
Interest rate contracts	$	18,022	$	1,700	$	1,700	$	24,013	$	1,829	$	1,829
Foreign exchange contracts		5,190		822		826		5,217		494		494
Equity contracts		58,131		1,505		1,504		54,151		4,358		4,358
Credit contracts		—		—		—		1,840		—		—
Other contracts		49		1		1		—		—		—
Derivative liabilities, gross		81,392		4,028		4,031		85,221		6,681		6,681
Counter party netting*		—		(3,562)		(3,562)		—		(5,599)		(5,599)
Derivative assets, net	$	81,392	$	466	$	469	$	85,221	$	1,082	$	1,082
Liabilities:
Interest rate contracts	$	22,448	$	2,653	$	2,653	$	23,713	$	1,571	$	1,571
Foreign exchange contracts		7,484		523		521		5,874		327		327
Equity contracts		39,808		1,193		1,193		37,065		3,924		3,924
Other contracts		—		—		—		52		—		—
Derivative liabilities, gross		69,740		4,369		4,367		66,704		5,822		5,822
Counter party netting*		—		(3,562)		(3,562)		—		(5,599)		(5,599)
Derivative liabilities, net	$	69,740	$	807	$	805	$	66,704	$	223	$	223

* Represents netting of derivative exposures covered by a qualifying master netting agreement.

The Company has a right of offset of its derivatives asset and liability positions with various counterparties. The following table presents the effect of the right of offsets:

	December 31, 2022				December 31, 2021
(in millions)	Assets		Liabilities		Assets		Liabilities
Gross amount recognized	$	4,028	$	4,369	$	6,681	$	(5,822)
Amount offset		(3,562)		(3,562)		(5,599)		5,599
Net amount presented in the Statement of Admitted Assets, Liabilities, and Capital and Surplus	$	466	$	807	$	1,082	$	(223)

45

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

9. INFORMATION ABOUT FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK

The following table presents the Company’s derivative financial instruments with concentrations of credit risk:

	December 31, 2022				December 31, 2021
(in millions)	Contract or Notional Amount		Final Maturity Date		Contract or Notional Amount		Final Maturity Date
Derivative assets:
Interest rate contracts	$	18,022		2069	$	24,013		2071
Foreign exchange contracts		5,190		2061		5,217		2051
Equity contracts		58,131		2028		54,151		2028
Credit contracts		—		—		1,840		2026
Other contracts		49		2042		—
Derivative liabilities:
Interest rate contracts		22,448		2071		23,713		2070
Foreign exchange contracts		7,484		2060		5,874		2060
Equity contracts		39,808		2024		37,065		2023
Other contracts		—		—		52		2042

The credit exposure to the Company’s derivative contracts is limited to the fair value of such contracts that are favorable to the Company at the reporting date.

The credit exposure to the Company’s derivative contracts aggregated $848.9 million and $978.2 million at December 31, 2022 and 2021, respectively.

10. FAIR VALUE INSTRUMENTS

Fair Value Measurements

The Company carries certain financial instruments at fair value. The Company defines the fair value of a financial instrument as the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company is responsible for the determination of the value of the investments carried at fair value and the supporting methodologies and assumptions.

The degree of judgment used in measuring the fair value of financial instruments generally inversely correlates with the level of observable valuation inputs. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Conversely, financial instruments for which no quoted prices are available have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. Pricing observability is affected by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction, liquidity and general market conditions.

Fair Value Hierarchy

Assets and liabilities recorded at fair value are measured and classified in accordance with a fair value hierarchy consisting of three “levels” based on the observability of valuation inputs:

• Level 1: Fair value measurements based on quoted prices (unadjusted) in active markets that the Company has the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. The Company does not adjust the quoted price for such instruments.

• Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

• Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, the Company must make certain assumptions as to the inputs a hypothetical market participant would use to value that asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In those cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.

Bonds: Fair value is based principally on value from independent third-party valuation service providers, broker quotes and other independent information.

Preferred stocks: Fair value of unaffiliated preferred stocks is based principally on value from independent third-party service providers, broker quotes and other independent information.

Cash, cash equivalents and short term investments: Carrying amount approximate fair value because of the relatively short period of time between origination and expected realization and their limited exposure to credit risk.

Mortgage loans: Fair values are primarily determined by discounting future cash flows to the present at current market rates, using expected prepayment rates.

Contract loans: Carrying amounts, which approximate fair value, are generally equal to unpaid principal amount as of each reporting date. No consideration is given to credit risk because contract loans are effectively collateralized by the cash surrender value of the policies.

Securities lending reinvested collateral assets: Securities lending assets are generally invested in short-term investments and thus carrying amounts approximate fair values because of the relatively short period of time between origination and expected realizations.

Separate account assets: Variable annuity and variable universal life assets are carried at the market value of the underlying securities. Certain separate account assets related to market value adjustment fixed annuity contracts are carried at book value. Fair value is based principally on the value from independent third-party valuation service providers, broker quotes and other independent information.

Policy reserves and contractual liabilities: Fair value for investment contracts (those without significant mortality risk) not accounted for at fair value were estimated for disclosure purposes using discounted cash flow calculations based upon interest rates currently being offered for similar contracts with maturities consistent with those remaining for the contracts being valued. When no similar contracts are being offered, the discount rate is the appropriate swap rates (if available) or current risk-free interest rates consistent with the currency in which cash flows are denominated.

Payable for securities lending: Cash collateral received from the securities lending program is invested in short-term investments and the offsetting liability is included in payable for securities lending. The carrying amount of this liability approximates fair value because of the relatively short period between origination of the liability and expected settlement.

Receivables/payables for securities: Such amounts represent transactions of a short-term nature for which the statement value is considered a reasonable estimate of fair value.

47

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Fair Value Information about Financial Instruments Not Measured at Fair Value

The following table presents the aggregate fair values of the Company’s financial instruments not measured at fair value compared to their statement values:

(in millions)	Aggregate Fair Value		Admitted Assets or Liabilities		Level 1		Level 2		Level 3
December 31, 2022
Assets:
Bonds	$	94,784	$	108,404	$	—	$	80,029	$	14,755
Preferred stocks		78		82		—		78		—
Common stocks		163		163		—		163		—
Cash, cash equivalents and short-term investments		951		951		564		387		—
Mortgage loans		23,082		25,131		—		—		23,082
Contract loans		1,138		1,138		—		—		1,138
Derivatives		5		2		—		5		—
Receivables for securities		73		73		—		73		—
Securities lending reinvested collateral assets		—		—		—		—		—
Separate account assets		12,087		14,525		—		12,087		—
Liabilities:
Policy reserves and contractual liabilities		11,734		11,635		—		106		11,628
Derivatives		20		22		—		20		—
Payable for securities		369		369		—		369		—
Payable for securities lending		—		—		—		—		—
December 31, 2021
Assets:
Bonds	$	117,841	$	107,761	$	—	$	102,757	$	15,084
Preferred stocks		83		79		—		83		—
Common stocks		158		158		—		158		—
Cash, cash equivalents and short-term investments		802		802		170		632		—
Mortgage loans		23,331		22,276		—		—		23,331
Contract loans		1,164		1,164		—		—		1,164
Receivables for securities		197		197		—		197		—
Securities lending reinvested collateral assets		1,727		1,727		—		1,727		—
Separate account assets		13,248		12,492		—		13,248		—
Liabilities:
Policy reserves and contractual liabilities		12,293		11,518		—		153		12,140
Payable for securities		678		678		—		678		—
Payable for securities lending		2,426		2,426		—		2,426		—

48

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Valuation Methodologies of Financial Instruments Measured at Fair Value

Bonds

Bonds with NAIC 6 or 6* designations and redeemable preferred stocks with NAIC 4, 5 or 6 designations are carried at the lower of amortized cost or fair value. Perpetual preferred stocks are carried at fair value, not to exceed any currently effective call rate. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Whenever available, the Company obtains quoted prices in active markets for identical assets at the balance sheet date to measure bonds at fair value. Market price data generally is obtained from exchange or dealer markets.

The Company estimates the fair value of securities not traded in active markets, by referring to traded securities with similar attributes, using dealer quotations, a matrix pricing methodology, discounted cash flow analyses or internal valuation models. This methodology considers such factors as the issuer’s industry, the security’s rating and tenor, its coupon rate, its position in the capital structure of the issuer, yield curves, credit curves, prepayment rates and other relevant factors. For bonds that are not traded in active markets or that are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments generally are based on available market evidence. In the absence of such evidence, management’s best estimate is used.

Fair values for bonds and preferred stocks based on observable market prices for identical or similar instruments implicitly include the incorporation of counterparty credit risk. Fair values for bonds and preferred stocks based on internal models incorporate counterparty credit risk by using discount rates that take into consideration cash issuance spreads for similar instruments or other observable information.

Common Stocks (Unaffiliated)

Whenever available, the Company obtains quoted prices in active markets for identical assets at the balance sheet date to measure equity securities at fair value. Market price data is generally obtained from exchanges or dealer markets.

Freestanding Derivatives

Derivative assets and liabilities can be exchange-traded or traded OTC. The Company generally values exchange-traded derivatives, such as futures and options, using quoted prices in active markets for identical derivatives at the balance sheet date.

OTC derivatives are valued using market transactions and other observable market evidence whenever possible, including market-based inputs to models, model calibration to market clearing transactions, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. When models are used, the selection of a particular model to value an OTC derivative depends on the contractual terms of, and specific risks inherent in, the instrument as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models can require a variety of inputs, including contractual terms, market prices and rates, yield curves, credit curves, measures of volatility, prepayment rates and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as generic forwards, swaps and options, model inputs can generally be corroborated by observable market data by correlation or other means, and model selection does not involve significant management judgment.

Certain OTC derivatives trade in less liquid markets with limited pricing information, and the determination of fair value for these derivatives is inherently more difficult. When the Company does not have corroborating market evidence to support significant model inputs and cannot verify the model using market transactions, the transaction price is initially used as the best estimate of fair value. Accordingly, when a pricing model is used to value such an instrument, the model is adjusted so the model value at inception equals the transaction price. Subsequent to initial recognition, the Company updates valuation inputs when corroborated by evidence such as similar market transactions, independent third-party valuation services and/or broker or dealer quotations, or other empirical market data. When appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads and credit considerations. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used.

49

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Separate Account Assets

Separate account assets are comprised primarily of registered and open-ended variable funds that trade daily and are measured at fair value using quoted prices in active markets for identical assets. Certain separate account assets are carried at amortized cost.

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Assets and Liabilities Measured at Fair Value

The following table presents information about assets and liabilities measured at fair value:

(in millions)	Level 1		Level 2		Level 3		Counterparty Netting*			Total
December 31, 2022
Assets at fair value:
Bonds
All Other Government				2							2
Industrial and miscellaneous		—		46		3		—			49
Total bonds		—		48		3		—			51
Preferred stock
Industrial and miscellaneous		4		—		7		—			11
Total preferred stock		4		—		7		—			11
Common stock
Industrial and miscellaneous		7		2		2		—			11
Mutual funds		—		—		—		—			—
Total common stock		7		2		2		—			11
Derivative assets:
Interest rate contracts		1		1,411		288		—			1,700
Foreign exchange contracts		—		821		—		—			821
Equity contracts		9		1,255		240		—			1,504
Other Contracts		—		—		1					1
Counterparty netting		—		—				(3,562	)		(3,562	)
Total derivative assets		10		3,487		529		(3,562	)		464
Separate account assets		43,653		1,523		—		—			45,176
Total assets at fair value	$	43,674	$	5,060	$	541	$	(3,562	)	$	45,713
Liabilities at fair value:
Derivative liabilities:
Interest rate contracts	$	—	$	2,653	$	—	$	—		$	2,653
Foreign exchange contracts		—		502		—		—			502
Equity contracts		2		1,174		16		—			1,192
Counterparty netting		—		—		—		(3,562	)		(3,562	)
Total derivative liabilities		2		4,329		16		(3,562	)		785
Total liabilities at fair value	$	2	$	4,329	$	16	$	(3,562	)	$	785
December 31, 2021
Assets at fair value:
Bonds
Industrial and miscellaneous	$	—	$	2	$	11	$	—		$	13
Total bonds		—		2		11		—			13
Preferred stock
Industrial and miscellaneous		5		1		6		—			12
Total preferred stock		5		1		6		—			12
Common stock
Industrial and miscellaneous		7		—		—		—			7
Mutual funds		—		1		—		—			1
Total common stock		7		1		—		—			8
Derivative assets:
Interest rate contracts		—		1,829		—		—			1,829
Foreign exchange contracts		—		494		—		—			494
Equity contracts		5		3,942		410		—			4,357
Counterparty netting		—		—		—		(5,599	)		(5,599	)
Total derivative assets		5		6,265		410		(5,599	)		1,081
Separate account assets		55,769		2,037		—		—			57,806
Total assets at fair value	$	55,786	$	8,306	$	427	$	(5,599	)	$	58,920
Liabilities at fair value:
Derivative liabilities:
Interest rate contracts	$	1	$	1,570	$	—	$	—		$	1,571
Foreign exchange contracts		—		327		—		—			327
Equity contracts		1		3,901		22		—			3,924
Counterparty netting		—		—		—		(5,599	)		(5,599	)
Total derivative liabilities		2		5,798		22		(5,599	)		223
Total liabilities at fair value	$	2	$	5,798	$	22	$	(5,599	)	$	223

* Represents netting of derivative exposures covered by a qualifying master netting agreement.

51

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Changes in Level 3 Fair Value Measurements

The following tables present changes in Level 3 assets and liabilities measured at fair value and the gains (losses) related to the Level 3 assets and liabilities that remained on the Statutory Statements of Admitted Assets, Liabilities and Capital and Surplus:

(in millions)	Bonds			Preferred Stocks			Common Stocks			Derivative Assets			Total     Assets			Derivative Liabilities
Balance, January 1, 2020	$	1		$	—		$	20		$	157		$	178		$	30
Total realized/unrealized capital gains or losses:
Included in net (loss) income		(2	)		—			—			88			86			44
Included in surplus		2			1			—			30			33			24
Purchases, issuances and settlements		(14	)		—			(30	)		(94	)		(138	)		(43	)
Transfers into Level 3		39			1			10			—			50			—
Transfers out of Level 3		(14	)		(2	)		—			—			(16	)		—
Balance, December 31, 2020	$	12		$	—		$	—		$	181		$	193		$	55
Total realized/unrealized capital gains or losses:
Included in net (loss) income		(9	)		14			10			(56	)		(41	)		7
Included in surplus		15			—			—			28			43			(49	)
Purchases, issuances and settlements		(43	)		(12	)		(10	)		258			193			9
Transfers into Level 3		38			4			—			52			94			—
Transfers out of Level 3		(2	)		—			—			(53	)		(55	)		—
Balance, December 31, 2021	$	11		$	6		$	—		$	410		$	427		$	22
Total realized/unrealized capital gains or losses:
Included in net (loss) income		13			—			—			(232	)		(219	)		(29	)
Included in surplus		(11	)		(1	)		—			(214	)		(226	)		(22	)
Purchases, issuances and settlements		(44	)		2			1			565			524			45
Transfers into Level 3		73			—			1			—			74			—
Transfers out of Level 3		(39	)		—			—			—			(39	)		—
Balance, December 31, 2022	$	3		$	7		$	2		$	529		$	541		$	16

Assets are transferred out of Level 3 when circumstances change such that significant inputs can be corroborated with market observable data or when the asset is no longer carried at fair value. This may be due to a significant increase in market activity for the asset, a specific event, one or more significant inputs becoming observable or when a long-term interest rate significant to a valuation becomes short-term and thus observable. Transfers out of level 3 can also occur due to favorable credit migration resulting in a higher NAIC designation. Securities are generally transferred into Level 3 due to a decrease in market transparency, downward credit migration and an overall increase in price disparity for certain individual security types. The Company’s policy is to recognize transfers in and out at the end of the reporting period, consistent with the date of the determination of fair value.

In both 2022 and 2021, there were no transfers between Level 1 and Level 2 securities and transfers between Level 2 and Level 3 securities were less than one million.

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables above. As a result, the unrealized capital gains (losses) on instruments held at December 31, 2022 and 2021 may include changes in fair value that were attributable to both observable and unobservable inputs.

Quantitative Information About Level 3 Fair Value Measurements

The Company had no quantitative information about level 3 fair value measurements to report at December 31, 2022.

52

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Gross Basis Fair Value Measurements

The following table presents the Company’s derivative assets and liabilities measured at fair value, on a gross basis, before counterparty and cash collateral netting:

(in millions)	Level 1		Level 2		Level 3		Total
December 31, 2022
Derivative assets at fair value	$	10	$	3,487	$	529	$	4,026
Derivative liabilities at fair value		(2)		(4,329)		(16)		(4,347)
December 31, 2021
Derivative assets at fair value	$	5	$	6,266	$	410	$	6,681
Derivative liabilities at fair value		2		5,798		22		5,822

11. AGGREGATE POLICY RESERVES AND DEPOSIT FUND LIABILITIES

The following table presents the Company’s reserves by major category:

	Years ended December 31,
(in millions)	2022			2021
Life insurance	$	41,157		$	40,862
Annuities (excluding supplementary contracts with life contingencies)		88,847			84,078
Supplementary contracts with life contingencies		480			582
Accidental death benefits		15			16
Disability - active lives		31			33
Disability - disabled lives		210			221
Excess of VM-21 reserves over basic reserves		18			181
Deficiency reserves		1,272			1,351
Other miscellaneous reserve		1,154			1,324
Gross life and annuity reserves		133,184			128,648
Reinsurance ceded		(24,335	)		(24,568	)
Net life and annuity reserves		108,849			104,080
Accident and health reserves
Unearned premium reserves		7			8
Present value of amounts not yet due on claims		193			202
Additional contract reserves		520			537
Gross accident and health reserves		720			747
Reinsurance ceded		(9	)		(11	)
Net accident and health reserves		711			736
Aggregate policy reserves	$	109,560		$	104,816

The following table presents the withdrawal characteristics of annuity actuarial reserves and deposit-type contract funds and other liabilities without life contingencies:

A. Individual Annuities:

	December 31, 2022
(in millions)	General account		Separate account with guarantees		Separate account non- guaranteed		Total		% of Total
(1) Subject to discretionary withdrawal :
a. With market value adjusted	$	35,097	$	2,469	$	—	$	37,566		32.71	%
b. At book value less current surrender charge of 5% or more		10,105		—		—		10,105		8.80	%
c. At fair value		—		32		27,518		27,550		23.99	%
d. Total with market adjustment or at fair value		45,202		2,501		27,518		75,221		65.50	%
e. At book value without adjustment (minimal or no charge or adjustment)		25,372		—		11		25,383		22.10	%
(2) Not subject to discretionary withdrawal		14,182		—		54		14,236		12.40	%
(3) Total (gross: direct + assumed)	$	84,756	$	2,501	$	27,583	$	114,840		100.00	%
(4) Reinsurance ceded		253		—		—		253
(5) Total (net)* (3) - (4)	$	84,503	$	2,501	$	27,583	$	114,587
(6) Amount included in A(1)b above that will move to A(1)e in the year after statement date:	$	2,936	$	—	$	—	$	2,936

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

* Reconciliation of total annuity actuarial reserves and deposit fund liabilities.

B. Group Annuities:

	December 31, 2022
(in millions)	General account		Separate account with guarantees		Separate account non- guaranteed		Total		% of Total
(1) Subject to discretionary withdrawal :
a. With market value adjusted	$	180	$	59	$	—	$	239		0.82	%
b. At book value less current surrender charge of 5% or more		33		—		—		33		0.11	%
c. At fair value		—		—		13,545		13,545		46.30	%
d. Total with market adjustment or at fair value		213		59		13,545		13,817		47.23	%
e. At book value without adjustment (minimal or no charge or adjustment)		2,369		—		—		2,369		8.10	%
(2) Not subject to discretionary withdrawal		1,989		11,057		24		13,070		44.67	%
(3) Total (gross: direct + assumed)	$	4,571	$	11,116	$	13,569	$	29,256		100.00	%
(4) Reinsurance ceded		64		—		—		64
(5) Total (net)* (3) - (4)	$	4,507	$	11,116	$	13,569	$	29,192
(6) Amount included in B(1)b above that will move to B(1)e in the year after statement date:	$	2	$	—	$	—	$	2
* Reconciliation of total annuity actuarial reserves and deposit fund liabilities.
C. Deposit-Type Contracts (no life contingencies):
	December 31, 2022
(in millions)	General account		Separate account with guarantees		Separate account non- guaranteed		Total		% of Total
(1) Subject to discretionary withdrawal :
a. With market value adjusted	$	—	$	—	$	—	$	—		—	%
b. At book value less current surrender charge of 5% or more		—		—		—		—		—	%
c. At fair value		—		—		—		—		—	%
d. Total with market adjustment or at fair value		—		—		—		—		—	%
e. At book value without adjustment (minimal or no charge or adjustment)		578		—		6		584		4.71	%
(2) Not subject to discretionary withdrawal		11,757		—		52		11,809		95.29	%
(3) Total (gross: direct + assumed)	$	12,335	$	—	$	58	$	12,393		100.00	%
(4) Reinsurance ceded		19		—		—		19
(5) Total (net)* (3) - (4)	$	12,316	$	—	$	58	$	12,374
(6) Amount included in C(1)b above that will move to C(1)e in the year after statement date:	$	—	$	—	$	—	$	—

* Represents annuity reserves reported in separate accounts liabilities.

Withdrawal characteristics of Life Actuarial Reserves as of December 31, 2022:

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

	December 31, 2022
	General Account						Separate Account - non-guaranteed
(in millions)	Account value		Cash value		Reserve		Account value		Cash value		Reserve
A. Subject to discretionary withdrawal,
surrender values, or policy loans:
(1) Term policies with cash value	$	—	$	573	$	3,172	$	—	$	—	$	—
(2) Universal life		5,672		5,653		6,432		—		—		—
(3) Universal life with secondary guarantees		1,684		1,458		7,568		—		—		—
(4) Indexed universal life		721		636		733		—		—		—
(5) Indexed universal life with secondary guarantees		1,590		1,015		1,656		—		—		—
(6) Indexed life		—		—		—		—		—		—
(7) Other permanent cash value life insurance		2,164		8,628		9,888		1,718		1,718		1,718
(8) Variable life		—		—		—		—		—		—
(9) Variable universal life		115		103		142		1,797		1,789		1,768
(10) Miscellaneous reserves		—		—		—		—		—		—
B. Not subject to discretionary withdrawal or no cash values
(1) Term policies without cash value	$	—	$	—	$	11,566	$	—	$	—	$	—
(2) Accidental death benefits		—		—		15		—		—		—
(3) Disability - active lives		—		—		31		—		—		—
(4) Disability - disabled lives		—		—		210		—		—		—
(5) Miscellaneous reserves		—		—		2,303		—		—		—
C. Total (gross: direct + assumed)	$	11,946	$	18,066	$	43,716	$	3,515	$	3,507	$	3,486
D. Reinsurance ceded		6,328		9,266		24,000		—		—		—
E. Total (net) (C) - (D)	$	5,618	$	8,800	$	19,716	$	3,515	$	3,507	$	3,486

12. SEPARATE ACCOUNTS

Separate Accounts

The separate accounts held by the Company consist primarily of variable life insurance policies and variable annuities. These contracts generally are non-guaranteed in nature such that the benefit is determined by the performance and/or market value of the investments held in the separate account. The net investment experience of the separate account is credited directly to the policyholder and can be positive or negative.

Certain other separate accounts relate to MVA fixed annuity contracts in which the assets are carried at amortized cost. These policies are required to be held in the Company’s separate account by certain states, including Texas.

Certain other separate accounts relate to flexible premium adjustable life insurance and terminal funding annuities in which the assets are carried at amortized cost. These contracts provide the greater of guaranteed interest returns defined in the policy or interest in excess of the guaranteed rate as defined by the Company.

The Company does not engage in securities lending transactions within the separate accounts.

In accordance with the products/transactions recorded within the separate account, some assets are considered legally insulated whereas others are not legally insulated from the general account. The legal insulation of the separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account.

General account reserves of $82 million and $14 million were established for the separate account reserve in excess of assets in subaccounts TFA1-B and TFA1-D, respectively.

During 2019, the Company established an insulated subaccount CRT-1 of separate account CRT for a reinsurance transaction. Excluding the initial premium and after foreign exchange conversions, the aggregate amount transferred from the general account to the subaccount CRT-1 was $30 million during the fourth quarter of 2022 and $79 million on a cumulative basis. A reserve of $0 is maintained at December 31, 2022 in the general account related to subaccount

55

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

CRT-1. The insulated separate account maintained a reserve of $178 million at December 31, 2022 for this subaccount CRT-1.

During 2020, the Company established an insulated subaccount CRT-2 of separate account CRT for a reinsurance transaction. Excluding the initial premium and after foreign exchange conversions, the aggregate amount transferred from the subaccount CRT-2 to the general account, was $67 million during the fourth quarter of 2022 and $247 million on a cumulative basis. A reserve of $0 is maintained at December 31, 2022 in the general account related to subaccount CRT-2. The insulated separate account maintained a reserve of $469 million at December 31, 2022 for this subaccount CRT-2.

During 2020, the Company established an insulated subaccount CRT-3 of separate account CRT for a reinsurance transaction. Excluding the initial premium and after foreign exchange conversions, the aggregate amount transferred from the general account to the subaccount CRT-3 was $48 million during the fourth quarter of 2022 and $171 million on a cumulative basis. A reserve of $0 is maintained at December 31, 2022 in the general account related to subaccount CRT-3. The insulated separate account maintained a reserve of $388 million at December 31, 2022 for this subaccount CRT-3.

During 2021, the Company established an insulated subaccount CRT-5 of separate account CRT for a reinsurance transaction. Excluding the initial premium and after foreign exchange conversions, the aggregate amount transferred from the general account CRT-5 to the subaccount was $33 million during the fourth quarter of 2022 and $43 million on a cumulative basis. A reserve of $0 is maintained at December 31, 2022 in the general account related to subaccount CRT-5. The insulated separate account maintained a reserve of $201 million at December 31, 2022 for this subaccount CRT-5.

During 2021, the Company established an insulated subaccount CRT-6 of separate account CRT for a reinsurance transaction. Excluding the initial premium and after foreign exchange conversions, the aggregate amount transferred from the subaccount CRT-6 to the general account was $31 million during the fourth quarter of 2022 and $115 million on a cumulative basis. A reserve of $0 is maintained at December 31, 2022 in the general account related to subaccount CRT-6. The insulated separate account maintained a reserve $171 million at December 31, 2022 for this subaccount CRT-6.

During 2021, the Company established an insulated subaccount CRT-7 of separate account CRT for a reinsurance transaction. Excluding the initial premium and after foreign exchange conversions, the aggregate amount transferred from the subaccount CRT-7 to the general account was $106 million during the fourth quarter of 2022 and $273 million on a cumulative basis. A reserve of $0 is maintained at December 31, 2022 in the general account related to subaccount CRT-7. The insulated separate account maintained a reserve $634 million at December 31, 2022 for this subaccount CRT-7.

During 2021, the Company established an insulated subaccount CRT-8 of separate account CRT for a reinsurance transaction. Excluding the initial premium and after foreign exchange conversions, the aggregate amount transferred from the subaccount CRT-8 to the general account was $149 million during the fourth quarter of 2022 and $394 million on a cumulative basis. A reserve of $0 is maintained at December 31, 2022 in the general account related to subaccount CRT-8. The insulated separate account maintained a reserve 743 million at December 31, 2022 for this subaccount CRT-8.

During 2022, the Company established an insulated subaccount CRT-9 of separate account CRT for a reinsurance transaction. Excluding the initial premium and after foreign exchange conversions, the aggregate amount transferred from the subaccount CRT-9 to the general account was $25 million during the fourth quarter of 2022 and $38 million on a cumulative basis. A reserve of $0 is maintained at December 31, 2022 in the general account related to subaccount CRT-9. The insulated separate account maintained a reserve $109 million at December 31, 2022 for this subaccount CRT-9.

During 2022, the Company established an insulated subaccount CRT-10 of separate account CRT for a reinsurance transaction. Excluding the initial premium and after foreign exchange conversions, there were no transfers from the

56

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

subaccount CRT-10 to the general account during the fourth quarter of 2022 and on a cumulative basis. A reserve of $0 is maintained at December 31, 2022 in the general account related to subaccount CRT-10. The insulated separate account maintained a reserve $228 million at December 31, 2022 for this subaccount CRT-10.

During 2022, the Company established an insulated subaccount CRT-11 of separate account CRT for a reinsurance transaction. Excluding the initial premium and after foreign exchange conversions, there were no transfers from the subaccount CRT-11 to the general account during the fourth quarter of 2022 and on a cumulative basis. A reserve of $0 is maintained at December 31, 2022 in the general account related to subaccount CRT-11. The insulated separate account maintained a reserve $953 million at December 31, 2022 for this subaccount CRT-11.

The following table presents separate account assets by product or transaction:

	December 31, 2022				December 31, 2021
(in millions)	Legally Insulated Assets		Separate Accounts Assets (Not Legally Insulated)		Legally Insulated Assets		Separate Accounts Assets (Not Legally Insulated)
Variable annuities	$	42,104	$	—	$	54,057	$	—
Variable life		3,073		—		3,750		—
Bank-owned life insurance – hybrid		482		—		463		—
Deferred annuities with MVA features		417		—		428		—
Terminal funding		11,453		—		9,759		—
Annuities with MVA features		—		2,148		—		1,818
Fixed annuities excess interest adjustment features		—		24		—		23
Total	$	57,529	$	2,172	$	68,457	$	1,841

Some separate account liabilities are guaranteed by the general account. To compensate the general account for the risks taken, the separate accounts pay risk charges to the general account.

If claims were filed on all contracts, the current total maximum guarantee the general account would provide to the separate account as of December 31, 2022 and 2021 is $3.9 billion and $5.3 billion, respectively.

There was no separate account business seed money at December 31, for both 2022 and 2021.

The following table presents the risk charges paid by the separate accounts and the guarantees paid by the general account:

(in millions)	Risk Charge paid by the Separate Account		Guarantees Paid by the General Account
2022	$	596	$	64
2021		539		36
2020		450		43
2019		383		35
2018		324		41

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents information regarding the separate accounts:

(in millions)	Indexed		Non- indexed guarantee less than or equal to 4%		Non- indexed guarantee more than 4%		Non- guaranteed separate accounts		Total
December 31, 2022
Premiums, considerations or deposits	$	434	$	—	$	41	$	4,964	$	5,439
Reserves for accounts with assets at:
Market value	$	—	$	—	$	—	$	44,187	$	44,187
Amortized costs		2,071		11,613		385		—		14,069
Total reserves	$	2,071	$	11,613	$	385	$	44,187	$	58,256
By withdrawal characteristics:
Subject to discretionary withdrawal with MVA	$	2,071	$	11,154	$	385	$	—	$	13,610
At market value		—		—		—		44,094		44,094
Subtotal		2,071		11,154		385		44,094		57,704
Not subject to discretionary withdrawal		—		458		—		93		551
Total reserves	$	2,071	$	11,612	$	385	$	44,187	$	58,255
December 31, 2021
Premiums, considerations or deposits	$	414	$	—	$	9	$	6,659	$	7,082
Reserves for accounts with assets at:
Market value	$	—	$	—	$	—	$	56,703	$	56,703
Amortized costs		1,805		9,370		361		—		11,536
Total reserves	$	1,805	$	9,370	$	361	$	56,703	$	68,239
By withdrawal characteristics:
Subject to discretionary withdrawal with MVA	$	1,805	$	8,840	$	361	$	—	$	11,006
At market value		—		—		—		56,565		56,565
Subtotal		1,805		8,840		361		56,565		67,571
Not subject to discretionary withdrawal		—		530		—		138		668
Total reserves	$	1,805	$	9,370	$	361	$	56,703	$	68,239
December 31, 2020
Premiums, considerations or deposits	$	287	$	—	$	15	$	4,263	$	4,565
Reserves for accounts with assets at:
Market value	$	—	$	—	$	—	$	52,439	$	52,439
Amortized costs		1,542		6,988		404		—		8,934
Total reserves	$	1,542	$	6,988	$	404	$	52,439	$	61,373
By withdrawal characteristics:
Subject to discretionary withdrawal with MVA	$	1,542	$	5,360	$	404	$	—	$	7,306
At market value		—		—		—		52,324		52,324
Subtotal		1,542		5,360		404		52,324		59,630
Not subject to discretionary withdrawal		—		1,628		—		114		1,742
Total reserves	$	1,542	$	6,988	$	404	$	52,438	$	61,372

Reconciliation of Net Transfers to or from Separate Accounts

The following table presents a reconciliation of the net transfers to (from) separate accounts:

	Years Ended December 31,
(in millions)	2022		2021		2020
Transfers to separate accounts	$	5,439	$	7,082	$	4,553
Transfers from separate accounts		(4,330)		(5,400)		(4,280)
Net transfers to (from) separate accounts		1,109		1,682		273
Reconciling adjustments:
Deposit-type contracts		—		—		—
Total reconciling adjustments		—		—		—
Transfers as reported in the Statutory Statements of Operations	$	1,109	$	1,682	$	273

13. RESERVES FOR GUARANTEED POLICY BENEFITS AND ENHANCEMENTS

Variable annuity contracts may include certain contractually guaranteed benefits to the contract holder. These guaranteed features include GMDB that are payable in the event of death, and living benefits that are payable in the event of annuitization, or, in other instances, at specified dates during the accumulation period. Living benefits include guaranteed minimum withdrawal benefits (GMWB) and, to a lesser extent, guaranteed minimum accumulation benefits

58

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

(GMAB), which are no longer offered. A variable annuity contract may include more than one type of guaranteed benefit feature; for example, it may have both a GMDB and a GMWB. However, a policyholder generally can only receive payout from one guaranteed feature on a contract containing a death benefit and a living benefit, i.e. the features are mutually exclusive. A policyholder cannot purchase more than one living benefit on one contract. The net amount at risk for each feature is calculated irrespective of the existence of other features; as a result, the net amount at risk for each feature is not additive to that of other features.

Reserves for GMDB, GMIB and GMWB were included in the VACARVM reserves. Total reserves in excess of cash surrender value were none and $0.2 billion at December 31, 2022 and 2021, respectively.

GMDB and GMIB

Depending on the product, the GMDB feature may provide a death benefit of either (a) total deposits made to the contract less any partial withdrawals plus a minimum return or (b) the highest contract value attained, typically on any anniversary date minus any subsequent withdrawals following the contract anniversary. GMIB guarantees a minimum level of periodic income payments upon annuitization. GMDB is the Company’s most widely offered benefit; variable annuity contracts may also include GMIB to a lesser extent, which is no longer offered.

The net amount at risk, which represents the guaranteed benefit exposure in excess of the current account value if death claims were filed on all contracts related to GMDB, was $3.3 billion and $0.7 billion at December 31, 2022 and 2021, respectively.

GMWB

Certain of the Company’s variable annuity contracts offer optional GMWB. With a GMWB, the contract holder can monetize the excess of the guaranteed amount over the account value of the contract only through a series of withdrawals that do not exceed a specific percentage per year of the guaranteed amount. If, after the series of withdrawals, the account value is exhausted, the contract holder will receive a series of annuity payments equal to the remaining guaranteed amount, and, for lifetime GMWB products, the annuity payments continue as long as the covered person(s) are living.

The net amount at risk for GMWB represents the present value of minimum guaranteed withdrawal payments, in accordance with contract terms, in excess of account value. The net amount at risk related to these guarantees was $188 million and $439 million at December 31, 2022 and 2021, respectively. The Company uses derivative instruments and other financial instruments to mitigate a portion of the exposure that arises from GMWB.

14. PARTICIPATING POLICY CONTRACTS

Participating policy contracts entitle a policyholder to share in earnings through dividend payments. These contracts represented less than 1.0 percent of gross insurance in-force at December 31, 2022, 2021 and 2020, respectively. Policyholder dividends for the years ended December 31, 2022, 2021 and 2020 were $10 million, $13 million, and $5 million, respectively.

15. PREMIUM AND ANNUITY CONSIDERATIONS DEFERRED AND UNCOLLECTED

The following table presents the deferred and uncollected insurance premiums and annuity consideration (before deduction for amounts non-admitted):

	December 31, 2022						December 31, 2021
(in millions)	Gross			Net of Loading			Gross			Net of Loading
Ordinary new business		22			22			1			1
Ordinary renewal		(416	)		132			(395	)		164
Group life		(2	)		(2	)		(16	)		(16	)
Total	$	(396	)	$	152		$	(410	)	$	149

59

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

16. REINSURANCE

In the ordinary course of business, the Company utilizes internal and third-party reinsurance relationships to manage insurance risks and to facilitate capital management strategies. Long-duration reinsurance is effected principally under yearly renewable term treaties. Pools of highly-rated third party reinsurers are utilized to manage net amounts at risk in excess of retention limits. Reinsurance agreements do not relieve the Company of its direct obligations from its beneficiaries. Thus, a credit exposure exists with respect to reinsurance ceded to the extent that any reinsurer fails to meet the obligations assumed under any reinsurance agreement. In addition, the Company assumes reinsurance from other insurance companies.

Reinsurance premiums assumed in 2022, 2021 and 2020 were $24.5 billion, $2.3 billion and $1.1 billion, respectively. Reinsurance premiums ceded in 2022, 2021 and 2020 were $2.7 billion, $3.3 billion and $3.3 billion, respectively. Additionally, reserves on reinsurance assumed were $5.5 billion, $4.5 billion and $2.6 billion at December 31, 2022, 2021 and 2020, respectively. The reserve credit taken on reinsurance ceded was $24.4 billion, $24.6 billion and $24.4 billion at December 31, 2022, 2021 and 2020, respectively. Amounts payable or recoverable for reinsurance on policy and contract liabilities are not subject to periodic or maximum limits. At December 31, 2022 and 2021, the Company’s reinsurance recoverables were $270 million and $338 million, respectively.

The Company does not have any reinsurance agreements in effect under which the reinsurer may unilaterally cancel any reinsurance for reasons other than for nonpayment of premium or other similar credits. The Company has no reinsurance agreements in effect such that the amount of losses paid or accrued through the statement date may result in a payment to the reinsurer of amounts which, in aggregate and allowing for offset of mutual credits from other reinsurance agreements with the same reinsurer, exceed the total revenue collected under the reinsured policies.

The NAIC Model Regulation “Valuation of Life Insurance Policies” (Regulation XXX) requires U.S. life insurers to establish additional statutory reserves for term life insurance policies with long-term premium guarantees and universal life policies with secondary guarantees (ULSGs). In addition, NAIC Actuarial Guideline 38 (Guideline AXXX) clarifies the application of Regulation XXX as to these guarantees, including certain ULSGs. Prior to 2017, the Company managed the capital impact of statutory reserve requirements under Regulation XXX and Guideline AXXX through intercompany reinsurance transactions. Regulation XXX and Guideline AXXX reserves related to new and in-force business (term and universal life) were ceded to the Parent under a coinsurance/modified coinsurance agreement effective January 1, 2011 (the AGC Life Co/ModCo Agreement), prior to the recapture of in-force business effective December 31, 2017. New business is still ceded under this treaty. Concurrent with the recapture of this in-force business, the reserves were ceded to an unaffiliated reinsurer via amendment to a treaty effective July 1, 2017.

In 2022, the AGC Life Co/ModCo Agreement increased the Company’s pre-tax earnings by $91 million, while in 2021, the AGC Life Co/ModCo Agreement increased pre-tax earnings by $333 million. In 2020, the AGC Life Co/ModCo Agreement increased pre-tax earnings by $337 million.

As of December 31, 2022, $29.3 billion of the Company, USL and VALIC reserves representing a mix of run-off life and annuity risks had been ceded to Fortitude Re under these reinsurance transactions. Effective as of January 1, 2022, certain AIG subsidiaries sold to an affiliate of Fortitude Re all of the outstanding capital stock of two servicing companies. The ceding insurers entered into administrative services agreements pursuant to which AIG transferred administration of certain of our ceded business to those companies.

In 2022 and 2021, the Company commuted reinsurance treaties with non-affiliated reinsurers, which resulted in a decrease in the Company’s pre-tax earnings of $31.8 million and an increase in the Company’s pre-tax earnings of less than a million dollars, respectively. The Company did not commute any treaties with non-affiliated reinsurers in 2020.

The Company has an annuity Co/ModCo agreement with an affiliate, AIG Life of Bermuda, Ltd. (AIGB), in which AIGB reinsures certain deferred annuity contracts issued between 2003 and 2007. The agreement is such that the Company retains and controls assets held in relation to the related reserve. At December 31, 2022 and 2021, the assets and liabilities resulting from the agreement and recorded in the accompanying financial statements were $5.0 billion and $5.6 billion, respectively. In 2022, 2021 and 2020, the Agreement decreased the Company’s pre-tax earnings by $1 million.

60

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

17. FEDERAL INCOME TAXES

Recent U.S. Tax Law Changes

On November 15, 2021, the U.S. enacted the Infrastructure Investment and Jobs Act to improve infrastructure in the U.S. The tax provisions for the Infrastructure Investment and Jobs Act have not had and are currently not expected to have a material impact on our U.S. federal tax liabilities.

On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022, which finances climate and energy provisions and an extension of enhanced subsidies under the Affordable Care Act with a 15% corporate alternative minimum tax (“CAMT”) on adjusted financial statement income for corporations with profits over $1 billion, a 1% stock buyback tax, increased IRS enforcement funding, and Medicare’s new ability to negotiate prescription drug prices. The Company believes that as of the reporting date it will be subject to the CAMT in 2023. The 2022 financial statements included an estimated impact of the CAMT of $433,000,000.

The following table presents the components of the net deferred tax assets and liabilities:

	December 31, 2022						December 31, 2021						Change
(in millions)	Ordinary		Capital		Total		Ordinary		Capital		Total		Ordinary			Capital			Total
Gross DTA	$	3,280	$	2,472	$	5,752	$	2,970	$	2,434	$	5,404	$	310		$	38		$	348
Statutory valuation allowance adjustment		—		303		303		—		—		—		—			303			303
Adjusted gross DTA		3,280		2,169		5,449		2,970		2,434		5,404		310			(265	)		45
DTA non-admitted		1,983		2,169		4,152		1,681		2,434		4,115		302			(265	)		37
Net admitted DTA		1,297		—		1,297		1,289		—		1,289		8			—			8
DTL		210		—		210		435		—		435		(225	)		—			(225	)
Total	$	1,087	$	—	$	1,087	$	854	$	—	$	854	$	233		$	—		$	233
The following table presents the ordinary and capital DTA admitted assets as the result of the application of SSAP 101:
	December 31, 2022						December 31, 2021						Change
(in millions)	Ordinary		Capital		Total		Ordinary		Capital		Total		Ordinary			Capital			Total
Admission calculation components
SSAP 101
Federal income taxes paid in prior years recoverable through loss carry backs	$	—	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—
Adjusted gross DTA expected to be realized (excluding amount of DTA from above) after application of the threshold limitation		1,087		—		1,087		854		—		854		233			—			233
1. Adjusted gross DTA expected to be realized following the reporting date		1,087		—		1,087		854		—		854		233			—			233
2. Adjusted gross DTA allowed per limitation threshold		—		—		1,299		—		—		1,498		—			—			(199	)
Adjusted gross DTA (excluding the amount of DTA from above) offset by gross DTL		210		—		210		435		—		435		(225	)		—			(225	)
DTA admitted as the result of application of SSAP 101	$	1,297	$	—	$	1,297	$	1,289	$	—	$	1,289	$	8		$	—		$	8

The following table presents the ratio percentage and amount of adjusted capital to determine the recovery period and threshold limitation amount:

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

	Years Ended December 31,
($ in millions)	2022			2021
Ratio percentage used to determine recovery period and threshold limitation amount		736	%		785	%
Amount of adjusted capital and surplus used to determine recovery period and threshold limitation amount	$	8,662		$	9,987

The Company has no tax planning strategies used in the determination of adjusted gross DTA’s or net admitted DTA’s.

The Company’s planning strategy does not include the use of reinsurance.

The Company is not aware of any significant DTLs that are not recognized in the statutory financial statements.

62

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following tables present the major components of the current income tax expense and net deferred tax assets (liabilities):

	Years Ended December 31,
(in millions)	2022		2021		2020
Current income tax expense
Federal	$	518	$	1,421	$	961
Foreign		—		1
Subtotal		518		1,422		961
Federal income tax on net capital gains (losses)		(397)		(3)		316
Federal income tax incurred		121		1,419		1,277
		Years Ended December 31,
(in millions)		2022		2021		Change
Deferred tax assets:
Ordinary:
Policyholder reserves	$	1,343	$	1,432	$	(89)
Investments		243		15		228
Deferred acquisition costs		1,080		947		133
Fixed assets		102		404		(302)
Policyholder Dividend Accruals		4		—		4
Compensation and benefits accrual		45		37		8
Tax credit carryforward		—		97		(97)
Net operating loss carry-forward		435				435
Other (including items less than 5% of total ordinary tax assets)		28		38		(10)
Subtotal		3,280		2,970		310
Non-admitted		1,983		1,681		302
Admitted ordinary deferred tax assets		1,297		1,289		8
Capital:
Investments		2,472		2,434		38
Subtotal		2,472		2,434		38
Statutory Valuation Adjustment		303				303
Non-admitted		2,169		2,434		(265)
Admitted capital deferred tax assets		—		—		—
Admitted deferred tax assets		1,297		1,289		8
Deferred tax liabilities:
Ordinary:
Deferred and uncollected premium		105		107		(2)
Policyholder reserves		104		245		(141)
General expense		—		82		(82)
Other (including items less than 5% of total ordinary tax liabilities)		1		1		—
Subtotal		210		435		(225)
Capital:
Other (including items less than 5% of total capital tax liabilities)		—		—		—
Subtotal		—		—		—
Deferred tax liabilities		210		435		(225)
Net deferred tax assets		1,087	$	854		233

63

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The change in net deferred income taxes is comprised of the following (this analysis is exclusive of non-admitted assets as the change in non-admitted assets and the change in net deferred income taxes are reported in separate components of capital and surplus):

	Years Ended December 31,
(in millions)	2022		2021		Change
Total adjusted deferred tax assets	$	5,449	$	5,404	$	45
Total deferred tax liabilities		210		435		(225)
Net adjusted deferred tax assets	$	5,239	$	4,969		270
Tax effect of unrealized gains (losses)						(310)
Change in net deferred income tax						(40)

The provision for incurred federal taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The following table presents the significant items causing this difference:

	December 31, 2022					December 31, 2021					December 31, 2020
(in millions)	Amount		Effective Tax Rate			Amount		Effective Tax Rate			Amount		Effective Tax Rate
Income tax expense at applicable rate	$	191		21.0	%		$        769		21.0	%	$	262		21.0	%
Change in valuation adjustment		303		33.2			—		—			—		—
Disregarded entities		(56)		(6.2)			(152)		(4.3)			7		0.6
Amortization of interest maintenance reserve		(97)		(10.4)			21		0.6			111		8.9
Surplus adjustments		(38)		(4.2)			(17)		(0.5)			62		5.1
Dividend received deduction		(14)		(1.6)			(15)		(0.4)			(20)		(1.6)
Prior year return true-ups and adjustments		(25)		(2.8)			(11)		(0.3)			7		0.5
Other permanent adjustments		(8)		(0.9)			11		0.3			3		0.2
Change in non-admitted assets		8		0.9			6		0.2			(13)		(1.0)
LTIP shortfall deduction		(4)		(0.4)			2		0.1			7		0.6
Separation adjustment on pensions	$	(99)		(10.9)		$	—		—		$	—		—
Statutory income tax expense (benefit)	$	161		17.7	%	$	614		16.7	%	$	426		34.3	%
Federal income taxes incurred	$	121		13.3	%	$	1,419		38.7	%	$	1,277		102.5	%
Change in net deferred income taxes		40		4.4			(805)		(22.0)			(851)		(68.2)
Total statutory income taxes	$	161		17.7	%	$	614		16.7	%	$	426		34.3	%

At December 31, 2022, the Company had no foreign tax credit carryforwards.

At December 31, 2022, the Company had U.S operating loss carryforwards of $435 million generated in 2022 with unlimited carryforward periods.

At December 31, 2022, the Company had no capital loss carryforward.

At December 31, 2022, the Company had no alternative minimum tax credit.

At December 31, 2022, the Company had no general business credit carryforwards.

At December 31, 2022, the Company had no charitable contribution carryforwards.

The following table presents income tax incurred that is available for recoupment in the event of future net losses:

(in millions)
December 31,		Capital
2020	$	—
2021		627
2022		—
Total	$	627

64

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

In general, realization of DTAs depends on a company’s ability to generate sufficient taxable income of the appropriate character within the carryforward periods in the jurisdictions in which the net operating losses and deductible temporary differences were incurred. In accordance with the requirements established in SSAP 101, the Company assessed its ability to realize DTAs of $5.8 billion and concluded that $303 million valuation allowance was required at December 31, 2022. The Company had concluded that no valuation allowance was required on the DTAs of $5.4 billion at December 31, 2021.

The Company had no deposits admitted under Internal Revenue Code Section 6603.

The following table presents a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits, excluding interest and penalties:

	Years Ended December 31,
(in millions)	2022		2021
Gross unrecognized tax benefits at beginning of year	$	7	$	17
Increases in tax position for prior years		—		—
Decreases in tax position for prior years		—		(10)
Gross unrecognized tax benefits at end of year	$	7	$	7

At December 31, 2022 and 2021, the amounts of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate were $7 million, respectively.

Interest and penalties related to unrecognized tax benefits are recognized in income tax expense. At December 31, 2022 and 2021, the Company had accrued liabilities of $(0.1) million, respectively, for the payment of interest (net of the federal benefit) and penalties. In 2022, the Company did not recognize any expense of interest (net of the federal benefit) and penalties. In 2021 and 2020 the Company recognized benefit of interest (net of the federal expense) and penalties of $7million and less than $1 million respectively.

The Company regularly evaluates proposed adjustments by taxing authorities. At December 31, 2022, such proposed adjustments would not have resulted in a material change to the Company’s financial condition, although it is possible that the effect could be material to the Company’s results of operations for an individual reporting period. Although it is reasonably possible that a change in the balance of unrecognized tax benefits may occur within the next twelve months, based on the information currently available, the Company does not expect any change to be material to its financial condition.

The Company is currently under Internal Revenue Service (IRS) examinations for the taxable years 2011-2019. Although the final outcome of possible issues raised in any future examination are uncertain, the Company believes that the ultimate liability, including interest, will not materially exceed amounts recorded in the financial statements. The Company’s taxable years 2007-2021 remain subject to examination by major tax jurisdictions.

The Company is not subject to the repatriation transition tax for the year ended December 31, 2022.

For the period prior to the tax deconsolidation of Corebridge from AIG, the Company will join in the filing of a consolidated federal tax return with AIG.

The following table lists those companies that form part of the 2022 AIG consolidated federal tax return:

Company	Company
A.I. Credit Corp.	AIG Credit Corp.
AGC Life Insurance Company	AIG Direct Insurance Services, Inc.
AGL Assignment Company, LLC	AIG Employee Services, Inc.
AGL Loan Investments Corporation	AIG FCOE, Inc.
AGLIC Investments Bermuda Limited	AIG Federal Savings Bank
AH SubGP 1158 Flat Iron, LLC	AIG Financial Products Corp.
AH SubGP 1384 Woodglen, LLC	AIG Fund Services, Inc.

65

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Company	Company
AH SubGP 1450 Timber, LLC	AIG Global Asset Management Holdings Corp.
AH SubGP 1535 Hunter’s Run, LLC	AIG Global Capital Markets Securities, LLC
AH SubGP 1551 Spanish Creek, LLC	AIG Global Operations (Ireland) Limited
AH SubGP 479 Sunrise, LLC	AIG Global Real Estate Investment Corp.
AH SubGP 516 Merrilltown, LLC	AIG GLOBAL REAL ESTATE INVESTMENT CORP. [RUSS
AH SubGP 693 Parkland Pointe, LLC	AIG Home Protection Company, Inc.
AH SubGP 716 Villas of Mission Bend, LLC	AIG Insurance Management Services, Inc.
AH SubGP 759 Parker Commons, LLC	AIG International Inc.
AH SubGP 911 Mainland, LLC	AIG Kirkwood, Inc.
AIG Aerospace Adjustment Services, Inc.	AIG Life Holdings, Inc.
AIG Aerospace Insurance Services, Inc.	AIG Life of Bermuda, Ltd.
AIG Asset Management (U.S.), LLC	AIG Markets, Inc.
AIG Asset Management EU CLO, LLC	AIG Matched Funding Corp.
AIG Assurance Company	AIG MEA Investments and Services, LLC
AIG BG Holdings LLC	AIG Mortgage Capital, LLC
AIG Capital Corporation	AIG North America, Inc.
AIG Capital Services, Inc.	AIGGRE U.S. Real Estate Fund IV Lexington
AIG Century Verwaltungsgesellschaft mbH	AIGGRE VISTA, LLC
AIG Claims, Inc.	AIGT Inc. Hong Kong Branch
AIG Commercial Equipment Finance, Inc.	AIU Insurance Company
AIG Commercial Real Estate Lending	Akita, Inc.
AIG Credit (Europe) Corporation	Alabaster Capital LLC
AIG Property Casualty, Inc.	AlphaCat Capital Inc.
AIG Realty, Inc.	AM Holdings LLC
AIG Securities Lending Corp.	AIG Partnership Holdings Corp.
AIG Shared Services	AIG PC Global Services Inc.
AIG Shared Services Corporation	AIG Procurement Services, Inc.
AIG Shared Services Corporation - Management	AIG Property Casualty Company
AIG Shared Services Corporation (Philippines)	AIG Property Casualty International, LLC
AIG Specialty Insurance Company	AIG Property Casualty U.S., Inc.
AIG Spring Ridge I, Inc.	American Athletic Club, Inc.
AIG Technologies, Inc.	American General Annuity Service Corporation
AIG Technologies, Inc. (U.K. branch)	American General Assignment
AIG Travel Assist, Inc.	American General Assignment Corporation
AIG TRAVEL EMEA LIMITED	American General Insurance Agency, Inc.
AIG TRAVEL EUROPE LIMITED	American General Life Ins. Co. Non-Insulated
AIG Travel, Inc.	American General Life Insurance Co. - Insulat
AIG UNITED GUARANTY AGENZIA DI ASSICURAZIONE	American General Life Insurance Company

66

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Company	Company
AIG Warranty Services of Florida, Inc.	American General Life Services Company, LLC
AIG WarrantyGuard, Inc.	American General Realty
AIG.COM, Inc.	American Home Assurance Company
AIG-FP Capital Preservation Corp.	American International Facilities Management
AIG-FP Matched Funding Corp.	American International Group, Inc.
AIG-FP Pinestead Holdings Corp.	American International Realty Corporation
AIGGRE DC Ballpark Investor, LLC	American International Reinsurance
AIGGRE Europe Real Estate Fund I	Arthur J. Glatfelter Agency, Inc.
AIGGRE Europe Real Estate Fund I GP S.a r.l.	Blackboard Customer Care Insurance Services
AIGGRE Europe Real Estate Fund II GP S.a.r.l	Blackboard Insurance Company
AIGGRE U.S. LT Apartments Investor Lexington	Blackboard Services, LLC
AIGGRE U.S. Real Estate Fund I	Blackboard Specialty Insurance Company
AIGGRE U.S. Real Estate Fund II	Blackboard U.S. Holdings, Inc.
AIGGRE U.S. Real Estate Fund II GP, LLC	CAP Investor 1, LLC
AIGGRE U.S. Real Estate Fund III	CAP Investor 10, LLC
CAP Investor 14, LLC	LSTREET I, LLC
CAP Investor 2, LLC	LSTREET II, LLC
CAP Investor 4, LLC	MG Reinsurance Limited
CAP Investor 5, LLC	MIP PE Holdings, LLC
CAP Investor 8, LLC	Morefar Marketing, Inc.
Charleston Bay SAHP Corp.	Mt. Mansfield Company, Inc.
Commerce and Industry Insurance Company	National Union Fire Insurance
Crop Risk Services, Inc.	National Union Fire Insurance Company
Crossings SAHP Corp.	New Hampshire Insurance Company
Curzon Funding Limited	NF Seven (Cayman) Limited
Curzon Street Funding Designated Activity	PCG 2019 Corporate Member Limited
Design Professionals Association	Pearce & Pearce, Inc.
DIL/SAHP Corp.	Pine Street Real Estate Holdings Corp.
DSA P&C Solutions, Inc.	Prairie SAHP Corp.
Eaglestone Reinsurance Company	Rialto Melbourne Investor LLC
Eastgreen, Inc.	Risk Specialists Companies
First Principles Capital Management, LLC	SA Affordable Housing, LLC
Fortitude Life & Annuity Solutions, Inc.	SA SubGP 1000 Woodwind Lakes, LLC
GIG of Missouri, Inc.	SAAHP GP Corp.
Glatfelter Claims Management, Inc.	SAFG Capital LLC
Glatfelter Properties, LLC	SAFG Markets, LLC
Glatfelter Underwriting Services, Inc.	SAFG Retirement Services, Inc.
Global Loss Prevention, Inc.	SAFG Technologies, LLC

67

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Company	Company
Global Loss Prevention, Inc. [Canada]	Susquehanna Agents Alliance, LLC
Grand Savannah SAHP Corp.	The Glatfelter Agency, Inc.
Granite State Insurance Company	The Insurance Company of the State of Pennsylvania
Health Direct, Inc.	The United States Life Insurance Company
HOSPITAL PLAN INSURANCE SERVICES	The United States Life Insurance Company - Insulated
HPIS LIMITED	The Variable Annuity Life - Insulated
Illinois National Insurance Co.	The Variable Annuity Life - Non-Insulated
Integrated Manufacturing Companies, Inc.	The Variable Annuity Life Insurance Company
Knickerbocker Corporation	Travel Guard Americas LLC Sucursal Mexico
LBMA Equipment Services, Inc.	Travel Guard Americas, LLC
Lexington Insurance Company	Travel Guard Americas, LLC [Argentina]
Lexington Specialty Insurance Agency, Inc.	Travel Guard Group, Inc.
Lilac Heights LLC	Tudor Insurance Company
Livetravel, Inc.	U G Corporation
SAHP GA III - SC LLC	VALIC Financial Advisors, Inc.
SCSP Corp.	VALIC Retirement Services Company
Service Net Solutions of Florida, LLC	Validus America, Inc.
Service Net Warranty, LLC	Validus Re Americas (New Jersey), Inc.
SNW Insurance Agency, LLC	Validus Reaseguros, Inc.
Spruce Peak Realty, LLC	Validus Services, Inc.
Stowe Mountain Holdings, Inc.	Validus Specialty Underwriting Services, Inc.
Stratford Insurance Company	Validus Specialty, LLC
SubGen NT, Inc.	Volunteer Firemen’s Insurance Services, Inc.
SunAmerica Affordable Housing Partners, Inc.	Western World Insurance Company
SunAmerica Asset Management, LLC
SunAmerica Fund Assets 83, LLC
SunAmerica Life Reinsurance Company
SunAmerica Retirement Markets, Inc.

For the period following the tax consolidation of Corebridge from AIG, the Company will join with AGC Life, AIGB, USL, and VALIC, in filing a consolidated life company federal income tax return.

The Company has a written agreement with both parent entities, AIG and AGC Life under which each subsidiary agrees to pay parent company an amount equal to the consolidated federal income tax expense multiplied by the ratio that the subsidiary’s separate return tax liability bears to the consolidated tax liability, plus one hundred percent of the excess of the subsidiary’s separate return tax liability over the allocated consolidated tax liability. Both AIG and AGC Life agree to pay each subsidiary for the tax benefits, if any, of net operating losses, net capital losses and tax credits which are not usable by the subsidiary but which are used by other members of the consolidated group.

68

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

18. CAPITAL AND SURPLUS

RBC standards are designed to measure the adequacy of an insurer’s statutory capital and surplus in relation to the risks inherent in its business. The RBC standards consist of formulas that establish capital requirements relating to asset, insurance, business and interest rate risks. The standards are intended to help identify companies that are under-capitalized, and require specific regulatory actions in the event an insurer’s RBC is deficient. The RBC formula develops a risk-adjusted target level of adjusted statutory capital and surplus by applying certain factors to various asset, premium and reserve items. Higher factors are applied to more risky items and lower factors are applied to less risky items. Thus, the target level of statutory surplus varies not only because of the insurer’s size, but also on the risk profile of the insurer’s operations. At December 31, 2022, the Company exceeded RBC requirements that would require any regulatory action.

Dividends that the Company may pay to the Parent in any year without prior approval of the TDI are limited by statute. The maximum amount of dividends in a 12-month period, measured retrospectively from the date of payment, which the Company can pay without the Company obtaining the prior approval of the TDI is limited to the greater of: (1) 10 percent of the Company’s statutory surplus as regards to policyholders at the preceding December 31 ; or (2) the preceding year’s statutory net gain from operations. Additionally, unless prior approval of the TDI is obtained, dividends can only be paid out of the Company’s unassigned surplus. Subject to the TDI requirements, the maximum dividend payout that may be made in 2023 without prior approval of the TDI is $1.9 billion. Dividend payments in excess of positive retained earnings are classified and reported as a return of capital.

Dividends are paid as determined by the Board of Directors and are noncumulative. The following table presents the dividends paid by the Company during 2022, 2021 and 2020:

Date	Type	Cash or Non-cash	Amount (in millions)
2022
March 28, 2022	Ordinary	Cash	$	400
June 24, 2022	Ordinary	Cash		400
2021
March 15, 2021	Ordinary	Cash	$	199
June 15, 2021	Ordinary	Cash		266
September 24, 2021	Ordinary	Cash		214
December 22, 2021	Extraordinary	Non-Cash		295
December 27, 2021	Ordinary	Cash		71

The Company’s cumulative preferred stock has an $80 dividend rate and is redeemable at $1,000 per share. The holder of this stock, the Parent, is entitled to one vote per share. The Company paid no dividends to its parent in 2020.

19. RETIREMENT AND SHARE-BASED AND DEFERRED COMPENSATION

The Company does not directly sponsor any defined benefit or defined contribution plans and does not participate in any multi-employer plans.

Employee Retirement Plan

Certain Corebridge employees participate in various AIG sponsored defined benefit pension and postretirement plans. AIG, as sponsor, is ultimately responsible for the maintenance of these plans in compliance with applicable laws. The Company is not directly liable for obligations under these plans; its obligation results from AIG Parent’s allocation of the Company’s share of expenses from the plans based on participants’ earnings for the pension plans and on estimated claims less contributions from participants for the postretirement plans.

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The following table presents information about employee-related costs (expense credits) allocated to the Company:

	Years Ended December 31,
(in millions)	2022		2021		2020
Defined benefit plans	$	(9)	$	(11)	$	(10)
Postretirement medical and life insurance plans		1		1		1
Total	$	(8)	$	(10)	$	(9)

Defined Contribution Plan

Prior to August 22, 2022, Corebridge employees participated in AIG’s qualified defined contribution plan that provided for contributions by employees, as well as an employer contribution. On August 22, 2022, participants’ accounts in the AIG plan were transferred to the Corebridge Financial Inc. Retirement Savings 401(k) Plan.

The 401(k) plan provides pre-tax salary reduction contributions by its U.S. employees. Employer matching contributions of 100 percent were made on the first six percent of participant contributions, subject to IRS-imposed limitations, and an additional fully vested, non-elective, non-discretionary employer contribution equal to three percent of the participant’s annual base compensation for the plan year, paid each pay period regardless of whether the participant currently contributes to the plan, and subject to the IRS-imposed limitations.

The Company’s pre-tax expense associated with this plan was $28 million, $27 million and $27 million in 2022, 2021 and 2020, respectively.

Share-based and Deferred Compensation Plans

Prior to the IPO, certain Corebridge employees received grants of equity awards under the AIG Long Term Incentive Plan (as amended) and its predecessor plan, the AIG 2013 Long Term Incentive Plan (each as applicable, the “LTIP”), which are governed by the AIG 2013 Omnibus Incentive Plan (“Omnibus Plan”). The value of AIG equity awards are linked to the performance of AIG’s common stock. AIG granted equity awards to our employees primarily in the form of AIG restricted stock units (“RSUs”) but also granted AIG performance share units (“PSUs”) and AIG stock options to certain executives.

AIG RSUs and AIG stock options granted to Corebridge employees by AIG will be earned based solely on continued service by the participant while AIG PSUs will be earned based on both continued service and AIG achieving specified performance goals at the end of a three year performance period. These performance goals were pre-established by AIG’s Compensation and Management Resources Committee (“CMRC”) for each annual grant. The actual number of PSUs earned can vary from zero to 200% of the amount granted. Vesting occurs on January 1 of the year immediately following the end of the three-year performance period.

Prior to 2021, LTI awards accrued dividend equivalent units (“DEUs”) in the form of additional PSUs and/or RSUs whenever a cash dividend is declared on shares of AIG Common Stock; the DEUs were subject to the same vesting terms and conditions as the underlying unit. Beginning in 2021, PSUs and RSUs granted via the annual 2021 LTI award (as of the date of grant), and those existing from the 2020 LTI awards (as of the third quarter) accrue dividend equivalent rights (DERs) as AIG’s dividends are declared. These DERs will be settled in cash only if the underlying units’ vesting conditions are met; previously accrued DEUs were not impacted by this change.

The fair value of AIG RSUs and AIG PSUs that are earned solely based on certain AIG-specific metrics was based on the closing price of AIG Common Stock on the grant date; while the fair value of AIG PSUs that are earned based on AIG’s relative total shareholder return (“TSR”) was determined on the grant date using a Monte Carlo simulation. The fair value of AIG stock options was estimated on the grant date using the Black-Scholes model.

On September 6, 2022, Corebridge adopted the Corebridge Financial, Inc. 2022 Omnibus Incentive Plan (the “2022 Plan”) and the Corebridge Financial, Inc. Long-term Incentive Plan (the “LTIP,” together with the 2022 Plan, the “Corebridge Plans”). Following the IPO, equity awards may be granted under the Corebridge Plans to current employees or directors of the Company or, solely with respect to their final year of service, former employees.

Equity awards under the Corebridge Plans are linked to Corebridge common stock (“CRBG Stock”). A total of 40,000,000 shares of CRBG Stock are authorized for delivery pursuant to awards granted or assumed under the Plans. Delivered shares may be newly-issued shares or shares held in treasury.

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All AIG RSUs that were held by active Corebridge employees on September 14, 2022 (the pricing date for the IPO) were converted into RSUs linked to the performance of CRBG Stock (“Corebridge RSUs”), on terms and conditions that are substantially the same as the corresponding AIG RSUs, with the number of AIG RSUs adjusted in a manner intended to preserve their intrinsic value as of immediately before and immediately following the conversion (subject to rounding). Specifically, the AIG RSUs were converted to Corebridge RSUs based on a conversion factor of 2.580952. The conversion factor was determined by the AIG closing stock price on September 14 ($54.20) divided by the public offering price for CRBG Stock in the IPO ($21.00).

The Company receives an allocation for these expenses. The Company recognized compensation expenses of $31 million, $28 million and $22 million for the years ending December 31, 2022, 2021 and 2020, respectively, on the date of grant of which all was recharged to related parties.

20. DEBT

The Company is a member of the Federal Home Loan Bank (FHLB) of Dallas. The Company’s interest in the stock of FHLB of San Francisco was redeemed on March 24, 2016.

Membership with the FHLB provides the Company with collateralized borrowing opportunities, primarily as an additional source of liquidity or for other uses deemed appropriate by management. The Company’s ownership in the FHLB stock is reported as common stock. Pursuant to the membership terms, the Company elected to pledge such stock to the FHLB as collateral for the Company’s obligations under agreements entered into with the FHLB.

Cash advances obtained from the FHLB are reported in and accounted for as borrowed money. The Company may periodically obtain cash advances on a same-day basis, up to a limit determined by management and applicable laws.

The Company is required to pledge certain mortgage-backed securities, government and agency securities and other qualifying assets to secure advances obtained from the FHLB. To provide adequate collateral for potential advances, the Company has pledged securities to the FHLB in excess of outstanding borrowings. Upon any event of default by the Company, the recovery by the FHLB would generally be limited to the amount of the Company’s liability under advances borrowed. The Company’s net borrowing capacity as of December 31, 2022 is $2 billion

The following table presents the aggregate carrying value of stock held with the FHLB of Dallas and the classification of the stock:

	December 31,
(in millions)	2022		2021
Membership stock - Class B	$	7	$	7
Activity stock		141		129
Excess stock		15		22
Total	$	163	$	158
Actual or estimated borrowing capacity as determined by the insurer	$	5,525	$	5,942

The Company did not hold any Class A at December 31, 2022 or 2021.

The following table presents the amount of collateral pledged, including FHLB common stock held, to secure advances from the FHLB:

	December 31, 2022				December 31, 2021
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Amount pledged	$	5,043	$	4,432	$	4,265	$	4,469
Maximum amount pledged during reporting period		5,131		4,486		4,589		4,817

The Company’s borrowing capacity determined quarterly based upon the borrowing limit imposed by statute in the state of domicile.

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The following table presents the outstanding funding agreements and maximum borrowings from the FHLB:

	December 31,
(in millions)	2022		2021
Amount outstanding	$	3,448	$	3,148
Maximum amount borrowed during reporting period	$	3,448	$	3,648

While the funding agreements are presented herein to show all amounts received from FHLB, the funding agreements are treated as deposit-type contracts, consistent with the other funding agreements for which the Company’s intent is to earn a spread and not to fund operations. The Company had no debt outstanding with the FHLB at December 31, 2022 or 2021.

The following table reflects the principal amounts of the funding agreements issued to the FHLB:

(in millions)
Funding Agreements	Date Issued	Amounts
10-year floating rate	February 15, 2018	$	1,148
10-year floating rate	February 15, 2018		1,277
10-year floating rate	February 15, 2018		175
10-year floating rate	February 6, 2018		87
10-year floating rate	January 25, 2018		31
10-year floating rate	May 23, 2017		52
10-year floating rate	January 31, 2017		67
10-year floating rate	January 12, 2017		57
10-year floating rate	June 14, 2016		254
5-year fixed rate	August 25, 2022		300

21. COMMITMENTS AND CONTINGENCIES

Commitments

The Company had commitments to provide funding to various limited partnerships totaling $3.2 billion and at December 31, 2022 and 2021, respectively. The commitments to invest in limited partnerships and other funds may be called at the discretion of each fund, as needed and subject to the provisions of such fund’s governing documents, for funding new investments, follow-on investments and/or fees and other expenses of the fund. Of the total commitments at December 31, 2022, $1.1 billion are currently expected to expire in 2023, and the remainder by 2041 based on the expected life cycle of the related funds and the Company’s historical funding trends for such commitments.

At December 31, 2022 and 2021, the Company had $3.8 billion and $2.4 billion, respectively, of outstanding commitments related to various funding obligations associated with its investments in commercial mortgage loans. Of the total current commitments, $1.3 billion are expected to expire in 2023 and the remainder by 2036, based on the expected life cycle of the related loans and the Company’s historical funding trends for such commitments.

The Company has various long-term, noncancelable operating leases, primarily for office space and equipment, which expire at various dates over the next several years. At December 31, 2021, the future minimum lease payments under the operating leases are as follows:

(in millions)
2023	$	12
2024		5
2025		4
2026		4
2027		1
Thereafter	$	—
Total		26

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Rent expense was $16 million, $18 million and $19 million in 2022, 2021 and 2020, respectively.

Contingencies

Legal Matters

Various lawsuits against the Company have arisen in the ordinary course of business. The Company believes it is unlikely that contingent liabilities arising from such lawsuits will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Effective January 1, 2013, the California legislature enacted AB 1747 (the Act), which amended the Insurance Code to mandate that life insurance policies issued and delivered in California contain a 60-day grace period during which time the policies must remain in force after a premium payment is missed, and that life insurers provide both a 30-day minimum notification of lapse and the right of policy owners to designate a secondary recipient for lapse and termination notices. Following guidance from the California Department of Insurance and certain industry trade groups, the Company interpreted the Act to be prospective in nature, applying only to policies issued and delivered on or after the Act’s January 1, 2013, effective date. On July 18, 2017, the Company was sued in a putative class action captioned Moriarty v. American General Life Insurance Company, No. 17-cv-1709 (S.D. Cal.), challenging the Company’s prospective application of the Act. Plaintiff’s complaint, which is similar to complaints filed against other insurers, argues that policies issued and delivered prior to January 1, 2013, like the $1 million policy issued to Plaintiff’s husband do not lapse—despite nonpayment of premiums—if the insurer has not complied with the Act’s terms. On August 30, 2021, the California Supreme Court issued an opinion in McHugh v. Protective Life Insurance, 12 Cal. 5th 213 (2021), ruling that the Act applies to all policies in force on January 1, 2013, regardless of when the policies were issued. On February 7, 2022, Plaintiff filed motions for summary judgment and class certification; the Company opposed both motions and filed its own motion for partial summary judgment. On July 26, 2022, the District Court granted in part and denied in part the Company’s motion for partial summary judgment, and on September 7, 2022, the District Court denied Plaintiff’s motion for summary judgment. In the summary judgment decisions, the District Court declined to adopt Plaintiff’s theory that a failure to comply with the Act necessitates payment of policy benefits or to make a pre-trial determination as to the Company’s liability. On September 27, 2022, the District Court denied Plaintiff’s motion for class certification without prejudice. The District Court declined to certify Plaintiff’s proposed class consisting of claims for monetary damages and equitable relief but indicated that Plaintiff could seek the certification of a narrower class consisting only of claims for monetary damages. The District Court indicated, however, that it has “substantial concerns” as to whether individual issues such as actual damages and causation would predominate, precluding class certification. While the District Court had initially set a trial date for February 7, 2023, it has since vacated that date and indicated that it will set a new trial date in due course, following consultation with the parties. Proceedings are ongoing in other California cases that raise similar industry- wide issues, including in the McHugh case on remand from the California Supreme Court, in which the California Court of Appeal rendered an unpublished opinion on October 10, 2022 that also declined to hold that failure to comply with the Act automatically necessitates payment of policy benefits. We have accrued our current estimate of probable loss with respect to this litigation.

Certain reinsurers have sought rate increases on certain yearly renewable term agreements. The Company is disputing

the requested rate increases under these agreements. Certain reinsurers with whom the Company has disputes have

initiated arbitration proceedings against the Company, and others may initiate them in the future. To the extent

reinsurers have sought retroactive premium increases, the Company has accrued our current estimate of probable loss

with respect to these matters.

Regulatory Matters

All fifty states and the District of Columbia have laws requiring solvent life insurance companies, through participation in guaranty associations, to pay assessments to protect the interests of policyholders of insolvent life insurance companies. These state insurance guaranty associations generally levy assessments, up to prescribed limits, on member insurers in a particular state based on the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer is engaged. Such assessments are used to pay certain contractual insurance benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. The Company accrues liabilities for guaranty fund assessments when an assessment is probable and can be

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reasonably estimated. The Company estimates the liability using the latest information available from the National Organization of Life and Health Insurance Guaranty Associations. While the Company cannot predict the amount and timing of any future guaranty fund assessments, the Company has established reserves it believes are adequate for assessments relating to insurance companies that are currently subject to insolvency proceedings.

The Company accrued $39 million and $38 million for these guarantee fund assessments at December 31, 2022 and 2021, respectively. The Company has recorded receivables of $31 million and $30 million at December 31, 2022 and 2021, respectively, for expected recoveries against the payment of future premium taxes.

During 1997 and 1998, the Company participated in a workers’ compensation underwriting pool with a third party insurance company. Both companies share equally in the pool. Collectively, the workers’ compensation business is assumed from over 50 ceding companies and retro-ceded to 15 programs. The business covers risks primarily from the 1997 and 1998 underwriting years but also includes risk from the 1996 underwriting year. There were no reinsurance recoverables on claim liabilities and reserves included in these financial statements related to the workers’ compensation business at both December 31, 2022 and 2021. While not included in these statutory financial statements, the Company is contingently liable for losses incurred by its 50 percent pool participant should that third party become insolvent or otherwise unable to meet its obligations under the pool agreement.

At December 31, 2022 and 2021, the Company had admitted assets of $153 million and $152 million, respectively, in premiums receivable due from policyholders (or agents). The Company routinely evaluates the collectability of these receivables. Based upon Company experience, the potential for any loss is not believed to be material to the Company’s financial condition.

During 2022 and 2021, the Company wrote accident and health insurance premiums that were subject to the risk-sharing provisions of the Affordable Care Act (ACA). However, the Company had no balances for the risk corridors program due to exclusion from the program. There was no financial impact of risk-sharing provisions on assets, liabilities or operations, related to the Permanent ACA Risk Adjustment Program. In addition, there was no financial impact of risk-sharing provisions on assets and liabilities related to the Transitional ACA Reinsurance Program. Under this program, the Company has recorded an insignificant amount in reinsurance recoveries due to ACA Reinsurance payments.

Various federal, state or other regulatory agencies may from time to time review, examine or inquire into the operations, practices and procedures of the Company, such as through financial examinations, subpoenas, investigations, market conduct exams or other regulatory inquiries. Based on the current status of pending regulatory examinations, investigations, and inquiries involving the Company, the Company believes it is not likely that these regulatory examinations, investigations, or inquiries will have a material adverse effect on the financial position, results of operations or cash flows of the Company.

Standard of Care Development

The Company provides products and services to certain employee benefit plans that are subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or the Code. Plans subject to ERISA include certain pension and profit-sharing plans and welfare plans, including health, life and disability plans. As a result, our activities are subject to the restrictions imposed by ERISA and the Code, including the requirement under ERISA that fiduciaries must perform their duties solely in the interests of ERISA plan participants and beneficiaries, and that fiduciaries may not cause a covered plan to engage in certain prohibited transactions. The applicable provisions of ERISA and the Code are subject to enforcement by the DOL, the IRS and the Pension Benefit Guaranty Corporation.

The Company and our distributors are subject to laws and regulations regarding the standard of care applicable to sales of our products and the provision of advice to our customers. In recent years, many of these laws and regulations have been revised or reexamined while others have been newly adopted. We closely monitor these legislative and regulatory activities and evaluate the impact of these requirements on us and our customers, distribution partners and financial advisers. Where needed, we have made significant investments to implement and enhance our tools, processes and procedures, to comply with the final rules and interpretations. These efforts and enhancements have resulted in increased compliance costs and may impact sales results and increase regulatory and litigation risk. Additional changes in standard of care requirements or new standards issued by governmental authorities, such as the DOL, the SEC, the NAIC or state regulators and/or legislators, have impacted, and may impact our businesses, results of operations and financial condition.

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22. RELATED PARTY TRANSACTIONS

Sale of Certain AIG Life and Retirement Retail Mutual Funds Business

On February 8, 2021, Corebridge announced the execution of a definitive agreement with Touchstone Investments, Inc. (“Touchstone”), an indirect wholly owned subsidiary of Western & Southern Financial Group, to sell certain assets of our retail mutual funds business. This sale consisted of the reorganization of twelve of the retail mutual funds managed by our subsidiary SunAmerica Asset Management, LLC (“SAAMCo”) into certain Touchstone funds. Concurrently, the twelve retail mutual funds managed by SAAMCo, with $6.8 billion in assets, were reorganized into Touchstone funds. Additional consideration has been and may be earned over a three-year period based on asset levels in certain reorganized funds. Six retail mutual funds managed by SAAMCo and not included in the transaction were liquidated. Corebridge continues to retain our fund management platform and capabilities dedicated to our variable annuity insurance products.

Events Related to AIG and Corebridge

Separation of Life and Retirement Business and Relationship with Blackstone

On September 19, 2022, Corebridge completed an initial public offering (the “IPO”) in which AIG sold 80 million shares of Corebridge common stock to the public. As of December 31, 2022, AIG owns 77.7% of the outstanding common stock of Corebridge. AIG is a publicly-traded entity, listed on the New York Stock Exchange (NYSE:AIG). The term “AIG” means AIG and its consolidated subsidiaries, unless the context refers to AIG only.

On November 2, 2021, Argon Holdco LLC (“Argon”), a wholly-owned subsidiary of Blackstone, Inc. (“Blackstone”), acquired a 9.9% equity stake in Corebridge and Corebridge entered into a long-term asset management relationship with Blackstone. Pursuant to the partnership, Corebridge initially transferred $50 billion of assets in their investment portfolio to Blackstone. As of December 31, 2022, the book value of the assets transferred to Blackstone was $48.9 billion. Further beginning in the fourth quarter of 2022, Corebridge transferred $2.1 billion to Blackstone and will transfer $2.1 billion each quarter for an aggregate of $92.5 billion by the third quarter of 2027.

Pursuant to the Stockholders’ Agreement that Corebridge entered into with AIG and Argon at the time of acquisition of Argon’s Corebridge equity stake, Argon may not sell its ownership interest in Corebridge subject to exceptions permitting Argon to sell 25%, 67% and 75% of its shares after the first, second and third anniversaries, respectively, of the IPO, with the transfer restrictions terminating in full on the fifth anniversary of the IPO. Also, until Argon no longer owns at least 50% of its initial investment in Corebridge, it will have the right to designate for nomination for election one member of the Corebridge board of directors.

Prior to the IPO, Corebridge and certain U.S. subsidiaries were included in the consolidated federal income tax return of AIG as well as certain state tax returns where AIG files on a combined or unitary basis. The provision for income taxes is calculated on a separate return basis. Following the IPO, AIG owns a less than 80% interest in Corebridge, resulting in tax deconsolidation of Corebridge from the AIG Consolidated Tax Group and in a small minority of state jurisdictions which follow federal consolidation rules, the most significant being Florida. In addition, under the applicable law, AGC and its directly owned life insurance subsidiaries (the “AGC Group”) will not be permitted to join in the filing of a U.S. consolidated federal income tax return with our other subsidiaries (collectively, the “Non-Life Group”) for the five-year waiting period. Instead, the AGC Group is expected to file separately as members of the AGC consolidated U.S. federal income tax return during the five-year waiting period. Following the five-year waiting period, the AGC Group is expected to join the U.S. consolidated federal income tax return with the Non-Life Group.

On November 1, 2021, Corebridge declared a dividend payable to AIG in the amount of $8.3 billion. In connection with such dividend, Corebridge issued a promissory note to AIG in the amount of $8.3 billion. As of September 30, 2022, the promissory note to AIG has been paid in full.

On December 15, 2021, Corebridge and Blackstone Real Estate Income Trust (“BREIT”), a long-term, perpetual capital vehicle affiliated with Blackstone, completed the acquisition by BREIT of the Company’s interests in a U.S. affordable housing portfolio for $4.9 billion.

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Investment Management Agreements with BlackRock

Under the BlackRock Agreements, Corebridge completed the transfer of the management of approximately $82.4 billion in book value of liquid fixed income and certain private placement assets in the aggregate to BlackRock as of December 31, 2022. In addition, liquid fixed income assets associated with Fortitude Re portfolio were separately transferred to BlackRock. The BlackRock Agreements provide Corebridge with access to market-leading capabilities, including portfolio management, research and tactical strategies in addition to a larger pool of investment professionals. Corebridge believes BlackRock’s scale and fee structure make BlackRock an excellent outsourcing partner for certain asset classes and will allow us to further optimize our investment management operating model while improving overall performance. The fees, terms and conditions of the BlackRock Agreements were extensively negotiated, and Corebridge believes them to be highly competitive with those available from other leading investment managers for a fixed income portfolio of comparable size. Further, BlackRock is responsible for its own overhead and operating expenses under the BlackRock Agreements, with the insurance company subsidiaries reimbursing reasonable and documented out-of-pocket third-party expenses.

With respect to other potential liabilities under the BlackRock Agreements, the insurance company subsidiaries have agreed to indemnify BlackRock for certain losses incurred in connection with the services provided by BlackRock pursuant to the BlackRock Agreements or resulting from the insurance company subsidiaries’ breach of the investment management agreements.

The investment management agreements contain detailed investment guidelines and reporting requirements. These agreements also contain reasonable and customary representations and warranties, standard of care, confidentiality and other provisions. The investment management agreements will continue unless terminated by either party on 45 days’ notice or by us immediately for cause. Corebridge will continue to be responsible for the overall investment portfolio, including decisions surrounding asset allocation, risk composition and investment strategy.

Fortitude Re

Fortitude Re was established during the first quarter of 2018 in a series of reinsurance transactions related to AIG’s run-off operations. Those reinsurance transactions were designed to consolidate most of AIG’s Insurance run-off lines into a single legal entity. As of December 31, 2022, approximately $29.0 billion of reserves from Corebridge Run-Off Lines and approximately $3.2 billion of reserves from AIG’s General Insurance Run-Off Lines related to business written by multiple wholly-owned AIG subsidiaries, had been ceded to Fortitude Re under these reinsurance transactions. Of the Fortitude Re reinsurance agreements, the largest is the Amended and Restated Combination Coinsurance and Modified Coinsurance Agreement by and between Corebridge’s subsidiary, the Company and Fortitude Re. Under this treaty, approximately $22.1 billion of the Company reserves as of December 31, 2022 were ceded to Fortitude Re representing a mix of life and annuity risks. Fortitude Re provides 100 percent reinsurance of the ceded risks. The Company retains the risk of collection of any third party reinsurance covering the ceded business. At effectiveness of the treaty, an amount equal to the aggregate ceded reserves was deposited by the Company into a modified coinsurance account of the Company to secure the obligations of Fortitude Re. Fortitude Re receives or makes quarterly payments that represent the net gain or loss under the treaty for the relevant quarter, including any net investment gain or loss on the assets in the modified coinsurance account. In December 2022, the management of most of the public fixed income securities in the modified coinsurance account was transitioned to BlackRock. In accordance with the terms of the treaty, following the third anniversary of the June 2, 2020 closing of the sale of our majority interest in Fortitude Group Holdings, L.L.C., Fortitude Re has increased rights to direct the appointment of investment managers to manage the assets in the modified coinsurance account.

Following receipt of all regulatory approvals and the satisfaction of other conditions, effective as of January 1, 2022, AIG sold to an affiliate of Fortitude Re all of the outstanding capital stock of two servicing companies that administer the Life and Retirement and General Insurance ceded business, and the ceding insurers entered into administrative services agreements pursuant to which AIG transferred administration of certain Life and Retirement and General Insurance ceded business to such companies.

Transfer of AIG Technologies, Inc and Eastgreen Inc.

In connection with the Reorganization, Corebridge and AIG entered into agreements under which Corebridge purchased AIG Technologies, Inc. (“AIGT”) and Eastgreen, Inc. (“Eastgreen”) from AIG affiliates on February 28, 2022 for total consideration of $107 million. AIGT provides data processing, technology and infrastructure services to Corebridge and AIG entities in the United States, including management of AIG hardware and networks. AIGT utilizes two data centers to provide its services. The real estate related to the two data centers is owned by Eastgreen. To the extent needed, AIGT will continue to provide services to AIG for a transition period.

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COVID-19

We are continually assessing the impact on our business, operations and investments of COVID-19 and the resulting ongoing economic and societal disruption. These impacts initially included a global economic contraction, disruptions in financial markets, increased market volatility and declines in certain equity and other asset prices that had negative effects on our investments, our access to liquidity, our ability to generate new sales and the costs associated with claims. Further, significant legislative and regulatory activity has occurred at both the U.S. federal and state levels, as well as globally. We cannot predict what form future legal and regulatory responses to concerns about COVID-19 and related public health issues will take, or how such responses will impact our business.

The most significant impacts relating to COVID-19 have been the impact of interest rate, credit spreads and equity market levels on spread and fee income, and increased mortality. We are actively monitoring the mortality rates and the potential direct and indirect impacts that COVID-19 may have across our businesses. The last two quarters saw the fewest national fatalities since the start of the pandemic. Actual data related to cause of death is not always available for all claims paid, and such cause of death data does not always capture the existence of comorbid conditions. The regulatory approach to the pandemic and impact on the insurance industry is continuing to evolve and its ultimate impact remains uncertain.

We have a diverse investment portfolio with material exposures to various forms of credit risk. To date, there has been minimal impact on the value of the portfolio. At this point in time, uncertainty surrounding the duration and severity of the COVID-19 pandemic makes the long-term financial impact difficult to quantify.

COVID-19 continued to have an impact in 2022. Circumstances resulting from the COVID-19 pandemic, in addition to an increase in claims, may also impact utilization of benefits, lapses or surrenders of policies and payments of insurance premiums, all of which have impacted and could further impact the revenues and expenses associated with our products.

Selkirk Transactions

During 2013 and 2014, the Company entered into securitization transactions in which portfolios of the Company’s commercial mortgage loans were transferred to special purpose entities (Selkirk No.1 Investments, Selkirk No.3A Investments ), with the Company retaining a significant beneficial interest in the securitized loans. As consideration for the transferred loans, the Company received beneficial interests in certain special purpose entities and cash proceeds from the securitized notes issued to third party investors by other special purpose entities. Selkirk No.1 Investments and Selkirk No.3V Investments was redeemed in full in 2021.

Lighthouse VI

During 2013, the Company, along with its affiliate, The Variable Annuity Life Insurance Company (“VALIC”) executed three transactions (Lighthouse I, Lighthouse II, and Lighthouse III) in which a portfolio of securities was, in each transaction, transferred into a newly established Common Trust Fund (CTF) in exchange for proportionate interests in all assets within each CTF as evidenced by specific securities controlled by and included within the Company’s Representative Security Account (RSA). In each transaction, a portion of the Company’s securities were transferred to the RSA of VALIC in exchange for other VALIC securities. As of October 2021, the CTFs for the Lighthouse I and Lighthouse II transactions were liquidated.

Ambrose

During 2013 and 2014, the Company entered into securitization transactions in which the Company transferred portfolios of high grade corporate securities, and structured securities acquired from AIG, to newly formed special purpose entities (Ambrose 2013-2, Ambrose 2013-3, Ambrose 2013-5, Ambrose 2014-6). As consideration for the transferred securities, the Company received beneficial interests in tranches of structured securities issued by each Ambrose entity. As of May 2021, all of the structured securities issued by the Ambrose entities, held by the Company were redeemed in full.

77

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

American Home and National Union Guarantees

The Company has a General Guarantee Agreement with American Home Assurance Company (American Home), an indirect wholly owned subsidiary of AIG. Pursuant to the terms of this agreement, American Home has unconditionally and irrevocably guaranteed insurance policies the Company issued between March 3, 2003 and December 29, 2006.

The Company, as successor-in-interest to American General Life and Accident Insurance Company (AGLA) has a General Guarantee Agreement with American Home. Pursuant to the terms of this agreement, American Home has unconditionally and irrevocably guaranteed policies of insurance issued by AGLA between March 3, 2003 and September 30, 2010.

The Company, as successor-in-interest to SunAmerica Annuity and Life Assurance Company (SAAL) and SunAmerica Life Insurance Company (SALIC) has a General Guarantee Agreement with American Home. Pursuant to the terms of this agreement, American Home has unconditionally and irrevocably guaranteed policies of insurance issued by SAAL and SALIC between January 4, 1999 and December 29, 2006.

The Company, as successor-in-interest to American General Life Insurance Company of Delaware, formerly known as AIG Life Insurance Company (AIG Life), has a General Guarantee Agreement with National Union Fire Insurance Company of Pittsburg, Pa. (National Union), an indirect wholly owned subsidiary of AIG. Pursuant to the terms of this agreement, National Union has unconditionally and irrevocably guaranteed insurance policies issued by AIG Life Holding, Inc. between July 13, 1998 and April 30, 2010.

American Home’s and National Union’s audited statutory financial statements are filed with the SEC in the Company’s registration statements for variable products that are subject to the Guarantees.

Cut-Through Agreement

The Company and AIG Life of Bermuda, Ltd. (“AIGB”) entered into a Cut-through Agreement in which insureds, their beneficiaries and owners were granted a direct right of action against the Company in the event AIGB becomes insolvent or otherwise cannot or refuses to perform its obligations under certain life insurance policies issued by AIGB. The Cut-through Agreement was approved by the TDI. The amount of the retained liability on AIGB’s books related to this agreement was approximately $330,000 at December 31, 2022 and 2021. The Company believes the probability of loss under this agreement is remote. No liability has been recognized in relation to this guarantee due to immateriality.

Affiliate Transactions

Effective October 1, 2022, the Company entered into a modified coinsurance reinsurance agreement with VALIC, pursuant to which certain blocks of VALIC’s variable annuity (VA) business were ceded to the Company. The ceded reserves and assets supporting the reserves remain on VALIC’s balance sheet, pursuant to the modified coinsurance structure. The business covered by the agreement includes substantially all of VALIC’s VA contracts, excluding those issued by VALIC in the State of New York and those that have been previously assumed (through reinsurance) by VALIC. At inception, VALIC ceded approximately $22.9 billion of reserves and received a ceding commission of approximately $1.5 billion from the Company representing the embedded profits in the business ceded. The Company recorded assumed premiums of approximately $23 billion as well as modco reinsurance assumed of approximately $22 billion in the statutory statement of operations. After contract inception, the Company will pay a ceding commission and expense allowance to reimburse VALIC for its commissions, related issue and policy administration expenses. The agreement was non-disapproved by the TDI. The agreement allows the Company and VALIC to more efficiently manage the reserve and capital requirements for their VA business.

In December 2022, the Company received capital contributions of $1.9 billion from AGC Life in connection with the Company and VALIC reinsurance transaction.

During the year ended December 31, 2022, the Company purchased $4 billion and sold $5 billion of securities, at fair market value, from or to one or more of its affiliates in the ordinary course of business. For additional information regarding purchase and sale transactions involving the Company with an affiliate, please refer to the Company’s Annual Registration Statement and monthly amendments filed with the TDI, as applicable.

Effective January 1, 2011, the Company entered into a Reinsurance Agreement (AGL-1101) with AGC Life pursuant to which certain blocks of life business issued by the Company were ceded to AGCL. The Reinsurance Agreement was non-disapproved by the TDI and Missouri Department of Insurance. Amendment 29 to the reinsurance agreement was

78

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

approved by the TDI and MDOI effective December 31, 2021 to add certain term and universal life policies issued by the Company on or after January 1, 2020 to the reinsurance agreement. Amendment 29 will be closed to new business as of December 31, 2021.

On January 2, 2020, the Company sold its Houston Campus properties to an affiliate, 2929 REH, a newly formed limited liability company incorporated in the state of Texas. 2929 REH is owned by AIG Life Holdings, Inc. and Knickerbocker Corporation, a Texas corporation wholly owned by AIG Life Holdings, Inc. The sale of the properties is treated as a sale and leaseback transaction pursuant to SSAP 22R. The gain on sale of $253 million was recognized directly to special surplus funds and will be subsequently amortized to unassigned surplus over a 10 year period. Amortization for the period ending December 31, 2022 and 2021 were $25 million each year.

AIG Life Holdings, Inc. issued two senior promissory notes to the Company in the amount of $150 million and $200 million (“2019 Promissory Notes”), respectively in exchange for cash. Each of the promissory notes was supported by a guarantee issued by AIG for the benefit of the Company, with maturity dates of five and four years respectively and interest rates of 2.52% and 2.40% per year respectively. On December 31, 2020, the TDI issued a letter allowing the Company to record the total amounts due under each promissory note as an admitted asset for the period ending March 31, 2020 and in each subsequent quarter thereafter subject to certain conditions and in accordance with applicable provisions of SSAP 25.

In 2018, AGLIC Investments Bermuda Limited, a Bermuda corporation (“AGLIC Bermuda”) was formed by the Company as an investment subsidiary under Texas Insurance Code Section 823.255. The Company made capital contributions of $76 million, $263 million, and $320 million in 2022, 2021 and 2020, respectively. AGLIC Bermuda made distributions to the Company of $214 million in 2022, $113 million in 2021 and $8 in 2020.

At December 31, 2022, the Company’s unfunded capital commitment to US Fund I, US Fund II, US Fund III, US Fund IV, Europe Fund I and Europe Fund II were approximately $86.9 million, $79 million, $191 million, $75.8 million, $47 million and $179 million, respectively.

At December 31, 2021, the Company’s unfunded capital commitment to US Fund I, US Fund II, US Fund III, Europe Fund I and Europe Fund II were approximately $87.5 million, $82.2 million, $128 million, $52.8 million and $192.2 million, respectively.

At December 31, 2020, the Company’s unfunded capital commitment to U.S. Fund I, U.S. Fund II, U.S Fund III, Europe Fund I and Europe Fund II were approximately $90.7 million, $93.2 million, $128 million, $57.9 million and $229.9 million, respectively.

Financing Agreements

On January 1, 2015, the Company and certain of its affiliates entered into a revolving loan facility with AIG, pursuant to which the Company and each such affiliate can, on a several basis, borrow monies from AIG (as lender) subject to the terms and conditions stated therein. Principal amounts borrowed under this facility may be repaid and reborrowed, in whole or in part, from time to time, without penalty. However, the total aggregate amount of loans borrowed by all borrowers under the facility cannot exceed $500 million. The loan facility also sets forth individual borrowing limits for each borrower, with the Company’s maximum borrowing limit being $500 million. This agreement terminated concurrent with the IPO of Corebridge Financial on September 19, 2022.

On May 17, 2022, the Company and certain of its affiliates entered into a revolving loan facility with Corebridge, pursuant to which the Company and each such affiliate can, on a several basis, borrow monies from Corebridge (as lender) subject to the terms and conditions stated therein. Principal amounts borrowed under this facility may be repaid and re-borrowed, in whole or in part, from time to time, without penalty. However, the total aggregate amount of loans borrowed by all borrowers under the facility cannot exceed $500 million.The loan facility also sets forth individual borrowing limits for each borrower, with the Company’s maximum borrowing limit being $500 million. As of December 31, 2022, the Company had no outstanding balance owing under this revolving loan facility.

79

AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Investments in Subsidiary, Controlled and Affiliated

The following table presents information regarding the Company’s investments in non-insurance SCA entities as of December 31, 2022:

(in millions)	Gross Amount			Non-admitted Amount		Admitted Asset Amount			Date of NAIC Filing
AGLIC INVESTMENTS BERMUDA LTD.	$	678		$	—	$	678			10/13/2020
AGL LOAN INVESTMENTS CORPORATION		76			—		76			5/7/2020
AIG Direct - SER B		2			2		—			NA
AIG Direct - SER A		2			2		—			NA
AIG Direct - NON VOTING		1			1		—			NA
American General Assignment Corp COM		—			—		—			NA
Kirkwood		—			—		—			NA
American Gen Annuity Svc Corp		—			—		—			NA
UG Corp COM		—			—		—			NA
AGL Assignment Co LLC		—			—		—			NA
SunAmerica Affordable Housing LLC		183			—		183
SunAmerica Asset Management LLC		41			—		41			NA
Helios Finance III LLC		2			—		2			NA
Whitehouse Hotel LP		65			—		65			NA
GRE LB Industrial Joint Venture II, LP		38			—		38			NA
Bayshore PII Company LLC		9			9		—			NA
AIGGRE Europe Real Estate Fund II LR Feeder, LLC		73			—		73			NA
AIGGRE US Real Estate Fund IV Development Sidecar LP		34			—		34			NA
SPAIG North Williams, LLC		(3	)		—		(3	)		NA
AIGGRE U.S. Real Estate Fund IV, LP		158			—		158			NA
Southeast Industrial JV LLC		78			—		78			NA
AIGGRE U.S. Real Estate Fund III, LP		199			—		199			NA
Clinton Grand Holdings LLC		9			—		9			NA
AIGGRE Europe Real Estate Fund I S.C.SP		24			—		24			NA
Bayshore Shopping Center JV LLC		23			—		23			NA
AIGGRE U.S. Real Estate Fund II, LP		117			—		117			NA
AIGGRE U.S. Real Estate Fund I, LP		(17	)		—		(17	)		NA
Total	$	1,792		$	14	$	1,778

Operating Agreements

The Company has investments in a Liquidity Pool in which funds are managed by an affiliate, AIG Capital Management Corporation, in the amount of $585 million and $242 million at December 31, 2022 and 2021, respectively. These funds were reclassified in 2021 to cash equivalents from short-term investments per NAIC guidelines.

Pursuant to service and expense agreements, AIG, Corebridge and affiliates provide, or cause to be provided, such as administrative, marketing, investment management, accounting, occupancy, and data processing services to the Company. The allocation of costs for services is based generally on estimated levels of usage, transactions or time incurred in providing the respective services. Generally, these agreements provide for the allocation of costs upon either the specific identification basis or a proportional cost allocation basis which management believes to be reasonable. In all cases, billed amounts pursuant to these agreements do not exceed the cost to AIG or the affiliate providing the service. The Company was charged $68 million and $84 million, as part of the cost sharing expenses attributed to the Company but incurred by AIG and affiliates in 2022 and 2021, respectively. The Company is also party to several other service and/or cost sharing agreements with its affiliates. The Company was charged $1 million, $50 million and $43

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AMERICAN GENERAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

million under such agreements for expenses attributed to the Company but incurred by affiliates in 2022, 2021 and 2020, respectively.

Pursuant to an amended and restated investment advisory agreement, the majority of the Company’s invested assets are managed by an affiliate. The investment management fees incurred were $112 million in 2022, $102 million in 2021 and $119 million in 2020, respectively.

The majority of the Company’s Swap agreements are entered into with an affiliated counterparty, AIG Markets, Inc. (See Note 7).

Other

The Company engages in structured settlement transactions, certain of which involve affiliated property and casualty insurance companies that are subsidiaries of AIG Parent. In a structured settlement arrangement, a property and casualty insurance policy claimant has agreed to settle a casualty insurance claim in exchange for fixed payments over either a fixed determinable period of time or a life contingent period. In such claim settlement arrangements, a casualty insurance claim payment provides the funding for the purchase of a single premium immediate annuity issued by the Company for the ultimate benefit of the claimant. In certain structured settlement arrangements, the affiliated property and casualty insurance company remains contingently liable for the payments to the claimant.

23. SUBSEQUENT EVENTS

Management considers events or transactions that occur after the reporting date, but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures. The Company has evaluated subsequent events through April 25, 2023, the date the financial statements were issued.

The Company paid an ordinary dividend of $500 million to AGC Life Insurance Company on March 27, 2023.

81

Supplemental Information

AMERICAN GENERAL LIFE INSURANCE COMPANY

SUPPLEMENTAL SCHEDULE OF ASSETS AND LIABILITIES

(in millions)	December 31, 2022
Investment income earned:
Government bonds	$	44
Other bonds (unaffiliated)		4,564
Bonds of affiliates		10
Preferred stocks (unaffiliated)		10
Common stocks (unaffiliated)		2
Common stocks of affiliates		6
Cash and short-term investments		43
Mortgage loans		1,042
Real estate		4
Contract loans		68
Other invested assets		696
Derivative instruments		994
Miscellaneous income		4
Gross investment income	$	7,487
Real estate owned - book value less encumbrances	$	9
Mortgage loans - book value:
Commercial mortgages	$	22,340
Residential mortgages		2,484
Mezzanine loans		601
Total mortgage loans	$	25,425
Mortgage loans by standing - book value:
Good standing	$	24,779
Good standing with restructured terms		476
Interest overdue more than 90 days, not in foreclosure		11
Foreclosure in process		159
Total mortgage loans	$	25,425
Partnerships - statement value	$	8,026
Bonds and stocks of parents, subsidiaries and affiliates - statement value:
Bonds	$	360
Common stocks		753
Bonds, short-term and cash equivalent bond investments by class and maturity:
Bonds, short-term and cash equivalent bond investments by maturity - statement value:
Due within one year or less	$	5,004
Over 1 year through 5 years		24,935
Over 5 years through 10 years		28,471
Over 10 years through 20 years		18,570
Over 20 years		31,887
Total maturity	$	108,867
Bonds, short-term and cash equivalent bond investments by class - statement value:
Class 1	$	61,599
Class 2		40,244
Class 3		3,873
Class 4		2,918
Class 5		109
Class 6		124
Total by class	$	108,867
Total bonds, short-term and cash equivalent bond investments publicly traded	$	59,709
Total bonds, short-term and cash equivalent bond investments privately traded		49,158
Preferred stocks - statement value	$	93
Common stocks - market value		927
Short-term investments - book value		387
Cash equivalents - book value		758
Options, caps and floors owned - statement value		818
Collar, swap and forward agreements open - statement value		(1,168)
Futures contracts open - current value		9
Cash on deposit		(194)

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SUPPLEMENTAL SCHEDULE OF ASSETS AND LIABILITIES - (continued)

(in millions)	December 31, 2022
Life insurance in-force:
Industrial	$	715
Ordinary		127,538
Credit		—
Group		3,701
Amount of accidental death insurance in-force under ordinary policies		4,649
Life insurance policies with disability provisions in-force:
Industrial		198
Ordinary		38,398
Group life		31
Supplementary contracts in-force:
Ordinary - not involving life contingencies:
Amount on deposit		712
Income payable		331
Ordinary - involving life contingencies:
Amount on deposit		275
Income payable		92
Group - not involving life contingencies:
Amount on deposit		1
Annuities:
Ordinary:
Immediate - amount of income payable	$	1,379
Deferred, fully paid - account balance		65,407
Deferred, not fully paid - account balance		34,280
Group:
Amount of income payable		563
Fully paid - account balance		506
Not fully paid - account balance		15,702
Accident and health insurance - premiums in-force:
Other	$	70
Group		—
Credit		—
Deposit funds and dividend accumulations:
Deposit funds - account balance	$	7,194
Dividend accumulations - account balance		511
Claim payments in 2022
Group accident & health:
2022	$	—
2021		—
2020		—
2019		—
2018		—
Prior		160
Other accident & health:
2022		1
2021		(79	)
2020		(57)
2019		(13)
2018		57
Prior		370

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AMERICAN GENERAL LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES

DECEMBER 31, 2022

(in millions)

1. The Company’s total admitted assets as of December 31, 2022 are $212 billion

The Company’s total admitted assets, excluding separate accounts, as of December 31, 2022 are $152 billion.

2. Following are the 10 largest exposures to a single issuer/borrower/investment, by investment category, excluding: (i) U.S. Government, U.S. Government agency securities and those U.S. Government money market funds listed in the Appendix to the IAO Practices and Procedures Manual as exempt, (ii) property occupied by the Company, and (iii) policy loans:

	Issuer	Description of Exposure	Amount		Percentage of       Total Admitted       Assets
a.	Carlyle Group	OIA	$	1,443	0.90  %
b.	AIG Global Real Estate Investment Corp	OIA RE		774	0.50
c.	Senior Direct Lending Program LLC	BONDS		774	0.50
d.	Amazon.com, Inc.	BONDS		679	0.40
e.	Duke Energy Corporation	BONDS		627	0.40
f.	American Electric Power Company, Inc.	BONDS		545	0.40
g.	Exelon Corporation	BONDS		530	0.30
h.	Microsoft Corporation	BONDS		500	0.30
i.	Anheuser-Busch InBev NV/SA	BONDS		497	0.30
j.	Comcast Corporation	BONDS		493	0.30

3. The Company’s total admitted assets held in bonds and preferred stocks, by NAIC rating, are:

Bonds and Short-Term Investments				Preferred Stocks
NAIC Rating	Amount		Percentage of       Total Admitted       Assets	NAIC Rating	Amount		Percentage of       Total Admitted       Assets
NAIC - 1	$	61,599	40.50  %	P/RP - 1	$	82	0.10  %
NAIC - 2		40,244	26.50	P/RP - 2		4	—
NAIC - 3		3,873	2.50	P/RP - 3		—	—
NAIC - 4		2,918	1.90	P/RP - 4		—	—
NAIC - 5		109	0.10	P/RP - 5		7	—
NAIC - 6		124	0.10	P/RP - 6		—	—

4. Assets held in foreign investments:

		Amount		Percentage       of Total       Admitted       Assets
a.	Total admitted assets held in foreign investments	$	25,974	17.10  %
b.	Foreign currency denominated investments		9,988	6.60
c.	Insurance liabilities denominated in that same foreign currency		—	—

5. Aggregate foreign investment exposure categorized by NAIC sovereign rating:

		Amount		Percentage       of Total       Admitted       Assets
a.	Countries rated NAIC - 1	$	23,394	15.40  %
b.	Countries rated NAIC - 2		1,943	1.30
c.	Countries rated NAIC - 3 or below		637	0.40

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AMERICAN GENERAL LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES - (continued)

DECEMBER 31, 2022

6. Two largest foreign investment exposures to a single country, categorized by the country’s NAIC sovereign rating:

		Amount		Percentage       of Total       Admitted       Assets
a.	Countries rated NAIC - 1
	Country 1: United Kingdom	$	5,929	3.90  %
	Country 2: Cayman Islands		4,238	2.80
b.	Countries rated NAIC - 2
	Country 1: Mexico		569	0.40
	Country 2: Indonesia		312	0.20
c.	Countries rated NAIC - 3 or below
	Country 1: British Virgin Isles		144	0.10
	Country 2: Dominican Republic		77	0.10

7. Aggregate unhedged foreign currency exposure:

	Amount		Percentage       of Total       Admitted       Assets
Aggregate unhedged foreign currency exposure	$	9,988	6.60  %

8. Aggregate unhedged foreign currency exposure categorized by NAIC sovereign rating:

		Amount		Percentage       of Total       Admitted       Assets
a.	Countries rated NAIC - 1	$	9,982	6.60  %
b.	Countries rated NAIC - 2		5	—
c.	Countries rated NAIC - 3 or below		2	—

9. Two largest unhedged foreign currency exposures to a single country, categorized by the country’s NAIC sovereign rating:

		Amount		Percentage       of Total       Admitted       Assets
a.	Countries rated NAIC - 1
	Country 1: Ireland	$	4,278	2.80  %
	Country 2: United Kingdom		1,930	1.30
b.	Countries rated NAIC - 2
	Country 1:		3	—
	Country 2:		2	—
c.	Countries rated NAIC - 3 or below
	Country 1: Brazil		2	—
	Country 2:		—	—

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AMERICAN GENERAL LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES - (continued)

DECEMBER 31, 2022

10. Ten largest non-sovereign (i.e. non-governmental) foreign issues:

		NAIC Rating	Amount		Percentage       of Total       Admitted       Assets
a.	5555180	MORTGAGE LOAN	$	309	0.20  %
b.	5555233	MORTGAGE LOAN		302	0.20
c.	5555207	MORTGAGE LOAN		290	0.20
d.	Royal Dutch Shell plc	NAIC 1 - Bonds		270	0.20
e.	5555143	MORTGAGE LOAN		253	0.20
f.	5555239	MORTGAGE LOAN		248	0.20
g.	Silver (BREDS)	Other invested Assest		244	0.20
h.	5555184	MORTGAGE LOAN		241	0.20
i.	Carlyle Group	Other invested Assest		210	0.10
j.	5555187	MORTGAGE LOAN		210	0.10

11. Assets held in Canadian investments are less than 2.5% of the reporting entity’s total admitted assets.

12. Assets held in investments with contractual sales restrictions are less than 2.5 percent of the Company’s total admitted assets.

13. The Company’s admitted assets held in the ten largest equity interests (including investments in the shares of mutual funds, preferred stocks, publicly traded equity securities, and other equity securities and excluding money market and bond mutual funds listed in the Appendix to the SVO Practices and Procedures Manual as exempt or Class 1) are:

		Amount		Percentage       of Total       Admitted       Assets
a.	Carlyle Group	$	1443	0.90  %
b.	AIG Global Real Estate Investment Corp		774	0.50
c.	AIG Home Loan		425	0.30
d.	Silver (BREDS)		244	0.20
e.	SUNAMERICA INVESTMENT INC.		224	0.10
f.	Think Investments LLC		210	0.10
g.	AIG DECO Fund II LP		191	0.10
h.	AIG Commercial Real Estate Lending Holdings LLC		169	0.10
i.	Project Jermyn USD		166	0.10
j.	GENERAL ATLANTIC		166	0.10

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AMERICAN GENERAL LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES - (continued)

DECEMBER 31, 2022

14. Assets held in nonaffiliated, privately placed equities:

		Amount		Percentage       of Total       Admitted       Assets
Aggregate statement value of investment held in nonaffiliated, privately placed equities:		$	2,340	1.50  %
Largest three investments held in nonaffiliated, privately placed equities:
a.	AIG Home Loan 2 LLC	$	425	0.30
b.	Carlyle Alternative Opportunities Fund L.P.		348	0.20
c.	Carlyle Credit Opportunities Fund II L.P.		271	0.20

Ten largest fund managers:

	Fund Manager	Total Invested		Diversified		Non- diversified
a.	Carlyle Group	$	1,443	$	1,443	$	—
b.	AIG Global Real Estate Investment Corp		774		—		774
c.	AIG Home Loan		425		425		—
d.	Silver (BREDS)		244		—		244
e.	SUNAMERICA INVESTMENT INC.		224		224		—
f.	Think Investments LLC		210		210		—
g.	AIG DECO Fund II LP		191		191		—
h.	AIG Commercial Real Estate Lending Holdings LLC		169		—		169
i.	Project Jermyn USD		166		—		166
j.	GENERAL ATLANTIC		166		166		—

15. Assets held in general partnership interests are less than 2.5 percent of the Company’s total admitted assets.

16. Mortgage loans reported in Schedule B, include the following ten largest aggregate mortgage interests. The aggregate mortgage interest represents the combined value of all mortgages secured by the same property or same group of properties:

		Amount		Percentage       of Total       Admitted       Assets
a.	COMMERCIAL MORTGAGE LOAN, Loan No. 8002341, NY	$	366	0.20  %
b.	COMMERCIAL MORTGAGE LOAN, Loan No. 5555180, DNK		309	0.20
c.	COMMERCIAL MORTGAGE LOAN, Loan No. 5555233, DEU		302	0.20
d.	COMMERCIAL MORTGAGE LOAN, Loan No. 5555207, GBR		290	0.20
e.	COMMERCIAL MORTGAGE LOAN, Loan No. 8002930, CA		273	0.20
f.	COMMERCIAL MORTGAGE LOAN, Loan No. 8002711, NJ		265	0.20
g.	COMMERCIAL MORTGAGE LOAN, Loan No. 5555143, GBR		253	0.20
h.	COMMERCIAL MORTGAGE LOAN, Loan No. 5555239, DEU		248	0.20
i.	COMMERCIAL MORTGAGE LOAN, Loan No. 5555184, GBR		241	0.20
j.	COMMERCIAL MORTGAGE LOAN, Loan No. 8002917, NY		232	0.20

86

AMERICAN GENERAL LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES - (continued)

DECEMBER 31, 2022

Amount and percentage of the reporting entity’s total admitted assets held in the following categories of mortgage loans:

		Amount		Percentage       of Total       Admitted       Assets
a.	Construction loans	$	1,949	1.30  %
b.	Mortgage loans over 90 days past due		11	—
c.	Mortgage loans in the process of foreclosure		159	0.10
d.	Mortgage loans foreclosed		—	—
e.	Restructured mortgage loans		476	0.30

17. Aggregate mortgage loans having the following loan-to-value ratios as determined from the most current appraisal as of the annual statement date:

		Residential			Commercial			Agricultural
Loan-to-Value		Amount		Percentage       of Total       Admitted       Assets	Amount		Percentage       of Total       Admitted       Assets	Amount		Percentage       of Total       Admitted       Assets
a.	above 95%	$	—	—  %	$	385	0.30  %	$	—	—  %
b.	91% to 95%		—	—		244	0.20		—	—
c.	81% to 90%		1	—		728	0.50		—	—
d.	71% to 80%		—	—		2,307	1.50		—	—
e.	below 70%		2,483	1.60		18,983	12.50		—	—

18. Assets held in each of the five largest investments in one parcel or group of contiguous parcels of real estate reported in Schedule A are less than 2.5 percent of the Company’s total admitted assets.

19. Assets held in mezzanine real estate loans are less than 2.5 percent of the Company’s total admitted assets.

20. The Company’s total admitted assets subject to the following types of agreements as of the following dates:

					Unaudited At End of Each Quarter
			At Year-End			1st Quarter		2nd Quarter		3rd Quarter
		Amount		Percentage of       Total Admitted       Assets	Amount		Amount		Amount
a.	Securities lending (do not include assets held as collateral for such transactions)	$	—	—  %	$	1,886	$	1,947	$	—
b.	Repurchase agreements		1,933	1.30		217		225		236
c.	Reverse repurchase agreements		—	—		—		—		—
d.	Dollar repurchase agreements		—	—		—		—		—
e.	Dollar reverse repurchase agreements		—	—		—		—		—

87

AMERICAN GENERAL LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES - (continued)

DECEMBER 31, 2022

21. The Company’s potential exposure to warrants not attached to other financial instruments, options, caps, and floors:

		Owned			Written
		Amount		Percentage       of Total       Admitted       Assets	Amount		Percentage       of Total       Admitted       Assets
a.	Hedging	$	—	—  %		$        —	—  %
b.	Income generation		—	—		—	—
c.	Other		—	—		—	—

22. The Company’s potential exposure (defined as the amount determined in accordance with the NAIC Annual Statement Instructions) for collars, swaps, and forwards as of the following dates:

					Unaudited At End of Each Quarter
		At Year-End			1st Quarter		2nd Quarter		3rd Quarter
		Amount		Percentage       of Total       Admitted       Assets	Amount		Amount		Amount
a.	Hedging	$	706	0.50  %		$        786		$        739		$        721
b.	Income generation		—	—		—		—		—
c.	Replications		—	—		—		—		—
d.	Other		—	—		—		—		—

23. The Company’s potential exposure (defined as the amount determined in accordance with the NAIC Annual Statement Instructions) for futures contracts as of the following dates:

					Unaudited At End of Each Quarter
		At Year-End			1st Quarter		2nd Quarter		3rd Quarter
		Amount		Percentage       of Total       Admitted       Assets	Amount		Amount		Amount
a.	Hedging	$	142	0.10  %	$	113	$	93	$	88
b.	Income generation		—	—		—		—		—
c.	Replications		—	—		—		—		—
d.	Other		—	—		—		—		—

88

AMERICAN GENERAL LIFE INSURANCE COMPANY

SUPPLEMENTAL SUMMARY INVESTMENT SCHEDULE

DECEMBER 31, 2022

(in millions)	Gross Investment Holdings					Admitted Assets as Reported in the Annual Statement
Investment Categories	Amount			Percentage		Amount			Securities Lending Reinvested Collateral Amount		Total Amount			Percentage
Bonds:
U.S. governments	$	1,314			0.9  %		$1,314		$	—	$	1,314			0.9  %
All other governments		2,629			1.8		2,629			—		2,629			1.8
U.S. states, territories and possessions, etc. guaranteed		268			0.2		268			—		268			0.2
U.S. political subdivisions of states, territories, and possessions, guaranteed		332			0.2		332			—		332			0.2
U.S. special revenue and special assessment obligations, etc. non-guaranteed		6,159			4.2		6,159			—		6,159			4.2
Industrial and miscellaneous		93,378			63.6		93,378			—		93,378			63.6
Hybrid securities		435			0.3		435			—		435			0.3
Parent, subsidiaries and affiliates		360			0.3		360			—		360			0.3
SVO identified funds		—			—		—			—		—			—
Unaffiliated Bank loans		3,580			2.4		3,580			—		3,580			2.4
Total long-term bonds	$	108,455			73.9	$	108,455		$	—	$	108,455			73.9
Preferred stocks:
Industrial and miscellaneous (Unaffiliated)	$	93			0.1	$	93		$	—	$	93			0.1
Parent, subsidiaries and affiliates		—			—		—			—		—			—
Total preferred stocks	$	93			0.1	$	93		$	—	$	93			0.1
Common stocks:
Industrial and miscellaneous Publicly traded (Unaffiliated)	$	9			—	$	9		$	—	$	9			—
Industrial and miscellaneous Other (Unaffiliated)		165			0.1		165			—		165			0.1
Parent, subsidiaries and affiliates Publicly traded		678			0.5		678			—		678			0.5
Parent, subsidiaries and affiliates Other		80			0.1		76			—		76			0.1
Mutual funds		—			—		—			—		—			—
Total common stocks	$	932			0.6	$	928		$	—	$	928			0.6
Mortgage loans:
Farm mortgages	$	—			—	$	—		$	—	$	—			—
Residential mortgages		2,484			1.7		2,484			—		2,484			1.7
Commercial mortgages		22,340			15.2		22,340			—		22,340			15.2
Mezzanine real estate loans		601			0.4		601			—		601			0.4
Total valuation allowance		(294	)		(0.2)		(294	)		—		(294	)		(0.2)
Total mortgage loans	$	25,131			17.1	$	25,131		$	—	$	25,131			17.1
Real estate:
Properties occupied by company	$	6			—	$	6		$	—	$	6			—
Properties held for production of income		3			—		3			—		3			—
Properties held for sale		—			—		—			—		—			—
Total real estate	$	9			—	$	9		$	—	$	9			—
Cash, cash equivalents and short-term investments:
Cash	$	(194	)		(0.1)	$	(194	)	$	—	$	(194	)		(0.1)
Cash equivalents		758			0.5		758			—		758			0.5
Short-term investments		387			0.3		387			—		387			0.3
Total cash, cash equivalents and short-term investments	$	951			0.7	$	951		$	—	$	951			0.7
Contract loans	$	1,159			0.8	$	1,138		$	—	$	1,138			0.8
Derivatives		466			0.3		466			—		466			0.3
Other invested assets		7,877			5.4		7,866			—		7,866			5.4
Receivables for securities		73			0.1		73			—		73			0.1
Securities Lending		—			—		—			—		—			—
Other invested assets		1,661			1.1		1,661			—		1,661			1.1
Total invested assets	$	146,807			100.0  %		$146,771		$	—	$	146,771			100  %

89

AMERICAN GENERAL LIFE INSURANCE COMPANY

SUPPLEMENTAL SCHEDULE OF REINSURANCE DISCLOSURES

December 31, 2022

The following information regarding reinsurance contracts is presented to satisfy the disclosure requirements in SSAP No. 61R, Life, Deposit-Type and Accident and Health Reinsurance, which apply to reinsurance contracts entered into, renewed or amended on or after January 1, 1996.

1. Has the Company reinsured any risk with any other entity under a reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) that is subject to Appendix A-791, Life and Health Reinsurance Agreements, and includes a provision that limits the reinsurer’s assumption of significant risks identified in Appendix A-791?

Yes [ ] No [ X ]

If yes, indicate the number of reinsurance contracts to which such provisions apply:             __________

If yes, indicate if deposit accounting was applied for all contracts subject to Appendix A-791 that limit significant risks.

Yes [ ] No [ ] N/A [ X ]

2. Has the Company reinsured any risk with any other entity under a reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) that is not subject to Appendix A-791, for which reinsurance accounting was applied and includes a provision that limits the reinsurer’s assumption of risk?

Yes [ ] No [ X ]

If yes, indicate the number of reinsurance contracts to which such provisions apply:             __________

If yes, indicate whether the reinsurance credit was reduced for the risk-limiting features.

Yes [ ] No [ ] N/A [ X ]

3. Does the Company have any reinsurance contracts (other than reinsurance contracts with a federal or state facility) that contain one or more of the following features which may result in delays in payment in form or in fact:

(a) Provisions that permit the reporting of losses to be made less frequently than quarterly;

(b) Provisions that permit settlements to be made less frequently than quarterly;

(c) Provisions that permit payments due from the reinsurer to not be made in cash within ninety (90) days of the settlement date (unless there is no activity during the period); or

(d) The existence of payment schedules, accumulating retentions from multiple years, or any features inherently designed to delay timing of the reimbursement to the ceding entity.

Yes [ ] No [ X ]

4. Has the Company reflected reinsurance accounting credit for any contracts that are not subject to Appendix A-791 and not yearly renewable term reinsurance, which meet the risk transfer requirements of SSAP No. 61R?

Type of contract:	Response:	Identify reinsurance contract(s):	Has the insured event(s) triggering contract coverage been recognized?
Assumption reinsurance – new for the reporting period	Yes [ ] No [ X ]		N/A
Non-proportional reinsurance, which does not result in significant surplus relief	Yes [ X ] No [ ]		No

90

AMERICAN GENERAL LIFE INSURANCE COMPANY

SUPPLEMENTAL SCHEDULE OF REINSURANCE DISCLOSURES - (continued)

DECEMBER 31, 2022

5. Has the Company ceded any risk, which is not subject to Appendix A-791 and not yearly renewable term reinsurance, under any reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) during the period covered by the financial statements, and either:

(a) Accounted for that contract as reinsurance under statutory accounting principles (SAP) and as a deposit under generally accepted accounting principles (GAAP); or

Yes [ ] No [ X ] N/A [ ]

(b) Accounted for that contract as reinsurance under GAAP and as a deposit under SAP?

Yes [ ] No [ X ] N/A [ ]

If the answer to item (a) or item (b) is yes, include relevant information regarding GAAP to SAP differences from the accounting policy footnote to the audited statutory-basis financial statements to explain why the contract(s) is treated differently for GAAP and SAP below:

91

American Home Assurance Company

An AIG Company

NAIC Code: 19380

Statutory Basis Financial Statements

As of December 31, 2022 and 2021

and for the years ended December 31, 2022, 2021 and 2020

AMERICAN HOME ASSURANCE COMPANY

Statutory Basis Financial Statements

As of December 31, 2022 and 2021 and for the years ended December 31, 2022, 2021 and 2020

TABLE OF CONTENTS

	Report of Independent Auditors	3
	Statements of Admitted Assets	5
	Statements of Liabilities, Capital and Surplus	6
	Statements of Operations and Changes in Capital and Surplus	7
	Statements of Cash Flows	8
Note 1	Organization and Summary of Significant Statutory Basis Accounting Policies	9
Note 2	Accounting Adjustments to Statutory Basis Financial Statements	22
Note 3	Investments	24
Note 4	Fair Value of Financial Instruments	28
Note 5	Reserves for Losses and Loss Adjustment Expenses	30
Note 6	Related Party Transactions	33
Note 7	Reinsurance	36
Note 8	Income Taxes	39
Note 9	Capital and Surplus and Dividend Restrictions	44
Note 10	Contingencies	45
Note 11	Other Significant Matters	47
Note 12	Subsequent Events	48

Report of Independent Auditors

To the Board of Directors of American Home Assurance Company:

Opinions

We have audited the accompanying statutory basis financial statements of American Home Assurance Company (the “Company”), which comprise the statements of admitted assets, and of liabilities, capital and surplus as of December 31, 2022 and 2021, and the related statements of operations and changes in capital and surplus, and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “financial statements”).

Unmodified Opinion on Statutory Basis of Accounting

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities, and capital and surplus of the Company as of December 31, 2022 and 2021, and the results of its operations and changes in capital and surplus, and its cash flows for each of the three years in the period ended December 31, 2022, in accordance with the accounting practices prescribed or permitted by the New York State Department of Financial Services described in Note 1.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles section of our report, the accompanying financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2022 and 2021, or the results of its operations and changes in capital and surplus, or its cash flows for each of the three years in the period ended December 31, 2022.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 1 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the New York State Department of Financial Services, which is a basis of accounting other than accounting principles generally accepted in the United States of America.

The effects on the financial statements of the variances between the statutory basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the New York State Department of Financial Services. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with US GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Emphasis of Matter

As discussed in Notes 1, 6 and 7 to the financial statements, the Company has entered into significant transactions with certain affiliated entities. Our opinion is not modified with respect to this matter.

/s/ PricewaterhouseCoopers LLP

New York, NY

April 25, 2023

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Statements of Admitted Assets
	December 31, 2022			December 31, 2021
Cash and invested assets:
Bonds, primarily at amortized cost (fair value: 2022 - $13,386; 2021 - $14,084)	$	14,424		$	13,516
Common stocks, at carrying value (cost: 2022 - $250; 2020 - $279)		244			292
Preferred stocks, at carrying value (cost: 2022 - $26; 2021 - $0)		29			-
Other invested assets (cost: 2022 - $1,694; 2021 - $1,925)		1,981			2,389
Mortgage loans		1,244			1,936
Derivative instruments		32			2
Short-term investments, at amortized cost (approximates fair value)		141			171
Cash and cash equivalents		579			456
Receivable for securities sold		31			60
Total cash and invested assets	$	18,705		$	18,822
Investment income due and accrued	$	101		$	83
Agents’ balances or uncollected premiums:
Premiums in course of collection		1,288			1,183
Premiums and installments booked but deferred and not yet due		174			136
Accrued retrospective premiums		264			324
High deductible recoverable on paid losses		21			34
Reinsurance recoverable on paid losses		616			600
Funds held by or deposited with reinsurers		289			271
Net deferred tax assets		346			479
Receivables from parent, subsidiaries and affiliates		53			46
Other assets		165			128
Allowance for uncollectible accounts		(32	)		(36	)
Total admitted assets	$	21,990		$	22,070

See Notes to Statutory Basis Financial Statements

5     STATEMENTS OF ADMITTED ASSETS – As of December 31, 2021 and 2020

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions, Except Share Information)

Statements of Liabilities, Capital and Surplus
	December 31, 2022		December 31, 2021
Liabilities
Reserves for losses and loss adjustment expenses	$	8,172	$	8,216
Unearned premium reserves		2,498		2,554
Commissions, premium taxes, and other expenses payable		97		112
Reinsurance payable on paid loss and loss adjustment expenses		429		303
Current federal and foreign taxes payable to parent		26		18
Funds held by company under reinsurance treaties		1,419		1,561
Provision for reinsurance		46		24
Ceded reinsurance premiums payable, net of ceding commissions		629		598
Collateral deposit liability		416		400
Payable for securities purchased		49		94
Payable to parent, subsidiaries and affiliates		12		128
Other liabilities		339		400
Total liabilities	$	14,132	$	14,408
Capital and Surplus
Common capital stock, $20 par value, 1,758,158 shares authorized, 1,556,054 shares issued and outstanding	$	31	$	31
Capital in excess of par value		6,730		6,730
Unassigned surplus		427		210
Special surplus funds from reinsurance		670		691
Total capital and surplus	$	7,858	$	7,662
Total liabilities, capital and surplus	$	21,990	$	22,070

See Notes to Statutory Basis Financial Statements

  6     STATEMENTS OF LIABILITIES, CAPITAL and SURPLUS - As of December 31, 2022 and 2021

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Statements of Operations and Changes in Capital and Surplus

	For the Years Ended December 31,
	2022			2021			2020
Statements of Operations
Underwriting income:
Premiums earned	$	4,293		$	4,110		$	4,832
Underwriting deductions:
Losses incurred		2,529			2,596			3,255
Loss adjustment expenses		258			196			366
Other underwriting expenses		1,499			1,391			1,547
Total underwriting deductions		4,286			4,183			5,168
Net underwriting income (loss)		7			(73	)		(336	)
Investment gain:
Net investment income earned		679			806			664
Net realized capital (loss) gain (net of capital gains tax expense: 2022 - $39; 2021 - $26; 2020 - $22)		(176	)		260			91
Net investment gain		503			1,066			755
Net loss from agents’ or premium balances charged-off		(2	)		4			(2	)
Other expense		(19	)		(74	)		(113	)
Net Income after capital gains taxes and before federal income taxes		489			923			304
Federal and foreign income tax benefit		(24	)		(20	)		(13	)
Net Income	$	513		$	943		$	317
Changes in Capital and Surplus
Capital and surplus, as of December 31, previous year	$	7,662		$	6,696		$	5,995
Adjustment to beginning surplus (Note 2)		(15	)		-			(9	)
Capital and surplus, as of January 1,		7,647			6,696			5,986
Other changes in capital and surplus:
Net Income		513			943			317
Change in net unrealized capital gain (net of capital gain (loss) tax expense (benefit): 2022 - $(12); 2021 - $25; 2020 - $15		(221	)		52			178
Change in net deferred income tax		(125	)		(169	)		(77	)
Change in nonadmitted assets		(48	)		52			11
Change in provision for reinsurance		(22	)		1			(9	)
Capital contribution (Return of Capital)		-			-			245
Foreign exchange translation		114			90			(116	)
Change in assumed mortgage guaranty contingency reserve		(6	)		4			(21	)
Change in ceded mortgage guaranty contingency reserve		6			(4	)		184
Other surplus adjustments		-			(3	)		(2	)
Total changes in capital and surplus		211			966			710
Capital and Surplus, as of December 31,	$	7,858		$	7,662		$	6,696

See Notes to Statutory Basis Financial Statements

  7     STATEMENTS OF OPERATIONS and CHANGES IN CAPITAL AND SURPLUS - for the years ending December 31, 2022, 2021 and 2020    

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Statements of Cash Flows

	For the Years Ended December 31,
	2022			2021			2020
Cash from Operations:
Premiums collected, net of reinsurance	$	4,178		$	4,239		$	4,809
Net investment income		588			744			583
Miscellaneous income (expense)		1			13			(6	)
Sub-total		4,767			4,996			5,386
Benefit and loss related payments		2,481			2,747			3,848
Commission and other expense paid		1,844			1,778			2,141
Federal and foreign income taxes recovered		1			(2	)		(14	)
Net cash provided from (used in) operations		441			473			(589	)
Cash from Investments:
Proceeds from investments sold, matured, or repaid:
Bonds		2,744			5,415			3,708
Stocks		91			1			51
Mortgage loans		669			465			485
Other investments		824			1,180			1,338
Total proceeds from investments sold, matured, or repaid		4,328			7,061			5,582
Cost of investments acquired:
Bonds		3,665			6,223			4,434
Stocks		104			68			46
Mortgage loans		55			365			45
Other investments		361			869			782
Total cost of investments acquired		4,185			7,525			5,307
Net cash (used in) provided from investing activities		143			(464	)		275
Cash from Financing and Miscellaneous Sources:
Capital contributions		-			-			245
Intercompany (payments) receipts		(574	)		(265	)		211
Net deposit activity on deposit-type contracts and other insurance		(1	)		(10	)		(2	)
Collateral deposit liability receipts (payments)		17			147			1
Other receipt (payments)		67			181			(61	)
Net cash provided from (used in) financing and miscellaneous activities		(491	)		53			394
Net change in cash and short-term investments		93			62			80
Cash, cash equivalents, and short-term investments
Beginning of year		627			565			485
End of year	$	720		$	627		$	565
Refer to Note 11D for description of non-cash items.

See Notes to Statutory Basis Financial Statements

8     STATEMENTS OF CASH FLOW – for the years ended December 31, 2022, 2021 and 2020

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

1. Organization and Summary of Significant Statutory Basis Accounting Policies

A. Basis of Organization and Presentation

Organization

American Home Assurance Company (“the Company” or “American Home”) is a direct wholly-owned subsidiary of AIG Property Casualty U.S., Inc. (“AIG PC US”), a Delaware corporation, which is in turn owned by AIG Property Casualty Inc. (“AIG PC”), a Delaware corporation. The Company’s ultimate parent is American International Group, Inc. (the “Ultimate Parent” or “AIG”). AIG conducts its property and casualty operations through multiple line companies writing substantially all commercial (casualty, property, specialty and financial liability) and consumer (accident & health and personal lines) insurance both domestically and abroad.

The Company is party to an inter-company pooling agreement (the “Combined Pooling Agreement”), among the twelve companies listed below; collectively named the Combined Pool. The member companies of the Combined Pool, their National Association of Insurance Commissioners (“NAIC”) company codes, inter-company pooling percentages under the Combined Pooling Agreement, and states of domicile, are as follows:

Company	NAIC Company	Pool Participation         Percentage	State of Domicile
National Union *	19445	35%	Pennsylvania
American Home	19380	32%	New York
Lexington	19437	30%	Delaware
C&I	19410	3%	New York
APCC	19402	0%	Illinois
ISOP	19429	0%	Illinois
New Hampshire	23841	0%	Illinois
Specialty	26883	0%	Illinois
Assurance	40258	0%	Illinois
Granite	23809	0%	Illinois
Illinois National	23817	0%	Illinois
AIU	19399	0%	New York
* Lead Company of the Combined Pool

Refer to Note 6 for additional information on the Combined Pool and the effects of the changes in the intercompany pooling arrangements in 2021 (the “2021 Repooling Transaction”). The Company decreased its participation percentage from 35% to 32% as a result of the 2021 Repooling Transaction.

The Company accepts commercial business primarily through a network of independent retail and wholesale brokers and through independent agency networks. In addition, the Company accepts consumer business primarily through agents and brokers, as well as through direct marketing and partner organizations. There were no Managing Agents or Third Party Administrators who placed direct written premium with the Company in an amount exceeding more than 5.0 percent of surplus of the Company for the years ending December 31, 2022, 2021, and 2020.

  9     NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The Company is diversified in terms of classes of its business, distribution network and geographic locations. The Company has direct written premium concentrations of 5.0 percent or more in the following locations:

State / Location		2022		2021		2020
California	$	50	$	57	$	84
Florida		55		69		59
United Arab Emirates		83		78		50
New York		41		36		39
Texas*		37		14		14
*Texas was below 5% in 2021 and 2020.

Basis of Presentation

The accompanying financial statements of the Company have been prepared in conformity with accounting practices prescribed or permitted by the New York State Department of Financial Services (“NY SAP”). Certain balances relating to prior periods have been reclassified to conform to the current year’s presentation.

Additionally, the financial statements include the Company’s U.S. operations, its Dubai, Caribbean, Jamaica and Argentina branch operations and its participation in the American International Overseas Association (the “Association”).

The Company’s financial information as of and for the years ended December 31, 2022, 2021 and 2020 have been presented in accordance with the terms of the Combined Pooling Agreement.

B. Permitted and Prescribed Practices

NY SAP recognizes only statutory accounting practices prescribed or permitted by the New York State Department of Financial Services (“NY DFS”) for determining and reporting the financial position and results of operations of an insurance company and for the purpose of determining its solvency under the New York Insurance Code. The NAIC Statutory Accounting Principles included within the Accounting Practices and Procedures Manual (“NAIC SAP”) have been adopted as a component of prescribed practices by the NY DFS. The Superintendent of the NY DFS (the “Superintendent”) has the right to permit other specific practices that differ from prescribed practices.

NY SAP has prescribed the practice of discounting workers’ compensation known case loss reserves on a non-tabular basis. This practice is not prescribed under NAIC SAP.

Accounting practices prescribed by the Insurance Department of the Commonwealth of Pennsylvania (“PA SAP”) provide for the availability of certain offsets in the calculation of the Provision for reinsurance, which offsets are not prescribed under NAIC SAP. The Company applied PA SAP with concurrence from the NY DFS to reflect the transfer of collection risk on certain of the Company’s asbestos related reinsurance recoverable balances, to an authorized third party reinsurer, as another form of collateral acceptable to the Commissioner with respect to the reinsurance recoverable balance from the original reinsurers.

In 2021, the Company received a permitted practice to present the consideration received in relation to loss reserves transferred other than via commutation as part of 2021 Repooling transaction within paid losses rather than as premiums written and earned. The classification had no effect on net income or surplus.

The Company applied a permitted practice to account for the retroactive aggregate excess of loss reinsurance arrangement entered into with National Indemnity Company (“NICO”), a subsidiary of Berkshire Hathaway, Inc., (the “ADC”) as prospective reinsurance. However, any gain associated with the ADC has been reported in a segregated surplus account and does not form part of the Company’s Unassigned surplus, subject to the applicable dividend restrictions; such amounts must be restricted in surplus until such time as payments received by NICO exceed premiums paid for the retrocession. Segregated surplus balances were $664, $685 and $799 at December 31, 2022, 2021 and 2020, respectively. The effects of the ADC comprise the majority of total segregated surplus; accordingly, Statutory surplus, NAIC SAP, excluding segregated surplus was $7,008, $6,763, $5,732 at December 31, 2022, 2021 and 2020, respectively. For more information, see Note 7.

The use of the aforementioned permitted and prescribed practices has not affected the Company’s ability to comply with the NY DFS’s risk based capital (“RBC”) and surplus requirements for the 2022, 2021 and 2020 reporting periods.

  10     NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

A reconciliation of the net income (loss) and capital and surplus between NAIC SAP and practices prescribed or permitted by NY SAP is shown below:

December 31,	SSAP #		FS Ref		2022			2021*		2020*
Net Income, NY SAP					$	513		$	943	$	317
State prescribed or permitted practices - addition (charge):
Change in non-tabular discounting		65		(a)		(27	)		49		(17	)
Adverse Development Cover		62R		(a)		-			-		-
Present the consideration received/paid in relation to the loss reserves within paid losses		62R		(b)		-			-		-
Net Income , NAIC SAP					$	540		$	894	$	334
Statutory surplus, NY SAP					$	7,858		$	7,662	$	6,696
State prescribed or permitted practices - addition (charge):
Non-tabular discounting		65		(a)		138			165		116
Credits for collection risk on certain asbestos reinsurance recoveries		62R		(c)		42			43		43
Present the consideration received/paid in relation to the loss reserves within paid losses		62R		(b)		-			-		-
Statutory surplus, NAIC SAP					$	7,678		$	7,454	$	6,537

*Prior year presentation revised to be presented in accordance with current year presentation

(a) Impacts Reserves for losses and loss adjustment expenses within the Statements of Liabilities, Capital and Surplus and Losses incurred within the Statements of Operations and Changes in Capital and Surplus.

(b) Impacts Losses incurred and Premiums earned within the Statements of Operations and Changes in Capital and Surplus.

(c) Impacts Provision for reinsurance within the Statements of Liabilities, Capital and Surplus and the change in Provision for reinsurance within the Statements of Operations and Changes in Capital and Surplus.

C. Use of Estimates in the Preparation of the Financial Statements

The preparation of statutory financial statements in accordance with NY SAP requires the application of accounting policies that often involve a significant degree of judgment. The Company’s accounting policies that are most dependent on the application of estimates and assumptions are considered critical accounting estimates and are related to the determination of:

• Reserves for losses and loss adjustment expenses (“LAE”) including estimates and recoverability of the related reinsurance assets;

• Legal contingencies;

• Other than temporary impairment (“OTTI”) losses on investments;

• Fair value of certain financial assets, impacting those investments measured at fair value in the Statements of Admitted Assets and Liabilities, Capital and Surplus, as well as unrealized gains (losses) included in Capital and Surplus; and

• Income tax assets and liabilities, including the recoverability and admissibility of net deferred tax assets and the predictability of future tax operating profitability of the character necessary to realize the net deferred tax asset.

These accounting estimates require the use of assumptions, including some that are highly uncertain at the time of estimation. It is reasonably possible that actual experience may materially differ from the assumptions used and therefore the Company’s statutory financial condition, results of operations and cash flows could be materially affected.

11   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

D. Accounting Policy Differences

NAIC SAP is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America (“US GAAP”). NAIC SAP varies from US GAAP in certain significant respects, including:

Transactions	NAIC SAP Treatment	US GAAP Treatment
Policy Acquisition Costs Principally brokerage commissions and premium taxes arising from the issuance of insurance contracts.	Costs are immediately expensed and are included in Other Underwriting Expenses, except for reinsurance ceding commissions received in excess of the cost to acquire business which are recognized as a deferred liability and amortized over the period of the reinsurance agreement.	Costs directly related to the successful acquisition of new or renewal insurance contracts are deferred and amortized over the term of the related insurance coverage.
Unearned Premiums, Unpaid Losses and Loss Expense Liabilities	Presented net of reinsurance recoverable.	Presented gross of reinsurance with corresponding reinsurance recoverable assets for ceded unearned premiums and reinsurance recoverable on unpaid losses.
Retroactive reinsurance contracts	Gains and losses are recognized in earnings immediately and surplus is segregated to the extent pretax gains are recognized. Certain retroactive affiliate or related party reinsurance contracts are accounted for as prospective reinsurance if there is no gain in surplus as a result of the transaction.	Gains are deferred and amortized over the settlement period of the ceded claim recoveries. Losses are immediately recognized in the Statements of Operations.
Investments in Bonds held as: 1) available for sale 2) fair value option	Investment grade securities (rated by NAIC as class 1 or 2) are carried at amortized cost. Non-investment grade securities (NAIC rated 3 to 6) are carried at the lower of amortized cost or fair value.	All available for sale investments are carried at fair value with changes in fair value, net of applicable taxes, reported in accumulated other comprehensive income within shareholder’s equity. Fair value option investments are carried at fair value with changes in fair value, net of applicable projected income taxes, reported in Net Investment Income.
Investments in Common Stocks	Carried at fair value with unrealized gains and losses reported, net of applicable taxes, in the Statements of Changes in Capital and Surplus.	All equity securities that do not follow the equity method of accounting, are measured at fair value with changes in fair value recognized in earnings.
Investments in Limited Partnerships, Hedge Funds and Private Equity Interests	Carried at the underlying US GAAP equity with results from the investment’s operations recorded, net of applicable taxes, as unrealized gains (losses) directly in the Statements of Changes in Capital and Surplus.	If aggregate interests allow the holding entity to exercise more than significant influence (typically more than 3%), the investment is recorded as an equity method investment wherein the Company’s pro rata share of income or loss for the period, is recorded as net investment income and adjusted against the carrying value of the asset. Similar equity method investments in investment company entities (eg: hedge funds) is adjusted for the Company’s pro rata share of income or loss for the period which is based on the Net Asset Value (“NAV”) with changes in value recorded to Net Investment Income.
		Where the aggregate interests do not allow the entity to exercise significant influence (typically less than 3%), the investment is recorded as equity investment fair valued through net investment income. Similar equity investment in investment companies (eg: hedge funds) are recorded at NAV with changes in value recorded to Net Investment Income.

  12     NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Transactions	NAIC SAP Treatment	US GAAP Treatment
Investments in Subsidiary, Controlled and Affiliated Entities (SCAs)	Subsidiaries are not consolidated. The equity investment in SCAs are accounted for under the equity method and recorded as Common stock investments. Dividends are recorded within Net Investment Income.	Consolidation is required when there is a determination that the affiliated entity is a variable interest entity (“VIE”) and the reporting entity has a variable interest and the power to direct the activities of the VIE. The VIE assessment would consider various factors including limited partnership (LP) status and inherent rights of equity investors. Investments in SCAs that are voting interest entities (VOE) with majority voting rights are generally consolidated. Investments in SCAs where the holding entity exercises significant influence (generally ownership of >3% voting interests for LPs and similar entities and between 20 percent and 50 percent for other entities) are recorded at equity value. The change in equity is included within operating income.
Other-than-temporary impairments	Bonds, other than loan-backed and structured securities, which are considered to be other-than-temporarily impaired, are written down to fair value with a realized loss recognized in the Statements of Operations.	The non-credit portion of impairments relating to debt securities that the entity does not intend to sell and for which it is not more likely than not that the entity will be required to sell before anticipated recovery is recorded in other comprehensive income.
Derivatives	Embedded derivatives are not separated from the host contract and not accounted for separately as derivative instruments.	Contracts may include embedded derivatives that are bifurcated from the host contracts and accounted for separately at fair value.
Statement of Cash Flows	Statutory Statements of Cash Flows must be presented using the direct method. Changes in cash, cash equivalents, and short-term investments and certain sources of cash are excluded from operational cash flows.	The Statements of Cash Flows can be presented using the direct or indirect methods, however are typically presented using the indirect method. Presentation is limited to changes in cash and cash equivalents (short-term investments are excluded).
Deferred Federal Income Taxes	Deferred income taxes are established for the temporary differences between tax and book assets and liabilities, subject to limitations on admissibility of tax assets. Changes in deferred income taxes are recorded within capital and surplus and have no impact on the Statements of Operations.	The provision for deferred income taxes is recorded as a component of income tax expense, as a component of the Statements of Operations, except for changes associated with items that are included within other comprehensive income where such items are recorded net of applicable income taxes.
Statutory Adjustments (applied to certain assets including goodwill, furniture and equipment, deferred taxes in excess of limitations, prepaid expenses, overdue receivable balances and unsecured reinsurance amounts)	Certain asset balances designated as nonadmitted, such as some intangible assets and certain investments in affiliated entities are excluded from the Statements of Admitted Assets and are reflected as deductions from capital and surplus.	All assets and liabilities are included in the financial statements. Provisions for uncollectible receivables are established as valuation allowances and are recognized as expense within the Statements of Operations.

The effects on the financial statements of the variances between NAIC SAP and US GAAP, although not reasonably determinable, are presumed to be material.

  13     NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

E. Significant Statutory Accounting Policies

Premiums

Premiums for insurance and reinsurance contracts are recorded as gross premiums written as of the effective date of the policy. Premiums are earned primarily on a pro-rata basis over the term of the related insurance coverage. Premiums collected prior to the effective date of the policy are recorded as an advance premium liability and not considered income until due. Extended reporting endorsements are reflected as premiums written and are earned on a pro-rata basis over the stated term of the endorsement unless the term of the endorsement is indefinite, in which case premiums are fully earned at inception of the endorsement along with the recognition of associated loss and LAE.

Unearned premium reserves are established on an individual policy basis, reflecting the terms and conditions of the coverage being provided. Unearned premium reserves represent the portion of premiums written relating to the unexpired terms of coverage as of the date of the financial statements. For policies with coverage periods equal to or greater than thirteen months and generally not subject to cancellation or modification by the Company, premiums are earned using a prescribed percentage of completion method. Additional unearned premium reserves for policies exceeding thirteen months are established as greater of three prescribed tests.

Reinsurance premiums are typically earned over the same period as the underlying policies, or risks, covered by the contracts. As a result, the earnings pattern of a reinsurance contract generally written for a 12 month term may extend up to 24 months, reflecting the inception dates of the underlying attaching policies throughout the 12 month period of the reinsurance contract. Reinsurance premiums ceded are recognized as a reduction in revenues over the period reinsurance coverage is provided.

Insurance premiums billed and outstanding for 90 days or more are nonadmitted and charged against Unassigned funds (surplus).

Premiums for retrospectively rated contracts are initially recorded based on the expected loss experience and are earned on a pro-rata basis over the term of the related insurance coverage. Additional or returned premium is recorded if the estimated loss experience differs from the initial estimate and is immediately recognized in earned premium. The Company records accrued retrospectively rated premiums as written premiums. Adjustments to premiums for changes in the level of exposure to insurance risk are generally determined based upon audits conducted after the policy expiration date.

Gross written premiums net of ceded written premiums (“Net written premiums”) that were subject to retrospective rating features as of December 31, 2022, 2021 and 2020 were as follows:

Years ended December 31,		2022		2021		2020
Net written premiums subject to retrospectively rated contracts	$	45	$	49	$	67
Percentage of total net written premiums		1.1%		1.2 %		1.5 %

As of December 31, 2022 and 2021, the admitted portion of accrued premiums related to the Company’s retrospectively rated contracts were $264 and $324, respectively, which will be billed in future periods based primarily on the payment of the underlying expected losses and LAE. Unsecured amounts associated with these accrued retrospective premiums were $28 and $36 as of December 31, 2022 and 2021, respectively. Ten percent of the amount of accrued retrospective premiums receivable not offset by retrospective return premiums or other liabilities to the same party, other than loss and LAE reserves, or collateral (collectively referred to as the unsecured amount) have been nonadmitted in the amount of $4 and $4 as of December 31, 2022 and 2021, respectively.

High Deductible

The Company establishes loss reserves for high deductible policies net of the insured’s contractual deductible (such deductibles are referred to as “reserve credits”). The Company establishes a nonadmitted asset for ten percent of paid losses recoverable in excess of collateral held on an individual insured basis, or for one hundred percent of paid losses recoverable where no collateral is held and amounts are outstanding for more than ninety days. Additionally, the Company establishes an allowance for doubtful accounts for such paid losses recoverable in excess of collateral and after nonadmitted assets. Similarly, the Company does not recognize reserve credit offsets to its estimate of loss reserves where such credits are deemed uncollectible, as the Company ultimately bears credit risk on the underlying policies’ insurance obligations.

  14     NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The following table shows the counterparty exposure on unpaid claims and billed recoverable on paid claims for high deductibles by line of business as of December 31, 2022 and 2021:

December 31, 2022	Gross Loss Reserves*		Reserve Credits on Unpaid Claims		Recoverable on Paid Claims		Total
Allied Lines	$	469	$	469	$	4	$	473
General Liabilities		485		485		3		488
Workers Compensation		2,901		2,901		18		2,919
Total	$	3,855	$	3,855	$	25	$	3,880

*Gross loss reserves as presented in the table above represent loss reserves within the insured’s contractual layer. Loss reserves exceeding the insured’s contractual deductible are the insurance obligation of the Pool and are reflected, net of applicable reinsurance, within the Reserves for losses and loss adjustment expenses line items on the Balance Sheet.

As of December 31, 2022, both on-balance sheet and off-balance sheet collateral pledged to the Company related to deductible and paid recoverables was $151 and $2,622, respectively. Unsecured high deductible amounts related to unpaid claims and for paid recoverables for 2022 were $1,107, or 28.52% of the total high deductible. Additionally, as of December 31, 2022, the Company had recoverables on paid claims greater than 90 days overdue of $11, of which $4 have been nonadmitted.

December 31, 2021	Gross Loss Reserves*		Reserve Credits on Unpaid Claims		Recoverable on Paid Claims		Total
Allied Lines	$	476	$	476	$	6	$	482
General Liabilities		501		501		5		506
Workers Compensation		2,940		2,940		28		2,968
Total	$	3,917	$	3,917	$	39	$	3,956

*Gross loss reserves as presented in the table above represent loss reserves within the insured’s contractual layer. Loss reserves exceeding the insured’s contractual deductible are the insurance obligation of the Pool and are reflected, net of applicable reinsurance, within the Reserves for losses and loss adjustment expenses line items on the Balance Sheet.

As of December 31, 2021, both on-balance sheet and off-balance sheet collateral pledged to the Company related to deductible and paid recoverables was $129 and $2,662, respectively. Unsecured high deductible amounts related to unpaid claims and for paid recoverables for 2021 were $1,164, or 29% of the total high deductible. Additionally, as of December 31, 2021, the Company had recoverables on paid claims greater than 90 days overdue of $20, of which $4 have been nonadmitted.

The following table shows the deductible amounts for the highest ten unsecured high deductible policies as of December 31, 2022 and 2021:

Counterparty*	Unsecured High Deductible Amounts
December 31,	2022		2021
Counterparty 1	$	149	$	198
Counterparty 2		126		131
Counterparty 3		83		82
Counterparty 4		70		48
Counterparty 5		44		37
Counterparty 6		33		27
Counterparty 7		29		24
Counterparty 8		27		23
Counterparty 9		27		21
Counterparty 10		20		16
*Actual counterparty is not named and may vary year over year. Additionally, a group of entities under common control is regarded as a single counterparty.

  15     NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Deposit Accounting

Direct insurance transactions where management determines there is insufficient insurance risk transfer are recorded as deposits unless the policy was issued (i) in respect of the insured’s requirement for evidence of coverage pursuant to applicable statutes (insurance statutes or otherwise), contractual terms or normal business practices, (ii) in respect of an excess insurer’s requirement for an underlying primary insurance policy in lieu of self-insurance, or (iii) in compliance with filed forms, rates and/or rating plans.

Assumed and ceded reinsurance contracts, which do not transfer a sufficient amount of insurance risk are recorded as deposits with the net consideration paid or received recognized as a deposit asset or liability, respectively. Deposit assets are admitted if (i) the assuming company is licensed, accredited or qualified by the PA DOI, or (ii) the collateral (i.e., funds withheld, letters of credit or trusts) provided by the reinsurer meets all the requirements of the NY SAP, as applicable. The deposit asset or liability is adjusted by calculating the effective yield on the deposit to reflect the actual payments made or received to date and expected future payments with a corresponding credit or charge to Other Income (Expense) in the Statements of Operations.

Deposit assets are recorded to Other assets within the Statements of Admitted Assets, refer to Note 11A. Deposit liabilities are recorded to Other liabilities within the Statements of Liabilities, Capital and Surplus, refer to Note 11B.

Premium Deficiency

The Company periodically reviews its expected ultimate losses with respect to its unearned premium reserves. A premium deficiency loss and related liability are established if the unearned premium reserves and related future investment income are collectively not sufficient to cover the expected ultimate loss projection. For purposes of premium deficiency tests, contracts are grouped in a manner consistent with how policies are marketed, serviced, and measured for the profitability of such contracts. As of December 31, 2022 and 2021, the Company did not incur any premium deficiency losses.

Retroactive Reinsurance

Reinsurance transactions involving the transfer of loss and LAE reserves associated with loss events that occurred prior to the effective date of the transfer are recorded as retroactive reinsurance and reported separately from Reserves for losses and loss adjustment expenses in the Statements of Liabilities, Capital and Surplus. Initial pre-tax gains or losses are recorded in Retroactive reinsurance gain within the Statements of Operations and Changes in Capital and Surplus with surplus gains recorded as Special surplus funds from reinsurance, which is a component of Capital and Surplus that is restricted from dividend payment. Amounts recorded in Special surplus funds from reinsurance are considered to be earned surplus (i.e., transferred to Unassigned surplus) only when, and to the extent that, cash recoveries from the assuming entity exceed the consideration paid by the ceding entity. Special surplus funds from retroactive reinsurance are maintained separately for each respective retroactive reinsurance agreement; Special surplus funds from retroactive reinsurance account write-in entry on the balance sheet is adjusted, upward or downward, to reflect any subsequent increase or reduction in reserves ceded. The reduction in the special surplus funds is limited to the lesser of amounts recovered by the Company in excess of consideration paid or the surplus gain in relation to such agreement.

To the extent that the transfer of loss and LAE reserves associated with loss events that occurred prior to the effective date of the transfer is between affiliated entities and neither entity records a gain or loss in surplus, the transaction qualifies as an exception in the NAIC SAP accounting guidance and is accounted for as prospective reinsurance.

Insurance Related Acquisition Costs

Commissions, premium taxes, and certain underwriting costs are expensed as incurred and are included in Other underwriting expenses. The Company records an unearned ceding commission accrual equal to the excess of the ceding commissions received from reinsurers compared to the anticipated acquisition cost of the business ceded. This amount is amortized as an increase to income over the effective period of the reinsurance agreement in proportion to the amount of insurance coverage provided.

Provisions for Allowances and Unauthorized or Overdue Reinsurance

The recoverability of certain assets, including insurance receivables with counterparties, is reviewed periodically by management. A minimum reserve, as required under the NAIC Annual Statement Instructions for Property and Casualty Companies for Schedule F–Provision for Overdue Reinsurance for uncollectible reinsurance is recorded with an additional reserve required if an entity’s experience indicates that a higher amount should be provided. The minimum reserve is recorded as a liability and the change between years is recorded as a gain or loss directly to Unassigned fund (surplus) in the Statement of Liabilities, Capital and Surplus. Any reserve over the minimum amount is recorded on the statement of operations by reversing the accounts previously utilized to establish the reinsurance recoverable. Various factors are taken into consideration when assessing the recoverability of these asset balances including: the age of the related amounts due and the nature of the unpaid balance; disputed balances, historical recovery rates and any significant decline in the credit standing of the counterparty. PA SAP is applied in the determination of the Company’s Provision for reinsurance with concurrence from the NY DFS.

16   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Reserves for Losses and Loss Adjustment Expenses

Reserves for case IBNR and LAE losses are determined on the basis of actuarial specialists’ evaluations and other estimates, including historical loss experience. The methods of making such estimates and for establishing the resulting reserves are reviewed and updated based on available information, and any resulting adjustments are recorded in the current period. Accordingly, newly established reserves for losses and LAE, or subsequent changes, are charged to income as incurred. In the event of loss recoveries through reinsurance agreements, loss and LAE reserves are reported net of reinsurance amounts recoverable for unpaid losses and LAE. Losses and LAE ceded through reinsurance are netted against losses and LAE incurred. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsurance policy based upon the terms of the underlying contract. See Note 5 for further discussion of policies and methodologies for estimating the liabilities and losses.

Workers’ compensation reserves are discounted in accordance with NY DFS statutes; see Note 5 for further details.

Salvage and subrogation recoverables are estimated using past experience adjusted for current trends, and any other factors that would modify past experience. Estimated salvage and subrogation recoveries (net of associated expenses) are deducted from the liability for unpaid claims or losses.

Structured Settlements

In the ordinary course of business, the Company enters into structured settlements to settle certain claims. Structured settlements involve the purchase of an annuity to fund future claim obligations. In the event the life insurers providing the annuity, on certain structured settlements, are not able to meet their obligations, the Company would be liable for the payments of benefits. As of December 31, 2022, the Company has not incurred a loss and there has been no default by any of the life insurers included in the transactions. Management believes that based on the financial strength of the life insurers involved in these structured settlements (mostly affiliates) the likelihood of a loss is remote.

The estimated loss reserves eliminated by such structured settlement annuities and the unrecorded loss contingencies as of December 31, 2022 and 2021 were $1,104 and $1,128, respectively.

As of December 31, 2022, the Company had annuities with aggregate statement values in excess of one percent of its policyholders’ surplus with life insurer affiliates as follows:

Life Insurance Company	State of Domicile	Licensed in New York		Statement Value
American General Life Insurance Company	Texas	No	$	135
American General Life Insurance Company of Delaware	Delaware	No		216
The United State Life Insurance Company in the City of New York	New York	Yes		710

Fair Value of Financial Instruments

The degree of judgment used in measuring the fair value of financial instruments generally inversely correlates with the level of observable valuation inputs. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Conversely, financial instruments for which no quoted prices are available have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. Pricing observability is affected by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction, liquidity and general market conditions.

Assets and liabilities recorded at fair value are measured and classified in accordance with a fair value hierarchy consisting of three ‘levels’ based upon the observability of inputs available in the marketplace as discussed below:

• Level 1: Fair value measurements that are based upon quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. The quoted price for such instruments is not subject to adjustment.

17   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

• Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

• Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, we must make certain assumptions as to the inputs a hypothetical market participant would use to value that asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The Company’s policy is to recognize transfers in and out at the end of the reporting period, consistent with the date of the determination of fair value (See Note 4 for the balance and activity of financial instruments). The valuation methods and assumptions used in estimating the fair values of financial instruments are as follows:

• The fair values of bonds, mortgage loans, unaffiliated common stocks and preferred stocks are based on fair values that reflect the price at which a security would sell in an arm’s length transaction between a willing buyer and seller. As such, sources of valuation include third party pricing sources, stock exchanges, brokers or custodians or the NAIC Capital Markets and Investment Analysis Office (“NAIC IAO”).

• The fair value of derivatives is determined using quoted prices in active markets and other market evidence whenever possible, including market-based updates, broker or dealer quotations or alternative pricing sources.

• The carrying value of all other financial instruments approximates fair value due to the short term nature.

Cash Equivalents and Short-Term Investments

Cash equivalents are short-term, highly liquid investments, with original maturities of three months or less, that are both; (a) readily convertible to known amounts of cash; and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Highly liquid debt securities with maturities of greater than three months but less than twelve months from the date of purchase are classified as short-term investments. Short-term investments are carried at amortized cost which approximates fair value.

Bonds and Loan Backed and Structured Securities (excluding non-rated residual tranches or interests)

Bonds include any securities representing a creditor relationship, whereby there is a fixed schedule for one or more future payments such as US government agency securities, municipal securities, corporate and convertible bonds, and fixed income instruments. Loan-backed and structured securities (“LBaSS”) include residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), asset-backed securities (“ABS”), pass-through securities, lease-backed securities, equipment trust certificates, loan-backed securities issued by special purpose corporations or trusts, and securities where there is not direct recourse to the issuer.

Bonds and LBaSS with an NAIC IAO designation of “1” or “2” (considered to be investment grade) are carried at amortized cost. Bonds and LBaSS with an NAIC designation of “3”, “4”, “5”, “5GI”, “6” or “6*” (considered to be non-investment grade) are carried at the lower of amortized cost or fair value. LBaSS fair values are primarily determined using independent pricing services and broker quotes. Bonds and LBaSS that have not been filed with the NAIC IAO, and have not received a designation in over a year, are assigned a 5GI or 6* designation depending on if the obligor is current on contracted principal and interest. Bond and LBaSS securities are assigned a 5GI designation when the following conditions are met: a) the documentation required for a full credit analysis did not exist, b) the issuer/obligor has made all contractual interest and principal payments, and c) an expectation of repayment of interest and principal exists. Amortization of premium or discount on bonds and LBaSS is calculated using the effective yield method.

Additionally, mortgage-backed securities (“MBS”) and ABS prepayment assumptions are obtained from an outside vendor or internal estimates. The retrospective adjustment method is used to account for the effect of unscheduled payments affecting high credit quality securities, while securities with less than high credit quality and securities for which the collection of all contractual cash flows is not probable are both accounted for using the prospective adjustment method.

Non-rated residual tranches or interests

Non-rated residual tranches or interests are carried at the lower of cost or fair value. Changes in carrying value are record as Unrealized gains or (losses) in the Statement of Changes in Capital and Surplus.

18   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Mortgage Loans

Mortgage loans on real estate are carried at unpaid principal balances, net of unamortized premiums, discounts and impairments. Pre-payments of principal are recorded as a reduction in the mortgage loan balance. If a mortgage loan provides for a prepayment penalty or acceleration fee in the event the loan is liquidated prior to its scheduled termination date, such fees are reported as investment income when received. Interest income includes interest collected, the change in interest income due and accrued, the change in unearned interest income, and the amortization of premiums, discounts, and deferred fees.

Impaired loans are identified by management as loans in which it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. The Company accrues income on impaired loans to the extent it is deemed collectible and the loan continues to perform under its original or restructured contractual terms. Non-performing loan interest income that is delinquent more than 90 days is generally recognized on a cash basis.

Mortgage loans are considered impaired when collection of all amounts due under contractual terms is not probable. Impairment is measured using either i) the present value of expected future cash flows discounted at the loan’s effective interest rate, ii) the loan’s observable market price, if available, or iii) the fair value of the collateral if the loan is collateral dependent. An allowance is typically established for the difference between the impaired value of the loan and its current carrying amount. Additional allowance amounts are established for incurred but not specifically identified impairments, based on statistical models primarily driven by past due status, debt service coverage, loan-to-value ratio, property occupancy, profile of the borrower and of the major property tenants, and economic trends in the market where the property is located. When all or a portion of a loan is deemed uncollectible, the uncollectible portion of the carrying amount of the loan is charged off against the allowance.

Preferred Stocks

Perpetual preferred stocks with an NAIC rating of “P1” or “P2”, having characteristics of equity securities are carried at fair value. Redeemable preferred stocks with an NAIC rating of “RP1” or “RP2”, which have characteristics of debt securities, are carried at book value. All preferred stocks with an NAIC rating of “3” through “6” are carried at the lower of book or fair value.

Unaffiliated Common Stock Securities

Unaffiliated common stock investments are carried at fair value with changes in fair value recorded as Unrealized gains or (losses) in Unassigned funds (surplus), or as realized losses in the event a decline in value is determined to be other than temporary. For FHLB capital stock, which is only redeemable at par, the fair value shall be presumed to be par, unless considered other-than-temporarily impaired.

Investments in subsidiaries and affiliated companies

Investments in non-publicly traded affiliates are recorded based on the underlying equity of the respective entity’s financial statements as presented on a basis consistent with the nature of the affiliates’ operations (including any nonadmitted amounts). The Company’s share of undistributed earnings and losses of affiliates is recorded as unrealized gains (losses) in Unassigned surplus.

Investments in joint ventures, partnerships and limited liability companies

Other invested assets include joint ventures and partnerships and are accounted for under the equity method, based on the most recent financial statements of the entity. Changes in carrying value are recorded as unrealized gains (losses). Additionally, other invested assets include investments in collateralized loans that are recorded at the lower of amortized cost and the fair value of the underlying collateral. Changes in carrying value resulting from adjustments where the fair value is less than amortized cost are recorded as unrealized gains (losses) in Unassigned surplus, while changes resulting from amortization are recorded as Net investment income.

Derivatives

Derivative financial instruments are accounted for at fair value using quoted prices in active markets and other market evidence whenever possible, including market-based inputs to valuation models, broker or dealer quotations or alternative pricing sources, reduced by the amount of collateral held or posted by the Company with respect to the derivative position. Changes in carrying value are recorded as unrealized gains (losses) in Unassigned surplus.

19   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Net investment income and gain/loss

Investment income is recorded as earned and includes interest, dividends and earnings from subsidiaries, loans and joint ventures. Realized gains or losses on the disposition or impairment of investments are determined on the basis of specific identification.

Investment income due and accrued is assessed for collectability. The Company records a valuation allowance on investment income receivable when it is probable that an amount is uncollectible by recording a charge against investment income in the period such determination is made. Any amounts receivable over 90 days past due, or 180 days past due for mortgage loans, that do not have a valuation allowance are nonadmitted by the Company.

Evaluating Investments for Other-Than-Temporary Impairment

If a bond is determined to have an OTTI in value the cost basis is written down to fair value as its new cost basis, with the corresponding charge to Net realized capital gains (losses) as a realized loss.

For bonds, other than loan-backed and structured securities, an OTTI shall be considered to have occurred if it is probable that the Company will not be able to collect all amounts due under the original contractual terms.

For loan-backed and structured securities, an OTTI shall be considered to have occurred if the fair value of a security is below its amortized cost and management intends to sell or does not have the ability and intent to retain the security until recovery of the amortized cost (i.e., intent based impairment). When assessing the intent to sell a security, management evaluates relevant facts and circumstances including, but not limited to, decisions to rebalance the investment portfolio, sales of securities to meet cash flow needs and sales of securities to take advantage of favorable pricing.

In general, a security is considered for OTTI if it meets any of the following criteria:

• The Company may not realize a full recovery on their investment based on lack of ability or intent to hold a security to recovery;

• Fundamental credit risk of the issuer exists; or

• Other qualitative/quantitative factors exist indicating an OTTI has occurred.

When a credit-related OTTI is present, the amount of OTTI recognized as a realized capital loss is equal to the difference between the investment’s amortized cost basis and the present value of cash flows expected to be collected regardless of management’s ability or intent to hold the security.

Common and preferred stock investments whose fair value is less than their carrying value or is at a significant discount to acquisition value are considered to be potentially impaired. For securities with unrealized losses, an analysis is performed. Factors include:

• If management intends to sell a security that is in an unrealized loss position then an OTTI loss is considered to have occurred;

• If the investments are trading at a significant (25 percent or more) discount to par, amortized cost (if lower) or cost for an extended period of time based on facts and circumstances of the investment; or

• If a discrete credit event occurs resulting in: (i) the issuer defaulting on a material outstanding obligation; (ii) the issuer seeking protection from creditors under bankruptcy law or any similar laws intended for court supervised reorganization of insolvent enterprises; or, (iii) the issuer proposing a voluntary reorganization pursuant to which creditors are asked to exchange their claims for cash or securities having a fair value substantially lower than par value of their claims; or

• If there are other factors precluding a full recovery of the investment.

Limited partnership investments whose fair value is less than its book value with a significant unrealized loss are considered for OTTI. OTTI factors that are periodically considered include:

• If an order of liquidation or other fundamental credit issues with the partnership exists;

• If there is a significant reduction in scheduled cash flow activities between the Company and the partnership or fund during the year;

• If there is an intent to sell, or the Company may be required to sell, the investment prior to the recovery of cost of the investment; or

• If other qualitative/quantitative factors indicating an OTTI exist based on facts and circumstances of the investment.

20   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Foreign Currency Translation

Foreign currency denominated assets and liabilities are translated into U.S. dollars using rates of exchange prevailing at the period end date. Revenues, expenses, gains, losses and surplus adjustments, of non-U.S. operations are translated into U.S. dollars based on weighted average exchange rate for the period. All gains or losses due to translation adjustments are recorded as unrealized gains (losses) within Unassigned surplus in the Statements of Liabilities, Capital and Surplus. All realized gains and losses due to exchange differences between settlement date and transaction date resulting from foreign currency transactions, not in support of foreign insurance operations, are included in Net realized capital gains (losses) in the Statements of Operations and Changes in Capital and Surplus.

Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences and Other Postretirement Benefit Plans

The Company’s employees participate in various AIG-sponsored defined benefit pension and postretirement plans. AIG, as sponsor, is ultimately responsible for the maintenance of these plans in compliance with applicable laws. The Company is not directly liable for obligations under these plans. AIG charges the Company and its insurance company affiliates pursuant to intercompany expense sharing agreements; the expenses are then shared by the pool participants in accordance with the pooling agreement.

The Company incurred employee related costs related to defined benefit and defined contribution plans during 2022, 2021 and 2020 of $6, $4 and $5, respectively.

Income Taxes

The Company files a consolidated U.S. federal income tax return with AIG. AIG has more than 200 subsidiaries which form part of this tax return. A complete listing of the participating subsidiaries is included in Note 8.

The Company is allocated U.S. federal income taxes based upon a tax sharing agreement (the “Tax Sharing Agreement”) with AIG, effective January 1, 2018, and approved by the Company’s Board of Directors. This agreement provides that the Company shall incur tax results that would have been paid or received by such company if it had filed a separate federal income tax return, with limited exceptions.

Additionally, while the agreement described above governs the current and deferred income tax recorded in the income tax provision, the amount of cash that will be paid or received for U.S. federal income taxes may at times be different. The terms of this agreement are based on principles consistent with the allocation of income tax expense or benefit on a separate company basis, except that:

• The sections of the Internal Revenue Code relating to the Base Erosion Anti-abuse Tax (“BEAT”) are applied, but only if the AIG consolidated group is subject to BEAT in the Consolidated Tax Liability; and

• The impact of Deferred Intercompany Transactions (as defined in Treas. Reg. §1.1502-13(b)(1), if the “intercompany items” from such transaction, as defined in Treas. Reg. §1.1502-13(b)(2), have not been taken into account pursuant to the “matching rule” of Treas. Reg. §1.1502-13(c)), are excluded from current taxation, provided however, that the Company records the appropriate deferred tax asset and/or deferred tax liability related to the gain or loss and includes such gain or loss in its separate return tax liability in the subsequent tax year when the deferred tax liability or deferred tax asset becomes current.

The Company has an enforceable right to recoup federal income taxes in the event of future net losses that it may incur or to recoup its net losses carried forward as an offset to future net income subject to federal income taxes.

Under the Tax Sharing Agreement, income tax liabilities related to uncertain tax positions and tax authority audit adjustments (“TAAAs”) shall remain with the Company for which the income tax liabilities relate. Furthermore, if and when such income tax liabilities are realized or determined to no longer be necessary, the responsibility for any additional income tax liabilities, benefits or rights to any refunds due, remains with the Company.

In accordance with Circular Letter 1979-33 issued by the NY DFS, AIG shall establish and maintain an escrow account for amounts where the Company’s separate return liability exceeds the AIG consolidated tax liability. As of December 31, 2022, the Company’s separate return liability did not exceed the AIG consolidated tax liability and therefore no amounts were maintained in escrow.

21   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Deferred Taxes

The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance, if necessary, to reduce the deferred tax asset to an amount that is more likely than not to be realized (“adjusted gross deferred tax asset”). The evaluation of the recoverability of the deferred tax asset and the need for a valuation allowance requires management to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax asset will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, the more positive evidence is necessary and the more difficult it would be to support a conclusion that a valuation allowance is not needed.

The Company’s framework for assessing the recoverability of deferred tax assets requires it to consider all available evidence, including:

• the nature, frequency, and amount of cumulative financial reporting income and losses in recent years;

• the sustainability of recent operating profitability of our subsidiaries;

• the predictability of future operating profitability of the character necessary to realize the net deferred tax asset;

• the carryforward periods for the net operating loss, capital loss and foreign tax credit carryforwards, including the effect of reversing taxable temporary differences; and

• prudent and feasible actions and tax planning strategies that would be implemented, if necessary, to protect against the loss of the deferred tax asset.

The adjusted gross deferred tax asset is then assessed for statutory admissibility. The reversing amount eligible for loss carryback or the amount expected to be realized in three years is admissible, subject to the defined surplus limitation. The remaining adjusted gross deferred tax asset can be admitted to the extent of offsetting deferred tax liabilities.

2. Accounting Adjustments to Statutory Basis Financial Statements

A. Change in Accounting Principles

2022 Changes

In 2022, there were no significant changes or modifications in the Statements of Statutory Accounting Principles (“SSAP”).

2021 Changes

In 2021, there were no significant changes or modifications in the SSAP.

In 2021, the Company changed its method of accounting from insurance to deposit accounting with respect to a specific insurance program. As a result of the change in accounting, any previously established reserves associated with the program were reversed resulting in favorable development and a new deposit liability was established. However, whether accounted for as insurance or deposit, there is no net impact to the Company’s net income, surplus, total assets and total liabilities given the underlying nature and structure of the program. The Company assessed the impact of the change in accounting on prior years and has concluded that the cumulative effect of the change had no net effect on net income or surplus. Refer to Note 5 for additional details around prior year development.

2020 Changes

In 2020, there were no significant changes or modifications in the SSAP.

22   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

B. Adjustments to Surplus

During 2022, 2021 and 2020 the Company identified corrections that resulted in after-tax statutory adjustments to beginning capital and surplus of $(15), $0 and $(9), respectively. In accordance with SSAP No. 3, Accounting Changes and Corrections of Errors (“SSAP 3”), the corrections of errors have been reported in the 2022, 2021 and 2020 statutory financial statements as adjustments to Unassigned surplus. The impact of the 2022 corrections would have increased the 2021 pre-tax income by $1 and decreased the 2020 pre-tax income by $9, respectively. Management has concluded that the effects of these errors on the previously issued financial statements were immaterial based on a quantitative and qualitative analysis. The impact to surplus, assets and liabilities as of January 1, 2022, 2021 and 2020 is presented in the following tables:

2022 Adjustments	Policyholders’ Surplus		Total Admitted Assets		Total Liabilities
Balance At December 31, 2021	$	7,662	$	22,070	$	14,408
Adjustments to beginning Capital and Surplus:
Asset corrections		-		-		-
Liability corrections		(8)		-		8
Income tax corrections		(7)		(6)		1
Total adjustments to beginning Capital and Surplus		(15)		(6)		9
Balance at January 1, 2022 as adjusted	$	7,647	$	22,064	$	14,417

An explanation for each of the adjustments for prior period corrections is described below:

Liability corrections - The increase in total liabilities is primarily due the result of an adjustment in deferred commission earning.

Income tax corrections – The decrease in the tax assets and liabilities is primarily the result of a) corrections to prior period balances for adjustments to the current and deferred tax assets and liabilities and b) the tax effect of the corresponding change in asset realization and liability corrections.

2021 Adjustments	Policyholders’ Surplus		Total Admitted Assets		Total Liabilities
Balance At December 31, 2020	$	6,696	$	22,828	$	16,132
Adjustments to beginning Capital and Surplus:
Asset corrections		-		-		-
Liability corrections		-		-		-
Income tax corrections		-		2		2
Total adjustments to beginning Capital and Surplus		-		2		2
Balance at January 1, 2021 as adjusted	$	6,696	$	22,830	$	16,134

An explanation for each of the adjustments for prior period corrections is described below:

Income tax corrections – The increase in the tax assets and liabilities is primarily the result of corrections to prior period balances for adjustments to the current and deferred tax assets and liabilities.

2020 Adjustments	Policyholders’ Surplus		Total Admitted Assets		Total Liabilities
Balance At December 31, 2019	$	5,995	$	22,965	$	16,970
Adjustments to beginning Capital and Surplus:
Asset corrections		-		-		-
Liability corrections		-		-		-
Income tax corrections		(9)		(9)		-
Total adjustments to beginning Capital and Surplus		(9)		(9)		-
Balance at January 1, 2020 as adjusted	$	5,986	$	22,956	$	16,970

An explanation for each of the adjustments for prior period corrections is described below:

Income tax corrections – The decrease in the tax assets is primarily the result of a) corrections to prior period balances for adjustments to the current and deferred tax assets and liabilities and b) the tax effect of the corresponding change in asset realization and liability corrections.

23   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

3. Investments

A. Bond Investments

The reconciliations from carrying value to fair value of the Company’s bond investments as of December 31, 2022 and 2021 are outlined in the tables below:

December 31, 2022	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. governments	$	644	$	-	$	(51	)	$	593
All other governments		131		-		(7	)		124
States, territories and possessions		285		7		(14	)		278
Political subdivisions of states, territories and possessions		303		-		(19	)		284
Special revenue and special assessment obligations and all non-guaranteed obligations of agencies and authorities and their political subdivisions		2,752		9		(275	)		2,486
Industrial and miscellaneous		10,309		193		(881	)		9,621
Total	$	14,424	$	209	$	(1,247	)	$	13,386
December 31, 2021	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. governments	$	747	$	8	$	(3	)	$	752
All other governments		133		2		(2	)		133
States, territories and possessions		187		36		-			223
Political subdivisions of states, territories and possessions		180		6		-			186
Special revenue and special assessment obligations and all non-guaranteed obligations of agencies and authorities and their political subdivisions		2,456		84		(20	)		2,520
Industrial and miscellaneous		9,813		510		(53	)		10,270
Total	$	13,516	$	646	$	(78	)	$	14,084

The carrying values and fair values of bonds at December 31, 2022, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.

December 31, 2022	Carrying Value		Fair Value
Due in one year or less	$	364	$	365
Due after one year through five years		3,448		3,263
Due after five years through ten years		4,181		3,720
Due after ten years		1,326		1,173
Structured securities		5,246		5,006
Total	$	14,565	$	13,527

24   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

B. Mortgage Loan Investments

The minimum and maximum lending rates for mortgage loans during 2022 were:

Category	Minimum Lending Rate %	Maximum Lending Rate %
Industrial	3.5%	3.5%
Multi-Family	3.6%	7.9%
Other Commercial	2.7%	3.2%

The maximum percentage of any one loan to the value of security at the time of the loan, exclusive of insured or guaranteed or purchase money mortgages was 61 percent. The Company’s mortgage loan portfolio is current as to payments of principal and interest, for both periods presented. There were no significant amounts of nonperforming mortgages (defined as those loans where payment of contractual principal or interest is more than 90 days past due) during any of the periods presented. The Company did not have any advanced amounts for taxes or assessments.

The following table details an analysis of mortgage loans as of December 31, 2022 and 2021:

			Residential				Commercial
	Farm		Insured		All Other		Insured		All Other		Mezzanine		Total
2022
Recorded Investment
Current	$	-	$	-	$	-	$	-	$	1,244	$	-	$	1,244
30 - 59 days past due		-		-		-		-		-		-		-
60 - 89 days past due		-		-		-		-		-		-		-
90 - 179 days past due		-		-		-		-		-		-		-
Greater than 180 days past due		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	-	$	1,244	$	-	$	1,244
2021
Recorded Investment
Current	$	-	$	-	$	283	$	-	$	1,632	$	-	$	1,915
30 - 59 days past due		-		-		2		-		18		-		20
60 - 89 days past due		-		-		-		-		-		-		-
90 - 179 days past due		-		-		-		-		-		-		-
Greater than 180 days past due		-		-		1		-		-		-		1
Total	$	-	$	-	$	286	$	-	$	1,650	$	-	$	1,936

C. Loan-Backed and Structured Securities

The Company did not record any non-credit OTTI losses during 2022, 2021 and 2020 for LBaSS.

As of December 31, 2022, 2021 and 2020, the Company held LBaSS for which it recognized $39, $0 and $31, respectively, of credit-related OTTI based on the present value of projected cash flows being less than the amortized cost of the securities.

The following table shows the aggregate unrealized losses and related fair value relating to those securities for which an OTTI has not been recognized as of the reporting date and the length of time that the securities have been in a continuous unrealized loss position:

Years Ended December 31,	2022		2021
Aggregate unrealized losses:
Less than 12 Months	$	412	$	30
12 Months or longer		15	$	13
Aggregate related fair value of securities with unrealized losses:
Less than 12 Months	$	3,834	$	2,000
12 Months or longer		95	$	257

25   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

D. Unrealized losses

The fair value of the Company’s bonds and stocks that had gross unrealized losses (where fair value is less than amortized cost) as of December 31, 2022 and 2021 are set forth in the tables below:

December 31, 2022	Less than 12 Months					12 Months or Longer					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. governments	$	590	$	(31	)	$	-	$	-		$	590	$	(31	)
All other governments		77		(10	)		38		(16	)		115		(26	)
States, territories and possessions		150		(14	)		-		-			150		(14	)
Political subdivisions of states, territories and possessions		249		(20	)		-		-			249		(20	)
Special revenue and special assessment obligations and all non-guaranteed obligations of agencies and authorities and their political subdivisions		2,070		(268	)		45		(7	)		2,115		(275	)
Industrial and miscellaneous		7,689		(869	)		441		(87	)		8,130		(956	)
Total bonds	$	10,825	$	(1,212	)	$	524	$	(110	)	$	11,349	$	(1,322	)
Non-affiliated		34		(9	)		-		-			34		(9	)
Total common stocks	$	34	$	(9	)	$	-	$	-		$	34	$	(9	)
Total bonds and stocks	$	10,859	$	(1,221	)	$	524	$	(110	)	$	11,383	$	(1,331	)
December 31, 2021	Less than 12 Months					12 Months or Longer					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. governments	$	501	$	(3	)	$	-	$	-		$	501	$	(3	)
All other governments		65		(2	)		12		(12	)		77		(14	)
States, territories and possessions		2		-			3		-			5		-
Political subdivisions of states, territories and possessions		32		-			-		-			32		-
Special revenue and special assessment obligations and all non-guaranteed obligations of agencies and authorities and their political subdivisions		1,157		(14	)		118		(6	)		1,275		(20	)
Industrial and miscellaneous		2,984		(46	)		423		(34	)		3,407		(80	)
Total bonds	$	4,741	$	(65	)	$	556	$	(52	)	$	5,297	$	(117	)
Non-affiliated		38		(8	)		-		-			38		(8	)
Total common stocks	$	38	$	(8	)	$	-	$	-		$	38	$	(8	)
Total bonds and stocks	$	4,779	$	(73	)	$	556	$	(52	)	$	5,335	$	(125	)

E Realized Gains Losses

Proceeds from sales and associated gross realized gains (losses) for the years ended December 31, 2022, 2021 and 2020 were as follows:

Years ended December 31,	2022				2021				2020
	Bonds		Equity Securities		Bonds		Equity Securities		Bonds			Equity Securities
Proceeds from sales	$	1,458	$	19	$	2,669	$	2	$	1,222		$	34
Gross realized gains		55		3		151		1		89			-
Gross realized losses		145		1		30		-		(30	)		-

26   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

F. Derivative Financial Instruments

The Company holds currency as well as interest rate derivative financial instruments in the form of currency swaps, interest rate swaps, and currency forwards to manage risk from currency exchange rate fluctuations, and the impact of such fluctuations to surplus and cash flows on investments or loss reserves. While not accounted for under hedge accounting, the currency derivatives are economic hedges of the Company’s exposure to fluctuations in the value of receipts on certain investments held by the Company denominated in foreign currencies (primarily GBP and EUR), or of the Company’s exposure to fluctuations in recorded amounts of loss reserves denominated in foreign currencies (primarily JPY). Additionally, interest rate derivatives were entered into to manage risk from fluctuating interest rates in the market, and the impact of such fluctuations to surplus and cash flows on investments or loss reserves. The interest rate derivatives are cash flow hedges of the company’s exposure to fluctuations in LIBOR/EURIBOR rates on investments in collateralized loan obligations.

Market Risk

The Company is exposed under these types of contracts to fluctuations in value of the swaps and forwards and variability of cash flows due to changes in interest rates and exchange rates.

Credit Risk

The current credit exposure of the Company’s derivative contracts is limited to the fair value of such contracts. Credit risk is managed by entering into transactions with creditworthy counterparties and obtaining collateral.

Cash Requirements

The Company is subject to collateral requirements on its currency and interest rate derivative contracts. Additionally, the Company is required to make currency exchanges on fixed dates and fixed amounts or fixed exchange rates, or make a payment in the amount of foreign currency physically received on certain foreign denominated investments. For interest rate swaps, the Company is required to make payments based on a floating rate (LIBOR/EURIBOR) on a fixed payment date.

The Company has determined that the currency and interest rate derivatives do not qualify for hedge accounting under the criteria set forth in SSAP No. 86, Accounting for Derivative Instruments and Hedging Transactions (“SSAP 86”). As a result, the Company’s currency and interest rate contracts are accounted for at fair value and the changes in fair value are recorded as unrealized gains (losses) within the Statements of Operations and Changes in Capital and Surplus until the contract expires, paid down or is redeemed early. In the event a contract is fully redeemed before its expiration, the related unrealized amounts will be recognized in Net realized capital gains (losses). Furthermore, if the contract has periodic payments or fully matures, any related unrealized amounts are recognized in Net investment income earned.

The Company did not apply hedge accounting to any of its derivatives for any period in these financial statements. The following tables summarize the outstanding notional amounts, the fair values and the realized and unrealized gains or losses of the derivative financial instruments held by the Company for the years ended December 31, 2022 and 2021:

	December 31, 2022					Years ended December 31, 2022
Derivative Financial Instrument	Outstanding Notional Amount		Fair Value			Realized capital gains/ (losses)			Unrealized capital gains / (losses)
Swaps	$	1,108	$	3		$	15		$	(8	)
Forwards		680		29			-			39
Total	$	1,788	$	32		$	15		$	31
	December 31, 2021					Years ended December 31, 2021
Derivative Financial Instrument	Outstanding Notional Amount		Fair Value			Realized Capital gains/(losses)			Unrealized capital gains / losses
Swaps	$	2,094	$	12		$	(7	)	$	50
Forwards		786		(10	)		-			(27	)
Total	$	2,880	$	2		$	(7	)	$	23

G. Other Invested Assets

During 2022, 2021 and 2020, the Company recorded OTTI losses on investments in joint ventures and partnerships of $15, $18, and $56, respectively.

27   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

H. Investment Income

Investment income due and accrued over 90 days past due of $1 was non-admitted. The Company did not have any accrued investment income receivables over 90 days past due as of December 31, 2021. Investment expenses of $34, $30 and $29 were included in Net investment income earned for the years ended December 31, 2022, 2021 and 2020, respectively.

I. Restricted Assets

The Company had securities deposited with regulatory authorities, as required by law, with a carrying value of $1,788 and $1,848 as of December 31, 2022 and 2021, respectively.

4. Fair Value of Financial Instruments

The following tables present information about financial instruments carried at fair value on a recurring basis and indicate the level of the fair value measurement as of December 31, 2022 and 2021:

December 31, 2022	Level 1		Level 2			Level 3		Total
Bonds	$	-	$	549		$	137	$	686
Common stocks		20		-			4		24
Preferred stock		-		-			29		29
Mutual funds		-		-			31		31
Derivative assets		-		58			-		58
Derivative liabilities		-		(27	)		-		(27	)
Total	$	20	$	580		$	201	$	801
December 31, 2021	Level 1		Level 2			Level 3		Total
Bonds	$	-	$	270		$	73	$	343
Common stocks		7		-			-		7
Mutual funds		-		-			34		34
Derivative assets		-		37			-		37
Derivative liabilities		-		(35	)		-		(35	)
Total	$	7	$	272		$	107	$	386

A. Fair Value Measurements in Level 3 of the Fair Value Hierarchy

The following tables show the balance and activity of financial instruments classified as level 3 in the fair value hierarchy for the years ended December 31, 2022 and 2021:

	Beginning Balance at January 1, 2022		Transfers into Level 3		Transfers out of Level 3			Total Gains (Losses) included in Net Income		Total Gains (Losses) Included in Surplus			Purchases, Sales, Issuances, Settlements, Net			Balance at December 31, 2022
Bonds	$	73	$	127	$	(55	)	$	1	$	(6	)	$	(3	)	$	137
Preferred stocks		-		-		-			-		2			27			29
Common stocks		-		-		-			-		-			4			4
Mutual funds		34		-		-			3		(8	)		2			31
Total	$	107	$	127	$	(55	)	$	4	$	(12	)	$	30		$	201

28   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

	Beginning Balance at January 1, 2021		Transfers into Level 3		Transfers out of Level 3			Total Gains (Losses) included in Net Income			Total Gains (Losses) included in Surplus		Purchases, Sales, Issuances, Settlements, Net		Balance at December 31, 2021
Bonds	$	46	$	18	$	(30	)	$	(3	)	$	5	$	37	$	73
Common stocks		-		-		-			-			-		-		-
Mutual funds		2		1		(1	)		-			4		36		34
Total	$	48	$	19	$	(31	)	$	(3	)	$	9	$	73	$	107

Assets are transferred out of Level 3 when circumstances change such that significant inputs can be corroborated with market observable data or when the asset is no longer carried at fair value. This may be due to a significant increase in market activity for the asset, a specific event, one or more significant inputs becoming observable or when a long-term interest rate significant to a valuation becomes short-term and this observable. Transfers out of Level 3 can also occur due to favorable credit migration resulting in a higher NAIC designation. Securities are generally transferred into Level 3 due to a decrease in market transparency, downward credit migration and an overall increase in price disparity for certain individual security types. The Company’s policy is to recognize transfers in and out at the end of the reporting period, consistent with the date of the determination of fair value.

The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments, and includes only those instruments for which information about the inputs is reasonably available to us, such as data from independent third-party valuation service providers and from internal valuation models. Because input information from third-parties with respect to certain Level 3 instruments may not be reasonably available to the Company, balances shown below may not equal total amounts reported for such Level 3 assets.

	Fair Value at December 31, 2022		Valuation Technique	Unobservable Input	Range (Weighted Average)
Assets: Bonds	$	1,122	Discounted cash flow	Yield	6.91% - 9.91% (8.49%)

B. Fair Value of all Financial Instruments

The table below details the fair value of all financial instruments except for those accounted for under the equity method as of December 31, 2022 and 2021:

December 31, 2022	Aggregate Fair Value			Admitted Assets			Level 1		Level 2			Level 3		Not Practicable (Carry Value)
Bonds	$	13,386		$	14,424		$	9	$	11,639		$	1,738	$	-
Cash equivalents and short term investments		213			213			72		70			71		-
Common stocks		32			32			20		8			4		-
Derivative assets		58			58			-		58			-		-
Derivative liabilities		(27	)		(27	)		-		(27	)		-		-
Mortgage loans		1,198			1,244			-		-			1,198		-
Mutual funds		31			31			-		-			31		-
Preferred stocks		29			29			-		-			29		-
Total	$	14,920		$	16,004		$	101	$	11,748		$	3,071	$	-

29   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

December 31, 2021	Aggregate Fair Value			Admitted Assets			Level 1		Level 2			Level 3		Not Practicable (Carry Value)
Bonds	$	14,084		$	13,516		$	-	$	11,444		$	2,640	$	-
Cash equivalents and short term investments		222			222			44		59			119		-
Common stocks		16			16			7		9			-		-
Derivative assets		37			37			-		37			-		-
Derivative liabilities		(35	)		(35	)		-		(35	)		-		-
Mortgage loans		1,997			1,936			-		-			1,997		-
Mutual funds		34			34			-		-			34		-
Total	$	16,355		$	15,726		$	51	$	11,514		$	4,790	$	-

5. Reserves for Losses and Loss Adjustment Expenses

A roll forward of the Company’s net reserves for losses and LAE as of December 31, 2022, 2021 and 2020, is set forth in the table below:

December 31,	2022			2021			2020
Reserves for losses and LAE, end of prior year	$	8,216		$	8,979		$	9,732
Cumulative effect of accounting change*		-			(51	)		-
Incurred losses and LAE related to:
Current accident year		2,764			2,856			3,599
Prior accident year		23			(64	)		22
Total incurred losses and LAE	$	2,787		$	2,792		$	3,621
Paid losses and LAE related to:
Current accident year		(838	)		(759	)		(1,307	)
Prior accident year		(1,993	)		(2,745	)		(3,067	)
Total paid losses and LAE		(2,831	)		(3,504	)		(4,374	)
Reserves for losses and LAE, end of current year	$	8,172		$	8,216		$	8,979

*Accounting reclassification from insurance to deposit accounting with respect to a specific commercial insurance program (Refer to Note 2A).

During 2022, after applying the impact of the ADC, the Company reported net unfavorable incurred loss and LAE of approximately $23. This unfavorable incurred includes $50 unfavorable due to changes in discount as a result of interest rate fluctuation. This results in a favorable prior year development (“PYD”) of $27.

The favorable PYD was driven by favorable development in Personal Insurance, partially offset by adverse development in Commercial Insurance.

During 2021, after applying the impact of the ADC, the Company reported net favorable incurred loss and LAE of approximately $64. This favorable incurred includes $22 favorable due to changes in discount as a result of interest rate fluctuation. This results in a net favorable PYD of $42.

The favorable PYD is generally a result of the following:

• Strong favorable development in Personal Insurance, primarily attributable to subrogation recovery related to the 2017 and 2018 California wildfires;

• Favorable development on U.S. Workers Compensation and short-tailed commercial lines within Other Product Lines, reflecting lower frequency and severity in recent calendar years;

The above favorable development is partially offset by unfavorable development as a result of the following:

• U.S. Property and Special Risk Commercial lines were adversely impacted by the impact of dropping below the attachment point of the 2018 catastrophe aggregate treaty;

• Reserve strengthening within U.S. Financial Lines, reflecting higher severity of claims in Directors & Officers and cyber risk;

• Unfavorable development primarily attributed to the Blackboard insurance portfolio due to increased severity on reported claims.

30   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

During 2020, after applying the impact of the ADC, the Company reported net unfavorable incurred loss and LAE of approximately $22. This was due to the changes in discount of $8 as a result of interest rate fluctuations. This results in a net unfavorable PYD of $30.

The unfavorable PYD is generally a result of the following:

• Unfavorable development in U.S. Financial Lines, notably D&O, Employment Practices Liability (“EPLI”), Mergers and Acquisitions, Cyber and Non-Medical Professional Errors & Omissions business where the Company reacted to increasing frequency and severity in recent accident years;

• Unfavorable development in Personal Lines where the Company reacted to adverse development in Homeowners and Umbrella.

The Company’s reserves for losses and LAE have been reduced for anticipated salvage and subrogation of $204, $214 and $234 for the years ended December 31, 2022, 2021 and 2020, respectively. The Company paid $8, $15 and $5 in the reporting period to settle 98, 112 and 137 claims related to extra contractual obligations or bad faith claims stemming from lawsuits for the years ended December 31, 2022, 2021 and 2020, respectively.

A. Asbestos/Environmental Reserves

The Company has indemnity claims asserting injuries from toxic waste, hazardous substances, asbestos and other environmental pollutants and alleged damages to cover the clean-up costs of hazardous waste dump sites (environmental claims). Estimation of environmental claims loss reserves is a difficult process, as these claims, which emanate from policies written in 1986 and prior years, cannot be estimated by conventional reserving techniques. Environmental claims development is affected by factors such as inconsistent court resolutions, the broadening of the intent of policies and scope of coverage and increasing number of new claims. The Company and other industry members have and will continue to litigate the broadening judicial interpretation of policy coverage and the liability issues. If the courts continue in the future to expand the intent of the policies and the scope of the coverage, as they have in the past, additional liabilities would emerge for amounts in excess of reserves held. This emergence cannot now be reasonably estimated, but could have a material impact on the Company’s future operating results or financial position.

The Company has exposure to asbestos and/or environmental losses and LAE costs arising from pre-1986 general liability, product liability, commercial multi-peril and excess liability insurance or reinsurance policies as noted below:

	Asbestos Losses									Environmental Losses
December 31,	2022			2021			2020			2022			2021			2020
Direct
Loss and LAE reserves, beginning of year	$	550		$	618		$	734		$	240		$	286		$	307
Incurred losses and LAE		33			46			(61	)		(3	)		-			(1	)
Calendar year paid losses and LAE		(46	)		(114	)		(55	)		(18	)		(46	)		(20	)
Loss and LAE Reserves, end of year	$	537		$	550		$	618		$	219		$	240		$	286
Assumed reinsurance
Loss and LAE reserves, beginning of year	$	257		$	292		$	305		$	16		$	18		$	18
Incurred losses and LAE		(4	)		6			1			-			-			1
Calendar year paid losses and LAE		(9	)		(41	)		(14	)		-			(2	)		(1	)
Loss and LAE Reserves, end of year	$	244		$	257		$	292		$	16		$	16		$	18
Net of reinsurance
Loss and LAE reserves, beginning of year	$	1		$	1		$	1		$	-		$	-		$	-
Incurred losses and LAE		-			-			-			-			-			-
Calendar year paid losses and LAE		-			-			-			-			-			-
Loss and LAE Reserves, end of year	$	1		$	1		$	1		$	-		$	-		$	-

The Company estimates the full impact of the asbestos and environmental exposure by establishing case basis reserves on all known losses and establishes bulk reserves for IBNR losses and LAE based on management’s judgment after reviewing all the available loss, exposure, and other information.

31   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Included in the above table are loss and LAE - IBNR and bulk reserves arising from pre-1986 general liability, product liability, commercial multi-peril and excess liability insurance or reinsurance policies as noted below:

Asbestos	Loss Reserves				LAE Reserves
December 31,	2022		2021		2022		2021
Direct basis:	$	232	$	241	$	19	$	20
Assumed reinsurance basis:		84		81		7		11
Net of ceded reinsurance basis:		-		-		-		-
Environmental	Loss Reserves				LAE Reserves
December 31,	2022		2021		2022		2021
Direct basis:	$	83	$	70	$	50	$	63
Assumed reinsurance basis:		5		3		3		3
Net of ceded reinsurance basis:		-		-		-		-

B. Discounting of Liabilities for Unpaid Losses or Unpaid Loss Adjustment Expenses

The Company discounts its workers’ compensation (both tabular and non-tabular) reserves.

The calculation of the Company’s tabular discount is based upon the mortality table used in the 2007 US Decennial Life Table, and applying a weighted average discount rate of 3.76% percent as of December 31, 2022 and 2021. The tabular reserve is capped at 45% of total outstanding reserve discount. Only case basis reserves are subject to tabular discounting. The December 31, 2022 and 2021 liabilities include $616 and $577 of such discounted reserves, respectively.

Tabular Reserve Discount

The table below presents the amount of tabular discount applied to the Company’s reserves as of December 31, 2022, 2021 and 2020.

Lines of Business	2022		2021		2020
Workers’ Compensation
Case Reserves	$	104	$	119	$	161

As of December 31, 2022, 2021 and 2020, the tabular case reserve discount is presented net of the ceded discount related to the ADC of $101, $116, and $301, respectively.

Non-Tabular Discount

The Company’s non-tabular workers’ compensation case reserves are discounted using the Company’s own payout pattern and a 5 percent interest rate, as prescribed by NY SAP. The table below presents the amount of non-tabular discount applied to the Company’s reserves as of December 31, 2022, 2021 and 2020.

Lines of Business	2022		2021		2020
Workers’ Compensation
Case Reserves	$	138	$	165	$	116

As of December 31, 2022, 2021 and 2020, the non-tabular case reserve discount is presented net of the ceded discount related to the ADC of $123, $142, and $19,respectively.

32   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

6. Related Party Transactions

A. Combined Pooling Agreement

As described in Note 1, effective January 1, 2021, the Combined Pooling Agreement was amended and restated among the twelve member companies.

The following table shows the changes in assets, liabilities and surplus as a result of the 2021 Repooling Transaction:

	Amount
Assets:
Agents’ balances or uncollected premiums	$	(151	)
Amounts recoverable from reinsurers		(52	)
Funds held by or deposited with reinsured companies		(22	)
Other insurance assets		(16	)
Total Assets	$	(241	)
Liabilities
Unearned premium reserves (net)		(233	)
Reinsurance payable on paid losses and loss adjustment expenses		(70	)
Reserves for losses and loss adjustment expenses (net)		(789	)
Funds held by company under reinsurance treaties		(156	)
Ceded reinsurance premiums payable		(40	)
Payable to parent, subsidiaries and affiliates		(15	)
Other insurance liabilities		(68	)
Total Liabilities	$	(1,371	)
Statements of Operations and Changes in Surplus
Net premiums written	$	(233	)
Change in unearned premium reserves		233
Premiums earned		-
Other underwriting expenses incurred		(54	)
Net income		(54	)
Total change in Surplus		(54	)
Net Impact Corresponding to Consideration Receivable / (Payable)	$	(1,076	)

Other underwriting expenses incurred represent the net expense allowance impact to the Company pursuant to the Combined Pooling Agreement.

Under the terms of the Combined Pooling Agreement, certain insurance assets and liabilities were transferred gross of admissibility, recoverability allowances, provisions and discount amounts. As a result of the transaction, the Company recorded an increase/(decrease) in its Assets, Liabilities and Surplus related to the following:

Line Description		Change in Surplus			Impact to Net Income
Change in nonadmitted assets	$	5		$	-
Workers’ compensation discount		(24	)		(24	)
Other allocations		5			4
Total	$	(14	)	$	(20	)

The Company became a thirty two percent participant in the Combined Pool pursuant to the aforementioned amendment to the Combined Pooling Agreement. As a result, the special surplus of $69 on the gain from retroactive reinsurance ceded related to the decreased pool participation percentage reduced aggregate write-ins for special surplus funds with a corresponding increase in Unassigned surplus.

33   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

B. Significant Transactions

The following table summarizes transactions (excluding reinsurance and cost allocation transactions) that occurred during 2022, 2021 and 2020 between the Company and affiliated companies in which the value exceeded one-half of one percent of the Company’s admitted assets as of December 31, 2022, 2021 and 2020:

			2022
			Assets Received by the Company				Assets Transferred by the Company
Date of Transaction	Explanation of Transaction	Name of Affiliate	Statement Value		Description		Statement Value		Description
9/9/2022	Sale of Securities	US Life NY	$	165		Cash	$	165	Securities
			2021
			Assets Received by the Company				Assets Transferred by the Company
Date of Transaction	Explanation of Transaction	Name of Affiliate	Statement Value		Description		Statement Value		Description
11/22/2021	Purchase of Securities	AG Life	$	129		Securities	$	129	Cash
11/22/2021	Sale of Securities	AG Life		510		Cash		510	Securities
			2020
			Assets Received by the Company				Assets Transferred by the Company
Date of Transaction	Explanation of Transaction	Name of Affiliate	Statement Value		Description		Statement Value		Description
3/25/2020	Purchase of securities	National Union	$	183		Securities	$	183	Cash
6/9/2020	Capital Contribution	AIG PC US		245		Cash
12/29/2020	Purchase of securities	National Union		115		Securities		115	Cash
Various	Capital Contribution	AHAC DECO Sub LLC						302	Securities

Glatfelter Insurance Group Reinsurance Company (“GIG Re”) Novation

On January 1, 2020, GIG Re novated its Munich Re 2019 & prior in-force reinsurance business to National Union accounted for as retroactive reinsurance and reported separately from Reserves for losses and loss adjustment expenses in the Statements of Liabilities, Capital and Surplus. The novation consideration was equal to the total statutory reserves and resulted in no gain or loss on the transaction. Further, GIG RE commuted its National Union business back to National Union. As a result, total reserves transferred to the Combined Pool were $261 of Loss and LAE and $129 of unearned premium of which the Company’s proportionate share was $91 of Loss and LAE and $45 of unearned premium.

The novation was accounted for as retroactive reinsurance in accordance with SSAP 62R.

Lexington Insurance Company (“Lexington”) and American International Reinsurance Company, Ltd. (“AIRCO”) Commutation

During 2020, Lexington and AIRCO entered into a commutation agreement which partially commutes the Casualty Quota Share Reinsurance Contract (“QS Agreement”) which was in effect since January 1, 2010. As a result of the commutation, the companies settled the obligations and liabilities known and unknown of Lexington under the 2016-2019 accident years of the QS Agreement. Any obligations or liabilities of the companies under the 2010-2015 and 2020 Accident Years will continue to be settled under modified QS Agreement.

As a result of the commutation, Lexington transferred reserves back to AIRCO of $397 for Loss and LAE, of which the Company’s proportionate share after pooling was $139 for Loss and LAE.

The partial commutation of the original arrangement was accounted for in accordance with SSAP 62R as prospective reinsurance with the consideration paid reflected as paid losses within Loss and LAE line of the Income Statement.

AIG Europe SA (“AESA”) Commutation

Effective November 30, 2020, the 55% All Lines Assumed Quota Share Arrangement (“ALQS”) originally entered into in 2019 between the Combined Pool members and AESA was partially commuted, maintaining the accident year stop-loss arrangement in effect. As a result of the commutation, the Combined Pool members transferred reserves back to AESA of $1,010 for Loss and LAE, and $543 of unearned premium, of which the Company’s proportionate share was $354 for loss and LAE, and $190 of unearned premium.

34   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The partial commutation of the original arrangement was accounted for in accordance with SSAP 62R as prospective reinsurance with the consideration paid reflected as paid losses within Loss and LAE line of the Income Statement.

AIRCO Retrocession

Effective December 31, 2020, the Company, with other members of the Pool, entered into a prospective reinsurance arrangement with AIRCO, whereby members of the Pool retroceded 100 percent of their future reinsurance obligations associated with certain underlying mortgage insurance policies stemming from a previously executed assumed quota-share arrangement. The arrangement is accounted for prospectively, on a funds withheld basis, in accordance with SSAP 62R. As part of the arrangement, a contra mortgage guaranty contingency reserve, in the amount of $525 was recorded by the Pool, of which the Company’s proportionate share was $184 as of December 31, 2020.

C. Amounts Due to or from Related Parties

At December 31, 2022 and 2021, the Company reported the following receivables/payables balances from/to its Ultimate Parent, subsidiaries and affiliates (excluding reinsurance transactions). Intercompany agreements have defined settlement terms and related receivables are reported as nonadmitted if balances due remain outstanding more than ninety days past the due date as specified in the agreement.

As of December 31,	2022		2021
Balances with National Union	$	13	$	-
Balances with other member pool companies		26		33
Balances with other affiliates		14		13
Receivable from parent, subsidiaries and affiliates	$	53	$	46
Balances with National Union	$	-	$	108
Balances with other member pool companies		3		-
Balances with other affiliates		9		20
Payable to parent, subsidiaries and affiliates	$	12	$	128

Current federal and foreign taxes payable under the Tax Sharing Agreement at December 31, 2022 and 2021 were $(26) and $(18), respectively.

The Company did not change its methods of establishing terms regarding any transactions with its affiliates during the years ended December 31, 2022 or 2021.

D. Guarantees or Contingencies for Related Parties

The Company has issued guarantees whereby it unconditionally and irrevocably guarantees all present and future obligations and liabilities arising from the policies of insurance issued by certain insurers who, as of the guarantee issue date, were members of the AIG holding company group. The guarantees were provided in order to secure or maintain the guaranteed companies’ rating status issued by certain rating agencies, as disclosed in Note 10.

E. Management, Service Contract and Cost Sharing Arrangements

As an affiliated company of AIG, the Company utilizes centralized services from AIG and its affiliates. The Company is allocated a charge for these services, based on the amount of incremental expense associated with operating the Company as a separate legal entity. The amount of expense allocated to the Company each period was determined based on an analysis of services provided to the Company.

The following table summarizes fees incurred related to affiliates that exceeded one-half of one percent of the Company’s admitted assets during 2022, 2021 and 2020:

Affiliates	2022		2021		2020
AIG Claims Inc.	$	126	$	129	$	152
AIG PC Global Services, Inc.*		411		102		108
Total	$	537	$	231	$	260
*AIG PC Global Services, Inc. is below one-half of one percent in 2021 and 2020.

35   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

F. Borrowed Money

The Company (among other affiliates) is a borrower under a Loan Agreement, with AIG, as lender, pursuant to which the Company may borrow funds from AIG from time to time (the “Loan Facility”). The aggregate amount of all loans that may be outstanding under the Loan Facility at a given time is $500. As of December 31, 2022 and 2021, the Company had no outstanding liability pursuant to this Loan Facility.

Significant debt terms and covenants include the following:

• The Company must preserve and maintain its legal existence while maintaining all rights, privileges and franchises necessary to the normal conduct of its business;

• The Company must take, or cause to be taken, all other actions reasonably necessary or desirable to preserve and defend the rights of the Lender to payment hereunder, and to assure to the Lender the benefits hereof; and

• The Company must not merge with or into or consolidate with any other person, sell, transfer or dispose of all or substantially all of its assets or undergo any change in the control of its voting stock unless (a) such merger or consolidation is with or into a wholly-owned subsidiary of Lender, (b) such sale or transfer is to a wholly-owned subsidiary of the Lender or (c) The Company receives the prior written authorization from the Lender.

There have been no violations of the terms and covenants associated with the debt issuance.

Refer to Note 11 E regarding funds borrowed from FHLB.

7. Reinsurance

In the ordinary course of business, the Company may use both treaty and facultative reinsurance to minimize its net loss exposure to a) any single catastrophic loss event; b) an accumulation of losses from a number of smaller events; or c) provide greater risk diversification. Based on the terms of the reinsurance contracts, a portion of expected IBNR losses will be recoverable in accordance with terms of the reinsurance protection purchased. This determination is necessarily based on the estimate of IBNR and accordingly, is subject to the same uncertainties as the estimate of IBNR. Ceded amounts related to paid and unpaid losses and loss expenses with respect to these reinsurance agreements are generally substantially collateralized. The Company remains liable to the extent that the reinsurers do not meet their obligation under the reinsurance contracts after any collateral is exhausted, and as such, the financial condition of the reinsurers is regularly evaluated and monitored for concentration of credit risk. In addition, the Company assumes reinsurance from other insurance companies.

The following table presents direct, assumed reinsurance and ceded reinsurance written and earned premiums for the years ended December 31, 2022, 2021 and 2020:

Years Ended December 31,	2022				2021				2020
	Written		Earned		Written		Earned		Written		Earned
Direct premiums	$	411	$	400	$	410	$	401	$	396	$	438
Reinsurance premiums assumed:
Affiliates		7,400		7,236		6,874		6,951		7,816		8,148
Non-affiliates		198		199		166		178		187		221
Gross premiums	$	8,009	$	7,835	$	7,450	$	7,530	$	8,399	$	8,807
Reinsurance premiums ceded:
Affiliates		1,261		1,251		1,277		1,275		1,562		1,702
Non-affiliates		2,425		2,291		2,166		2,145		2,440		2,272
Net premiums	$	4,323	$	4,293	$	4,007	$	4,110	$	4,397	$	4,833

36   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

As of December 31, 2022 and 2021, and for the years then ended, the Company’s unearned premium reserves, paid losses and LAE, and reserves for losses and LAE (including IBNR), have been reduced for reinsurance ceded as follows:

	Unearned Premium Reserves		Paid Losses and LAE		Reserves for Losses and LAE
December 31, 2022
Affiliates	$	616	$	80	$	6,565
Non-affiliates		972		536		7,332
Total	$	1,588	$	616	$	13,897
December 31, 2021
Affiliates	$	637	$	64	$	6,341
Non-affiliates		838		535		8,011
Total	$	1,475	$	599	$	14,352

A. Reinsurance Return Commission    

The maximum amount of return commission which would have been due to reinsurers if all of the Company’s reinsurance had been cancelled as of December 31, 2022 and 2021 with the return of the unearned premium reserve is as follows:

	Assumed Reinsurance				Ceded Reinsurance				Net
	Premium Reserve		Commission Equity		Premium Reserve		Commission Equity		Premium Reserve			Commission Equity
December 31, 2022
Affiliates	$	3,822	$	814	$	616	$	114	$	3,206		$	700
All Other		75		16		972		180		(897	)		(164	)
Total	$	3,897	$	830	$	1,588	$	294	$	2,309		$	536
December 31, 2021
Affiliates	$	3,747	$	855	$	637	$	140	$	3,110		$	715
All Other		76		17		838		184		(762)			(167)
Total	$	3,823	$	872	$	1,475	$	324	$	2,348		$	548

37   NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

B. Unsecured Reinsurance Recoverable

The aggregate unsecured reinsurance balances (comprising recoverables for paid and unpaid losses and LAE and unearned premium reserves) in excess of three percent of policyholders’ surplus at December 31, 2022 and 2021 with respect to an individual reinsurer, and each of such reinsurer’s related group members having an unsecured aggregate reinsurance balance with the Company, are as follows:

Reinsurer		2022		2021
Affiliates:
Combined Pool*	$	6,297	$	6,089
Eaglestone		513		512
Other affiliates		310		291
Total affiliates	$	7,120	$	6,892
Berkshire Hathaway Group		167		64
Swiss Reinsurance Group		426		411
Munich Reinsurance Group		271		243
Total Non-affiliates		864		718
Total affiliates and non-affiliates	$	7,984	$	7,610

* Includes intercompany pooling impact of $437 related to Unearned Premium Reserve, $5,709 related to Reserves for Losses and LAE and $9 related to Paid losses and LAE as of and for the year ended December 31, 2022, and $424, $5,514, and $9, respectively, as of and for the year ended December 31, 2021.

C. Reinsurance Recoverable in Dispute

At December 31, 2022 and 2021, the aggregate of all disputed items did not exceed ten percent of capital and surplus and there were no amounts in dispute for any single reinsurer that exceeded five percent of capital and surplus. The total reinsurance recoverable balances in dispute are $16 and $24 as of December 31, 2022 and 2021, respectively.

D. Retroactive Reinsurance

On January 20, 2017, the Combined Pool entered into an adverse development reinsurance agreement with NICO under which the Combined Pool ceded to NICO eighty percent of its reserve risk above an attachment point on substantially all of its U.S. Commercial long-tail exposures for accident years 2015 and prior. Under this agreement, the Combined Pool ceded to NICO eighty percent of net paid losses on subject business on or after January 1, 2016 in excess of $25,000 of net paid losses, up to an aggregate limit of $25,000. At NICO’s 80 percent share, NICO’s limit of liability under the contract is $20,000. The Combined Pool paid consideration of approximately $10,188 in February 2017, including interest at 4 percent per annum from January 1, 2016 through date of payment. American Home’s share of the consideration paid was $3,566. NICO placed the consideration received into a collateral trust account as security for NICO’s claim payment obligations, and Berkshire Hathaway Inc. has provided a parental guarantee to secure NICO’s obligations under the agreement.

American Home accounted for this transaction as prospective reinsurance, except that the surplus gain associated with the ADC has been reported in a segregated surplus account and does not form a part of the Company’s Unassigned funds.

The total surplus gain recognized by the Combined Pool as of December 31, 2022, 2021 and 2020 was $1,522, $1,996, and $2,287, respectively.. American Home’s share of this gain as of December 31, 2022, 2021 and 2020 was $664, $685 and $799, respectively. The surplus gain is presented as segregated surplus and subject to the applicable dividend restrictions. This amount must be restricted in surplus until such time as the actual retroactive reinsurance recovered from NICO exceeds the consideration paid for the cession.

  38       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

E. Reinsurance Agreements Qualifying for Reinsurer Aggregation

In 2011, the Combined Pool companies entered into a loss portfolio transfer reinsurance agreement with Eaglestone, an affiliate, which provides coverage up to a limit of $5,000 for the Pool’s net asbestos exposures. Effective the same date, Eaglestone retroceded the majority of this exposure to NICO, an unaffiliated company. NICO provides coverage up to a limit of $3,500 for subject business covered under the agreement. NICO administers claims and pursues amounts recoverable from the Combined Pool companies’ reinsurers with respect to paid losses and loss adjustment expenses. To the extent that the prior reinsurers pay, the amounts are collected and retained by NICO. NICO maintains funds in trust for the benefit of Eaglestone under the contract; as of December 31, 2022 and 2021 the amount in trust was 4,282 and 4,908 , respectively. The amount of the unexhausted limit under the NICO agreement as of December 31, 2022 and 2021 was 1,004 and 1,103 , respectively. The Company has accounted for its cession to Eaglestone as prospective reinsurance.

8. Income Taxes

U.S. TAX LAW CHANGES

On August 16, 2022, the U.S. enacted the Inflation Reduction Act (IRA) of 2022 (H.R. 5376), which finances climate and energy provisions and an extension of enhanced subsidies under the Affordable Care Act. Key provisions include a 15 Percent corporate alternative minimum tax (CAMT) on adjusted financial statement income for corporations with average profits over $1 billion over a three-year period, a 1 Percent stock buyback tax, increased IRS enforcement funding, and Medicare’s new ability to negotiate prescription drug prices. CAMT and the stock buyback tax are effective for tax years beginning after December 31, 2022. As of December 31, 2022, it has not yet been determined if the Company will be subject to the CAMT in 2023. However, the controlled group of corporations of which the Company is a member is expected to be considered an applicable corporation. The fourth quarter 2022 financial statements do not include the estimated impact of the CAMT, because a reasonable estimate cannot be made.

The components of the Company’s net deferred tax assets/liabilities (“DTA”/“DTL”) as of December 31, 2022 and 2021 are as follows:

	12/31/2022						12/31/2021							Change
	Ordinary		Capital		Total		Ordinary		Capital			Total		Ordinary			Capital			Total
Gross DTA	$	480	$	266	$	746	$	601	$	230		$	831	$	(121	)	$	36		$	(85	)
Statutory Valuation Allowance		-		23		23		5		-			5		(5	)		23			18
Adjusted Gross DTA		480		243		723		596		230			826		(116	)		13			(103	)
Nonadmitted DTA		14		-		14		-		-			-		14			-			14
Subtotal Admitted DTA		466		243		709		596		230			826		(130	)		13			(117	)
DTL		120		243		363		72		275			347		48			(32	)		16
Net Admitted DTA/(DTL)	$	346	$	-	$	346	$	524	$	(45	)	$	479	$	(178	)	$	45		$	(133	)

At December 31, 2022, the Company recorded gross deferred tax assets (“DTA”) of $746. A valuation allowance was established on deferred tax assets net of liabilities of $23 as it is management’s belief that certain assets will not be realized in the foreseeable future. Tax planning strategies had no impact on the determination of the net admitted DTA.

  39       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The following table shows the summary of the calculation for the net admitted DTA as of December 31, 2022 and 2021:

	12/31/2022						12/31/2021						Change
	Ordinary		Capital		Total		Ordinary		Capital		Total		Ordinary			Capital		Total
Adjusted gross DTAs realizable within 36 months or 15 percent of statutory surplus (the lesser of 1 and 2 below)		346		-		346		479		-		479		(133	)		-		(133	)
1. Adjusted gross DTAs realizable within 36 months		346		-		346		479		-		479		(133	)		-		(133	)
2. 15 percent of statutory surplus		NA		NA		1,127		NA		NA		1,077		NA			NA		50
Adjusted gross DTAs that can be offset against DTLs		120		243		363		117		230		347		3			13		16
Total DTA admitted as the result of application of SSAP 101	$	466	$	243	$	709	$	596	$	230	$	826	$	(130	)	$	13	$	(117	)

	2022		2021
Ratio percentage used to determine recovery period and threshold limitation amount		638%		597	%
Amount of adjusted capital and surplus used to determine recovery period and threshold limitation in (2) above.	$	7,511	$	7,183

The following table shows the components of the current income tax expense (benefit) for the periods listed:

For the Years Ended December 31,	2022			2021			Change
Federal income tax	$	(32	)	$	(27	)	$	(5	)
Foreign income tax		7			7			-
Subtotal		(25	)		(20	)		(5	)
Federal income tax on net capital gains		39			26			13
Federal and foreign income taxes incurred	$	14		$	6		$	8

The following table shows the components of the DTA split between ordinary and capital DTA as of December 31, 2022 and 2021:

	2022		2021		Change
Ordinary
Discounting of unpaid losses	$	109	$	111	$	(2	)
Nonadmitted assets		19		12		7
Unearned premium reserve		117		127		(10	)
Bad debt expense		7		8		(1	)
Net operating loss carry forward		52		198		(146	)
Foreign tax credit carry forward		86		82		4
Investments		40		22		18
Intangible Assets		6		8		(2	)
Compensation and benefits accrual		10		12		(2	)
Other temporary differences		35		21		14
Subtotal		480		601		(120	)
Statutory valuation allowance adjustment		-		5		(5	)
Nonadmitted		14		-		14
Admitted ordinary deferred tax assets	$	466	$	596	$	(129	)
Capital
Investments	$	238	$	214	$	24
Unrealized capital losses		28		16		12
Subtotal		266		230		36
Statutory valuation allowance adjustment		23		-		23
Admitted capital deferred tax assets		243		230		13
Admitted deferred tax assets	$	709	$	826	$	(116	)

  40       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The following table shows the components of the DTL split between ordinary and capital DTL as of December 31, 2022 and 2021:

	2022			2021			Change
Ordinary
Investments	$	86		$	37		$	49
Tax Act adjustment to discounting of unpaid losses		16			21			(5	)
Compensation and benefits accrual		17			7			10
Other temporary differences		-			5			(5	)
Section 481(a) adjustment		1			2			(1	)
Subtotal		120			72			48
Capital
Investments	$	140		$	172		$	(32	)
Unrealized capital gains (losses)		102			102			-
Other temporary differences		1			1			-
Subtotal		243			275			(32	)
Deferred tax liabilities		363			347			16
Net deferred tax assets/liabilities	$	346		$	479		$	(133	)
The change in net deferred tax assets is comprised of the following:
	2022			2021			Change
Adjusted gross deferred tax assets	$	723		$	826		$	(103	)
Total deferred tax liabilities		(363	)		(347	)		(16	)
Net deferred tax assets/ (liabilities)		360			479			(119	)
Tax effect of unrealized gains (losses)								12
Total change in net deferred tax							$	(131	)
Change in deferred tax - current year								(107	)
Change in deferred tax - current year - other surplus items								(18	)
Change in deferred tax - current year - total								(125	)
Change in deferred tax – prior period correction								(6	)
Total change in deferred tax - current year							$	(131	)
The following table shows the components of opening surplus adjustments on current and deferred taxes for the year ended December 31, 2022:
	Current			Deferred			Total
SSAP 3 impact:
SSAP 3 - general items	$	(1	)	$	(6	)	$	(7	)
SSAP 3 - statutory valuation allowance		-			-			-
Subtotal SSAP 3		(1	)		(6	)		(7	)
SSAP 3 - unrealized gain/loss		-			-			-
SSAP 3 - adjusted tax assets and liabilities		(1	)		(6	)		(7	)
SSAP 3 - nonadmitted impact		-			-			-
Total SSAP 3 impact	$	(1	)	$	(6	)	$	(7	)

  41       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The provision for federal and foreign income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The following table presents a reconciliation of such differences in arriving at total taxes related to the Company for the years ended December 31, 2022, 2021 and 2020:

	2022						2021						2020
Description	Amount			Tax Effect			Amount			Tax Effect			Amount			Tax Effect
Net Income (Loss) Before Federal Income Taxes and Capital Gains Taxes	$	528		$	111		$	949		$	199		$	325		$	68
Book to Tax Adjustments:
Tax Exempt Income, net of proration		(8	)		(2	)		(9	)		(2	)		(11	)		(2	)
Stock Options And Other Compensation		(3	)		(1	)		4			1			9			2
Change in Nonadmitted Assets		(34	)		(7	)		2			-			10			2
Change in Other Surplus items		88			18			31			7			-			-
Intercompany Dividends		(22	)		(5	)		(52	)		(11	)		-			-
Attribute Expiration		-			5			-			10			-			-
Change in Tax Position		-			-			-			(1	)		-			-
Statutory Valuation Allowance		-			18			-			(25	)		-			(17	)
Return to Provision		-			1			-			(4	)		-			(1	)
Change in contingency reserve		-			-			-			-			162			34
FTC carryforward expiration		-			-			-			-			-			3
Other		4			2			2			1			(20	)		(3	)
Total Book to Tax Adjustments		25			29			(22	)		(24	)		150			18
Total Income Tax	$	553		$	140		$	927		$	175		$	475		$	86
Federal and Foreign Income Taxes Incurred		-			(24	)		-			(20	)		-			(13	)
Federal Income Tax on Net Capital Gains		-			39			-			26			-			22
Change in Net Deferred Income Taxes		-			125			-			169			-			77
Total Income Tax	$	-		$	140		$	-		$	175		$	-		$	86

Operating loss and tax credit carry-forwards
At December 31, 2022 the Company had net operating loss carry forwards expiring through the year 2038 of:	$	249
At December 31, 2022 the Company had foreign tax credits expiring through the year 2032 of:	$	86

There were no deposits reported as admitted assets under Section 6603 of the Internal Revenue Service (IRS) Code as of December 31, 2022. The Company does not believe that the liability related to any federal or foreign tax loss contingencies will significantly change within the next 12 months. A reasonable estimate of such change cannot be made at this time.

As of December 31, 2022, there was a $9 liability related to tax return errors and omissions and a $17 liability related to uncertain tax positions.

The U.S. is the only major tax jurisdiction of the Company. The Company is currently under examination for the tax years 2007 through 2019 and open to examination through 2021.

The following table lists those companies that form part of the 2022 AIG consolidated federal income tax return:

Company	Company	Company	Company	Company
A.I. Credit Corp.	AGC Life Insurance Company	AGL Assignment Company, LLC	AGL Loan Investments Corporation	AGLIC Investments Bermuda Limited
AH SubGP 1158 Flat Iron, LLC	AH SubGP 1384 Woodglen, LLC	AH SubGP 1450 Timber, LLC	AH SubGP 1535 Hunter’s Run, LLC	AH SubGP 1551 Spanish Creek, LLC
AH SubGP 479 Sunrise, LLC	AH SubGP 516 Merrilltown, LLC	AH SubGP 693 Parkland Pointe, LLC	AH SubGP 716 Villas of Mission Bend, LLC	AH SubGP 759 Parker Commons, LLC
AH SubGP 911 Mainland, LLC	AIG Aerospace Adjustment Services, Inc.	AIG Aerospace Insurance Services, Inc.	AIG Asset Management (U.S.), LLC	AIG Asset Management EU CLO, LLC
AIG Assurance Company	AIG BG Holdings LLC	AIG Capital Corporation	AIG Capital Services, Inc.	AIG Century Verwaltun gsgesellschaft mbH

  42       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Company	Company	Company	Company	Company
AIG Claims, Inc.	AIG Commercial Equipment Finance, Inc.	AIG Commercial Real Estate Lending	AIG Credit (Europe) Corporation	AIG Credit Corp.
AIG Direct Insurance Services, Inc.	AIG Employee Services, Inc.	AIG FCOE, Inc.	AIG Federal Savings Bank	AIG Financial Products Corp.
AIG Fund Services, Inc.	AIG Global Asset Management Holdings Corp.	AIG Global Capital Markets Securities, LLC	AIG Global Operations (Ireland) Limited	AIG Global Real Estate Investment Corp.
AIG GLOBAL REAL ESTATE INVESTMENT CORP. [RUSS	AIG Home Protection Company, Inc.	AIG Insurance Management Services, Inc.	AIG International Inc.	AIG Kirkwood, Inc.
AIG Life Holdings, Inc.	AIG Life of Bermuda, Ltd.	AIG Markets, Inc.	AIG Matched Funding Corp.	AIG MEA Investments and Services, LLC
AIG MGU Holdings Inc.	AIG Mortgage Capital, LLC	AIG North America, Inc.	AIG Partnership Holdings Corp.	AIG PC Global Services Inc.
AIG Procurement Services, Inc.	AIG Property Casualty Company	AIG Property Casualty International, LLC	AIG Property Casualty U.S., Inc.	AIG Property Casualty, Inc.
AIG Realty, Inc.	AIG Securities Lending Corp.	AIG Shared Services	AIG Shared Services Corporation	AIG Shared Services Corporation - Management
AIG Shared Services Corporation (Philippines)	AIG Specialty Insurance Company	AIG Spring Ridge I, Inc.	AIG Technologies, Inc.	AIG Technologies, Inc. (U.K. branch)
AIG Travel Assist, Inc.	AIG TRAVEL EMEA LIMITED	AIG TRAVEL EUROPE LIMITED	AIG Travel, Inc.	AIG UNITED GUARANTY AGENZIA DI ASSICURAZIONE
AIG Warranty Services of Florida, Inc.	AIG WarrantyGuard, Inc.	AIG.COM, Inc.	AIG-FP Capital Preservation Corp.	AIG-FP Matched Funding Corp.
AIG-FP Pinestead Holdings Corp.	AIGGRE DC Ballpark Investor, LLC	AIGGRE Europe Real Estate Fund I	AIGGRE Europe Real Estate Fund I GP S.a r.l.	AIGGRE Europe Real Estate Fund II GP S.a.r.l
AIGGRE U.S. LT Apartments Investor Lexington	AIGGRE U.S. Real Estate Fund I	AIGGRE U.S. Real Estate Fund II	AIGGRE U.S. Real Estate Fund II GP, LLC	AIGGRE U.S. Real Estate Fund III
AIGGRE U.S. Real Estate Fund IV Lexington	AIGGRE U.S. Real Estate Fund IV Sidecar	AIGGRE VISTA, LLC	AIGT Inc. Hong Kong Branch	AIU Insurance Company
Akita, Inc.	Alabaster Capital LLC	AlphaCat Capital Inc.	AM Holdings LLC	American Athletic Club, Inc.
American General Annuity Service Corporation	American General Assignment	American General Assignment Corporation	American General Insurance Agency, Inc.	American General Life Ins. Co. Non-Insulated
American General Life Insurance Co. - Insulat	American General Life Insurance Company	American General Life Services Company, LLC	American General Realty	American Home Assurance Company
American International Facilities Management	American International Group, Inc.	American International Realty Corporation	American International Reinsurance	Arthur J. Glatfelter Agency, Inc.
Blackboard Customer Care Insurance Services	Blackboard Insurance Company	Blackboard Services, LLC	Blackboard Specialty Insurance Company	Blackboard U.S. Holdings, Inc.
CAP Investor 1, LLC	CAP Investor 10, LLC	CAP Investor 14, LLC	CAP Investor 2, LLC	CAP Investor 4, LLC
CAP Investor 5, LLC	CAP Investor 8, LLC	Charleston Bay SAHP Corp.	Commerce and Industry Insurance Company	Corebridge REI Lexington Holdco LLC
Crop Risk Services, Inc.	Crossings SAHP Corp.	Curzon Funding Limited	Curzon Street Funding Designated Activity	Design Professionals Association
DIL/SAHP Corp.	DSA P&C Solutions, Inc.	Eaglestone Reinsurance Company	Eastgreen, Inc.	First Principles Capital Management, LLC
Fortitude Life & Annuity Solutions, Inc.	GIG of Missouri, Inc.	Glatfelter Claims Management, Inc.	Glatfelter Properties, LLC	Glatfelter Underwriting Services, Inc.
Global Loss Prevention, Inc.	Global Loss Prevention, Inc. [Canada]	Grand Savannah SAHP Corp.	Granite State Insurance Company	Health Direct, Inc.
HOSPITAL PLAN INSURANCE SERVICES	HPIS LIMITED	Illinois National Insurance Co.	Integrated Manufacturing Companies, Inc.	Knickerbocker Corporation

    43       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Company	Company	Company	Company	Company
LBMA Equipment Services, Inc.	Lexington Insurance Company	Lexington Specialty Insurance Agency, Inc.	Lilac Heights LLC	Livetravel, Inc.
LSTREET I, LLC	LSTREET II, LLC	MG Reinsurance Limited	MIP PE Holdings, LLC	Morefar Marketing, Inc.
Mt. Mansfield Company, Inc.	National Union Fire Insurance	National Union Fire Insurance Company	New Hampshire Insurance Company	NF Seven (Cayman) Limited
PCG 2019 Corporate Member Limited	Pearce & Pearce, Inc.	Pine Street Real Estate Holdings Corp.	Prairie SAHP Corp.	Rialto Melbourne Investor LLC
Risk Specialists Companies	SA Affordable Housing, LLC	SA SubGP 1000 Woodwind Lakes, LLC	SAAHP GP Corp.	SAFG Capital LLC
SAFG Markets, LLC	SAFG Retirement Services, Inc.	SAFG Technologies, LLC	SAHP GA III - SC LLC	SCSP Corp.
Service Net Solutions of Florida, LLC	Service Net Warranty, LLC	SNW Insurance Agency, LLC	Spruce Peak Realty, LLC	Stowe Mountain Holdings, Inc.
Stratford Insurance Company	SubGen NT, Inc.	SunAmerica Affordable Housing Partners, Inc.	SunAmerica Asset Management, LLC	SunAmerica Fund Assets 83, LLC
SunAmerica Life Reinsurance Company	SunAmerica Retirement Markets, Inc.	Susquehanna Agents Alliance, LLC	The Glatfelter Agency, Inc.	The Insurance Company of the
The United State Life Insurance Company	The United States Life Insurance	The United States Life Insurance Company	The Variable Annuity Life - Insulated	The Variable Annuity Life - Non-Insulated
The Variable Annuity Life Insurance Company	Travel Guard Americas LLC Sucursal Mexico	Travel Guard Americas, LLC	Travel Guard Americas, LLC [Argentina]	Travel Guard Group, Inc.
Tudor Insurance Company	U G Corporation	VALIC Financial Advisors, Inc.	VALIC Retirement Services Company	VALIC Trust Company
Validus America, Inc.	Validus Re Americas (New Jersey), Inc.	Validus Reaseguros, Inc.	Validus Services, Inc.	Validus Specialty Underwriting Services, Inc.
Validus Specialty, LLC	Volunteer Firemen’s Insurance Services, Inc.	Western World Insurance Company

9. Capital and Surplus and Dividend Restrictions

A. Dividend Restrictions

Under New York law, the Company may pay dividends only from Unassigned surplus determined on a statutory basis.

New York domiciled companies are restricted (on the basis of the lower of 10 percent of statutory earned surplus as defined in NY Insurance Law section 4105, adjusted for special surplus items, as of the last statement on file with the Superintendent, or 100 percent of adjusted net investment income for the preceding thirty-six month period ended as of the last statement on file with the Superintendent) as to the amount of ordinary dividends they may declare or pay in any twelve-month period without the prior approval of the NY DFS. The maximum dividend amount the Company can pay in 2022, as of December 31, 2022 is $238.

Other than the limitations above, there are no restrictions placed on the portion of Company profits that may be paid as ordinary dividends to the stockholders.

The Company did not pay any dividends in 2022 and 2021.

  44       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

B. Capital & Surplus

Changes in balances of special surplus funds are due to adjustments in the amounts of reserves transferred under retroactive reinsurance agreements and when cash recoveries exceed the consideration paid.

The portion of Unassigned surplus at December 31, 2022, 2022 and 2021 represented or reduced by each item below is as follows:

	2022			As Adjusted 2021			2021
Unrealized gains and losses (net of taxes)	$	113		$	334		$	334
Nonadmitted asset values		(106	)		(58	)		(58	)
Provision for reinsurance		(46	)		(24	)		(24	)
* As Adjusted includes SSAP 3 prior year adjustments

The Company exceeded minimum RBC requirements at both December 31, 2022 and 2021.

10. Contingencies

A. Legal Proceedings

In the normal course of business, AIG and its subsidiaries are, like others in the insurance and financial services industries in general, subject to regulatory and government investigations and actions, and litigation and other forms of dispute resolution in a large number of proceedings pending in various domestic and foreign jurisdictions. Certain of these matters involve potentially significant risk of loss due to potential for significant jury awards and settlements, punitive damages or other penalties. Many of these matters are also highly complex and seek recovery on behalf of a class or similarly large number of plaintiffs. It is therefore inherently difficult to predict the size or scope of potential future losses arising from these matters. In AIG’s insurance and reinsurance operations, litigation and arbitration concerning the scope of coverage under insurance and reinsurance contracts, and litigation and arbitration in which its subsidiaries defend or indemnify their insureds under insurance contracts, are generally considered in the establishment of loss reserves. Separate and apart from the foregoing matters involving insurance and reinsurance coverage, AIG, its subsidiaries and their respective officers and directors are subject to a variety of additional types of legal proceedings brought by holders of AIG securities, customers, employees and others, alleging, among other things, breach of contractual or fiduciary duties, bad faith and violations of federal and state statutes and regulations. With respect to these other categories of matters not arising out of claims for insurance or reinsurance coverage, the Company establishes reserves for loss contingencies when it is probable that a loss will be incurred and the amount of the loss can be reasonably estimated. In many instances, the Company is unable to determine whether a loss is probable or to reasonably estimate the amount of such a loss and, therefore, the potential future losses arising from legal proceedings may exceed the amount of liabilities that has been recorded in its financial statements covering these matters. While such potential future charges could be material, based on information currently known to management, management does not believe, other than may be discussed below, that any such charges are likely to have a material adverse effect on the Company’s financial position or results of operation.

Additionally, from time to time, various regulatory and governmental agencies review the transactions and practices of AIG and its subsidiaries in connection with industry-wide and other inquiries into, among other matters, the business practices of current and former operating insurance subsidiaries. The Company has cooperated, and will continue to cooperate, in producing documents and other information in response to such requests.

B. Leases

Lease expenses are allocated to the Company based upon the percentage of space occupied with the final share of cost based upon its percentage participation in the Combined Pool.

C. Other Commitments

As part of its hedge fund, private equity and real estate equity portfolio investments, as of December 31, 2022, the Company may be called upon for additional capital investments of up to $545.

At December 31, 2022 the Company had $24 of outstanding commitments related to various funding obligations associated with investments in commercial and residential mortgage loans.

  45       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

D. Guarantees

The Company had issued guarantees whereby it unconditionally and irrevocably guaranteed all present and future obligations and liabilities arising from the policies of insurance issued by certain insurers who, as of the guarantee issue date, were members of the AIG holding company group. The guarantees were provided in order to secure or maintain the guaranteed companies’ rating status issued by certain rating agencies. The Company would be required to perform under the guarantee in the event that a guaranteed entity failed to make payments due under policies of insurance issued during the period of the guarantee. The Company has not been required to perform under any of the guarantees. The Company remains contingently liable for all policyholder obligations associated with insurance policies issued by the guaranteed entity during the period in which the guarantee was in force.

Each guaranteed entity has reported invested assets in excess of their direct (prior to reinsurance) policyholder liabilities. Additionally, the Company is party to an agreement with AIG whereby AIG has agreed to make any payments due under the guarantees in the Company’s place and stead. Furthermore, for any former affiliate that has been sold, the purchaser has provided the Company with hold harmless agreements relative to the guarantee of the divested affiliate. Accordingly, management believes that the likelihood of payment under any of the guarantees is remote.

The following schedule sets forth the effective and termination dates (agreements with guarantees in run off), of each guarantee, the amount of direct policyholder obligations guaranteed, the invested assets and policyholder surplus for each guaranteed entity as of December 31, 2022:

Guaranteed Company		Date Issued	Date Terminated	Policyholder Obligations @ 12/31/2022		Invested Assets @ 12/31/2022		Estimated Loss @ 12/31/2022		Policyholders’ Surplus 12/31/2022
21st Century Advantage Insurance Company (f/k/a AIG Advantage Insurance Company )		12/15/1997	8/31/2009	$	-	$	22	$	-	$	22
21st Century North America Insurance Company (f/k/a American International Insurance Company )		11/5/1997	8/31/2009		15		616		-		636
21st Century Pinnacle Insurance Company (f/k/a American International Insurance Company of New Jersey)		12/15/1997	8/31/2009		-		20		-		20
AIG Edison Life Insurance Company (f/k/a GE Edison Life Insurance Company)		8/29/2003	3/31/2011		6,101		74,709		-		2,105
American General Life and Accident Insurance Company	*	3/3/2003	9/30/2010		1,486		205,493		-		9,714
American General Life Insurance Company	*	3/3/2003	12/29/2006		6,752		205,493		-		9,714
American International Assurance Company (Australia) Limited	**	11/1/2002	10/31/2010		443		1,799		-		574
Chartis Europe, S.A. (f/k/a AIG Europe, S.A.)	*	9/15/1998	12/31/2012		5,673		7,867		-		2,106
AIG Seguros Mexico, S.A. de C.V. (f/k/a AIG Mexico Seguros Interamericana, S.A. de C.V.)	*	12/15/1997	3/31/2015		107		162		-		102
Chartis UK (f/k/a Landmark Insurance Company, Limited (UK))	*	3/2/1998	11/30/2007		102		5,678		-		2,233
Farmers Insurance Hawaii (f/k/a AIG Hawaii Insurance Company, Inc.)		11/5/1997	8/31/2009		-		25		-		26
Lloyd’s Syndicate (1414) Ascot (Ascot Underwriting Holdings Ltd.)		1/20/2005	10/31/2007		3		1,277		-		56
SunAmerica Annuity and Life Assurance Company (Anchor National Life Insurance Company)	*	1/4/1999	12/29/2006		644		205,493		-		9,714
SunAmerica Life Insurance Company	*	1/4/1999	12/29/2006		1,806		205,493		-		9,714
The United States Life Insurance Company in the City of New York	*	3/3/2003	4/30/2010		2,922		30,705		-		1,833
The Variable Annuity Life Insurance Company	*	3/3/2003	12/29/2006		4,032		83,510		-		2,344
Total				$	30,086	$	1,028,363	$	-	$	50,912
* Current affiliates
**AIA was formerly as subsidiary of AIG, Inc. In previous years AIA provided the direct policyholder obligations as of each year end. However, starting in 2014 AIA declined to provide financial information related to these guarantees. The financial information reflects amounts as of December 31, 2012, at which time the guaranteed entities had invested assets in excess of direct policyholder obligations and were in a positive surplus position. Such amounts continue to remain the Company’s best estimate given available financial information. The guaranteed policyholder obligations will decline as the policies expire.

  46       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

E. Joint and Several Liabilities

AIUI and the Company are jointly and severally obligated to the policyholders of their Japan branches, in connection with transfers of the business of those Japan branches to Japan-domiciled affiliates in 2013 and 2014, respectively. Under the terms of the transfer agreement, the Japan affiliates have agreed to be responsible for 100% of the obligations associated with such policies, and management expects such companies to satisfy their obligation. The Company carries no reserves with respect to such liabilities. The Japanese affiliates carried $7 and $11 of loss reserves in respect of such policies as of December 31, 2022 and 2021, respectively. As of December 31, 2022, if the Japan affiliates were to fail to satisfy their obligations, the Company’s share of the aggregate exposure under the pooling agreement is $5.

Each Pool member is also jointly and severally obligated to the other Pool members, in proportion to their pool share, in the event any other Pool member fails.

11. Other Significant Matters

A. Other Assets

As of December 31, 2022 and 2021, other admitted assets as reported in the accompanying Statements of Admitted Assets were comprised of the following balances:

Other admitted assets	2022		2021
Deposit accounting assets	$	9	$	9
Equities in underwriting pools and associations		7		11
Guaranty funds receivable on deposit		3		1
Loss funds on deposit		84		69
Contra Investments		46		-
Other assets		16		38
Total other admitted assets	$	165	$	128

B. Other Liabilities

As of December 31, 2022 and 2021, other liabilities as reported in the accompanying Statements of Liabilities, Capital and Surplus were comprised of the following balances:

Other liabilities	2022			2021
Assumed Mortgage Guaranty Contingency Reserve	$	185		$	179
Ceded Mortgage Guaranty Contingency Reserve		(185	)		(179	)
Escrow Deposit Liability		98			132
Other accrued liabilities		97			115
Retroactive reinsurance reserves - assumed		53			74
Retroactive reinsurance reserves - ceded		(22	)		(23	)
Deferred commission earnings		85			57
Escrow funds (NICO)		38			28
Accrued retrospective premiums		-			12
Servicing carrier liability		8			10
Collateral on derivative assets		25			5
Paid loss clearing contra liability (loss reserve offset for paid claims)		(43	)		(10	)
Total other liabilities	$	339		$	400

C. Other (Expense) Income

For the years ended December 31, 2022, 2021 and 2020, other (expense) income as reported in the accompanying Statements of Operations and Changes in Capital and Surplus were comprised of the following balances:

Other (expense) income	2022		2021			2020
Fee income on deposit programs	$	3	$	3		$	-
Interest expense on reinsurance program		(29)		(79	)		(79)
Other (expense) income		7		2			(34)
Total other (expense) income	$	(19)	$	(74	)	$	(113	)

  47       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

D. Non-Cash items

For the years ended December 31, 2022, 2021 and 2020, the amounts reported in the Statements of Cash Flow are net of the following non-cash items:

Non-cash transactions	2022			2021			2020
Funds Held:
Premiums collected		(18	)		(18	)		(22	)
Benefit and loss related payments		39			44			87
Interest		(30	)		(80	)		(74	)
Commission and other expense paid		10			15			19
Funds held		2			(39	)		10
Securities received/transferred:
Securities received		760			521			809
Securities transferred		(430	)		(666	)		(1,230	)
AESA Commutation:
Premiums collected		-			-			(81	)
Benefit and loss related payments		-			215			20
Commissions		-			-			60
2021 Repooling Transaction:
Premiums collected		-			121			-
Miscellaneous income		-			(28	)		-
Benefit and loss related payments		-			717			-
Commission and other expense paid		-			46			-
Net deposits		-			(1	)		-
Other receipts		-			163			-
Securities transferred		-			(1,018	)		-

E. Federal Home Loan Bank (“FHLB”) Agreements

The Company is a member of the FHLB of New York. Such membership requires ownership of stock in the FHLB. The Company owned an aggregate of $8 and $9 of stock in the FHLB at December 31, 2022 and 2021, respectively.

Through its membership, the Company has conducted business activity (borrowings) with the FHLB. The Company utilizes the FHLB facility to supplement liquidity or for other uses deemed appropriate by management. The outstanding borrowings are being used primarily for interest rate risk management purposes in connection with certain reinsurance arrangements, and the balances are expected to decline as underlying premiums are collected. The Company is required to pledge certain mortgage-backed securities, government and agency securities and other qualifying assets to secure advances obtained from the FHLB. The FHLB applies a haircut to collateral pledged to determine the amount of borrowing capacity it will provide to its member. As of December 31, 2022, the Company had an actual borrowing capacity of $541 based on qualified pledged collateral. At December 31, 2022, the Company had borrowings of $0 from the FHLB.

F. Insurance-Linked Securities

As of December 31, 2022 and 2021, the Company was not a ceding insurer in catastrophe bond reinsurance transactions in force.

12. Subsequent Events

Subsequent events have been considered through April 25, 2023 for these Financial Statements issued on April 25, 2023.

Type I – Recognized Subsequent Events:

None.

Type II – Nonrecognized Subsequent Events:

None

  48       NOTES TO FINANCIAL STATEMENTS - As of December 31, 2022 and 2021 and for years ended December 31, 2022, 2021 and 2020.