Market Risk Benefits

9 Months Ended

Sep. 30, 2024

Insurance [Abstract]

Market Risk Benefits

5. Policyholder Account Balances

The Company establishes liabilities for PABs, which are generally equal to the account value, and which includes accrued interest credited, but excludes the impact of any applicable charge that may be incurred upon surrender.

The Company’s PABs on the interim condensed consolidated balance sheets were as follows at:

	September 30, 2024		December 31, 2023
	(In millions)
Group Benefits - Group life	$	7,676	$	7,692
RIS:
Capital markets investment products and stable value GICs	65,330		64,140
Annuities and risk solutions	19,572		17,711
Asia:
Universal and variable universal life	51,756		49,739
Fixed annuities	38,742		36,863
EMEA - Variable annuities	2,617		2,720
MetLife Holdings:
Annuities	10,437		11,537
Life and other	11,284		11,641
Other	17,195		17,226
Total	$	224,609	$	219,269

Rollforwards

The following information about the direct and assumed liability for PABs includes year-to-date disaggregated rollforwards. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business. Policy charges presented in each disaggregated rollforward reflect a premium and/or assessment based on the account balance.

Group Benefits

Group Life

The Group Benefits segment’s group life PABs predominantly consist of retained asset accounts, universal life products, and the fixed account of variable life insurance products. Information regarding this liability was as follows:

	Nine Months Ended September 30,
	2024		2023
	(Dollars in millions)
Balance, beginning of period	$	7,692	$	8,028
Deposits	2,857		2,529
Policy charges	(493)		(475)
Surrenders and withdrawals	(2,512)		(2,432)
Benefit payments	(9)		(9)
Net transfers from (to) separate accounts	(3)		1
Interest credited	144		143
Balance, end of period	$	7,676	$	7,785
Weighted-average annual crediting rate	2.5 %		2.4 %
At period end:
Cash surrender value	$	7,614	$	7,721
Net amount at risk, excluding offsets from reinsurance:
In the event of death	$	265,266	$	250,611

The Group Benefits segment’s group life product account values by range of guaranteed minimum crediting rates (“GMCR”) and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:

Range of GMCR	At GMCR		Greater than  0% but less  than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50%  above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
September 30, 2024
Equal to or greater than 0% but less than 2%	$	456	$	72	$	877	$	4,141	$	5,546
Equal to or greater than 2% but less than 4%	1,266		8		59		1		1,334
Equal to or greater than 4%	684		—		39		36		759
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		37
Total	$	2,406	$	80	$	975	$	4,178	$	7,676
September 30, 2023
Equal to or greater than 0% but less than 2%	$	—	$	82	$	887	$	4,595	$	5,564
Equal to or greater than 2% but less than 4%	1,223		10		62		2		1,297
Equal to or greater than 4%	733		1		42		34		810
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		114
Total	$	1,956	$	93	$	991	$	4,631	$	7,785

RIS

Capital Markets Investment Products and Stable Value GICs

The RIS segment’s capital markets investment products and stable value GICs in PABs are investment-type products, mainly funding agreements. Information regarding this liability was as follows:

	Nine Months Ended September 30,
	2024		2023
	(Dollars in millions)
Balance, beginning of period	$	64,140	$	63,723
Deposits	56,170		54,674
Surrenders and withdrawals	(57,068)		(56,873)
Interest credited	1,811		1,524
Effect of foreign currency translation and other, net	277		369
Balance, end of period	$	65,330	$	63,417
Weighted-average annual crediting rate	3.8 %		3.2 %
Cash surrender value at period end	$	1,953	$	2,110

The RIS segment’s capital markets investment products and stable value GICs account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:

Range of GMCR	At GMCR		Greater than  0% but less  than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50%  above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
September 30, 2024
Equal to or greater than 0% but less than 2%	$	—	$	—	$	—	$	2,754	$	2,754
Equal to or greater than 2% but less than 4%	—		—		—		148		148
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		62,428
Total	$	—	$	—	$	—	$	2,902	$	65,330
September 30, 2023
Equal to or greater than 0% but less than 2%	$	—	$	—	$	1	$	2,620	$	2,621
Equal to or greater than 2% but less than 4%	—		—		—		—		—
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		60,796
Total	$	—	$	—	$	1	$	2,620	$	63,417

Annuities and Risk Solutions

The RIS segment’s annuity and risk solutions PABs include certain structured settlements and institutional income annuities, and benefit funding solutions that include postretirement benefits and company-, bank- or trust-owned life insurance used to finance nonqualified benefit programs for executives. Information regarding this liability was as follows:

	Nine Months Ended September 30,
	2024		2023
	(Dollars in millions)
Balance, beginning of period	$	17,711	$	15,549
Deposits	2,367		2,007
Policy charges	(122)		(133)
Surrenders and withdrawals	(239)		(134)
Benefit payments	(731)		(615)
Net transfers from (to) separate accounts	20		54
Interest credited	556		469
Other	10		(133)
Balance, end of period	$	19,572	$	17,064
Weighted-average annual crediting rate	4.0 %		3.9 %
At period end:
Cash surrender value	$	8,476	$	7,693
Net amount at risk, excluding offsets from ceded reinsurance:
In the event of death	$	44,437	$	42,043

The RIS segment’s annuity and risk solutions account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:

Range of GMCR	At GMCR		Greater than  0% but less  than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50%  above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
September 30, 2024
Equal to or greater than 0% but less than 2%	$	—	$	—	$	19	$	2,403	$	2,422
Equal to or greater than 2% but less than 4%	198		35		109		417		759
Equal to or greater than 4%	4,131		—		472		6		4,609
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		11,782
Total	$	4,329	$	35	$	600	$	2,826	$	19,572
September 30, 2023
Equal to or greater than 0% but less than 2%	$	—	$	—	$	22	$	1,525	$	1,547
Equal to or greater than 2% but less than 4%	260		33		94		437		824
Equal to or greater than 4%	4,363		—		277		6		4,646
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		10,047
Total	$	4,623	$	33	$	393	$	1,968	$	17,064

Asia

Universal and Variable Universal Life

The Asia segment’s universal and variable universal life PABs in Japan primarily include interest sensitive whole life products. Information regarding this liability was as follows:

	Nine Months Ended September 30,
	2024		2023
	(Dollars in millions)
Balance, beginning of period	$	49,739	$	46,417
Deposits	4,694		5,439
Policy charges	(812)		(888)
Surrenders and withdrawals	(2,483)		(2,018)
Benefit payments	(345)		(393)
Interest credited	1,153		979
Effect of foreign currency translation and other, net	(190)		(1,906)
Balance, end of period	$	51,756	$	47,630
Weighted-average annual crediting rate	3.1 %		2.8 %
At period end:
Cash surrender value	$	46,366	$	40,663
Net amount at risk, excluding offsets from reinsurance:
In the event of death	$	89,793	$	91,861

The Asia segment’s universal and variable universal life account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:

Range of GMCR	At GMCR		Greater than  0% but less  than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50%  above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
September 30, 2024
Equal to or greater than 0% but less than 2%	$	10,681	$	18	$	235	$	1,449	$	12,383
Equal to or greater than 2% but less than 4%	7,829		15,730		5,397		9,650		38,606
Equal to or greater than 4%	241		—		—		—		241
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		526
Total	$	18,751	$	15,748	$	5,632	$	11,099	$	51,756
September 30, 2023
Equal to or greater than 0% but less than 2%	$	9,986	$	25	$	233	$	729	$	10,973
Equal to or greater than 2% but less than 4%	5,742		17,923		5,628		6,633		35,926
Equal to or greater than 4%	256		—		—		—		256
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		475
Total	$	15,984	$	17,948	$	5,861	$	7,362	$	47,630

Fixed Annuities

Information regarding the Asia segment’s fixed annuity PAB liability in Japan was as follows:

	Nine Months Ended September 30,
	2024		2023
	(Dollars in millions)
Balance, beginning of period	$	36,863	$	32,454
Deposits	5,002		6,230
Policy charges	(2)		(2)
Surrenders and withdrawals	(2,248)		(1,665)
Benefit payments	(1,718)		(1,614)
Interest credited	784		629
Effect of foreign currency translation and other, net	61		(552)
Balance, end of period	$	38,742	$	35,480
Weighted-average annual crediting rate	2.8 %		2.5 %
At period end:
Cash surrender value	$	35,005	$	30,289
Net amount at risk, excluding offsets from reinsurance:
In the event of death	$	8	$	—

The Asia segment’s fixed annuity account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:

Range of GMCR	At GMCR		Greater than  0% but less  than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50%  above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
September 30, 2024
Equal to or greater than 0% but less than 2%	$	385	$	460	$	5,250	$	31,353	$	37,448
Equal to or greater than 2% but less than 4%	—		5		—		—		5
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		1,289
Total	$	385	$	465	$	5,250	$	31,353	$	38,742
September 30, 2023
Equal to or greater than 0% but less than 2%	$	315	$	574	$	6,494	$	26,811	$	34,194
Equal to or greater than 2% but less than 4%	—		6		—		—		6
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		1,280
Total	$	315	$	580	$	6,494	$	26,811	$	35,480

EMEA

Variable Annuities

Information regarding the EMEA segment’s variable annuity PABs in the United Kingdom was as follows:

	Nine Months Ended September 30,
	2024		2023
	(Dollars in millions)
Balance, beginning of period	$	2,720	$	2,802
Deposits	2		3
Policy charges	(44)		(48)
Surrenders and withdrawals	(214)		(206)
Benefit payments	(95)		(95)
Interest credited (1)	117		69
Effect of foreign currency translation and other, net	131		46
Balance, end of period	$	2,617	$	2,571
Weighted-average annual crediting rate	6.0 %		3.5 %
At period end:
Cash surrender value	$	2,617	$	2,571
Net amount at risk, excluding offsets from reinsurance:
In the event of death	$	426	$	577
At annuitization or exercise of other living benefits	$	550	$	725

__________________

(1)Interest credited on EMEA’s variable annuity products represents gains or losses which are passed through to the policyholder based on the underlying unit-linked investment fund returns, which may be positive or negative depending on market conditions. There are no GMCR on these products.

MetLife Holdings

Annuities

The MetLife Holdings segment’s annuity PABs primarily include fixed deferred annuities, the fixed account portion of variable annuities, certain income annuities, and embedded derivatives related to equity-indexed annuities. Information regarding this liability was as follows:

	Nine Months Ended September 30,
	2024		2023
	(Dollars in millions)
Balance, beginning of period	$	11,537	$	13,286
Deposits	121		115
Policy charges	(10)		(12)
Surrenders and withdrawals	(1,292)		(1,425)
Benefit payments	(298)		(320)
Net transfers from (to) separate accounts	105		48
Interest credited	265		299
Other	9		15
Balance, end of period	$	10,437	$	12,006
Weighted-average annual crediting rate	3.3 %		3.2 %
At period end:
Cash surrender value	$	9,866	$	11,263
Net amount at risk, excluding offsets from ceded reinsurance (1):
In the event of death	$	2,238	$	3,970
At annuitization or exercise of other living benefits	$	657	$	923

__________________

(1)Includes amounts for certain variable annuities recorded as PABs with the related guarantees recorded as MRBs which are disclosed in “MetLife Holdings – Annuities” in Note 6.

The MetLife Holdings segment’s annuity account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:

Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
September 30, 2024
Equal to or greater than 0% but less than 2%	$	3	$	166	$	444	$	52	$	665
Equal to or greater than 2% but less than 4%	1,378		6,188		501		153		8,220
Equal to or greater than 4%	745		404		17		—		1,166
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		386
Total	$	2,126	$	6,758	$	962	$	205	$	10,437
September 30, 2023
Equal to or greater than 0% but less than 2%	$	235	$	245	$	292	$	227	$	999
Equal to or greater than 2% but less than 4%	2,887		5,828		457		130		9,302
Equal to or greater than 4%	965		274		26		—		1,265
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		440
Total	$	4,087	$	6,347	$	775	$	357	$	12,006

Life and Other

The MetLife Holdings segment’s life and other PABs include retained asset accounts, universal life products, the fixed account of variable life insurance products and funding agreements. Information regarding this liability was as follows:

	Nine Months Ended September 30,
	2024		2023
	(Dollars in millions)
Balance, beginning of period	$	11,641	$	12,402
Deposits	549		617
Policy charges	(519)		(529)
Surrenders and withdrawals	(744)		(892)
Benefit payments	(114)		(120)
Net transfers from (to) separate accounts	26		29
Interest credited	318		336
Other	127		1
Balance, end of period	$	11,284	$	11,844
Weighted-average annual crediting rate	3.8 %		3.8 %
At period end:
Cash surrender value	$	10,722	$	11,360
Net amount at risk, excluding offsets from ceded reinsurance:
In the event of death (1)	$	64,816	$	68,972

__________________

(1)Including offsets from ceded reinsurance, the net amount at risk at both September 30, 2024 and December 31, 2023, would be reduced by 99%.

The MetLife Holdings segment’s life and other products account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:

Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
September 30, 2024
Equal to or greater than 0% but less than 2%	$	—	$	—	$	17	$	58	$	75
Equal to or greater than 2% but less than 4%	4,159		171		265		536		5,131
Equal to or greater than 4%	4,911		122		405		9		5,447
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		631
Total	$	9,070	$	293	$	687	$	603	$	11,284
September 30, 2023
Equal to or greater than 0% but less than 2%	$	—	$	—	$	19	$	54	$	73
Equal to or greater than 2% but less than 4%	4,595		172		285		554		5,606
Equal to or greater than 4%	5,109		126		414		15		5,664
Products with either a fixed rate or no GMCR	N/A		N/A		N/A		N/A		501
Total	$	9,704	$	298	$	718	$	623	$	11,844

6. Market Risk Benefits

The Company establishes liabilities for certain retirement assurance and variable annuity contract features which include a minimum benefit guarantee that provides to the contractholder a minimum return based on their initial deposit less withdrawals. In some cases, the benefit base may be increased by additional deposits, bonus amounts, accruals or optional market value resets.

The Company’s MRB assets and MRB liabilities on the interim condensed consolidated balance sheets were as follows at:

	September 30, 2024						December 31, 2023
	Asset		Liability		Net		Asset		Liability		Net
	(In millions)
Asia - Retirement Assurance	$	—	$	197	$	197	$	—	$	203	$	203
MetLife Holdings - Annuities	179		2,787		2,608		156		2,878		2,722
Other	131		133		2		130		98		(32)
Total	$	310	$	3,117	$	2,807	$	286	$	3,179	$	2,893

Rollforwards

The following information about the direct and assumed liability for MRBs includes disaggregated rollforwards. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business.

Asia - Retirement Assurance

The Asia segment’s retirement assurance product in Japan offers a contract feature whereby the Company guarantees the greater of the account value or a return of premium accumulated at a guaranteed rate upon maturity. Information regarding this liability was as follows:

	Nine Months Ended September 30,
	2024		2023
	(In millions)
Balance, beginning of period	$	203	$	226
Balance, beginning of period, before effect of cumulative changes in the instrument-specific credit risk	$	205	$	233
Attributed fees collected	3		2
Benefit payments	(9)		(9)
Effect of changes in interest rates	4		2
Actual policyholder behavior different from expected behavior	(2)		(1)
Effect of changes in future expected policyholder behavior and other assumptions	—		(1)
Effect of foreign currency translation and other, net	(3)		(30)
Balance, end of period, before the cumulative effect of changes in the instrument-specific credit risk	198		196
Cumulative effect of changes in the instrument-specific credit risk	(1)		(3)
Balance, end of period	$	197	$	193
At period end:
Net amount at risk, excluding offsets from hedging:
At annuitization or exercise of other living benefits	$	122	$	116
Weighted-average attained age of contractholders:
At annuitization or exercise of other living benefits	58 years		58 years

Significant Methodologies and Assumptions

The Company issues certain retirement assurance products with guarantees that meet the definition of MRBs, which are measured, in aggregate, as one compound MRB, at estimated fair value, with changes in estimated fair value reported in net income, except for changes in nonperformance risk of the Company which are recorded in other comprehensive income (loss) (“OCI”).

The Company calculates the fair value of these MRBs, which is estimated as the present value of projected future benefits minus the present value of projected attributed fees, using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, projecting future cash flows from the MRB over multiple risk neutral stochastic scenarios using observable risk-free rates.

Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience. See Note 12 for additional information on significant unobservable inputs.

The valuation of these MRBs includes a nonperformance risk adjustment and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries as compared to MetLife, Inc.

Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions at annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins

requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees.

These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, impact the estimated fair value of the guarantees and affect net income, and changes in nonperformance risk of the Company affect OCI.

MetLife Holdings - Annuities

The MetLife Holdings segment’s variable annuity products offer contract features where the Company guarantees to the contractholder a minimum benefit, which includes guaranteed minimum death benefits (“GMDBs”) and living benefit guarantees. The GMDB contract features include return of premium, which provides a return of the purchase payment upon death, annual step-up and roll-up and step-up combinations. The living benefit guarantees contract features primarily include guaranteed minimum income benefits (“GMIBs”), which provide a minimum accumulation of purchase payments that can be annuitized to receive a monthly income stream, and guaranteed minimum withdrawal benefits (“GMWBs”), which provide a series of withdrawals, provided that withdrawals in a contract year do not exceed a contractual limit. This segment also includes an in-force block of assumed variable annuity guarantees from a third party. Information regarding MetLife Holdings annuity products (including assumed reinsurance) was as follows:

		Nine Months Ended September 30,
		2024		2023
	(In millions)
Balance, beginning of period		$	2,722	$	3,225
Balance, beginning of period, before effect of cumulative changes in the instrument-specific credit risk		$	2,772	$	3,360
Attributed fees collected		266		286
Benefit payments		(67)		(36)
Effect of changes in interest rates		(70)		(881)
Effect of changes in capital markets		(527)		(542)
Effect of changes in equity index volatility		37		(84)
Actual policyholder behavior different from expected behavior		176		95
Effect of changes in future expected policyholder behavior and other assumptions		12		9
Effect of foreign currency translation and other, net (1)		34		118
Effect of changes in risk margin		(7)		(46)
Balance, end of period, before the cumulative effect of changes in the instrument-specific credit risk		2,626		2,279
Cumulative effect of changes in the instrument-specific credit risk		(19)		(16)
Effect of foreign currency translation on the cumulative instrument-specific credit risk		1		5
Balance, end of period		$	2,608	$	2,268
At period end:
Net amount at risk, excluding offsets from hedging (2):
In the event of death		$	2,243	$	3,979
At annuitization or exercise of other living benefits		$	643	$	921
Weighted-average attained age of contractholders:
In the event of death		71 years		70 years
At annuitization or exercise of other living benefits		68 years		70 years

__________________

(1)Included is the covariance impact from aggregating the market observable inputs, mostly driven by interest rate and capital market volatility.

(2)Includes amounts for certain variable annuity guarantees recorded as MRBs on contracts also recorded as PABs which are disclosed in “MetLife Holdings – Annuities” in Note 5.

Significant Methodologies and Assumptions

The Company issues GMDBs, GMWBs, guaranteed minimum accumulation benefits (“GMABs”) and GMIBs that typically meet the definition of MRBs, which are measured, in aggregate, as one compound MRB, at estimated fair value separately from the variable annuity contract, with changes in estimated fair value reported in net income, except for changes in nonperformance risk of the Company which are recorded in OCI.

The Company calculates the fair value of these MRBs, which is estimated as the present value of projected future benefits minus the present value of projected attributed fees, using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, projecting future cash flows from the MRB over multiple risk neutral stochastic scenarios using observable risk-free rates.

Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience. See Note 12 for additional information on significant unobservable inputs.

The valuation of these MRBs includes a nonperformance risk adjustment and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries as compared to MetLife, Inc.

Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions at annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees.

These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions, including changes in interest rates, equity indices, market volatility and foreign currency exchange rates; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, impact the estimated fair value of the guarantees and affect net income, and changes in nonperformance risk of the Company affect OCI.

Other

In addition to the disaggregated MRB product rollforwards above, the Company offers other products with guaranteed minimum benefit features across various segments. These MRBs are measured at estimated fair value, with changes in estimated fair value reported in net income, except for changes in nonperformance risk of the Company which are recorded in OCI. See Note 12 for additional information on significant unobservable inputs used in the fair value measurement of MRBs. Information regarding these product liabilities was as follows:

	Nine Months Ended September 30,
	2024		2023
	(In millions)
Balance, beginning of period	$	(32)	$	32
Balance, beginning of period, before effect of cumulative changes in the instrument-specific credit risk	$	(50)	$	24
Attributed fees collected	38		23
Benefit payments	(5)		(23)
Effect of changes in interest rates	(12)		(98)
Effect of changes in capital markets	(8)		(15)
Effect of changes in equity index volatility	—		(4)
Actual policyholder behavior different from expected behavior	6		(21)
Effect of changes in future expected policyholder behavior and other assumptions	(2)		2
Effect of foreign currency translation and other, net	22		37
Effect of changes in risk margin	(1)		(2)
Balance, end of period, before the cumulative effect of changes in the instrument-specific credit risk	(12)		(77)
Cumulative effect of changes in the instrument-specific credit risk	13		20
Effect of foreign currency translation on the cumulative instrument-specific credit risk	1		—
Balance, end of period	2		(57)
Less: Reinsurance recoverable	16		18
Balance, end of period, net of reinsurance	$	(14)	$	(75)