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Equity
 12 Months Ended
Dec. 31, 2019
Stockholders' Equity Note [Abstract]  
Equity
EQUITY
 
Preferred Stock
 
As of December 31, 2019, 2018 and 2017, the Company had 10,000,000 shares of preferred stock authorized but none issued or outstanding.

Common Stock

On the date of demutualization in December 2001, Prudential Financial completed an initial public offering of its Common Stock. The shares of Common Stock issued were in addition to shares of Common Stock the Company distributed to policyholders as part of the demutualization. The Common Stock is traded on the New York Stock Exchange under the symbol “PRU”. In the event of a liquidation, dissolution or winding-up of the Company, holders of Common Stock would be entitled to receive a proportionate share of the net assets of the Company that remain after paying all liabilities and the liquidation preferences of any preferred stock.
 
The changes in the number of shares of Common Stock issued, held in treasury and outstanding, are as follows for the periods indicated:
 
 
Common Stock
 
 
Issued
 
Held In
Treasury
 
Outstanding
 
 
 
 
 
 
 
 
 
 
 
(in millions)
Balance, December 31, 2016
 
660.1

 
230.5

 
429.6

Common Stock issued
 
0.0

 
0.0

 
0.0

Common Stock acquired
 
0.0

 
11.5

 
(11.5
)
Stock-based compensation programs(1)
 
0.0

 
(4.5
)
 
4.5

Balance, December 31, 2017
 
660.1

 
237.5

 
422.6

Common Stock issued
 
0.0

 
0.0

 
0.0

Common Stock acquired
 
0.0

 
14.9

 
(14.9
)
Stock-based compensation programs(1)
 
0.0

 
(3.0
)
 
3.0

Balance, December 31, 2018
 
660.1

 
249.4

 
410.7

Common Stock issued (2)(3)
 
6.2

 
(5.5
)
 
11.7

Common Stock acquired
 
0.0

 
27.2

 
(27.2
)
Stock-based compensation programs(1)
 
0.0

 
(3.6
)
 
3.6

Balance, December 31, 2019
 
666.3

 
267.5

 
398.8

__________
(1)
Represents net shares issued from treasury pursuant to the Company’s stock-based compensation programs.
(2)
In August 2019, as a result of the note holders’ exercise of the exchange option on $500 million of surplus notes, the Company issued approximately 6.2 million shares of Common Stock at an exchange rate equal to 12.3877 shares of Common Stock per each $1,000 principal amount of surplus notes. The Company’s obligations under the surplus notes are now satisfied. For additional information, see Note 20.
(3)
In October 2019, the Company issued approximately 5.5 million shares of restricted Common Stock as part of consideration paid for the Assurance IQ acquisition. For additional information about the acquisition, see Note 1.

Additional paid-in capital

Additional paid-in capital is primarily comprised of the cumulative excess between: (a) the total cash received by the Company in conjunction with past issuances of Common Stock shares or Common Stock shares reissued from treasury in conjunction with the Company’s stock-based compensation program and (b) the total par value associated with those shares ($.01 per share).

Common stock held in treasury
 
Common Stock held in treasury represents the Company’s previously issued shares of stock which have been repurchased by the Company but not retired. These shares are accounted for at the cost at which they were acquired. Common Stock held in treasury is typically impacted by repurchases of shares under the Board of Directors approved share repurchase program and by reissuances of shares associated with our stock-based compensation programs, or for other purposes, which are accounted for at average cost upon reissuance. Gains resulting from the reissuance of Common Stock held in treasury are credited to Additional paid-in capital. Losses resulting from the reissuance of Common Stock held in treasury are charged first to Additional paid-in capital to the extent the Company has previously recorded gains on treasury share transactions, then to Retained earnings.

The Board of Directors may from time to time, at its discretion, authorize management to repurchase shares of Common Stock of the Company. The timing and amount of share repurchases are determined by management based upon market conditions and other considerations, and repurchases may be executed in the open market, through derivative, accelerated repurchase and other negotiated transactions and through prearranged trading plans complying with Rule 10b5-1(c) under the Securities Exchange Act of 1934 (the “Exchange Act”). Numerous factors could affect the timing and amount of any future repurchases under the share repurchase authorization, including increased capital needs of the Company due to changes in regulatory capital requirements, opportunities for growth and acquisitions, and the effect of adverse market conditions on the segments.

The following table summarizes share repurchases for each of the past three years as well as the share repurchase authorization for 2020 which was approved by the Board of Directors in December 2019.
 
 
January 1, 2020 -
December 31, 2020

 
January 1, 2019 -
December 31, 2019

 
January 1, 2018 -
December 31, 2018
 
January 1, 2017 -
December 31, 2017
Total Board authorized share repurchase amount ($ in billions)
 
$
2.0

 
$
2.5

 
$
1.5

 
$
1.25

Total number of shares repurchased under this authorization as of the period end (in millions)
 
N/A*

 
27.2

 
14.9

 
11.5

__________
* Share repurchase authorization for a future period.
Accumulated Other Comprehensive Income (Loss)
 
AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Consolidated Statements of Comprehensive Income. Each of the components that comprise OCI are described in further detail in Note 2 (Foreign Currency Translation Adjustment and Net Unrealized Investment Gains (Losses)) and Note 18 (Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)). The balance of and changes in each component of AOCI as of and for the years ended December 31, are as follows:
 
 
Accumulated Other Comprehensive Income (Loss)
Attributable to Prudential Financial, Inc.
 
Foreign 
Currency
Translation
Adjustment
 
Net Unrealized
Investment
Gains
(Losses)(1)
 
Pension and
Postretirement
Unrecognized Net
Periodic Benefit (Cost)
 
Total Accumulated Other Comprehensive Income (Loss)
 
(in millions)
Balance, December 31, 2016
$
(973
)
 
$
18,171

 
$
(2,577
)
 
$
14,621

Change in OCI before reclassifications
768

 
4,026

 
(153
)
 
4,641

Amounts reclassified from AOCI
1

 
(1,629
)
 
224

 
(1,404
)
Income tax benefit (expense)
(65
)
 
(600
)
 
(119
)
 
(784
)
Balance, December 31, 2017
(269
)
 
19,968

 
(2,625
)
 
17,074

Change in OCI before reclassifications
(74
)
 
(7,614
)
 
(547
)
 
(8,235
)
Amounts reclassified from AOCI
1

 
(779
)
 
227

 
(551
)
Income tax benefit (expense)
9

 
1,735

 
68

 
1,812

Cumulative effect of adoption of ASU 2016-01
0

 
(847
)
 
0

 
(847
)
Cumulative effect of adoption of ASU 2018-02
(231
)
 
2,282

 
(398
)
 
1,653

Balance, December 31, 2018
(564
)
 
14,745

 
(3,275
)
 
10,906

Change in OCI before reclassifications
37

 
18,540

 
(563
)
 
18,014

Amounts reclassified from AOCI
27

 
(1,345
)
 
241

 
(1,077
)
Income tax benefit (expense)
(36
)
 
(3,835
)
 
60

 
(3,811
)
Cumulative effect of adoption of ASU 2017-12
0

 
7

 
0

 
7

Balance, December 31, 2019
$
(536
)
 
$
28,112

 
$
(3,537
)
 
$
24,039

__________
(1)
Includes cash flow hedges of $832 million, $811 million and $(39) million as of December 31, 2019, 2018, and 2017, respectively.
Reclassifications out of Accumulated Other Comprehensive Income (Loss)
 
 
Years Ended December  31,
 
Affected line item in Consolidated
Statements of Operations
 
2019
 
2018
 
2017
 
 
(in millions)
 
 
Amounts reclassified from AOCI(1)(2):
 
 
 
 
 
 
 
Foreign currency translation adjustment:
 
 
 
 
 
 
 
Foreign currency translation adjustment
$
(27
)
 
$
(1
)
 
$
(3
)
 
Realized investment gains (losses), net
Foreign currency translation adjustment
0

 
0

 
2

 
Other income (loss)
Total foreign currency translation adjustment
(27
)
 
(1
)
 
(1
)
 
 
Net unrealized investment gains (losses):
 
 
 
 
 
 
 
Cash flow hedges—Interest Rate
58

 
1

 
(2
)
 
(3)
Cash flow hedges—Currency
6

 
7

 
0

 
(3)
Cash flow hedges—Currency/Interest rate
315

 
543

 
(16
)
 
(3)
Net unrealized investment gains (losses) on available-for-sale securities
966

 
228

 
1,647

 
 
Total net unrealized investment gains (losses)
1,345

 
779

 
1,629

 
(4)
Amortization of defined benefit items:
 
 
 
 
 
 
 
Prior service cost
0

 
3

 
3

 
(5)
Actuarial gain (loss)
(241
)
 
(230
)
 
(227
)
 
(5)
Total amortization of defined benefit items
(241
)
 
(227
)
 
(224
)
 
 
Total reclassifications for the period
$
1,077

 
$
551

 
$
1,404

 
 
__________
(1)
All amounts are shown before tax.
(2)
Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.
(3)
See Note 5 for additional information on cash flow hedges.
(4)
See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ dividends.
(5)
See Note 18 for information on employee benefit plans.

Net Unrealized Investment Gains (Losses)
 
Net unrealized investment gains (losses) on securities classified as available-for-sale and certain other invested assets and other assets are included in the Company’s Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains (losses), are as follows:
 
Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities on which an OTTI loss has been recognized
 
Net Unrealized
Gains (Losses)
on Investments
 
DAC, DSI, VOBA and Reinsurance Recoverables
 
Future Policy
Benefits, Policyholders’
Account
Balances and Reinsurance Payables
 
Policyholders’
Dividends
 
Deferred
Income
Tax
(Liability)
Benefit
 
Accumulated Other Comprehensive Income (Loss)
Related to Net
Unrealized
Investment
Gains (Losses)
 
(in millions)
Balance, December 31, 2016
$
312

 
$
(5
)
 
$
(6
)
 
$
(47
)
 
$
(97
)
 
$
157

Net investment gains (losses) on investments arising during the period
79

 
 
 
 
 
 
 
(22
)
 
57

Reclassification adjustment for (gains) losses included in net income
(85
)
 
 
 
 
 
 
 
23

 
(62
)
Reclassification adjustment for OTTI losses excluded from net income(1)
(20
)
 
 
 
 
 
 
 
5

 
(15
)
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables
 
 
3

 
 
 
 
 
(1
)
 
2

Impact of net unrealized investment (gains) losses on future policy benefits, policyholders’ account balances and reinsurance payables
 
 
 
 
9

 
 
 
(2
)
 
7

Impact of net unrealized investment (gains) losses on policyholders’ dividends
 
 
 
 
 
 
1

 
0

 
1

Balance, December 31, 2017
286

 
(2
)
 
3

 
(46
)
 
(94
)
 
147

Net investment gains (losses) on investments arising during the period
(19
)
 
 
 
 
 
 
 
8

 
(11
)
Reclassification adjustment for (gains) losses included in net income
(76
)
 
 
 
 
 
 
 
33

 
(43
)
Reclassification adjustment for OTTI losses excluded from net income(1)
(2
)
 
 
 
 
 
 
 
1

 
(1
)
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables
 
 
1

 
 
 
 
 
0

 
1

Impact of net unrealized investment (gains) losses on future policy benefits, policyholders’ account balances and reinsurance payables
 
 
 
 
1

 
 
 
0

 
1

Impact of net unrealized investment (gains) losses on policyholders’ dividends
 
 
 
 
 
 
23

 
(9
)
 
14

Balance, December 31, 2018
189

 
(1
)
 
4

 
(23
)
 
(61
)
 
108

Net investment gains (losses) on investments arising during the period
129

 
 
 
 
 
 
 
(29
)
 
100

Reclassification adjustment for (gains) losses included in net income
(96
)
 
 
 
 
 
 
 
21

 
(75
)
Reclassification adjustment for OTTI losses excluded from net income(1)
21

 
 
 
 
 
 
 
(5
)
 
16

Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables
 
 
0

 
 
 
 
 
0

 
0

Impact of net unrealized investment (gains) losses on future policy benefits, policyholders’ account balances and reinsurance payables
 
 
 
 
1

 
 
 
0

 
1

Impact of net unrealized investment (gains) losses on policyholders’ dividends
 
 
 
 
 
 
1

 
0

 
1

Balance, December 31, 2019
$
243

 
$
(1
)
 
$
5

 
$
(22
)
 
$
(74
)
 
$
151

__________
(1)
Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

All Other Net Unrealized Investment Gains (Losses) in AOCI
 
Net Unrealized
Gains (Losses)
on Investments(1)
 
DAC, DSI, VOBA and Reinsurance Recoverables
 
Future Policy
Benefits, Policyholders’
Account
Balances and Reinsurance Payables
 
Policyholders’
Dividends
 
Deferred
Income
Tax
(Liability)
Benefit
 
Accumulated Other Comprehensive Income (Loss)
Related to Net
Unrealized
Investment
Gains (Losses)
 
(in millions)
Balance, December 31, 2016
$
32,420

 
$
(1,056
)
 
$
(1,136
)
 
$
(2,980
)
 
$
(9,234
)
 
$
18,014

Net investment gains (losses) on investments arising during the period
5,216

 
 
 
 
 
 
 
(1,425
)
 
3,791

Reclassification adjustment for (gains) losses included in net income
(1,544
)
 
 
 
 
 
 
 
421

 
(1,123
)
Reclassification adjustment for OTTI losses excluded from net income(2)
20

 
 
 
 
 
 
 
(5
)
 
15

Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables
 
 
(524
)
 
 
 
 
 
191

 
(333
)
Impact of net unrealized investment (gains) losses on future policy benefits, policyholders’ account balances and reinsurance payables
 
 
 
 
(107
)
 
 
 
25

 
(82
)
Impact of net unrealized investment (gains) losses on policyholders’ dividends
 
 
 
 
 
 
(651
)
 
190

 
(461
)
Balance, December 31, 2017
36,112

 
(1,580
)
 
(1,243
)
 
(3,631
)
 
(9,837
)
 
19,821

Net investment gains (losses) on investments arising during the period
(10,838
)
 
 
 
 
 
 
 
2,893

 
(7,945
)
Reclassification adjustment for (gains) losses included in net income
(703
)
 
 
 
 
 
 
 
303

 
(400
)
Reclassification adjustment for OTTI losses excluded from net income(2)
2

 
 
 
 
 
 
 
(1
)
 
1

Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables
 
 
842

 
 
 
 
 
(263
)
 
579

Impact of net unrealized investment (gains) losses on future policy benefits, policyholders’ account balances and reinsurance payables
 
 
 
 
452

 
 
 
(186
)
 
266

Impact of net unrealized investment (gains) losses on policyholders’ dividends
 
 
 
 
 
 
1,924

 
(874
)
 
1,050

Cumulative effect of adoption of ASU 2016-01
(2,042
)
 
 
 
 
 
813

 
212

 
(1,017
)
Cumulative effect of adoption of ASU 2018-02
 
 
 
 
 
 
 
 
2,282

 
2,282

Balance, December 31, 2018
22,531

 
(738
)
 
(791
)
 
(894
)
 
(5,471
)
 
14,637

Net investment gains (losses) on investments arising during the period
23,826

 
 
 
 
 
 
 
(5,282
)
 
18,544

Reclassification adjustment for (gains) losses included in net income
(1,249
)
 
 
 
 
 
 
 
277

 
(972
)
Reclassification adjustment for OTTI losses excluded from net income(2)
(21
)
 
 
 
 
 
 
 
5

 
(16
)
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables
 
 
(846
)
 
 
 
 
 
190

 
(656
)
Impact of net unrealized investment (gains) losses on future policy benefits, policyholders’ account balances and reinsurance payables
 
 
 
 
(2,123
)
 
 
 
475

 
(1,648
)
Impact of net unrealized investment (gains) losses on policyholders’ dividends
 
 
 
 
 
 
(2,450
)
 
515

 
(1,935
)
Cumulative effect of adoption of ASU 2017-12
9

 
 
 
 
 
 
 
(2
)
 
7

Balance, December 31, 2019
$
45,096

 
$
(1,584
)
 
$
(2,914
)
 
$
(3,344
)
 
$
(9,293
)
 
$
27,961

__________
(1)
Includes cash flow hedges. See Note 5 for information on cash flow hedges.
(2)
Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.
Retained earnings
 
Retained earnings primarily represents the cumulative net income earned by the Company that has been retained by the Company as of the reporting date. Other unique items, included but not limited to the adoption of new accounting standards updates, may also impact retained earnings. In any given period, retained earnings may increase due to net income and may decrease due to net losses or the declaration of dividends. The declaration and payment of dividends on the Common Stock is limited by New Jersey corporate law, pursuant to which Prudential Financial is prohibited from paying a Common Stock dividend if, after giving effect to that dividend, either (a) the Company would be unable to pay its debts as they become due in the usual course of its business or (b) the Company’s total assets would be less than its liabilities. In addition, the terms of the Company’s outstanding junior subordinated debt include a “dividend stopper” provision that restricts the payment of dividends on the Common Stock if interest payments are not made on the junior subordinated debt.
 
Other than the above limitations, the Company’s Retained earnings balance is free of restrictions for the payment of Common Stock dividends; however, Common Stock dividends will be dependent upon financial conditions, results of operations, cash needs, future prospects and other factors, including cash available to Prudential Financial, the parent holding company. The principal sources of funds available to Prudential Financial are dividends and returns of capital from its subsidiaries, loans from its subsidiaries, repayments of operating loans from its subsidiaries, and cash and other highly liquid assets. The primary uses of funds at Prudential Financial include servicing its debt, operating expenses, capital contributions and loans to subsidiaries, the payment of declared shareholder dividends and repurchases of outstanding shares of Common Stock if executed under Board authority. As of December 31, 2019, Prudential Financial had highly liquid assets (excluding amounts held in an intercompany liquidity account) of $4,061 million predominantly including cash, short-term investments, U.S. Treasury securities, obligations of other U.S. government authorities and agencies, and/or foreign government bonds.
 
Future cash available at Prudential Financial to support the payment of future Common Stock dividends is dependent on the receipt of dividends or other funds from its subsidiaries, the majority of which are subject to comprehensive regulation, including limitations on their payment of dividends and other transfers of funds, which are discussed in this Note further below.
 
Non-controlling interests

For certain subsidiaries, the Company owns a controlling interest that is less than 100% ownership of the subsidiary but must consolidate 100% of the subsidiary’s financial statements in accordance with U.S. GAAP. Non-controlling interests represent the portion of equity ownership in a consolidated subsidiary that is not attributable to the Company.
Insurance Subsidiaries - Statutory Financial Information and Restrictions on Payments of Dividends

U.S. Insurance Subsidiaries - Statutory Financial Information

The Company’s domestic insurance subsidiaries are required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the insurance department of the state of domicile. Statutory accounting practices primarily differ from U.S. GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions as well as valuing investments and certain assets and accounting for deferred taxes on a different basis.
 
The risk-based capital (“RBC”) ratio is a primary measure by which the Company and its insurance regulators evaluate the capital adequacy of PICA and the Company’s other domestic insurance subsidiaries. RBC is determined by NAIC-prescribed formulas that consider, among other things, risks related to the type and quality of the invested assets, insurance-related risks associated with an insurer’s products and liabilities, interest rate risks and general business risks. Insurers that have less statutory capital than required are considered to have inadequate capital and are subject to varying degrees of regulatory action depending upon the level of capital inadequacy. The Company expects to report RBC ratios as of December 31, 2019 above the regulatory required minimums that would require corrective action and above our “AA” financial strength target levels for both PICA and Prudential Annuities Life Assurance Corporation (“PALAC”).
 
The following table summarizes certain statutory financial information for the Company’s two largest U.S. insurance subsidiaries for the periods indicated:

 
 
PICA
 
PALAC
In millions and presented as of or for the year ended
 
December 31, 2019
 
December 31, 2018
 
December 31, 2017
 
December 31, 2019
 
December 31, 2018
 
December 31, 2017
Statutory net income (loss)(1)
 
$
(169
)
 
$
1,324

 
$
(217
)
 
$
(2,052
)
 
$
(852
)
 
$
3,911

Statutory capital and surplus(1)
 
$
11,483

 
$
10,695

 
$
9,948

 
$
4,748

 
$
6,396

 
$
8,059

__________
(1)
Prior year amounts have been updated to conform to finalized statutory filing where applicable.
U.S. Insurance Subsidiaries - Restrictions on Payment of Dividends to Prudential Financial, the Parent Holding Company

With respect to PICA, a New Jersey domiciled insurance subsidiary which is also the Company’s primary domestic insurance subsidiary, New Jersey insurance law provides that, except in the case of extraordinary dividends (as described below), all dividends or other distributions paid by PICA may be paid only from unassigned surplus, as determined pursuant to statutory accounting principles, less cumulative unrealized investment gains and losses and revaluation of assets as of the prior calendar year-end. As of December 31, 2019, PICA’s unassigned surplus less applicable adjustments for cumulative unrealized investment gains was $7,511 million. PICA must give prior notification to the NJDOBI of its intent to pay any such dividend or distribution. Also, if any dividend, together with other dividends or distributions made within the preceding twelve months, exceeds the greater of (i) 10% of statutory capital and surplus as of the preceding December 31 or (ii) its statutory net gain from operations excluding realized investment gains and losses for the twelve-month period ending on the preceding December 31, the dividend is considered to be an “extraordinary dividend” and requires the prior approval of the NJDOBI. Under New Jersey insurance law, PICA is permitted to pay an ordinary dividend of up to $1,148 million in 2020, without prior approval of the NJDOBI.
 
The laws regulating dividends of the states where the Company’s other domestic insurance subsidiaries are domiciled are similar, but not identical, to New Jersey. With respect to PALAC, an Arizona domiciled insurance subsidiary of the Company, Arizona insurance law provides that if any dividend, together with other dividends or distributions made within the preceding twelve months, exceeds the lesser of (i) 10% of statutory capital and surplus as of the preceding December 31 or (ii) its statutory net gain from operations excluding realized investment gains and losses for the twelve month period ending on the preceding December 31, the dividend is considered to be an “extraordinary dividend” and requires prior approval of the Arizona Department of Insurance. Under Arizona law, the maximum PALAC is permitted to pay in 2020 as an ordinary dividend is $204 million, without prior approval of the Arizona Department of Insurance.

International Insurance Subsidiaries - Statutory Financial Information

The Company’s international insurance subsidiaries prepare financial statements in accordance with local regulatory requirements. These statutory accounting practices differ from U.S. GAAP primarily by charging policy acquisition costs to expense as incurred and establishing future policy benefit liabilities using different actuarial assumptions, as well as valuing investments and certain assets and accounting for deferred taxes on a different basis.
 
The Japan Financial Services Agency (“FSA”) utilizes a solvency margin ratio to evaluate the capital adequacy of Japanese insurance companies. The solvency margin ratio considers the level of solvency margin capital to a solvency margin risk amount, which is calculated in a similar manner to RBC. As of December 31, 2019, the Company expects The Prudential Life Insurance Company Ltd. (“Prudential of Japan”) and Gibraltar Life both had solvency margin capital in excess of 3.5 times the regulatory required minimums that would require corrective action.
 
All of the Company’s domestic and international insurance subsidiaries have capital and surplus levels that exceed their respective regulatory minimum requirements, and none utilized prescribed or permitted practices that vary materially from the practices prescribed by the NAIC or equivalent regulatory bodies for results reported as of December 31, 2019 and 2018, respectively, or for the years ended December 31, 2019, 2018 and 2017, respectively.

International Insurance Subsidiaries - Restrictions on Payment of Dividends to Prudential Financial, the Parent Holding Company

The Company’s international insurance operations are subject to dividend restrictions from the regulatory authorities in the jurisdictions in which they operate. With respect to Prudential of Japan and Gibraltar Life, the Company’s most significant international insurance subsidiaries, both of which are domiciled in Japan, Japan insurance law provides that common stock dividends may be paid in an amount of up to 83% of prior fiscal year statutory after-tax earnings, after certain reserving thresholds are met, including providing for policyholder dividends. If statutory retained earnings exceed 100% of statutory paid-in capital,
100% of prior year statutory after-tax earnings may be paid, after reserving thresholds are met. Dividends in excess of these amounts and other forms of capital distribution require the prior approval of the FSA. Additionally, Prudential of Japan and Gibraltar Life must give prior notification to the FSA of their intent to pay any dividend or distribution. In addition to paying common stock dividends, Prudential of Japan and Gibraltar Life may return capital to Prudential Financial through other means, such as the repayment of subordinated debt or preferred stock obligations held by Prudential Financial or other affiliates and affiliated lending, derivatives and reinsurance.

For the year ended December 31, 2019, Prudential Financial received $1,065 million from its international insurance subsidiaries. In addition to paying Common Stock dividends, the Company’s international insurance operations may return capital to Prudential Financial through, or facilitated by, other means, such as the repayment of Preferred Stock obligations held by Prudential Financial or other affiliates, affiliated lending, affiliated derivatives and reinsurance with U.S.- and Bermuda-based affiliates. In 2019, the Company’s Japan insurance operations entered into reinsurance agreements with Gibraltar Re, the Company’s Bermuda-based reinsurance affiliate, to reinsure the mortality and morbidity risk associated with a portion of the in-force contracts as well as newly-issued contracts for certain products. The Company expects these transactions will allow it to more efficiently manage its capital and risk profile. The current regulatory fiscal year end for both Prudential of Japan and Gibraltar Life is March 31, 2020, after which time the common stock dividend amount permitted to be paid without prior approval from the FSA can be determined.
 
In addition, although prior regulatory approval may not be required by law for the payment of dividends up to the limitations described above, in practice, the Company would typically discuss any dividend payments with the applicable regulatory authority prior to payment. Additionally, the payment of dividends by the Company’s subsidiaries is subject to declaration by their Board of Directors and may be affected by market conditions and other factors.