CLOSED BLOCK

9 Months Ended

Sep. 30, 2020

As a result of demutualization, the Company’s Closed Block was established in 1992 for the benefit of certain individual participating policies that were in force on that date. Assets, liabilities and earnings of the Closed Block are specifically identified to support its participating policyholders.

Assets allocated to the Closed Block inure solely to the benefit of the Closed Block policyholders and will not revert to the benefit of the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of the Company’s General Account, any of its Separate Accounts or any affiliate of the Company without the approval of the New York State Department of Financial Services (the “NYDFS”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the General Account. For more information on the Closed Block, see Note 6 to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2019.

Summarized financial information for the Company’s Closed Block is as follows:


	September 30, 2020		December 31, 2019
	(in millions)
Closed Block Liabilities:
Future policy benefits, policyholders’ account balances and other	$	6,260	$	6,478
Policyholder dividend obligation	149		2
Other liabilities	58		38
Total Closed Block liabilities	6,467		6,518

Assets Designated to the Closed Block:
Fixed maturities available-for-sale, at fair value (amortized cost of $3,440 and $3,558) (allowance for credit losses of $0 at September 30, 2020)	3,788		3,754
Mortgage loans on real estate (net of allowance for credit losses of $6 at September 30, 2020)	1,782		1,759
Policy loans	656		706
Cash and other invested assets	3		82
Other assets	172		145
Total assets designated to the Closed Block	6,401		6,446


	September 30, 2020		December 31, 2019
	(in millions)
Excess of Closed Block liabilities over assets designated to the Closed Block	66		72
Amounts included in accumulated other comprehensive income (loss):
Net unrealized investment gains (losses), net of policyholders’ dividend obligation: $149 and $2; and net of income tax: $42 and $41	168		164
Maximum future earnings to be recognized from Closed Block assets and liabilities	$	234	$	236

The Company’s Closed Block revenues and expenses were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in millions)
Revenues:
Premiums and other income	$	36	$	42	$	118	$	136
Net investment income (loss)	61		69		190		208
Investment gains (losses), net	1		—		(1)		(1)
Total revenues	98		111		307		343

Benefits and Other Deductions:
Policyholders’ benefits and dividends	96		108		302		343
Other operating costs and expenses	—		—		1		1
Total benefits and other deductions	96		108		303		344
Net income (loss), before income taxes	2		3		4		(1)
Income tax (expense) benefit	(1)		—		(2)		(2)
Net income (loss)	$	1	$	3	$	2	$	(3)