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INSURANCE LIABILITIES AND ANNUITY BENEFITS
 6 Months Ended
Jun. 30, 2024
Insurance [Abstract]  
INSURANCE LIABILITIES AND ANNUITY BENEFITS INSURANCE LIABILITIES AND ANNUITY BENEFITS. Insurance liabilities and annuity benefits comprise substantially all obligations to annuitants and insureds in our run-off insurance operations. Our insurance operations (net of eliminations) generated revenues of $871 million and $847 million, profit was $170 million and $64 million and net earnings was $134 million and $50 million for the three months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024 and 2023, revenues were $1,750 million and $1,639 million, profit was $370 million and $134 million and net earnings was $292 million and $104 million, respectively. These operations were primarily supported by investment securities of $37,739 million and $37,592 million, limited partnerships of $3,741 million and $3,300 million, and a diversified commercial mortgage loan portfolio substantially all collateralized by first liens on U.S. commercial real estate properties of $1,900 million and $1,947 million (net of allowance for credit losses of $65 million and $48 million), as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, the commercial mortgage loan portfolio had three delinquent loans, two non-accrual loans and about one-third of the portfolio was held in the office sector, which had a weighted average loan-to-value ratio of 74%, debt service coverage of 1.5, and no scheduled maturities through 2025. A summary of our insurance liabilities and annuity benefits is presented below.
June 30, 2024
Long-term careStructured settlement annuitiesLifeOther contractsTotal
Future policy benefit reserves
$25,301 $8,700 $1,010 $365 $35,376 
Investment contracts
— 762 — 689 1,451 
Other
— — 118 270 388 
Total
$25,301 $9,463 $1,127 $1,324 $37,215 
December 31, 2023
Future policy benefit reserves
$26,832 $9,357 $1,117 $382 $37,689 
Investment contracts
— 793 — 742 1,535 
Other
— — 116 285 400 
Total
$26,832 $10,150 $1,233 $1,409 $39,624 
The following tables summarize balances of and changes in future policy benefits reserves.

June 30, 2024June 30, 2023
Present value of expected net premiumsLong-term careStructured settlement annuitiesLifeLong-term careStructured settlement annuitiesLife
Balance, beginning of year$4,063 $— $4,803 $4,059 $— $4,828 
Beginning balance at locked-in discount rate3,745 — 4,773 3,958 — 5,210 
Effect of changes in cash flow assumptions16 — — 1 — — 
Effect of actual variances from expected experience(26)— (34)31 — (87)
Adjusted beginning of year balance3,735 — 4,739 3,991 — 5,122 
Interest accrual 101 — 90 105 — 100 
Net premiums collected(196)— (140)(201)— (150)
Effect of foreign currency— — (91)— — 86 
Ending balance at locked-in discount rate3,640 — 4,597 3,895 — 5,159 
Effect of changes in discount rate assumptions164 — (183)239 — (162)
Balance, end of year$3,803 $— $4,415 $4,134 $— $4,997 
Present value of expected future policy benefits
Balance, beginning of year$30,895 $9,357 $5,921 $28,316 $8,860 $5,868 
Beginning balance at locked-in discount rate27,144 8,561 5,847 27,026 8,790 6,247 
Effect of changes in cash flow assumptions(10)— — (14)— — 
Effect of actual variances from expected experience7 (25)(51)26 10 (44)
Adjusted beginning of year balance27,141 8,536 5,796 27,038 8,800 6,203 
Interest accrual738 222 110 727 229 119 
Benefit payments(693)(328)(219)(630)(338)(287)
Effect of foreign currency— — (96)— — 91 
Ending balance at locked-in discount rate27,185 8,429 5,591 27,135 8,691 6,126 
Effect of changes in discount rate assumptions1,920 271 (166)2,887 533 (144)
Balance, end of year$29,105 $8,700 $5,424 $30,022 $9,224 $5,983 
Net future policy benefit reserves$25,301 $8,700 $1,010 $25,888 $9,224 $985 
Less: Reinsurance recoverables, net of allowance for credit losses(155)— (31)(186)— (34)
Net future policy benefit reserves, after reinsurance recoverables$25,146 $8,700 $979 $25,702 $9,224 $952 

The Statement of Earnings (Loss) for the six months ended June 30, 2024 and 2023, included gross premiums or assessments of $409 million and $424 million and interest accretion of $879 million and $869 million, respectively. For the six months ended June 30, 2024 and 2023, gross premiums or assessments was substantially all related to long-term care of $242 million and $246 million and life of $156 million and $166 million while interest accretion was substantially all related to long-term care of $637 million and $621 million and structured settlement annuities of $222 million and $229 million, respectively.

The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for nonparticipating traditional contracts.
June 30, 2024June 30, 2023
Undiscounted
Discounted(a)
Undiscounted
Discounted(a)
Long-term Care:Gross premiums$7,244 $4,665 $7,807 $4,995 
Benefit payments62,387 29,105 64,585 30,022 
Structured Settlement Annuities:Benefit payments18,937 8,700 19,608 9,224 
Life:Gross premiums11,886 5,323 13,620 6,125 
Benefit payments10,730 5,424 11,850 5,983 
(a) Duration determined using the current discount rate as of June 30, 2024 and 2023.
The following table provides the weighted-average durations of and weighted-average interest rates for the liability for future policy benefits.
June 30, 2024June 30, 2023
Long-term careStructured settlement annuitiesLifeLong-term careStructured settlement annuitiesLife
Duration (years)(a)
12.110.75.413.111.15.3
Interest Accretion Rate5.6%5.4%5.2%5.5%5.4%5.1%
Current Discount Rate5.4%5.4%5.1%5.1%5.1%5.0%
(a) Duration determined using the current discount rate as of June 30, 2024 and 2023.

As of June 30, 2024 and 2023, policyholders account balances totaled $1,654 million and $1,884 million, respectively. As our insurance operations are in run-off, changes in policyholder account balances for the six months ended June 30, 2024 and 2023 are primarily attributed to surrenders, withdrawals, and benefit payments of $215 million and $219 million, partially offset by net additions from separate accounts and interest credited of $142 million and $134 million, respectively. Interest on policyholder account balances is generally credited at minimum guaranteed rates, primarily between 3.0% and 6.0% at both June 30, 2024 and 2023.

In the third quarter, we will complete our annual review of future policy benefit reserves cash flow assumptions, except related claim expenses which remain locked-in. If the review concludes that the assumptions need to be updated, future policy benefit reserves will be adjusted retroactively to the ASU 2018-12 transition date based on the revised net premium ratio using actual historical experience, updated cash flow assumptions, and the locked-in discount rate with the effect of those changes recognized in current period earnings.

Following approval of a statutory permitted accounting practice in 2018 by our primary regulator, the Kansas Insurance Department, we have since provided a total of $15,035 million of capital contributions to our run-off insurance subsidiaries, including the final contribution of $1,820 million in the first quarter of 2024.

In June 2024, we signed an agreement to exit a block of our life and health insurance business via an assumption reinsurance transaction, pending regulatory approvals and other closing conditions.

See Notes 3 and 9 for further information related to our run-off insurance operations.