Adoption of Long-Duration Targeted Improvements (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Changes and Error Corrections [Abstract]

Liability for Future Policy Benefit, Activity

The following table presents the Successor Company rollforward of life-contingent payout annuities from the acquired balance measured before adoption, to the opening balance as of the adoption date:

Balance as of July 1, 2021	$	14,613
Change in discount rate assumptions	(2,280)
Change in cash flow assumptions and other activity	(554)
Adjusted balance as of July 1, 2021	$	11,779
Less: reinsurance recoverables	(2,938)
Adjusted balance as of July 1, 2021, net of reinsurance	$	8,841

The following table presents a rollforward of MRB liabilities associated with VA, from the acquired balance measured before adoption, to the opening balance as of the adoption date:

Balance as of July 1, 2021	$	—
Addition of existing balances [1]	261
Fair value adjustments	399
Adjusted balance as of July 1, 2021	$	660
Less: ceded market risk benefits [2]	(776)
Adjusted balance as of July 1, 2021, net of reinsurance	$	(116)

[1]Associated reserves were previously recorded within reserve for future policy benefits and other policyholder funds and benefits payable on the balance sheets.

[2]Included within reinsurance recoverables on the balance sheets.

The Company’s LFPBs consists only of the liability associated with limited pay annuities (e.g., single premium immediate annuities) with life contingencies. As this business has no future expected premiums, the following table presents a rollforward of the present value of expected future policy benefits for life-contingent payout annuities:

	Year Ended December 31,
	2023		2022
Beginning balance	$	8,335	$	11,617
Beginning balance at original discount rate	11,048		11,571
Effect of actual variances from expected experience due to mortality	(17)		2
Effect of changes in cash flow assumptions	(90)		(23)
Adjusted beginning balance at original discount rate	10,941		11,550
Issuances [1]	147		138
Interest accrual [2]	127		62
Benefit payments	(697)		(702)
Ending balance at original discount rate	10,518		11,048
Cumulative effect of changes in discount rate assumptions	(2,059)		(2,713)
Ending balance	8,459		8,335
Other business [3]	215		225
Adjusted ending balance	8,674		8,560
Less: reinsurance recoverables	(5,083)		(4,992)
Adjusted ending balance, net of reinsurance	$	3,591	$	3,568

[1]Issuances are included within premiums in the statements of operations.

[2]Interest accretion (expense) is recorded as a component of benefits and losses in the statements of operations.

[3]Represents fully reinsured blocks, whose activity is not included in the table above.

The following is a reconciliation of premiums to the statements of operations:

	Year Ended December 31,
	2023		2022
Life-contingent payout annuities	$	147	$	138
Reconciling items [1]	(59)		(39)
Total premiums	$	88	$	99

[1]Reconciling items represent premiums related to fully reinsured traditional life insurance and other lines of business, net of reinsured premiums.

The following presents supplemental disclosures related to the present value of expected future policy benefits for life-contingent payout annuities:

	Year Ended December 31,
	2023			2022
Undiscounted expected future benefits and expenses	$	18,127		$	18,696
Weighted-average duration of the liability (in years)	11.9			11.7
Weighted-average interest accretion rate	1.3		%	0.6		%
Weighted-average discount rate	4.9		%	5.3		%

Accounting Standards Update and Change in Accounting Principle

The following table presents a rollforward of VOBA associated with VA and negative VOBA associated with life-contingent payout annuities, from the acquired balance measured before adoption, to the opening balance as of the adoption date:

	Value of Business Acquired		Negative VOBA [1]
Balance, as of July 1, 2021	$	565	$	17
Establishment of market risk benefits	(200)
Change in discount rate assumptions for the liability for future policy benefits [2]			2,280
Change in cash flow assumptions and other activity for the liability for future policy benefits			554
Adjusted balance, as of July 1, 2021	$	365	$	2,851

[1]Included within other policyholder funds and benefits payable on the balance sheets.

[2]Relates to the change from a risk-free discount rate to a upper-medium grade (or low credit risk), fixed-income instrument yield.

The following table summarizes the effects of adoption on the applicable financial statement line items on the balance sheet as of December 31, 2022 (Successor Company):

	Reported		Adoption		Adjusted
Assets
Reinsurance recoverables	$	40,400	$	(1,177)	$	39,223
Market risk benefits	—		325		325
Value of business acquired and deferred acquisition costs	518		(22)		496
Deferred income taxes	1,120		(241)		879
Other assets	453		(12)		441
Total assets	$	152,866	$	(1,127)	$	151,739
Liabilities and Stockholder's Equity
Liabilities
Reserve for future policy benefits	$	21,432	$	(2,694)	$	18,738
Other policyholder funds and benefits payable	31,320		507		31,827
Market risk benefits	—		1,204		1,204
Funds withheld liability	10,485		(11)		10,474
Other liabilities	2,018		(1,037)		981
Total liabilities	152,510		(2,031)		150,479
Stockholder's Equity
Accumulated other comprehensive loss	(2,166)		507		(1,659)
Retained earnings	639		397		1,036
Total stockholder's equity	356		904		1,260
Total liabilities and stockholder's equity	$	152,866	$	(1,127)	$	151,739

The following table summarizes the effects of adoption on the applicable financial statement line items in the statement of operations for the year ended December 31, 2022 (Successor Company):

	Reported		Adoption		Adjusted
Revenues
Premiums	$	109	$	(10)	$	99
Policy charges and fee income	506		3		509
Investment and derivative related losses, net	(10)		(66)		(76)
Total revenues	1,383		(73)		1,310
Benefits, Losses, and Expenses
Benefits and losses	606		(85)		521
Change in market risk benefits	—		(295)		(295)
Amortization value of business acquired and deferred acquisition costs	79		(18)		61
Total benefits, losses, and expenses	986		(398)		588
Income before income taxes	397		325		722
Income tax expense	38		69		107
Net income	$	359	$	256	$	615

The following table summarizes the effects of adoption on the applicable financial statement line items in the statement of operations for the period of July 1, 2021 to December 31, 2021 (Successor Company):

	Reported		Adoption		Adjusted
Revenues
Premiums	$	31	$	(5)	$	26
Policy charges and fee income	410		24		434
Investment and derivative related losses, net	(20)		(30)		(50)
Total revenues	919		(11)		908
Benefits, Losses, and Expenses
Benefits and losses	285		(124)		161
Change in market risk benefits	—		2		2
Amortization value of business acquired and deferred acquisition costs	90		(66)		24
Insurance operating costs and other expenses	213		(1)		212
Total benefits, losses, and expenses	588		(189)		399
Income before income taxes	331		178		509
Income tax expense	51		37		88
Net income	$	280	$	141	$	421

The following table summarizes the effects of adoption on the applicable financial statement line items in the statement of comprehensive loss for the year ended December 31, 2022 (Successor Company):

	Reported		Adoption		Adjusted
Net income	$	359	$	256	$	615
Other comprehensive loss
Unrealized loss on available-for-sale securities	(2,129)		(477)		(2,606)
Gain related to discount rate for reserve for future policy benefits	—		873		873
Gain related to credit risk for market risk benefits	—		96		96
Other comprehensive loss	(2,156)		492		(1,664)
Comprehensive loss	$	(1,797)	$	748	$	(1,049)

The following table summarizes the effects of adoption on the applicable financial statement line items in the statement of comprehensive loss for the period of July 1, 2021 to December 31, 2021 (Successor Company):

	Reported		Adoption		Adjusted
Net income	$	280	$	141	$	421
Other comprehensive income
Unrealized loss on available-for-sale securities	(10)		(6)		(16)
Gain related to discount rate for reserve for future policy benefits	—		(14)		(14)
Gain related to credit risk for market risk benefits	—		35		35
Other comprehensive income (loss)	(10)		15		5
Comprehensive income	$	270	$	156	$	426

The following table summarizes the effects of adoption on the applicable financial statement line items in the statement of cash flows for the year ended December 31, 2022 (Successor Company):

	Reported		Adoption		Adjusted
Net income	$	359	$	256	$	615
Adjustments to reconcile net income to net cash provided by operating activities
Investment and derivative related losses, net	10		66		76
Amortization of value of business acquired and deferred acquisition costs	79		(18)		61
Amortization of unearned revenue reserve	(33)		(35)		(68)
Deferred income tax expense	56		68		124
Interest credited on investment and universal life-type contracts	534		(53)		481
Change in market risk benefits	—		(295)		(295)
Other operating activities, net	(38)		(2)		(40)
Change in operating assets and liabilities
Reinsurance recoverables	(758)		17		(741)
Reserve for future policy benefits	230		(2)		228
Other assets and liabilities	93		(2)		91
Net cash provided by operating activities	$	880	$	—	$	880

The following table summarizes the effects of adoption on the applicable financial statement line items in the statement of cash flows for the period of July 1, 2021 to December 31, 2021 (Successor Company):

	Reported		Adoption		Adjusted
Net income	$	280	$	141	$	421
Adjustments to reconcile net income to net cash used for operating activities
Investment and derivative related losses, net	20		30		50
Amortization of value of business acquired and deferred acquisition costs	90		(66)		24
Amortization of unearned revenue reserve	—		—		—
Deferred income tax expense	138		36		174
Change in market risk benefits	—		2		2
Other operating activities, net	(208)		(65)		(273)
Change in operating assets and liabilities
Reinsurance recoverables	(63)		34		(29)
Reserve for future policy benefits	(40)		(113)		(153)
Other assets and liabilities	(132)		1		(131)
Net cash used for operating activities	$	(376)	$	—	$	(376)