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Adoption of ASU 2018-12
 12 Months Ended
Dec. 31, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]  
Adoption of ASU 2018-12 New Accounting Standards
The following table provides a description of our adoption of new ASUs issued by the FASB and the impact of the adoption on the consolidated financial statements. ASUs not listed below were assessed and determined to be either not applicable or insignificant in presentation or amount.

StandardDescriptionEffective DateEffect on Financial Statements or Other Significant Matters
ASU 2020-04, Reference Rate Reform (Topic 848) and related amendmentsThe amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions impacted by reference rate reform. If certain criteria are met, an entity will not be required to remeasure or reassess contracts impacted by reference rate reform. Additionally, changes to the critical terms of a hedging relationship affected by reference rate reform will not require entities to de-designate the relationship if certain requirements are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, with certain exceptions. The amendments are effective for contract modifications made between March 12, 2020, and December 31, 2024.March 12, 2020 through December 31, 2024This standard may be elected and applied prospectively. We utilized certain practical expedients under this guidance for contract modifications and to maintain hedge accounting for certain derivatives from the effective date through December 31, 2023. This ASU has not had a material impact to our consolidated financial condition and results of operations to date, and we do not expect future material impacts through the close of the ASU effective date on December 31, 2024.
ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts and related amendments
See Note 3 for information about ASU 2018-12.
January 1, 2023
We adopted this ASU effective January 1, 2023, with a transition date of January 1, 2021, using a modified retrospective approach, except for MRBs for which we applied a full retrospective transition approach. See Note 3 for transition disclosures related to the adoption of this ASU.
Adoption of ASU 2018-12
On January 1, 2023, we adopted ASU 2018-12 with a transition date of January 1, 2021. ASU 2018-12 updated accounting and reporting requirements for long-duration contracts and certain investment contracts issued by insurance entities. We adopted ASU 2018-12 under the modified retrospective approach, except for MRBs, which applied the full retrospective approach. Our consolidated financial statements are presented under the new guidance for reporting periods beginning January 1, 2021.

Under ASU 2018-12, we include actual historical cash flows along with best estimate future cash flows to derive the net premium ratio when calculating the LFPB associated with our traditional and limited-payment long-duration contracts. We review and update, if necessary, assumptions used to measure future cash flows included in the net premium ratio at least annually. Historical cash flows included in the net premium ratio are updated for actual experience quarterly and as assumptions are updated. Changes in the measurement of our LFPB result from updates to cash flow assumptions and actual experience, which impacts are reported within policyholder remeasurement gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). We use an upper-medium grade (low credit risk) fixed-income instrument yield (single-A) discount rate when calculating the LFPB. This discount rate is updated quarterly at each reporting date with the impact recognized in OCI. ASU 2018-12 also eliminated loss recognition testing, premium deficiency testing and the provision for adverse deviation for LFPB.

ASU 2018-12 introduced the category of MRBs, which are contracts or contract features that provide protection to the policyholder from other-than-nominal capital market risk and expose us to other-than-nominal capital market risk upon the occurrence of a specific event or circumstance, such as death, annuitization or periodic withdrawal. MRBs are required to be measured at fair value, with periodic changes in fair value reported within MRB gain (loss) on our Consolidated Statements of Comprehensive Income (Loss), except for periodic changes to instrument-specific credit risk related to direct policies, which are recognized in OCI. Changes in the fair value of ceded MRB assets and liabilities are also reported within MRB gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

ASU 2018-12 simplified the amortization model for DAC and DAC-like intangible balances, including VOBA, DSI and DFEL. Historically these balances were amortized in proportion to premium or over expected gross profits. They are now amortized on a constant-level basis over the expected term of the contract. Loss recognition testing and impairment testing are no longer applicable for DAC.

ASU 2018-12 requires disaggregated rollforwards of the beginning of year to the end of the reporting period balances. We also disclose information about inputs, judgments, assumptions, methods, changes during the period and the effect of these changes on the measurement of applicable balances. In determining the appropriate level of aggregation, we considered our reportable segments, nature and risk characteristics of our products and level of aggregation we used in disclosures presented outside the financial statements.

The following table presents the cumulative effect adjustments (in millions), after-tax and shown as increase (decrease), to the components of stockholder’s equity due to the adoption of ASU 2018-12 as of January 1, 2021, by primary accounting topic:

Total Stockholder’s Equity
Retained EarningsAOCI
Shadow impacts:
DAC, VOBA, DSI and DFEL$– $2,271 $2,271 
Additional liabilities for other
insurance benefits– 1,197 1,197 
LFPB and other (1)
(121)(1,520)(1,641)
MRBs (2)
(1,699)2,874 1,175 
Total$(1,820)$4,822 $3,002 

(1) Includes impacts to reserves and ceded reserves reported within future contract benefits and reinsurance recoverables, respectively, on the Consolidated Balance Sheets, excluding shadow impacts on additional liabilities for other insurance benefits.
(2) Includes impacts related to MRB assets and MRB liabilities reported on the Consolidated Balance Sheets and ceded MRBs reported within other assets on the Consolidated Balance Sheets.
The following table summarizes the effect of the adoption of ASU 2018-12 as of January 1, 2021, (in millions) on the Consolidated Balance Sheets:

Retained EarningsAOCITotal Stockholder’s Equity
DAC, VOBA and DSI$– $6,079 $6,079 
Reinsurance recoverables607 2,556 3,163 
Other assets (1)
5,795 – 5,795 
Future contract benefits(760)(2,966)(3,726)
MRBs, net(7,956)3,656 (4,300)
DFEL– (3,190)(3,190)
Other liabilities (2)
494 (1,313)(819)
Total$(1,820)$4,822 $3,002 

(1) Consists primarily of ceded MRB adjustments.
(2) Consists of state and federal tax adjustments.

The following table summarizes the changes in DAC, VOBA and DSI, pre-tax, (in millions) due to the adoption of ASU 2018-12 and reconciles this balance to the Consolidated Balance Sheets:

Balance
Pre-Adoption December 31, 2020		Impact from Removal of Shadow Balances
from AOCI		Balance
Post-Adoption January 1,
2021
DAC
Variable Annuities$3,675 $52 $3,727 
Fixed Annuities264 215 479 
Traditional Life1,041 – 1,041 
UL and Other297 5,031 5,328 
Group Protection187 – 187 
Retirement Plan Services126 112 238 
Total DAC5,590 5,410 11,000 
VOBA
Fixed Annuities– 23 23 
Traditional Life67 – 67 
UL and Other167 630 797 
Total VOBA234 653 887 
DSI (1)
Variable Annuities194 2 196 
Fixed Annuities17 13 30 
UL and Other35 – 35 
Retirement Plan Services13 1 14 
Total DSI259 16 275 
Total DAC, VOBA and DSI$6,083 $6,079 $12,162 

(1) Pre-adoption DSI balance was previously reported in other assets on the Consolidated Balance Sheets.
The following table summarizes the changes in DFEL, pre-tax, (in millions) due to the adoption of ASU 2018-12 and reconciles this balance to the Consolidated Balance Sheets:

Balance
Pre-Adoption December 31, 2020		Impact from Removal of Shadow Balances
from AOCI		Balance
Post-Adoption January 1,
2021
DFEL (1)
Variable Annuities$319 $5 $324 
UL and Other77 3,185 3,262 
Total DFEL$396 $3,190 $3,586 

(1) Pre-adoption DFEL balance was previously reported in other contract holder funds on the Consolidated Balance Sheets.

The following table summarizes the changes in future contract benefits, pre-tax, (in millions) due to the adoption of ASU 2018-12 and reconciles this balance to the Consolidated Balance Sheets:

Balance Pre-Adoption December 31, 2020 (1)
Impact from Removal of Shadow Balances
from AOCI		Single-A Discount
Rate Measurement
in AOCI		Cumulative
Effect to
Retained
Earnings		Balance
Post-Adoption
January 1,
2021
LFPB
Payout Annuities$2,313 $(105)$415 $44 $2,667 
Traditional Life3,062 – 852 (2)3,912 
Liability for Future Claims
Group Protection5,422 – 517 – 5,939 
Additional Liabilities for Other
Insurance Benefits
UL and Other13,687 (1,515)– 92 12,264 
Other Operations (2)
10,309 (80)2,882 626 13,737 
Other (3)
3,525 – – – 3,525 
Total future contract benefits$38,318 $(1,700)$4,666 $760 $42,044 

(1) Balance pre-adoption excludes features that meet the definition of an MRB upon transition, including features that were previously accounted for as an additional liability. Also, balance pre-adoption reflects certain reclassifications of non-life contingent account balances from future contract benefits to policyholder account balances within the Consolidated Balance Sheets.
(2) Represents future contract benefits reported in Other Operations primarily attributable to the indemnity reinsurance agreements with Protective ($6.3 billion and $7.4 billion as of December 31, 2020, and January 1, 2021, respectively) and Swiss Re ($1.8 billion and $3.3 billion as of December 31, 2020, and January 1, 2021, respectively). Includes LFPB and additional liabilities balances.
(3) Represents other miscellaneous reserves outside the scope of ASU 2018-12.
The following table summarizes the changes in reinsurance recoverables, pre-tax, (in millions) due to the adoption of ASU 2018-12 and reconciles this balance to the Consolidated Balance Sheets:

Balance Pre-Adoption December 31, 2020 (1)
Single-A
Discount
Rate
 Measurement
in AOCI		Cumulative
Effect to
Retained
Earnings		Balance
Post-Adoption
January 1,
2021
Reinsured LFPB
Payout Annuities$5 $– $– $5 
Traditional Life372 88 – 460 
Reinsured Liability for Future
Claims
Group Protection148 14 – 162 
Reinsured Additional Liabilities
for Other Insurance Benefits
UL and Other922 – (3)919 
Reinsured Other Operations (2)
14,757 2,454 610 17,821 
Reinsured Other (3)
1,346 – – 1,346 
Total reinsurance recoverables$17,550 $2,556 $607 $20,713 

(1) Balance pre-adoption excludes features that meet the definition of a ceded MRB upon transition, including features that were previously accounted for as reinsured additional liabilities.
(2) Represents reinsurance recoverables reported in Other Operations primarily attributable to the indemnity reinsurance agreements with Protective ($12.0 billion and $13.2 billion as of December 31, 2020, and January 1, 2021, respectively) and Swiss Re ($1.7 billion and $3.2 billion as of December 31, 2020, and January 1, 2021, respectively). Includes reinsured LFPB and reinsured additional liabilities balances.
(3) Represents other miscellaneous reinsurance recoverables outside the scope of ASU 2018-12.

The following table summarizes the changes in the net liability position of MRBs, pre-tax, (in millions) due to the adoption of ASU 2018-12 and reconciles this balance to the Consolidated Balance Sheets:

Balance Pre-Adoption December 31, 2020 (1)
Cumulative
Effect of
Credit Risk
to AOCI		Cumulative
Effect to
Retained
Earnings		Balance
Post-Adoption
January 1,
2021
MRBs, Net
Variable Annuities$831 $(3,592)$7,968 $5,207 
Fixed Annuities192 (52)(22)118 
Retirement Plan Services11 (12)10 9 
Total MRBs, net$1,034 $(3,656)$7,956 $5,334 

(1) Balance pre-adoption includes all features that meet the definition of an MRB upon transition, including features that were previously accounted for as additional liabilities or embedded derivatives.
The following table summarizes the changes in the net asset position of ceded MRBs, pre-tax, (in millions) due to the adoption of ASU 2018-12, reported in other assets on the Consolidated Balance Sheets:

Balance Pre-Adoption December 31, 2020 (1)
Cumulative
Effect to
Retained
Earnings		Balance
Post-Adoption
January 1,
2021
Ceded MRBs, Net
Variable Annuities$828 $5,700 $6,528 
Retirement Plan Services1 10 11 
Total ceded MRBs, net$829 $5,710 $6,539 

(1) Balance pre-adoption includes all features that meet the definition of a ceded MRB upon transition, including features that were previously accounted for as reinsured additional liabilities or embedded derivatives.

The following summarizes the effect of the adoption of ASU 2018-12 (in millions) on certain financial statement line items within the previously reported Consolidated Balance Sheet:

As of December 31, 2022
As Previously Reported (1)
Adoption
of New
Accounting
Standard		As Adjusted
Deferred acquisition costs, value of business
acquired and deferred sales inducements (2)
$13,873 $(1,610)$12,263 
Reinsurance recoverables, net of allowance for
credit losses (2)
24,450 (2,646)21,804 
Market risk benefit assets– 2,807 2,807 
Other assets (2)
8,831 (1,154)7,677 
Total assets (2)
338,185 (2,603)335,582 
Future contract benefits (2)
41,203 (2,901)38,302 
Market risk benefit liabilities– 2,078 2,078 
Deferred front-end loads (2)
5,765 (650)5,115 
Other liabilities (2)
7,719 (1,468)6,251 
Total liabilities (2)
329,919 (2,941)326,978 
Retained earnings2,436 (1,022)1,414 
Accumulated other comprehensive income (loss)(7,073)1,360 (5,713)
Total stockholder’s equity$8,266 $338 $8,604 

(1) The amounts as previously reported were reported in our Annual Report on Form 10-K for the year ended December 31, 2022, as amended by Amendment No. 1 thereto (“2022 Form 10-K”).
(2) Certain as previously reported amounts have been reclassified to conform to the current presentation.
The following summarizes the effect of the adoption of ASU 2018-12 (in millions) on certain financial statement line items within the previously reported Consolidated Statements of Comprehensive Income (Loss):

For the Year Ended December 31, 2022For the Year Ended December 31, 2021
As Previously Reported (1)
Adoption
of New
Accounting
Standard		As Adjusted
As Previously Reported (1)
Adoption of New Accounting StandardAs Adjusted
Fee income$5,783 $(417)$5,366 $6,630 $(864)$5,766 
Realized gain (loss)214 204 418 711 148 859 
Total revenues17,770 (213)17,557 19,228 (716)18,512 
Benefits10,801 (2,598)8,203 8,039 (12)8,027 
Interest credited2,849 11 2,860 2,911 1 2,912 
Market risk benefit (gain) loss– 296 296 – (1,554)(1,554)
Policyholder liability remeasurement (gain)
  loss		– 2,445 2,445 – (119)(119)
Commissions and other expenses4,799 128 4,927 5,548 (537)5,011 
Total expenses19,387 282 19,669 16,699 (2,221)14,478 
Income (loss) before taxes(1,617)(495)(2,112)2,529 1,505 4,034 
Federal income tax expense (benefit)(332)(105)(437)420 317 737 
Net income (loss)(1,285)(390)(1,675)2,109 1,188 3,297 
Unrealized investment gain (loss)(13,613)(4,026)(17,639)(2,480)(753)(3,233)
Market risk benefit non-performance risk
gain (loss)– (211)(211)– (923)(923)
Policyholder liability discount rate
remeasurement gain (loss)– 1,891 1,891 – 560 560 
Total other comprehensive income (loss),
net of tax(13,617)(2,346)(15,963)(2,477)(1,116)(3,593)
Comprehensive income (loss)(14,902)(2,736)(17,638)(368)72 (296)

(1) The amounts as previously reported were reported in our 2022 Form 10-K.
The following summarizes the effect of the adoption of ASU 2018-12 (in millions) on certain financial statement line items within the previously reported Consolidated Statements of Stockholder’s Equity:

As of December 31, 2022As of December 31, 2021
As Previously Reported (1)
Adoption
of New
Accounting
Standard		As
Adjusted
As Previously Reported (1)
Adoption
of New Accounting Standard		As
Adjusted
Retained earnings balance as of
beginning-of-year$4,366 $(632)$3,734 $4,167 $– $4,167 
Cumulative effect from adoption of new
accounting standards– – – – (1,820)(1,820)
Net income (loss)(1,285)(390)(1,675)2,109 1,188 3,297 
Retained earnings balance as of end-of-year2,436 (1,022)1,414 4,366 (632)3,734 
Accumulated other comprehensive income
(loss) balance as of beginning-of-year6,544 3,706 10,250 9,021 – 9,021 
Cumulative effect from adoption of new
accounting standards– – – – 4,822 4,822 
Other comprehensive income (loss), net of
tax(13,617)(2,346)(15,963)(2,477)(1,116)(3,593)
Accumulated other comprehensive income
(loss) balance as of end-of-year(7,073)1,360 (5,713)6,544 3,706 10,250 
Total stockholder’s equity as of end-of-year$8,266 $338 $8,604 $22,860 $3,074 $25,934 

(1) The amounts as previously reported were reported in our 2022 Form 10-K

The following summarizes the effect of the adoption of ASU 2018-12 (in millions) on certain financial statement line items within the previously reported Consolidated Statements of Cash Flows:

For the Year Ended December 31, 2022
As Previously Reported (1)
Adoption
of New
Accounting
Standard		As
Adjusted
Net income (loss)$(1,285)$(390)$(1,675)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Realized (gain) loss (214)(204)(418)
Market risk benefit (gain) loss– 296 296 
Change in:
Deferred acquisition costs, value of business acquired, deferred sales
 inducements and deferred front-end loads45 450 495 
Insurance liabilities and reinsurance-related balances (2)
727 (75)652 
Accrued expenses(98)(3)(101)
Federal income tax accruals(271)(105)(376)
Other (2)
375 31 406 
For the Year Ended December 31, 2021
As Previously Reported (1)
Adoption
of New
Accounting
Standard		As
Adjusted
Net income (loss)$2,109 $1,188 $3,297 
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Realized (gain) loss (711)(148)(859)
Market risk benefit (gain) loss– (1,554)(1,554)
Change in:
Deferred acquisition costs, value of business acquired, deferred sales
 inducements and deferred front-end loads289 207 496 
Insurance liabilities and reinsurance-related balances (2)
(862)(31)(893)
Accrued expenses370 7 377 
Federal income tax accruals391 317 708 
Other (2)
(365)14 (351)

(1) The amounts as previously reported were reported in our 2022 Form 10-K.
(2) Certain as previously reported amounts have been reclassified to conform to the current presentation.