DAC, VOBA, DSI and DFEL

12 Months Ended

Dec. 31, 2023

Deferred Policy Acquisition Costs and Present Value of Future Insurance Profits, Net [Abstract]

DAC, VOBA, DSI and DFEL

DAC, VOBA, DSI and DFEL

The following table reconciles DAC, VOBA and DSI (in millions) to the Consolidated Balance Sheets:

	As of December 31,
	2023		2022
DAC, VOBA and DSI
Variable Annuities	$	4,025	$	4,047
Fixed Annuities	456		479
Traditional Life	1,374		1,336
UL and Other	6,139		6,002
Group Protection	154		141
Retirement Plan Services	270		258
Total DAC, VOBA and DSI	$	12,418	$	12,263

The following table reconciles DFEL (in millions) to the Consolidated Balance Sheets:

	As of December 31,
	2023		2022
DFEL
Variable Annuities	$	300	$	310
UL and Other (1)	5,579		4,766
Other Operations (2)	44		39
Total DFEL	$	5,923	$	5,115

(1) We reported $2.3 billion of ceded DFEL in reinsurance recoverables on the Consolidated Balance Sheet as of December 31, 2023.

(2) Represents DFEL reported in Other Operations attributable to the indemnity reinsurance agreement with Protective that is excluded from the following tables. We reported $44 million and $39 million of ceded DFEL in reinsurance recoverables on the Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively.

The following tables summarize the changes in DAC (in millions):

	For the Year Ended December 31, 2023
	Variable Annuities		Fixed Annuities		Traditional Life		UL and Other		Group Protection		Retirement Plan Services
Balance as of beginning-of-year	$	3,880	$	439	$	1,286	$	5,518	$	141	$	241
Deferrals	361		50		188		482		113		21
Amortization	(373)		(68)		(142)		(291)		(100)		(18)
Balance as of end-of-year	$	3,868	$	421	$	1,332	$	5,709	$	154	$	244

	For the Year Ended December 31, 2022
	Variable Annuities		Fixed Annuities		Traditional Life		UL and Other		Group Protection		Retirement Plan Services
Balance as of beginning-of-year	$	3,860	$	448	$	1,146	$	5,269	$	140	$	239
Deferrals	390		60		266		537		98		21
Amortization	(370)		(69)		(126)		(288)		(97)		(19)
Balance as of end-of-year	$	3,880	$	439	$	1,286	$	5,518	$	141	$	241

DAC amortization expense of $992 million, $969 million and $969 million was recorded in commissions and other expenses on the Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021, respectively.

The following tables summarize the changes in VOBA (in millions):

	For the Year Ended December 31, 2023
	Fixed Annuities		Traditional Life		UL and Other
Balance as of beginning-of-year	$	17	$	50	$	454
Business acquired (sold) through
reinsurance	–		–		(11)
Deferrals	–		–		2
Amortization	(2)		(8)		(43)
Balance as of end-of-year	$	15	$	42	$	402

	For the Year Ended December 31, 2022
	Fixed Annuities		Traditional Life		UL and Other
Balance as of beginning-of-year	$	20	$	59	$	499
Deferrals	–		–		2
Amortization	(3)		(9)		(47)
Balance as of end-of-year	$	17	$	50	$	454

VOBA amortization expense of $53 million, $59 million and $75 million was recorded in commissions and other expenses on the Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021, respectively. No additions or write-offs were recorded for each respective year.

Estimated future amortization of VOBA (in millions), as of December 31, 2023, was as follows:

2024	$	39
2025	37
2026	34
2027	29
2028	25

The following tables summarize the changes in DSI (in millions):

	For the Year Ended December 31, 2023
	Variable Annuities		Fixed Annuities		UL and Other		Retirement Plan Services
Balance as of beginning-of-year	$	167	$	23	$	30	$	17
Deferrals	5		–		–		10
Amortization	(15)		(3)		(2)		(1)
Balance as of end-of-year	$	157	$	20	$	28	$	26

	For the Year Ended December 31, 2022
	Variable Annuities		Fixed Annuities		UL and Other		Retirement Plan Services
Balance as of beginning-of-year	$	181	$	27	$	31	$	14
Deferrals	2		–		1		4
Amortization	(16)		(4)		(2)		(1)
Balance as of end-of-year	$	167	$	23	$	30	$	17

DSI amortization expense of $21 million, $23 million and $27 million was recorded in interest credited on the Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021, respectively.

The following tables summarize the changes in DFEL (in millions):

	For the Year Ended December 31, 2023				For the Year Ended December 31, 2022
	Variable Annuities		UL and Other		Variable Annuities		UL and Other
Balance as of beginning-of-year	$	310	$	4,766	$	318	$	3,934
Deferrals	19		1,074		22		1,061
Amortization	(29)		(261)		(30)		(229)
Balance as of end-of-year	300		5,579		310		4,766
Less: ceded DFEL	–		2,252		–		31
Balance as of end-of-year, net of reinsurance	$	300	$	3,327	$	310	$	4,735

DFEL amortization of $290 million, $259 million and $220 million was recorded in fee income on the Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021, respectively.