DAC, VOBA, DSI and DFEL

9 Months Ended

Sep. 30, 2025

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 deferred acquisition costs (“DAC”), value of business acquired (“VOBA”) and deferred sales inducements (“DSI”) (in millions) to the Consolidated Balance Sheets:

	As of  September 30, 2025		As of December 31, 2024
DAC, VOBA and DSI
Variable Annuities	$	4,186	$	4,104
Fixed Annuities	434		423
Traditional Life	1,240		1,329
UL and Other	6,174		6,146
Group Protection	166		136
Retirement Plan Services	304		288
Other Operations	7		–
Total DAC, VOBA and DSI	$	12,511	$	12,426

The following table reconciles deferred front-end loads (“DFEL”) (in millions) to the Consolidated Balance Sheets:

	As of  September 30, 2025		As of December 31, 2024
DFEL
Variable Annuities	$	285	$	293
UL and Other	7,027		6,406
Other Operations (1)	56		51
Total DFEL	$	7,368	$	6,750

(1) Represents DFEL reported in Other Operations attributable to the indemnity reinsurance agreement with Protective that is excluded from the following tables. We reported $56 million and $51 million of ceded DFEL in reinsurance recoverables on the Consolidated Balance Sheets as of September 30, 2025, and December 31, 2024, respectively.

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

	As of or For the Nine Months Ended September 30, 2025
	Variable Annuities		Fixed Annuities		Traditional Life		UL and Other		Group Protection		Retirement Plan Services
Balance as of beginning-of-year	$	3,959	$	393	$	1,294	$	5,754	$	136	$	246
Business acquired (sold) through
reinsurance	–		–		(19)		–		(4)		–
Deferrals	404		60		40		287		103		14
Amortization	(314)		(46)		(104)		(231)		(69)		(14)
Balance as of end-of-period	$	4,049	$	407	$	1,211	$	5,810	$	166	$	246

	As of or For the Nine Months Ended September 30, 2024
	Variable Annuities		Fixed Annuities		Traditional Life		UL and Other		Group Protection		Retirement Plan Services
Balance as of beginning-of-year	$	3,868	$	421	$	1,332	$	5,709	$	154	$	244
Business acquired (sold) through
reinsurance	–		–		–		(73)		(38)		–
Deferrals	308		35		85		310		101		15
Amortization	(270)		(55)		(109)		(225)		(81)		(14)
Balance as of end-of-period	$	3,906	$	401	$	1,308	$	5,721	$	136	$	245

DAC amortization expense of $273 million and $778 million was recorded in commissions and other expenses on the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025, respectively, and $252 million and $754 million, respectively, was recorded for the corresponding periods in 2024.

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

	As of or For the Nine Months Ended September 30, 2025
	Fixed Annuities		Traditional Life		UL and Other
Balance as of beginning-of-year	$	13	$	35	$	366
Amortization	(1)		(6)		(27)
Balance as of end-of-period	$	12	$	29	$	339

	As of or For the Nine Months Ended September 30, 2024
	Fixed Annuities		Traditional Life		UL and Other
Balance as of beginning-of-year	$	15	$	42	$	402
Deferrals	–		–		1
Amortization	(2)		(5)		(29)
Balance as of end-of-period	$	13	$	37	$	374

VOBA amortization expense of $12 million and $34 million was recorded in commissions and other expenses on the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025, respectively, and $12 million and $36 million, respectively, was recorded for the corresponding periods in 2024. No additions or write-offs were recorded for each respective period.

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

	As of or For the Nine Months Ended September 30, 2025
	Variable Annuities		Fixed Annuities		UL and Other		Retirement Plan Services
Balance as of beginning-of-year	$	145	$	17	$	26	$	42
Deferrals	1		–		–		17
Amortization	(9)		(2)		(1)		(1)
Balance as of end-of-period	$	137	$	15	$	25	$	58

	As of or For the Nine Months Ended September 30, 2024
	Variable Annuities		Fixed Annuities		UL and Other		Retirement Plan Services
Balance as of beginning-of-year	$	157	$	20	$	28	$	26
Deferrals	1		–		1		16
Amortization	(10)		(3)		(2)		(1)
Balance as of end-of-period	$	148	$	17	$	27	$	41

DSI amortization expense of $4 million and $13 million was recorded in interest credited on the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025, respectively, and $5 million and $16 million, respectively, was recorded for the corresponding periods in 2024.

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

	As of or For the Nine Months Ended September 30, 2025				As of or For the Nine Months Ended September 30, 2024
	Variable Annuities		UL and Other		Variable Annuities		UL and Other
Balance as of beginning-of-year	$	293	$	6,406	$	300	$	5,579
Deferrals	12		889		14		826
Amortization	(20)		(268)		(19)		(212)
Balance as of end-of-period	285		7,027		295		6,193
Less: Ceded DFEL	–		2,528		–		2,391
Balance as of end-of-period, net of reinsurance	$	285	$	4,499	$	295	$	3,802

DFEL amortization of $92 million and $288 million was recorded in fee income on the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025, respectively, and $79 million and $231 million, respectively, was recorded for the corresponding periods in 2024.