Variable Annuity and Insurance Guarantees

6 Months Ended

Jun. 30, 2020

Variable Annuity and Insurance Guarantees

The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (“GMDB”) provisions. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. The Company previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions.

Certain UL policies offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges.

The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities:


Variable Annuity Guarantees by Benefit Type⁽¹⁾	June 30, 2020																			December 31, 2019
			Total Contract Value			Contract Value in Separate Accounts			Net Amount at Risk		Weighted Average Attained Age			Total Contract Value			Contract Value in Separate Accounts			Net Amount at Risk	Weighted Average Attained Age
	(in millions, except age)
GMDB:
Return of premium	$	60,861		$	58,931		$	32		68		$	62,909		$	60,967		$	5	67
Five/six-year reset	7,545			4,812			25			68		7,983			5,263			7		67
One-year ratchet	5,613			5,278			56			71		5,935			5,600			7		70
Five-year ratchet	1,325			1,269			4			67		1,396			1,340			—		66
Other	1,150			1,132			92			73		1,192			1,174			65		73
Total — GMDB	$	76,494		$	71,422		$	209		68		$	79,415		$	74,344		$	84	67

GGU death benefit	$	1,072		$	1,016		$	122		71		$	1,115		$	1,063		$	133	71

GMIB	$	168		$	154		$	10		70		$	186		$	172		$	6	70

GMWB:
GMWB	$	1,855		$	1,850		$	1		74		$	1,999		$	1,993		$	1	73
GMWB for life	45,646			45,568			478			68		46,799			46,691			272		68
Total — GMWB	$	47,501		$	47,418		$	479		68		$	48,798		$	48,684		$	273	68

GMAB	$	2,318		$	2,317		$	2		60		$	2,528		$	2,524		$	—	60

⁽¹⁾Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table.

The net amount at risk for GMDB, GGU and GMAB is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB is defined as the greater of the present value of the minimum guaranteed annuity payments less the current contract value or zero. The net amount at risk for GMWB is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero.

The following table provides information related to insurance guarantees for which the Company has established additional liabilities:


	June 30, 2020							December 31, 2019
			Net Amount at Risk		Weighted Average Attained Age			Net Amount at Risk	Weighted Average Attained Age
			(in millions, except age)
UL secondary guarantees	$	6,580		67		$	6,550	67

The net amount at risk for UL secondary guarantees is defined as the current guaranteed death benefit amount in excess of the current policyholder account balance.

Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees were as follows:


	GMDB & GGU			GMIB		GMWB⁽¹⁾		GMAB⁽¹⁾		UL
			(in millions)
Balance at January 1, 2019	$	19		$	8	$	875	$	(19)	$	659
Incurred claims	1			(1)		422		(16)		64
Paid claims	(3)			—		—		—		(25)
Balance at June 30, 2019	$	17		$	7	$	1,297	$	(35)	$	698

Balance at January 1, 2020	$	16		$	7	$	1,462	$	(39)	$	758
Incurred claims	5			1		2,387		69		65
Paid claims	(4)			(1)		—		—		(24)
Balance at June 30, 2020	$	17		$	7	$	3,849	$	30	$	799

⁽¹⁾The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims.

The liabilities for guaranteed benefits are supported by general account assets.

The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts providing guaranteed benefits:


	June 30, 2020			December 31, 2019
			(in millions)
Mutual funds:
Equity	$	41,265		$	44,739
Bond	24,326			23,374
Other	6,050			6,471
Total mutual funds	$	71,641		$	74,584