REINSURANCE (Tables)

9 Months Ended

Sep. 30, 2023

The following table summarizes the effect of reinsurance. The impact of the reinsurance transaction described below results in an increase in reinsurance ceded:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in millions)
Direct charges and fee income	$	681	$	683	$	2,033	$	2,117
Reinsurance assumed	4		5		8		8
Reinsurance ceded - Equitable America	(340)		—		(685)		—
Reinsurance ceded - third party	(152)		(139)		(456)		(423)
Policy charges and fee income	$	193	$	549	$	900	$	1,702

Direct premiums	$	199	$	194	$	607	$	572
Reinsurance assumed	40		51		136		138
Reinsurance ceded - Equitable America	(78)		—		(118)		—
Reinsurance ceded - third party	(59)		(52)		(170)		(162)
Premiums	$	102	$	193	$	455	$	548

Direct policyholders’ benefits	$	673	$	674	$	2,122	$	2,046
Reinsurance assumed	29		46		106		151
Reinsurance ceded - Equitable America	(146)		—		(410)		—
Reinsurance ceded - third party	(138)		(197)		(447)		(469)
Policyholders’ benefits	$	418	$	523	$	1,371	$	1,728

Direct Interest credited to policyholders’ account balances	$	505	$	352	$	1,458	$	944
Reinsurance assumed	—		—		—		—
Reinsurance ceded - Equitable America	(155)		—		(306)		—
Reinsurance ceded - third party	(27)		—		(82)		(17)
Interest credited to policyholders’ account balances	$	323	$	352	$	1,070	$	927

Schedule of Reinsurance Retention

The following table summarizes the composition of the pool of assets:



	September 30, 2023
	Carrying Value		Fair Value
	(in millions)
Fixed maturities	$	23,958	$	23,958
Mortgage loans on real estate	8,476		7,171
Policy loans	241		241
Other equity investments	227		227
Other invested assets	6,290		6,290
Total assets supporting funds withheld	$	39,192	$	37,887

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(1)Other invested assets includes derivatives and cash and cash equivalents.

Schedule of Impact of Funds Withheld Arrangement of Net Investment Income Loss

The impact of the funds withheld and NI modco arrangement with Equitable America was as follows:


	Three Months Ended September 30, 2023		Nine Months Ended September 30, 2023
	(in millions)
Net derivative gains (losses):
Freestanding derivatives	$	(157)	$	1,208
Embedded derivatives	1,051		(279)
Net derivative gains (losses)	894		929
Net investment income (loss)	345		640
Investment gains (losses), net	(143)		(179)
Income (loss) from continuing operations, before income taxes	1,096		1,390
Income tax (expense) benefit	(96)		(149)
Net income (loss)	1,000		1,241

Change in unrealized gains (losses), net of income taxes	(843)		(1,016)
Comprehensive income (loss)	$	157	$	225

Schedule of Ceded Credit Risk

The following table summarizes the ceded purchased market risk benefits, internal reinsurance recoverable and third-party recoverables including amount due to reinsurance and assumed reserves:



	September 30, 2023		December 31, 2022
	(in millions)
Ceded Reinsurance:
Estimated net fair values of purchased market risk benefits	$	15,490	$	10,490
Reinsurance recoverables related to insurance contracts	21,512		7,131
Related party - Equitable America (1)	14,466		—
Third parties	7,046		7,131
Top reinsurers:
First Allmerica-GAF	3,735		4,005
Venerable Insurance and Annuity Company (A- KBRA (IFRS) rating)	862		543
Ceded group health reserves	13		14
Amount due to reinsurers	199		282
Top reinsurers:
First Allmerica-GAF	71		147

Assumed Reinsurance:
Reinsurance assumed reserves	689		701

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(1)Includes ceded PAB on NI Modco portion of the Reinsurance Treaty of $32.2 billion offset by $(28.2) billion of modco payable for the same portion of the Reinsurance Treaty.