ORGANIZATION

9 Months Ended

Sep. 30, 2023

Organization [Abstract]

ORGANIZATION

ORGANIZATION

Equitable Financial’s (collectively with its consolidated subsidiaries, the “Company”) primary business is providing variable annuity, life insurance and employee benefit products to both individuals and businesses. The Company is an indirect, wholly-owned subsidiary of Holdings. Equitable Financial is a stock life insurance company organized in 1859 under the laws of the State of New York.

The Company’s two principal subsidiaries include Equitable Distributors, LLC (“Equitable Distributors”) and Equitable Investment Management Group, LLC (“EIMG”), which both are wholly-owned indirect subsidiaries of Holdings.

Internal Reinsurance Treaty

On May 17, 2023, Equitable Financial Life Insurance Company (“Equitable Financial”) entered into a reinsurance agreement (the “Reinsurance Treaty”) with its affiliate Equitable Financial Life Insurance Company of America (“Equitable America”), effective April 1, 2023. Pursuant to the Reinsurance Treaty, virtually all of Equitable Financial’s net retained General Account liabilities, including all of its net retained liabilities relating to the living benefit and death riders related to (i) its variable annuity contracts issued outside the State of New York prior to October 1, 2022 (and with respect to its EQUI-VEST variable annuity contracts issued outside the State of New York prior to February 1, 2023) and (ii) certain universal life insurance policies issued outside the State of New York prior to October 1, 2022, were reinsured to Equitable America on a coinsurance funds withheld basis. In addition, all of the Separate Accounts liabilities relating to such variable annuity contracts were reinsured to Equitable America on a modified coinsurance basis. Equitable America’s obligations under the Reinsurance Treaty are secured through Equitable Financial’s retention of certain assets supporting the reinsured liabilities. The New York Department of Financial Services (the “NYDFS”) and the Arizona Department of Insurance and Financial Institutions each approved the Reinsurance Treaty.

As a condition to approving the Reinsurance Treaty, the NYDFS has required that the Company seeks to novate the reinsured contracts on a reasonable best effort basis either to Equitable America or another affiliate over the next three years. Novations of the reinsured contracts are subject to additional regulatory approvals, as well as certain policyholder approvals.

At the effective date of the transaction, April 1, 2023, the Company recorded a funds withheld liability of $11.2 billion, reinsurance deposit liabilities of $12.9 billion, amounts due from reinsurers of $14.2 billion (includes $32.4 billion of ceded policyholder account balances related to the non-insulated (“NI”) modco offset by $28.7 billion of NI modco payable), purchased MRBs of $8.2 billion, and cost of reinsurance asset of $1.7 billion. Additionally, $64.1 billion of insulated Separate Account liabilities were ceded under a modified coinsurance portion of the agreement.