XML 30 R18.htm IDEA: XBRL DOCUMENT v3.22.0.1
Equity
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Equity 10. Equity
Statutory Financial Information
Statutory accounting principles differ from GAAP primarily by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions, reporting of reinsurance agreements and valuing investments and deferred tax assets on a different basis.
Brighthouse Life Insurance Company and BHNY prepare statutory-basis financial statements in accordance with statutory accounting practices prescribed or permitted by the insurance department of the state of domicile.
The states of domicile of Brighthouse Life Insurance Company and BHNY impose RBC requirements that were developed by the National Association of Insurance Commissioners (“NAIC”). The requirements are used by regulators to assess the minimum amount of statutory capital needed for an insurance company to support its operations, based on its size and risk profile. RBC is based on the statutory financial statements and is calculated in a manner prescribed by the NAIC, with the RBC ratio equal to the Company’s Total Adjusted Capital (“TAC”) divided by the Company Action Level. Companies below specific trigger levels or RBC ratios are subject to specified corrective action. The minimum level of TAC before corrective action commences is the Company Action Level RBC. The RBC ratios for Brighthouse Life Insurance Company and BHNY were each in excess of 400% for all periods presented.
The tables below present amounts from Brighthouse Life Insurance Company and BHNY, which are derived from the statutory-basis financial statements as filed with the insurance regulators.
Statutory net income (loss) was as follows:
Years Ended December 31,
CompanyState of Domicile202120202019
(In millions)
Brighthouse Life Insurance CompanyDelaware $(156)$(979)$1,074 
Brighthouse Life Insurance Company of NYNew York$(52)$(390)$(139)
Statutory capital and surplus was as follows at:
December 31,
Company20212020
(In millions)
Brighthouse Life Insurance Company$7,763 $7,410 
Brighthouse Life Insurance Company of NY$357 $373 
The Company has a reinsurance subsidiary, BRCD, which reinsures risks including level premium term life and ULSG assumed from other Brighthouse Financial life insurance subsidiaries. BRCD, with the explicit permission of the Delaware Insurance Commissioner (“Delaware Commissioner”), has included the value of credit-linked notes as admitted assets, which resulted in higher statutory capital and surplus of $8.6 billion and $8.0 billion for the years ended December 31, 2021 and 2020, respectively.
The statutory net income (loss) of BRCD was $543 million, $145 million and ($316) million for the years ended December 31, 2021, 2020 and 2019, respectively, and the combined statutory capital and surplus, including the aforementioned prescribed practices, were $644 million and $624 million at December 31, 2021 and 2020, respectively.
Dividend Restrictions
The table below sets forth the dividends permitted to be paid by certain of the Company’s insurance companies without insurance regulatory approval and dividends paid:
2022202120202019
CompanyPermitted Without Approval (1)Paid (2)Paid (2)Paid (2)
(In millions)
Brighthouse Life Insurance Company$1,475 $550 $1,250 $— 
Brighthouse Life Insurance Company of NY$— $— $— $28 
_______________ 
(1)Reflects dividend amounts that may be paid during 2022 without prior regulatory approval. However, because dividend tests may be based on dividends previously paid over rolling 12-month periods, if paid before a specified date during 2022, some or all of such dividends may require regulatory approval.
(2)Reflects all amounts paid, including those requiring regulatory approval.
Under the Delaware Insurance Law, Brighthouse Life Insurance Company is permitted, without prior insurance regulatory clearance, to pay a stockholder dividend as long as the amount of the dividend when aggregated with all other dividends in the preceding 12 months does not exceed the greater of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its net gain from operations for the immediately preceding calendar year (excluding realized capital gains), not including pro rata distributions of Brighthouse Life Insurance Company’s own securities. Brighthouse Life Insurance Company will be permitted to pay a stockholder dividend in excess of the greater of such two amounts only if it files notice of the declaration of such a dividend and the amount thereof with the Delaware Commissioner and the Delaware Commissioner either approves the distribution of the dividend or does not disapprove the distribution within 30 days of its filing. In addition, any dividend that exceeds earned surplus (defined as “unassigned funds (surplus)”) as of the immediately preceding calendar year requires insurance regulatory approval. Under the Delaware Insurance Law, the Delaware Commissioner has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholders.
Under BRCD’s plan of operations, no dividend or distribution may be made by BRCD without the prior approval of the Delaware Commissioner. During the year ended December 31, 2021, BRCD paid an extraordinary dividend in the form of the settlement of affiliated reinsurance balances of $400 million, invested assets of $197 million and cash of $3 million. During the year ended December 31, 2020, BRCD paid an extraordinary dividend in the form of invested assets of $423 million and the settlement of affiliated reinsurance balances of $177 million, which was approved by the Delaware Commissioner in December 2019. BRCD did not pay any extraordinary dividends during the year ended December 31, 2019. During each of the years ended December 31, 2021, 2020 and 2019, BRCD paid cash dividends of $1 million to its preferred shareholders.
Accumulated Other Comprehensive Income (Loss)
Information regarding changes in the balances of each component of AOCI was as follows:
Unrealized
Investment Gains
(Losses), Net of
Related Offsets (1)		Unrealized Gains
(Losses) on Derivatives		Foreign
Currency
Translation
Adjustments		Total
(In millions)
Balance at December 31, 2018$564 $180 $(26)$718 
OCI before reclassifications3,224 37 12 3,273 
Deferred income tax benefit (expense) (3)(677)(8)— (685)
AOCI before reclassifications, net of income tax3,111 209 (14)3,306 
Amounts reclassified from AOCI(57)(58)— (115)
Deferred income tax benefit (expense) (3)12 12 — 24 
Amounts reclassified from AOCI, net of income tax(45)(46)— (91)
Balance at December 31, 20193,066 163 (14)3,215 
OCI before reclassifications (2)3,159 (52)19 3,126 
Deferred income tax benefit (expense) (3)(663)11 (13)(665)
AOCI before reclassifications, net of income tax5,562 122 (8)5,676 
Amounts reclassified from AOCI(305)(18)— (323)
Deferred income tax benefit (expense) (3)64 4 — 68 
Amounts reclassified from AOCI, net of income tax(241)(14)— (255)
Balance at December 31, 20205,321 108 (8)5,421 
OCI before reclassifications(2,090)170 1 (1,919)
Deferred income tax benefit (expense) (3)438 (36)— 402 
AOCI before reclassifications, net of income tax3,669 242 (7)3,904 
Amounts reclassified from AOCI7 (12)— (5)
Deferred income tax benefit (expense) (3)(1)3 — 2 
Amounts reclassified from AOCI, net of income tax6 (9)— (3)
Balance at December 31, 2021$3,675 $233 $(7)$3,901 
_______________
(1)See Note 6 for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI.
(2)Includes $3 million related to the adoption of the allowance for credit losses guidance.
(3)The effects of income taxes on amounts recorded to AOCI are also recognized in AOCI. These income tax effects are released from AOCI when the related activity is reclassified into results from operations.
Information regarding amounts reclassified out of each component of AOCI was as follows:
AOCI ComponentsAmounts Reclassified from AOCIConsolidated Statements of Operations Locations
Years Ended December 31,
202120202019
(In millions)
Net unrealized investment gains (losses):
Net unrealized investment gains(losses)$(4)$319 $94 Net investment gains (losses)
Net unrealized investment gains (losses)— — — Net investment income
Net unrealized investment gains (losses)(3)(14)(37)Net derivative gains (losses)
Net unrealized investment gains (losses), before income tax(7)305 57 
Income tax (expense) benefit1 (64)(12)
Net unrealized investment gains (losses), net of income tax(6)241 45 
Unrealized gains (losses) on derivatives - cash flow hedges:
Interest rate swaps2 2 31 Net derivative gains (losses)
Interest rate swaps3 3 2 Net investment income
Foreign currency swaps7 13 25 Net derivative gains (losses)
Gains (losses) on cash flow hedges, before income tax12 18 58 
Income tax (expense) benefit(3)(4)(12)
Gains (losses) on cash flow hedges, net of income tax9 14 46 
Total reclassifications, net of income tax$3 $255 $91