Insurance

6 Months Ended

Jun. 30, 2023

4. Insurance

Information regarding LFPBs for non-participating traditional and limited-payment contracts was as follows:


	Years Ended December 31,
	2022						2021
	Term and Whole Life Insurance		Income Annuities		Structured Settlement and Pension Risk Transfer Annuities		Term and Whole Life Insurance		Income Annuities		Structured Settlement and Pension Risk Transfer Annuities
	(Dollars in millions)
Present value of expected net premiums:
Balance, beginning of year	$	3,212	$	—	$	—	$	3,274	$	—	$	—
Beginning balance at original discount rate	2,964		—		—		2,868		—		—
Effect of model refinements	121		—		—		—		—		—
Effect of changes in cash flow assumptions	159		—		—		100		—		—
Effect of actual variances from expected experience	114		—		—		158		—		—
Adjusted beginning of year balance	3,358		—		—		3,126		—		—
Issuances	93		—		—		112		—		—
Interest accrual	112		—		—		107		—		—
Net premiums collected	(417)		—		—		(381)		—		—
Ending balance at original discount rate	3,146		—		—		2,964		—		—
Effect of changes in discount rate assumptions	(342)		—		—		248		—		—
Balance, end of year	$	2,804	$	—	$	—	$	3,212	$	—	$	—
Present value of expected future policy benefits:
Balance, beginning of year	$	6,253	$	4,283	$	10,171	$	6,606	$	4,636	$	11,301
Beginning balance at original discount rate	5,682		3,817		8,165		5,678		3,889		8,531
Effect of model refinements	134		—		(278)		—		—		—
Effect of changes in cash flow assumptions	179		55		(157)		100		(40)		(41)
Effect of actual variances from expected experience	150		(21)		(23)		158		(6)		(16)
Adjusted beginning of year balance	6,145		3,851		7,707		5,936		3,843		8,474
Issuances	101		220		—		128		193		—
Interest accrual	216		144		327		214		149		359
Benefit payments	(646)		(367)		(624)		(596)		(368)		(668)
Ending balance at original discount rate	5,816		3,848		7,410		5,682		3,817		8,165
Effect of changes in discount rate assumptions	(644)		(379)		(617)		571		466		2,006
Balance, end of year	$	5,172	$	3,469	$	6,793	$	6,253	$	4,283	$	10,171
Net liability for future policy benefits, end of year	$	2,368	$	3,469	$	6,793	$	3,041	$	4,283	$	10,171
Less: Reinsurance recoverable, end of year	32		25		68		42		28		93
Net liability for future policy benefits, after reinsurance recoverable	$	2,336	$	3,444	$	6,725	$	2,999	$	4,255	$	10,078

Policyholder Account Balances

Information regarding policyholder account balances was as follows:


	Universal Life Insurance			Variable Annuities (1)			Index-linked Annuities			Fixed Rate Annuities			ULSG			Company-Owned Life Insurance (1)
	(Dollars in millions)
Six Months Ended June 30, 2023
Balance, beginning of period	$	2,100		$	4,664		$	33,897		$	14,274		$	5,307		$	641
Premiums and deposits	103			43			3,390			1,479			339			—
Surrenders and withdrawals	(74)			(303)			(1,613)			(874)			(12)			—
Benefit payments	(39)			(54)			(117)			(203)			(55)			(4)
Net transfers from (to) separate account	7			9			—			—			—			—
Interest credited	(3)			75			203			229			122			15
Policy charges	(100)			(13)			(4)			—			(513)			(6)
Changes related to embedded derivatives	—			—			2,793			—			—			—

Balance, end of period	$	1,994		$	4,421		$	38,549		$	14,905		$	5,188		$	646

Weighted-average crediting rate (2)	(0.15)		%	1.65		%	0.66		%	1.57		%	2.33		%	2.33		%
Six Months Ended June 30, 2022
Balance, beginning of period	$	2,134		$	4,475		$	32,000		$	11,849		$	5,569		$	646
Premiums and deposits	100			86			3,431			340			356			—
Surrenders and withdrawals	(25)			(210)			(999)			(276)			(15)			—
Benefit payments	(30)			(53)			(77)			(166)			(37)			(4)
Net transfers from (to) separate account	12			136			—			—			—			2
Interest credited	18			79			149			150			107			11
Policy charges	(100)			(14)			(3)			—			(526)			(3)
Changes related to embedded derivatives	—			—			(3,575)			—			—			—

Balance, end of period	$	2,109		$	4,499		$	30,926		$	11,897		$	5,454		$	652

Weighted-average crediting rate (2)	0.85		%	1.76		%	0.56		%	1.28		%	1.94		%	1.69		%

_______________

(1)Includes liabilities related to separate account products where the contract holder elected a general account investment option.

(2)Excludes the effects of embedded derivatives related to index-linked crediting rates.

A reconciliation of policyholder account balances reported in the preceding rollforward table to the liability for policyholder account balances on the consolidated balance sheets was as follows at:


	June 30,
	2023		2022
	(In millions)
Policyholder account balances reported in the preceding rollforward table	$	65,703	$	55,537
Funding agreements classified as investment contracts	11,041		9,104
Other investment contract liabilities	998		1,122
Total policyholder account balances	$	77,742	$	65,763

The balance of account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums was as follows at:


Range of Guaranteed Minimum Crediting Rate	At Guaranteed Minimum		1 to 50 Basis Points Above		51 to 150 Basis Points Above		Greater than 150 Basis Points Above		Total
	(In millions)
June 30, 2023
Annuities (1) (3):
Less than 2.00%	$	716	$	253	$	424	$	7,147	$	8,540
2.00% to 3.99%	4,489		4,777		701		9		9,976
Greater than 3.99%	447		—		—		—		447
Total	$	5,652	$	5,030	$	1,125	$	7,156	$	18,963
Life insurance (2) (3):
Less than 2.00%	$	—	$	—	$	—	$	199	$	199
2.00% to 3.99%	—		452		49		145		646
Greater than 3.99%	1,105		—		—		—		1,105
Total	$	1,105	$	452	$	49	$	344	$	1,950
ULSG (3):
Less than 2.00%	$	—	$	—	$	—	$	—	$	—
2.00% to 3.99%	1,179		1,526		1,692		262		4,659
Greater than 3.99%	517		—		—		—		517
Total	$	1,696	$	1,526	$	1,692	$	262	$	5,176
December 31, 2022
Annuities (1) (3):
Less than 2.00%	$	805	$	293	$	356	$	5,805	$	7,259
2.00% to 3.99%	5,224		4,871		594		8		10,697
Greater than 3.99%	470		—		—		—		470
Total	$	6,499	$	5,164	$	950	$	5,813	$	18,426
Life insurance (2) (3):
Less than 2.00%	$	—	$	—	$	—	$	172	$	172
2.00% to 3.99%	—		462		87		150		699
Greater than 3.99%	1,148		—		—		—		1,148
Total	$	1,148	$	462	$	87	$	322	$	2,019
ULSG (3):
Less than 2.00%	$	—	$	—	$	—	$	—	$	—
2.00% to 3.99%	1,224		1,581		1,729		266		4,800
Greater than 3.99%	527		—		—		—		527
Total	$	1,751	$	1,581	$	1,729	$	266	$	5,327

_______________

(1)Includes policyholder account balances for fixed rate annuities and the fixed account portion of variable annuities.

(2)Includes policyholder account balances for retained asset accounts, universal life policies and the fixed account portion of universal variable life insurance policies.

(3)Amounts are gross of policy loans and net of excess interest reserves.

Market Risk Benefits

Information regarding MRB assets and liabilities associated with variable annuities was as follows:


	Six Months Ended June 30,				Years Ended December 31,
	2023		2022		2022		2021
	(Dollars in millions)
Balance, beginning of period	$	9,997	$	15,726	$	15,726	$	18,421
Balance, beginning of period, before effect of changes in nonperformance risk	8,253		11,639		11,639		14,969
Decrements	(54)		39		16		(70)
Effect of changes in future expected assumptions	—		—		212		41
Effect of actual different from expected experience	170		(333)		(48)		(86)
Effect of changes in interest rates	(146)		(5,940)		(8,397)		(1,831)
Effect of changes in fund returns	(1,529)		4,413		3,806		(2,578)
Issuances	(5)		(16)		(47)		(96)
Effect of changes in risk margin	(18)		(92)		(152)		(128)
Aging of the block and other	712		618		1,224		1,418
Balance, end of period, before effect of changes in nonperformance risk	7,383		10,328		8,253		11,639
Effect of changes in nonperformance risk	1,867		1,708		1,744		4,087
Balance, end of period	9,250		12,036		9,997		15,726
Less: Reinsurance recoverable, end of period	50		88		71		118
Balance, end of period, net of reinsurance (1)	$	9,200	$	11,948	$	9,926	$	15,608
Weighted-average attained age of contract holder	72.6 years		71.5 years		71.8 years		71.1 years

_______________

(1)Amounts represent the sum of MRB assets and MRB liabilities presented on the consolidated balance sheets at June 30, 2023 and 2022, with the exception of $4 million and $2 million, respectively, of index-linked annuities not included in this table, and at December 31, 2022 and 2021, with the exception of $2 million and $5 million, respectively, of index-linked annuities not included in this table.

Separate Accounts

Information regarding separate account liabilities was as follows:


	Six Months Ended June 30,
	2023						2022
	Variable Annuities		Universal Life Insurance		Company-Owned Life Insurance		Variable Annuities		Universal Life Insurance		Company-Owned Life Insurance
	(In millions)
Balance, beginning of period	$	74,845	$	1,970	$	1,919	$	101,108	$	2,577	$	2,367
Premiums and deposits	406		42		—		792		45		—
Surrenders and withdrawals	(2,877)		(38)		(7)		(3,057)		(30)		(11)
Benefit payments	(719)		(11)		(16)		(692)		(9)		(17)
Investment performance	6,906		253		212		(18,347)		(548)		(384)
Policy charges	(1,044)		(40)		(24)		(1,135)		(42)		(34)
Net transfers from (to) general account	(9)		(7)		—		(136)		(12)		(2)
Other	(9)		—		(4)		34		3		6
Balance, end of period	$	77,499	$	2,169	$	2,080	$	78,567	$	1,984	$	1,925

A reconciliation of separate account liabilities reported in the preceding rollforward table to the separate account liabilities balance on the consolidated balance sheets was as follows at:


	June 30,
	2023		2022
	(In millions)
Separate account liabilities reported in the preceding rollforward table	$	81,748	$	82,476
Variable income annuities	134		130
Pension risk transfer annuities	19		16
Total separate account liabilities	$	81,901	$	82,622

The aggregate estimated fair value of assets, by major investment asset category, supporting separate accounts was as follows at:



	June 30, 2023		December 31, 2022
	(In millions)
Equity securities	$	81,636	$	78,583

Fixed maturity securities	256		277
Cash and cash equivalents	1		9
Other assets	8		11
Total aggregate estimated fair value of assets	$	81,901	$	78,880

Net Amount at Risk and Cash Surrender Values

Information regarding the net amount at risk and cash surrender value for insurance products was as follows at:


	Universal Life Insurance		Variable Annuities		Index-linked Annuities		Fixed Rate Annuities		ULSG		Company-Owned Life Insurance
	(In millions)
June 30, 2023
Account balances reported in the preceding rollforward tables:
Policyholder account balances	$	1,994	$	4,421	$	38,549	$	14,905	$	5,188	$	646
Separate account liabilities	2,169		77,499		—		—		—		2,080
Total account balances	$	4,163	$	81,920	$	38,549	$	14,905	$	5,188	$	2,726
Net amount at risk	$	22,941	$	13,560	N/A		N/A		$	69,602	$	2,633
Cash surrender value	$	3,949	$	81,633	$	35,860	$	14,281	$	6,160	$	2,512
June 30, 2022
Account balances reported in the preceding rollforward tables:
Policyholder account balances	$	2,109	$	4,499	$	30,926	$	11,897	$	5,454	$	652
Separate account liabilities	1,984		78,567		—		—		—		1,925
Total account balances	$	4,093	$	83,066	$	30,926	$	11,897	$	5,454	$	2,577
Net amount at risk	$	24,675	$	15,360	N/A		N/A		$	71,683	$	3,290
Cash surrender value	$	3,819	$	83,080	$	27,083	$	11,158	$	6,363	$	2,348

Products may contain both separate account and general account fund options; accordingly, net amount at risk and cash surrender value reported in the table above relate to the total account balance for each respective product grouping.