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Equity
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Equity
13. Equity
Statutory Financial Information
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”). Such requirements are used by regulators to assess the minimum amount of statutory capital and surplus needed for an insurance company to support its operations, based on its size and risk profile (referred to as “company action level RBC”). RBC is based on statutory financial statements and is calculated in a manner prescribed by the NAIC. The RBC ratio, which is the basis for determining regulatory compliance, is equal to total adjusted capital (“TAC”) divided by the applicable company action level RBC. Companies below 100% of their company action level RBC are subject to corrective action. As of December 31, 2023, the annual RBC ratios for Brighthouse Life Insurance Company and BHNY were each in excess of 400%.
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.
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.
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 Domicile202320222021
(In millions)
Brighthouse Life Insurance CompanyDelaware $(3,131)$1,373 $(156)
Brighthouse Life Insurance Company of NYNew York$539 $(152)$(52)
Statutory capital and surplus was as follows at:
December 31,
Company20232022
(In millions)
Brighthouse Life Insurance Company$4,623 $6,349 
Brighthouse Life Insurance Company of NY$819 $223 
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 $11.0 billion and $10.7 billion for the years ended December 31, 2023 and 2022, respectively.
The statutory net income (loss) of BRCD was ($300) million, ($208) million and $543 million for the years ended December 31, 2023, 2022 and 2021, respectively, and the combined statutory capital and surplus, including the aforementioned prescribed practices, were $661 million and $696 million at December 31, 2023 and 2022, 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:
2024202320222021
CompanyPermitted Without Approval (1)Paid (2)Paid (2)Paid (2)
(In millions)
Brighthouse Life Insurance Company (3)
$— $266 $— $550 
Brighthouse Life Insurance Company of NY$81 $— $— $— 
_______________ 
(1)Reflects dividend amounts that may be paid during 2024 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 2024, some or all of such dividends may require regulatory approval to the extent dividends were paid in 2023.
(2)Reflects all amounts paid, including those requiring regulatory approval.
(3)Any payment of dividends in 2024 would be considered an extraordinary dividend subject to regulatory approval due to negative unassigned funds (surplus).
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 New York insurance laws, BHNY is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to its parent in any calendar year based on one of two standards. Under one standard, BHNY is permitted, without prior insurance regulatory clearance, to pay dividends out of earned surplus (defined as positive “unassigned funds (surplus),” excluding 85% of the change in net unrealized capital gains or losses (less capital gains tax), for the immediately preceding calendar year), in an amount up to the greater of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains), not to exceed 30% of surplus to policyholders as of the end of the immediately preceding calendar year. In addition, under this standard, BHNY may not, without prior insurance regulatory clearance, pay any dividends in any calendar year immediately following a calendar year for which its net gain from operations, excluding realized capital gains, was negative. Under the second standard, if dividends are paid from a source other than earned surplus, BHNY may, without prior insurance regulatory clearance, pay an amount up to the lesser of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains). In addition, BHNY will be permitted to pay a dividend to its parent in excess of the amounts allowed under both standards only if it files notice of its intention to declare such a dividend and the amount thereof with the New York Superintendent of Financial Services (the “NY Superintendent”), and the NY Superintendent either approves the distribution of the dividend or does not disapprove the dividend within 30 days of its filing. To the extent BHNY pays a stockholder dividend, such dividend will be paid to Brighthouse Life Insurance Company, its direct parent and sole stockholder.
Under BRCD’s plan of operations, no dividend or distribution may be made by BRCD without the prior approval of the Delaware Commissioner. BRCD did not pay any extraordinary dividends during the years ended December 31, 2023 and 2022. 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 each of the years ended December 31, 2023, 2022 and 2021, 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
Changes in Nonperformance Risk on Market Risk Benefits
Changes in Discount Rates on the Liability for Future Policy Benefits
Foreign Currency Translation Adjustments
Total
(In millions)
Balance at December 31, 2020
$5,321 $108 $— $— $(8)$5,421 
Cumulative effect to change in accounting principle, net of income tax (2)
1,959 — (2,727)(3,167)— (3,935)
Balance at January 1, 2021
7,280 108 (2,727)(3,167)(8)1,486 
OCI before reclassifications
(2,898)170 (636)1,234 1 (2,129)
Deferred income tax benefit (expense) (3)
608 (36)134 (259)— 447 
AOCI before reclassifications, net of income tax4,990 242 (3,229)(2,192)(7)(196)
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
4,996 233 (3,229)(2,192)(7)(199)
OCI before reclassifications
(14,148)329 2,344 4,060 (22)(7,437)
Deferred income tax benefit (expense) (3)
2,951 (50)(492)(852)4 1,561 
AOCI before reclassifications, net of income tax(6,201)512 (1,377)1,016 (25)(6,075)
Amounts reclassified from AOCI202 (21)— — — 181 
Deferred income tax benefit (expense) (3)
(42)5 — — — (37)
Amounts reclassified from AOCI, net of income tax160 (16)— — — 144 
Balance at December 31, 2022
(6,041)496 (1,377)1,016 (25)(5,931)
OCI before reclassifications
2,109 (273)(637)(376)18 841 
Deferred income tax benefit (expense) (3)
(443)58 134 79 (4)(176)
AOCI before reclassifications, net of income tax(4,375)281 (1,880)719 (11)(5,266)
Amounts reclassified from AOCI204 (11)— — — 193 
Deferred income tax benefit (expense) (3)
(43)2 — — — (41)
Amounts reclassified from AOCI, net of income tax161 (9)— — — 152 
Balance at December 31, 2023
$(4,214)$272 $(1,880)$719 $(11)$(5,114)
_______________
(1)See Note 9 for information on offsets to investments related to future policy benefits.
(2)See Notes 1 and 2 for information on the adoption of ASU 2018-12.
(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,
202320222021
(In millions)
Net unrealized investment gains (losses):
Net unrealized investment gains(losses)$(192)$(182)$(4)Net investment gains (losses)
Net unrealized investment gains (losses)(12)(20)(3)Net derivative gains (losses)
Net unrealized investment gains (losses), before income tax(204)(202)(7)
Income tax (expense) benefit43 42 1 
Net unrealized investment gains (losses), net of income tax(161)(160)(6)
Unrealized gains (losses) on derivatives - cash flow hedges:
Interest rate swaps1 5 2 Net derivative gains (losses)
Interest rate swaps3 4 3 Net investment income
Foreign currency swaps7 12 7 Net derivative gains (losses)
Gains (losses) on cash flow hedges, before income tax11 21 12 
Income tax (expense) benefit(2)(5)(3)
Gains (losses) on cash flow hedges, net of income tax9 16 9 
Total reclassifications, net of income tax$(152)$(144)$3