Reinsurance (Tables)

12 Months Ended

Dec. 31, 2021

Reinsurance amounts included in the Company’s Consolidated Statements of Financial Position as of December 31, were as follows:


	2021		2020
	(in thousands)
Reinsurance recoverables	$	38,598,767	$	48,367,096
Policy loans	(156,749)		(153,869)
Deferred policy acquisition costs	(2,575,232)		(6,574,020)
Deferred sales inducements	(37,905)		(445,493)
Other assets(1)	353,669		233,364
Policyholders’ account balances	12,005,839		4,773,439
Future policy benefits(2)	5,286,252		5,069,353
Other liabilities(3)	1,224,399		1,099,318

(1)Includes $0.0 million of unaffiliated activity as of both December 31, 2021 and 2020.

(2)Includes $0.0 million of unaffiliated activity as of both December 31, 2021 and 2020.

(3)Includes $49.2 million and $42.6 million of unaffiliated activity as of December 31, 2021 and 2020, respectively.

Reinsurance Recoverables By Counterparty

Reinsurance recoverables by counterparty are broken out below:


	December 31, 2021		December 31, 2020
	(in thousands)
PAR U	$	13,523,832	$	13,352,845
PALAC	7,198,504		15,941,123
PURC	5,830,441		5,368,831
PARCC	2,371,491		2,572,428
GUL Re	2,710,926		2,573,609
PAR Term	1,972,339		1,913,265
Prudential Insurance	2,082,551		2,421,226
Prudential of Taiwan	0		1,649,998
Term Re	1,953,063		1,766,978
DART	644,101		502,770
Lotus Re	32,039		0
Unaffiliated	279,480		304,023
Total reinsurance recoverables	$	38,598,767	$	48,367,096

Reinsurance Impact On Income Statement

The financial statement impacts of this transaction are as follows:

Interim Consolidated Statement of Financial Position


Day 1 Impact of 2021 Variable Annuities Recapture	Impacts of Recapture
	(in millions)
ASSETS
Total investments(1)(2)	$	8,324
Cash and cash equivalents	414
Deferred policy acquisition costs	3,286
Accrued investment income	42
Reinsurance recoverables	(12,307)
Deferred sales inducements	388
Receivable from parent and affiliates	0
Income taxes receivable	765
Other assets	(84)
Separate account assets	0
TOTAL ASSETS	$	828
LIABILITIES AND EQUITY
LIABILITIES
Future policy benefits	$	0
Policyholders’ account balances	0
Cash collateral for loaned securities	0
Payables to parent and affiliates	(106)

Other liabilities	0
Separate account liabilities	0
Total liabilities	(106)
EQUITY
Common stock	0
Additional paid-in capital(3)	3,786
Retained earnings	(2,797)
Accumulated other comprehensive income	(55)
Total equity	934
TOTAL LIABILITIES AND EQUITY	$	828

Significant non-cash transactions

(1) The increase in total investments includes non-cash activities of $8.3 billion related to the recapture transaction.

(2) The Company incurred a loss related to ceding commissions of $2 billion.

(3) The increase in Additional paid-in capital includes non-cash activities of $3.4 billion in invested assets related to capital contributions from Prudential Insurance.

Interim Consolidated Statement of Operations and Comprehensive Income (Loss)


Day 1 Impact of 2021 Variable Annuities Recapture	Impacts of Recapture
	(in millions)
REVENUES

Other income (loss)	$	(1)
Realized investment gains (losses), net	(4,953)
TOTAL REVENUES	(4,954)
BENEFITS AND EXPENSES
Policyholders’ benefits	257
Interest credited to policyholders’ account balances	(399)

General, administrative and other expenses	(1,272)
TOTAL BENEFITS AND EXPENSES	(1,414)
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	(3,540)
Income tax expense (benefit)	(743)
NET INCOME (LOSS)	$	(2,797)

Affiliated Asset Transfers


Affiliate	Period	Transaction	Security Type	Fair Value		Book Value		APIC/ Retained Earnings Increase/(Decrease)		Realized Investment Gain/(Loss), Net		Derivative Gain/(Loss)
				(in millions)
PALAC	July 1, 2021	Purchase	Derivatives, Fixed Maturities, Equity Securities, Commercial Mortgages and JV/LP Investments	$	4,908	$	4,908	$	0	$	0	$	0
Prudential Insurance	July 1, 2021	Contributed Capital	Fixed Maturities	$	3,420	$	3,420	$	3,420	$	0	$	0

Reinsurance amounts, included in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, were as follows:


	2021		2020		2019
	(in thousands)
Premiums:
Direct	$	1,909,878	$	1,923,708	$	1,882,584
Assumed(1)	162		184		206
Ceded(2)	(1,706,364)		(1,831,716)		(1,854,246)
Net premiums	203,676		92,176		28,544
Policy charges and fee income:
Direct	3,647,883		3,491,735		3,725,113
Assumed	582,003		587,466		519,265
Ceded(3)	(2,700,129)		(3,454,881)		(3,700,222)
Net policy charges and fee income	1,529,757		624,320		544,156
Net investment income:
Direct	555,404		372,822		398,762
Assumed	1,049		1,579		1,631
Ceded	(6,218)		(7,051)		(6,596)
Net investment income	550,235		367,350		393,797
Asset administration fees:
Direct	403,359		360,438		355,118
Assumed	0		0		0
Ceded	(201,182)		(341,300)		(339,062)
Net asset administration fees	202,177		19,138		16,056
Other income:
Direct	227,035		78,445		83,891
Assumed(4)	(66)		(1)		(293)
Ceded	35,790		165		(59)
Amortization of reinsurance income	4,449		4,647		21
Net other income	267,208		83,256		83,560
Realized investment gains (losses), net:
Direct	7,656,388		(3,593,799)		(1,912,241)
Assumed	18,171		0		0
Ceded(5)	(12,969,965)		3,530,823		1,795,492
Realized investment gains (losses), net	(5,295,406)		(62,976)		(116,749)
Policyholders’ benefits (including change in reserves):
Direct	3,611,402		3,584,011		3,352,159
Assumed(6)	849,599		1,055,277		885,542
Ceded(7)	(3,805,091)		(4,341,139)		(4,084,627)
Net policyholders’ benefits (including change in reserves)	655,910		298,149		153,074
Interest credited to policyholders’ account balances:
Direct	563,821		536,886		470,551
Assumed	138,202		136,153		135,355
Ceded	(816,608)		(439,664)		(418,677)
Net interest credited to policyholders’ account balances	(114,585)		233,375		187,229
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization	(2,265,350)		(1,589,113)		(1,772,111)

(1)Includes $0.2 million of unaffiliated activity for the year ended December 31, 2021 and $0.2 million for both years ended December 31, 2020 and 2019.

(2)Includes $(19.8) million, $(10.5) million and $(0.6) million of unaffiliated activity for the years ended December 31, 2021, 2020 and 2019, respectively.

(3)Includes $(65) million, $(54) million and $(34) million of unaffiliated activity for the years ended December 31, 2021, 2020 and 2019, respectively.

(4)Includes $0.0 million, $0.0 million and $(0.3) million of unaffiliated activity for the years ended December 31, 2021, 2020 and 2019, respectively.

(5)Includes $(48) million, $73 million and $44 million of unaffiliated activity for the years ended December 31, 2021, 2020 and 2019, respectively.

(6)Includes $0.4 million, $0.9 million and $1.9 million of unaffiliated activity for the years ended December 31, 2021, 2020 and 2019, respectively.

(7)Includes $(201) million, $(70) million and $(30) million of unaffiliated activity for the years ended December 31, 2021, 2020 and 2019, respectively.

Gross And Net Life Insurance In Force

The gross and net amounts of life insurance face amount in force as of December 31, were as follows:


	2021		2020		2019
	(in thousands)
Direct gross life insurance face amount in force	$	1,079,382,740	$	1,045,775,819	$	993,850,732
Assumed gross life insurance face amount in force	37,822,851		38,818,752		39,877,183
Reinsurance ceded	(992,635,327)		(986,701,914)		(963,444,461)
Net life insurance face amount in force	$	124,570,264	$	97,892,657	$	70,283,454