Reinsurance (Tables)

12 Months Ended

Dec. 31, 2022

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


	2022		2021
	(in thousands)
Reinsurance recoverables	$	34,561,825	$	38,598,767
Policy loans	(1,011,112)		(156,749)
Deferred policy acquisition costs	(3,155,419)		(2,575,232)
Deferred sales inducements	(33,346)		(37,905)
Other assets(1)	1,142,083		850,681
Policyholders’ account balances(1)	7,137,766		14,386,443
Future policy benefits	5,173,784		5,286,252
Other liabilities(1)	2,701,216		1,642,413

(1)Prior period has been reclassified to conform to the current period presentation to include reinsurance agreements using the deposit method of accounting.

Unaffiliated reinsurance amounts included in the table above and in the Company's Consolidated Statements of Financial Position as of December 31, were as follows:


	2022		2021(1)
	(in thousands)
Deferred policy acquisition costs	$	484,730	$	0
Other assets	1,034,000		497,050
Policyholders' account balances	2,782,114		0
Future policy benefits	0		9
Other liabilities	820,185		467,203

(1)Prior period has been reclassified to conform to the current period presentation.

Reinsurance Recoverables By Counterparty

Reinsurance recoverables by counterparty as of December 31, were as follows:


	2022		2021
	(in thousands)
PAR U	$	13,365,780	$	13,523,832
PALAC(1)	0		7,198,504
PURC	5,921,664		5,830,441
PARCC	2,211,803		2,371,491
GUL Re	2,709,538		2,710,926
PAR Term	2,043,970		1,972,339
Prudential Insurance	1,263,411		2,082,551

Term Re	2,054,090		1,953,063
Lotus Re	2,015,687		32,039
DART	763,004		644,101
Unaffiliated(1)	2,212,878		279,480
Total reinsurance recoverables	$	34,561,825	$	38,598,767

(1)Due to the sale of PALAC on April 1, 2022 the reinsurance recoverable balance has become unaffiliated.

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:


	2022		2021		2020
	(in thousands)
Premiums:
Direct	$	1,871,264	$	1,909,878	$	1,923,708
Assumed	776		162		184
Ceded	(1,597,257)		(1,706,364)		(1,831,716)
Net premiums	274,783		203,676		92,176
Policy charges and fee income:
Direct	3,436,953		3,647,883		3,491,735
Assumed	608,458		582,003		587,466
Ceded	(2,313,454)		(2,700,129)		(3,454,881)
Net policy charges and fee income	1,731,957		1,529,757		624,320
Net investment income:
Direct	920,674		555,404		372,822
Assumed	1,513		1,049		1,579
Ceded	(38,186)		(6,218)		(7,051)
Net investment income	884,001		550,235		367,350
Asset administration fees:
Direct	351,600		403,359		360,438
Assumed	0		0		0
Ceded	(67,418)		(201,182)		(341,300)
Net asset administration fees	284,182		202,177		19,138
Other income (loss):
Direct	(731,796)		227,035		78,445
Assumed	271		(66)		(1)
Ceded	(3,457)		35,790		165
Amortization of reinsurance income	73,122		4,449		4,647
Net other income	(661,860)		267,208		83,256
Realized investment gains (losses), net:
Direct(1)	1,838,136		7,663,351		(3,593,799)
Assumed(1)	(244,000)		12,593		0
Ceded(1)	(552,701)		(12,971,350)		3,530,823
Realized investment gains (losses), net	1,041,435		(5,295,406)		(62,976)
Policyholders’ benefits (including change in reserves):
Direct	3,951,690		3,611,402		3,584,011
Assumed	1,504,204		849,599		1,055,277
Ceded	(4,846,502)		(3,805,091)		(4,341,139)
Net policyholders’ benefits (including change in reserves)	609,392		655,910		298,149
Interest credited to policyholders’ account balances:
Direct	883,398		563,821		536,886
Assumed	74,402		138,202		136,153
Ceded	(440,312)		(816,608)		(439,664)
Net interest credited to policyholders’ account balances	517,488		(114,585)		233,375
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization	(427,208)		(2,265,350)		(1,589,113)

(1)Prior period has been reclassified to conform to the current period presentation to include reinsurance agreements using the deposit method of accounting.

Unaffiliated reinsurance assumed and ceded amounts included in the table above and in the Company's Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, were as follows:


	2022		2021(1)		2020(1)
	(in thousands)
Premiums:
Assumed	$	149	$	162	$	184
Ceded	(35,867)		(19,785)		(10,526)

Policy charges and fee income:
Assumed	2,113		0		0
Ceded	(81,781)		(65,451)		(53,871)

Net investment income:
Ceded	10,802		687		0

Other income (loss):
Assumed	270		(68)		1

Realized investment gains (losses), net:
Assumed	778,620		0		0
Ceded	(38,317)		(49,460)		73,108

Policyholders' benefits (including change in reserves):
Assumed	2,566		429		949
Ceded	(87,370)		(200,973)		(69,720)

Interest credited to policyholders' account balances:
Assumed	(95,285)		0		0

(1)Prior period has been reclassified to conform to the current period presentation.

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:


	2022		2021		2020
	(in thousands)
Direct gross life insurance face amount in force	$	1,093,610,227	$	1,079,382,740	$	1,045,775,819
Assumed gross life insurance face amount in force	36,668,045		37,822,851		38,818,752
Reinsurance ceded	(1,009,571,304)		(992,635,327)		(986,701,914)
Net life insurance face amount in force	$	120,706,968	$	124,570,264	$	97,892,657