Reinsurance (Tables)

9 Months Ended

Sep. 30, 2023

Reinsurance Impact on Statements of Financial Position

Reinsurance amounts included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as of September 30, 2023 and December 31, 2022 were as follows:


	September 30, 2023		December 31, 2022
	(in thousands)
Reinsurance recoverables(1)	$	36,860,011	$	37,096,562
Policy loans	(1,073,903)		(1,011,112)
Deferred policy acquisition costs(1)	(3,236,759)		(3,343,270)
Deferred sales inducements(1)	(36,080)		(38,146)
Market risk benefit assets(1)	1,108,690		543,177
Other assets(1)	1,851,596		1,146,794
Policyholders’ account balances(1)	6,026,901		7,157,639
Future policy benefits(1)	6,672,884		6,320,863
Market risk benefit liabilities(1)	286,622		120,916
Other liabilities(1)	4,039,544		2,891,433

(1)Prior period amounts adjusted for the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

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


	September 30, 2023		December 31, 2022
	(in thousands)
Deferred policy acquisition costs(1)	$	74,341	$	111,379
Market risk benefit assets(1)	757,038		64,738
Other assets	1,745,370		1,034,000
Policyholders’ account balances(1)	1,823,542		2,771,961
Future policy benefits	159		0
Market risk benefit liabilities(1)	149,460		40,731
Other liabilities	1,793,934		820,185

(1)Prior period amounts adjusted for the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

Reinsurance Recoverable by Counterparty

Reinsurance recoverables by counterparty are broken out below:


	September 30, 2023		December 31, 2022(1)
	(in thousands)
PAR U	$	15,272,691	$	15,051,337

PURC	7,169,637		6,928,950
PARCC	2,237,002		2,437,589
GUL Re	3,096,035		3,124,697
PAR Term	1,902,278		2,040,599
Prudential Insurance	1,112,606		986,013

Term Re	1,829,064		1,830,197
Lotus Re	2,034,218		1,952,215
DART	604,117		578,462
Unaffiliated	1,602,363		2,166,503
Total reinsurance recoverables	$	36,860,011	$	37,096,562

(1)Prior period amounts adjusted for the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

Reinsurance Impact on Statements of Operations and Comprehensive Income (Loss)

Reinsurance amounts, included in the Company’s Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in thousands)
Premiums:
Direct(1)	$	457,967	$	462,478	$	1,396,506	$	1,406,822
Assumed	32		(2,653)		(90)		(10,730)
Ceded(1)	(372,859)		(398,109)		(1,144,655)		(1,210,547)
Net premiums(1)	85,140		61,716		251,761		185,545
Policy charges and fee income:
Direct(1)	753,291		746,814		2,238,266		2,295,350
Assumed(1)	151,927		149,564		453,006		455,114
Ceded(1)	(558,737)		(526,432)		(1,594,764)		(1,892,583)
Net policy charges and fee income(1)	346,481		369,946		1,096,508		857,881
Net investment income:
Direct	463,070		226,827		1,216,154		617,818
Assumed	338		349		1,024		1,167
Ceded	(2,544)		(16,414)		(13,789)		(36,795)
Net investment income	460,864		210,762		1,203,389		582,190
Asset administration fees:
Direct	81,422		84,959		242,730		271,071
Assumed	0		0		0		0
Ceded	(24,668)		(16,405)		(64,986)		(51,495)
Net asset administration fees	56,754		68,554		177,744		219,576
Other income (loss):
Direct	(89,144)		(181,634)		216,247		(855,885)
Assumed	116		3,059		(233)		550
Ceded(1)	25,473		17,168		70,736		60,206

Net Other income (loss)(1)	(63,555)		(161,407)		286,750		(795,129)
Realized investment gains (losses), net:
Direct(1)	(492,184)		(44,847)		(826,822)		1,080,351
Assumed(1)	(31,544)		122,364		189,400		(363,266)
Ceded(1)	55,472		19,754		56,181		93,686
Realized investment gains (losses), net(1)	(468,256)		97,271		(581,241)		810,771
Change in value of market risk benefits, net of related hedging gain (loss):
Direct(1)	(54,544)		29,320		152,660		(698,317)
Assumed(1)	283		0		(3,160)		0
Ceded(1)	(193,210)		(109,398)		(415,656)		(537,098)
Net change in value of market risk benefits, net of related hedging gain (loss)(1)	(247,471)		(80,078)		(266,156)		(1,235,415)
Policyholders’ benefits (including change in reserves):
Direct(1)	912,588		880,240		2,639,868		2,460,564
Assumed(1)	336,300		289,093		985,635		868,301
Ceded(1)	(1,103,479)		(1,081,648)		(3,227,951)		(2,961,322)
Net policyholders’ benefits (including change in reserves)(1)	145,409		87,685		397,552		367,543


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Change in estimates of liability for future policy benefits:
Direct(1)	(44,155)	(69,944)	(61,510)	1,748,781
Assumed(1)	(17,580)	(12,640)	8,071	676,754
Ceded(1)	68,300	79,649	54,469	(2,382,670)
Net change in estimates of liability for future policy benefits(1)	6,565	(2,935)	1,030	42,865
Interest credited to policyholders’ account balances:
Direct(1)	228,399	259,175	666,947	593,160
Assumed	33,602	(52,300)	100,065	49,803
Ceded(1)	(98,927)	(109,226)	(299,900)	(324,377)
Net interest credited to policyholders’ account balances(1)	163,074	97,649	467,112	318,586
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization(1)	(57,368)	146,690	(280,393)	(71,962)

(1)Prior period amounts adjusted for the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

Unaffiliated reinsurance assumed and ceded amounts included in the table above and in the Company's Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022(1)		2023		2022(1)
	(in thousands)
Premiums:
Assumed(2)	$	32	$	(2,653)	$	(100)	$	(16,061)
Ceded(2)	(13,942)		(10,036)		(47,319)		(32,606)

Policy charges and fee income:
Assumed	460		1,929		1,383		13,350
Ceded	(39,143)		(21,196)		(101,419)		(59,453)

Net investment income:
Ceded	10,109		(4,122)		23,022		195

Asset administration fees:
Ceded	(7,464)		0		(15,204)		0

Other income (loss):
Assumed	185		3,059		(53)		549
Ceded	7,887		1,622		17,540		1,622

Realized investment gains (losses), net:
Assumed	(31,544)		122,365		189,400		(159,280)
Ceded(2)	41,007		19,601		40,378		92,377

Change in value of market risk benefits, net of related hedging gain (loss):
Assumed(2)	283		0		(3,160)		0
Ceded(2)	(70,693)		(20,174)		(150,791)		(106,676)

Policyholders’ benefits (including change in reserves):
Assumed	265		587		545		1,941
Ceded(2)	(42,655)		(18,206)		(106,475)		(61,248)

Change in estimates of liability for future policy benefits:
Ceded	(1,407)		0		(1,823)		(6,594)

Interest credited to policyholders’ account balances:
Assumed	3,651		(83,932)		8,750		(86,713)
Ceded	85		0		0		0

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

(2)Prior period amounts adjusted for the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

Gross and Net Life Insurance in Force

The gross and net amounts of life insurance face amount in force as of September 30, 2023 and 2022 were as follows:


	2023		2022
	(in thousands)
Direct gross life insurance face amount in force	$	1,115,174,542	$	1,089,504,288
Assumed gross life insurance face amount in force	35,824,627		36,865,826
Reinsurance ceded	(1,010,577,960)		(1,010,441,444)
Net life insurance face amount in force	$	140,421,209	$	115,928,670