Accounting Changes and Error Corrections (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Changes and Error Corrections [Abstract]

Accounting Standards Update and Change in Accounting Principle

Impact on Shareholders’ Equity

The following table provides the after-tax transition impact on January 1, 2021, to the reinsurance ceded receivables, liability for future policy benefits, market risk benefits, deferred policy acquisition costs and deferred tax asset and liability for the Company's adoption of ASU 2018-12 (dollars in millions):

	January 1, 2021
	Retained Earnings		Accumulated Other Comprehensive Income (Loss)
Reinsurance ceded receivables and other	$	254	$	388
Future policy benefits	(1,746)		(8,593)
Market risk benefits	(72)		45
Deferred policy acquisition costs	—		114
Deferred tax asset (included in other assets)	8		—
Deferred tax liability (included in deferred income taxes)	311		1,778
Total	$	(1,245)	$	(6,268)

Impact of Adoption by Segment

Traditional Business

The following table provides the pre-tax transition impact to the liability for future policy benefits for the Company's adoption of Financial Services – Insurance on January 1, 2021, for its Traditional business (dollars in millions):

	U.S. and Latin America – Traditional		Canada – Traditional		Europe, Middle East and Africa – Traditional		Asia Pacific – Traditional
Future policy benefits
Balance, January 1, 2021 pre-adoption	$	10,444	$	3,477	$	1,379	$	3,568
Adjustment to retained earnings (1)	896		33		70		463
Effect of changes in discount rate assumptions	4,542		2,651		320		(772)
Reclassification of claims and benefits payable (2)	1,750		203		901		1,160
Balance, January 1, 2021 post-adoption	$	17,632	$	6,364	$	2,670	$	4,419
Less: reinsurance recoverable	(1,123)		(386)		(85)		(212)
Balance, January 1, 2021 post-adoption, after reinsurance	$	16,509	$	5,978	$	2,585	$	4,207

(1)Includes adjustments for capping the net premium ratio at 100% and eliminating negative reserves on certain issue year cohorts.

(2)Amount includes certain reclassifications to conform with the revised presentation upon adoption of ASU 2018-12, such as reclassifying claims and benefits payable on long-duration contracts to liability for future policy benefits.

Financial Solutions Business

The following table provides the pre-tax transition impact to the liability for future policy benefits, market risk benefits and deferred policy acquisitions costs for the Company's adoption of Financial Services – Insurance on January 1, 2021, for its Financial Solutions business (dollars in millions):

	U.S. and Latin America – Financial Solutions		Canada – Financial Solutions		Europe, Middle East and Africa – Financial Solutions		Asia Pacific – Financial Solutions
Future policy benefits
Balance, January 1, 2021 pre-adoption	$	5,037	$	16	$	5,657	$	1,874
Adjustment to retained earnings (1)	—		20		256		8
Effect of changes in discount rate assumptions	857		9		1,011		3
Amounts previously recorded in AOCI (2)	(28)		—		—		—
Reclassification of claims and benefits payable (3)	17		4		67		2
Balance, January 1, 2021 post-adoption	$	5,883	$	49	$	6,991	$	1,887
Less: reinsurance recoverable	—		—		—		—
Balance, January 1, 2021 post-adoption, after reinsurance	$	5,883	$	49	$	6,991	$	1,887
Market risk benefits
Balance, January 1, 2021 pre-adoption	$	—	$	—	$	—	$	—
Cumulative effect of change in credit risk in AOCI	(45)		—		—		—
Cumulative effect to retained earnings	72		—		—		—
Reclassification from interest-sensitive contract liabilities	239		—		—		—
Balance, January 1, 2021 post-adoption	$	266	$	—	$	—	$	—
Less: reinsurance recoverable	—		—		—		—
Balance, January 1, 2021 post-adoption, after reinsurance	$	266	$	—	$	—	$	—
Deferred policy acquisition costs
Balance, January 1, 2021 pre-adoption	$	254	$	—	$	—	$	41
Amounts previously recorded in AOCI (2)	114		—		—		—
Balance, January 1, 2021 post-adoption	$	368	$	—	$	—	$	41

(1)Includes adjustments for capping the net premium ratio at 100% and eliminating negative reserves on certain issue year cohorts.

(2)Adjustment to remove amounts associated with unrealized gains and losses previously recorded in AOCI (i.e., “shadow adjustments”).

(3)Amount includes certain reclassifications to conform with the revised presentation upon adoption of ASU 2018-12, such as reclassifying claims and benefits payable on long-duration contracts to liability for future policy benefits.

Impact to Previously Reported Amounts

The adoption of ASU 2018-12 impacted the Company’s previously reported consolidated balance sheets as of December 31, 2021 and 2022, and related statements of income, comprehensive income and equity for the each of the two years in the period ended December 31, 2022 as follows (dollars in millions). The adoption of ASU 2018-12 did not materially impact the Company’s previously reported consolidated statements of cash flows for the two years in the period ended December 31, 2022.

	As Previously Reported		Adoption of ASU 2018-12		As Adjusted
Consolidated Balance Sheets
December 31, 2022
Assets
Fixed maturity securities available-for-sale, at fair value	$	52,901	$	—	$	52,901
Equity securities, at fair value	134		—		134
Mortgage loans	6,590		—		6,590
Policy loans	1,231		—		1,231
Funds withheld at interest	6,003		—		6,003
Limited partnerships and real estate joint ventures	2,327		—		2,327
Short-term investments	154		—		154
Other invested assets	1,140		—		1,140
Total investments	70,480		—		70,480
Cash and cash equivalents	2,927		—		2,927
Accrued investment income	630		—		630
Premiums receivable and other reinsurance balances	3,013		—		3,013
Reinsurance ceded receivables and other	2,462		209		2,671
Deferred policy acquisition costs	3,974		154		4,128
Other assets	1,220		(165)		1,055
Total assets	$	84,706	$	198	$	84,904
Liabilities and equity
Future policy benefits	35,220		469		35,689
Interest-sensitive contract liabilities	30,572		(230)		30,342
Market risk benefits, at fair value	—		247		247
Other policy claims and benefits	6,571		(4,091)		2,480
Other reinsurance balances	756		(31)		725
Deferred income taxes	736		647		1,383
Other liabilities	2,655		251		2,906
Long-term debt	3,961		—		3,961
Total liabilities	80,471		(2,738)		77,733
Equity
Preferred stock	—		—		—
Common stock	1		—		1
Additional paid-in-capital	2,502		—		2,502
Retained earnings	8,967		(798)		8,169
Treasury stock, at cost	(1,720)		—		(1,720)
Accumulated other comprehensive income (loss)	(5,605)		3,734		(1,871)
Total RGA, Inc. stockholders’ equity	4,145		2,936		7,081
Noncontrolling interest	90		—		90
Total equity	4,235		2,936		7,171
Total liabilities and stockholders’ equity	$	84,706	$	198	$	84,904

	As Previously Reported		Adoption of ASU 2018-12		As Adjusted
December 31, 2021
Assets
Fixed maturity securities available-for-sale, at fair value	$	60,749	$	—	$	60,749
Equity securities, at fair value	151		—		151
Mortgage loans	6,283		—		6,283
Policy loans	1,234		—		1,234
Funds withheld at interest	6,954		—		6,954
Limited partnerships and real estate joint ventures	1,996		—		1,996
Short-term investments	87		—		87
Other invested assets	1,074		—		1,074
Total investments	78,528		—		78,528
Cash and cash equivalents	2,948		—		2,948
Accrued investment income	533		—		533
Premiums receivable and other reinsurance balances	2,888		—		2,888
Reinsurance ceded receivables and other	2,580		585		3,165
Deferred policy acquisition costs	3,690		170		3,860
Other assets	1,008		11		1,019
Total assets	$	92,175	$	766	$	92,941
Liabilities and equity
Future policy benefits	35,782		11,667		47,449
Interest-sensitive contract liabilities	26,377		(258)		26,119
Market risk benefits, at fair value	—		262		262
Other policy claims and benefits	6,993		(4,883)		2,110
Other reinsurance balances	613		(56)		557
Deferred income taxes	2,886		(1,387)		1,499
Other liabilities	2,663		255		2,918
Long-term debt	3,667		—		3,667
Collateral finance and securitization notes	180		—		180
Total liabilities	79,161		5,600		84,761
Equity
Preferred stock	—		—		—
Common stock	1		—		1
Additional paid-in-capital	2,461		—		2,461
Retained earnings	8,563		(692)		7,871
Treasury stock, at cost	(1,653)		—		(1,653)
Accumulated other comprehensive income (loss)	3,642		(4,142)		(500)
Total RGA, Inc. stockholders’ equity	13,014		(4,834)		8,180
Noncontrolling interest	—		—		—
Total equity	13,014		(4,834)		8,180
Total liabilities and stockholders’ equity	$	92,175	$	766	$	92,941

	As Previously Reported		Adoption of ASU 2018-12		As Adjusted
Consolidated Statements of Income
Year ended December 31, 2022
Revenues
Net premiums	$	13,078	$	—	$	13,078
Net investment income	3,161		—		3,161
Investment related gains (losses), net	(506)		(33)		(539)
Other revenues	525		2		527
Total revenues	16,258		(31)		16,227
Benefits and expenses
Claims and other policy benefits	12,046		(64)		11,982
Future policy benefits remeasurement (gains) losses	—		291		291
Market risk benefits remeasurement (gains) losses	—		10		10
Interest credited	682		—		682
Policy acquisition costs and other insurance expenses	1,499		(155)		1,344
Other operating expenses	1,009		—		1,009
Interest expense	184		—		184
Collateral finance and securitization expense	7		—		7
Total benefits and expenses	15,427		82		15,509
Income before income taxes	831		(113)		718
Provision for income taxes	204		(7)		197
Net income	$	627	$	(106)	$	521
Net income attributable to noncontrolling interest	4		—		4
Net income available to RGA, Inc. shareholders	$	623	$	(106)	$	517

	As Previously Reported		Adoption of ASU 2018-12		As Adjusted
Year ended December 31, 2021
Revenues
Net premiums	$	12,513	$	—	$	12,513
Net investment income	3,138		—		3,138
Investment related gains (losses), net	560		7		567
Other revenues	447		2		449
Total revenues	16,658		9		16,667
Benefits and expenses
Claims and other policy benefits	12,776		(1,103)		11,673
Future policy benefits remeasurement (gains) losses	—		567		567
Market risk benefits remeasurement (gains) losses	—		(58)		(58)
Interest credited	700		—		700
Policy acquisition costs and other insurance expenses	1,416		(91)		1,325
Other operating expenses	936		—		936
Interest expense	127		—		127
Collateral finance and securitization expense	12		—		12
Total benefits and expenses	15,967		(685)		15,282
Income before income taxes	691		694		1,385
Provision for income taxes	74		141		215
Net income	$	617	$	553	$	1,170
Net income attributable to noncontrolling interest	—		—		—
Net income available to RGA, Inc. shareholders	$	617	$	553	$	1,170

	As Previously Reported		Adoption of ASU 2018-12		As Adjusted
Consolidated Statements of Comprehensive Income
Year ended December 31, 2022
Net income	$	627	$	(106)	$	521
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	(162)		60		(102)
Net unrealized investment gains (losses)	(9,108)		(168)		(9,276)
Effect of updating discount rates on future policy benefits	—		7,964		7,964
Change in instrument-specific credit risk for market risk benefits	—		20		20
Defined benefit pension and postretirement plan adjustments	23		—		23
Total other comprehensive income (loss), net of tax	(9,247)		7,876		(1,371)
Total comprehensive income (loss)	(8,620)		7,770		(850)
Comprehensive income (loss) attributable to noncontrolling interest	4		—		4
Total comprehensive income (loss) available to RGA, Inc.	$	(8,624)	$	7,770	$	(854)
Year ended December 31, 2021
Net income	$	617	$	553	$	1,170
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	60		(4)		56
Net unrealized investment gains (losses)	(1,799)		(34)		(1,833)
Effect of updating discount rates on future policy benefits	—		2,207		2,207
Change in instrument-specific credit risk for market risk benefits	—		(43)		(43)
Defined benefit pension and postretirement plan adjustments	22		—		22
Total other comprehensive income (loss), net of tax	(1,717)		2,126		409
Total comprehensive income (loss)	(1,100)		2,679		1,579
Comprehensive income (loss) attributable to noncontrolling interest	—		—		—
Total comprehensive income (loss) available to RGA, Inc.	$	(1,100)	$	2,679	$	1,579

	RGA, Inc. Stockholders’ Equity
	Common Stock		Additional Paid In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total RGA, Inc. Stockholders’ Equity		Noncontrolling Interest		Total Equity
Balance, December 31, 2020 as previously reported	$	1	$	2,406	$	8,148	$	(1,562)	$	5,359	$	14,352	$	—	$	14,352
Cumulative effect of modified retrospective adoption of Financial Services – Insurance on long-duration contracts					(1,187)				(6,304)		(7,491)				(7,491)
Cumulative effect of full retrospective adoption of Financial Services – Insurance on market risk benefits					(58)				36		(22)				(22)
Adjusted balance, January 1, 2021	1		2,406		6,903		(1,562)		(909)		6,839		—		6,839
Net income					1,170						1,170				1,170
Total other comprehensive income (loss)									409		409				409
Dividends to stockholders, $2.86 per share					(194)						(194)				(194)
Purchase of treasury stock							(99)				(99)				(99)
Reissuance of treasury stock			55		(8)		8				55				55
Balance, December, 31, 2021	1		2,461		7,871		(1,653)		(500)		8,180		—		8,180
Issuance of preferred interests by subsidiary													90		90
Change in equity of noncontrolling interest													(4)		(4)
Net income					517						517		4		521
Total other comprehensive income (loss)									(1,371)		(1,371)				(1,371)
Dividends to stockholders, $3.06 per share					(205)						(205)				(205)
Purchase of treasury stock							(81)				(81)				(81)
Reissuance of treasury stock			41		(14)		14				41				41
Balance, December 31, 2022	$	1	$	2,502	$	8,169	$	(1,720)	$	(1,871)	$	7,081	$	90	$	7,171

Policyholder Account Balances ASU 2018 12 Adoption

Policyholder Account Balances

The following tables provide the balances and changes in the Company’s policyholder account balances as of and for the years ending December 31, 2022 and 2021 (dollars in millions):

For the year ended December 31, 2022:	U.S. and Latin America – Traditional		U.S. and Latin America – Financial Solutions		Asia Pacific – Financial Solutions
Balance, beginning of year	$	1,719	$	18,758	$	1,621
Deposits	24		1,289		2,521
Policy charges	(32)		(33)		(134)
Surrenders and withdrawals	(17)		(1,258)		(639)
Benefit payments	(76)		(448)		(46)
Interest credited	65		598		51
Foreign currency translation	—		—		(23)
Balance, end of period	$	1,683	$	18,906	$	3,351
Less: reinsurance recoverable	—		(1,543)		—
Balance, end of period, after reinsurance	$	1,683	$	17,363	$	3,351

For the year ended December 31, 2021:	U.S. and Latin America – Traditional		U.S. and Latin America – Financial Solutions		Asia Pacific – Financial Solutions
Balance, beginning of year	$	1,752	$	16,273	$	809
Deposits	25		3,290		868
Policy charges	(32)		(31)		(1)
Surrenders and withdrawals	(13)		(1,015)		(36)
Benefit payments	(79)		(404)		(24)
Interest credited	66		645		19
Foreign currency translation	—		—		(14)
Balance, end of period	$	1,719	$	18,758	$	1,621
Less: reinsurance recoverable	—		(1,561)		—
Balance, end of period, after reinsurance	$	1,719	$	17,197	$	1,621

Market Risk Benefit, Activity ASU 2018 12 Adoption

Market Risk Benefits

The following tables provide the balances and changes in the Company’s liabilities for market risk benefits as of and for the years ending December 31, 2022 and 2021 (dollars in millions):

For the year ended December 31, 2022:	U.S. and Latin America – Financial Solutions
Balance, beginning of year	$	262
Balance, beginning of year, before effect of changes in the instrument-specific credit risk	254
Interest accrual	54
Attributed fees collected	28
Benefit payments	(9)
Effect of changes in future assumptions	18
Effect of changes in interest rates	(175)
Effect of changes in equity markets	48
Effect of changes in volatility	19
Other market impacts	7
Actual policyholder behavior different from expected behavior	19
Balance, end of period, before effect of changes in the instrument-specific credit risk	263
Effect of changes in the instrument-specific credit risk	(16)
Balance, end of period	247
Less: reinsurance recoverable	—
Balance, end of period, after reinsurance	$	247

For the year ended December 31, 2021:	U.S. and Latin America – Financial Solutions
Balance, beginning of year	$	—
Effect of adoption of Financial Services – Insurance	266
Adjusted balance, beginning of year	266
Balance, beginning of year, before effect of changes in the instrument-specific credit risk	311
Interest accrual	3
Attributed fees collected	12
Benefit payments	(14)
Effect of changes in future assumptions	25
Effect of changes in interest rates	(51)
Effect of changes in equity markets	(49)
Effect of changes in volatility	(2)
Other market impacts	5
Actual policyholder behavior different from expected behavior	14
Balance, end of period, before effect of changes in the instrument-specific credit risk	254
Effect of changes in the instrument-specific credit risk	8
Balance, end of period	262
Less: reinsurance recoverable	—
Balance, end of period, after reinsurance	$	262

Deferred Policy Acquisition Costs ASU 2018 12 Adoption

Deferred Policy Acquisition Costs

The following tables provide the balances and changes in the Company’s deferred policy acquisition costs as of and for the years ending December 31, 2022 and 2021 (dollars in millions):

For the year ended December 31, 2022:	U.S. and Latin America – Traditional		Canada – Traditional		Europe, Middle East and Africa – Traditional		Asia Pacific – Traditional
Balance, beginning of year	$	1,947	$	191	$	270	$	1,056
Capitalization	284		10		83		86
Amortization expense	(144)		(17)		(38)		(67)
Foreign currency translation	—		(13)		(21)		(32)
Balance, end of period	$	2,087	$	171	$	294	$	1,043

For the year ended December 31, 2022:	U.S. and Latin America – Financial Solutions		Canada – Financial Solutions		Europe, Middle East and Africa – Financial Solutions		Asia Pacific – Financial Solutions
Balance, beginning of year	$	312	$	—	$	—	$	81
Capitalization	87		—		—		121
Amortization expense	(58)		—		—		(13)
Foreign currency translation	—		—		—		(1)
Balance, end of period	$	341	$	—	$	—	$	188

For the year ended December 31, 2021:	U.S. and Latin America – Traditional		Canada – Traditional		Europe, Middle East and Africa – Traditional		Asia Pacific – Traditional
Balance, beginning of year	$	1,816	$	195	$	264	$	1,046
Effect of adoption of Financial Services – Insurance	—		—		—		—
Adjusted balance, beginning of year	1,816		195		264		1,046
Capitalization	254		8		42		83
Amortization expense	(123)		(13)		(24)		(55)
Foreign currency translation	—		1		(12)		(18)
Balance, end of period	$	1,947	$	191	$	270	$	1,056

For the year ended December 31, 2021:	U.S. and Latin America – Financial Solutions		Canada – Financial Solutions		Europe, Middle East and Africa – Financial Solutions		Asia Pacific – Financial Solutions
Balance, beginning of year	$	254	$	—	$	—	$	41
Effect of adoption of Financial Services – Insurance	114		—		—		—
Adjusted balance, beginning of year	368		—		—		41
Capitalization	8		—		—		49
Amortization expense	(64)		—		—		(8)
Foreign currency translation	—		—		—		(1)
Balance, end of period	$	312	$	—	$	—	$	81