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Reserve for Future Policy Benefits and Contractholder Funds
6 Months Ended
Jun. 30, 2023
Reserve for Future Policy Benefits and Contractholder Funds [Abstract]  
Reserve for Future Policy Benefits and Contractholder Funds
Note 9Reserve for Future Policy Benefits and Contractholder Funds
Rollforward of reserve for future policy benefits (1)
Six months ended June 30,
Accident and
health
Traditional
life
Total
($ in millions)202320222023202220232022
Present value of expected net premiums
Beginning balance$1,464 $1,785 $238 $254 $1,702 $2,039 
Beginning balance at original discount rate1,549 1,604 246 215 1,795 1,819 
Effect of changes in cash flow assumptions— — (12)— (12)— 
Effect of actual variances from expected experience(26)(61)19 20 (7)(41)
Adjusted beginning balance1,523 1,543 253 235 1,776 1,778 
Issuances259 243 18 277 248 
Interest accrual25 24 30 28 
Net premiums collected(186)(199)(25)(21)(211)(220)
Lapses and withdrawals— — — — — — 
Ending balance at original discount rate1,621 1,611 251 223 1,872 1,834 
Effect of changes in discount rate assumptions(68)(29)(7)(75)(25)
Ending balance1,553 1,582 244 227 1,797 1,809 
Present value of expected future policy benefits
Beginning balance2,229 2,796 524 673 2,753 3,469 
Beginning balance at original discount rate2,316 2,426 534 511 2,850 2,937 
Effect of changes in cash flow assumptions— — (12)— (12)— 
Effect of actual variances from expected experience(30)(63)20 (7)(10)(70)
Adjusted beginning balance2,286 2,363 542 504 2,828 2,867 
Issuances256 242 18 274 247 
Interest accrual47 37 12 11 59 48 
Benefit payments(199)(218)(26)11 (225)(207)
Lapses and withdrawals— — — — — — 
Ending balance at original discount rate2,390 2,424 546 531 2,936 2,955 
Effect of changes in discount rate assumptions(64)(7)30 (71)39 
Ending balance$2,326 $2,433 $539 $561 $2,865 $2,994 
Net reserve for future policy benefits (1)
$773 $851 $295 $334 $1,068 $1,185 
Less: reinsurance recoverables84 127 86 129 
Net reserve for future policy benefits, after reinsurance recoverables
$689 $724 $293 $332 $982 $1,056 
(1)Excludes $271 million and $281 million of reserves related to short-duration and other contracts as of June 30, 2023 and 2022, respectively.
Revenue and interest recognized in the condensed consolidated statements of operations
($ in millions)Six months ended June 30,
20232022
Revenues (1)
Accident and health$446 $494 
Traditional life50 44 
Total$496 $538 
Interest expense (2)
Accident and health$22 $13 
Traditional life
Total$29 $20 
(1) Total revenues reflects gross premiums used in the calculation for reserve for future policy benefits. Revenues included in Accident and health insurance premiums and contract charges on the Condensed Consolidated Statements of Operations reflect premium revenue recognized for traditional life insurance and long-duration and short-duration accident and health insurance contracts.
(2) Total interest expense presented as part of Accident, health and other policy benefits on the Condensed Consolidated Statements of Operations.
The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for nonparticipating traditional and limited-payment contracts.
As of June 30,
20232022
($ in millions)UndiscountedDiscountedUndiscountedDiscounted
Accident and health
Expected future gross premiums$5,020 $3,602 $5,133 $3,833 
Expected future benefits and expenses3,350 2,326 3,416 2,433 
Traditional life
Expected future gross premiums696 489 636 457 
Expected future benefits and expenses1,008 539 956 561 
Key assumptions used in calculating the reserve for future policy benefits
As of June 30,
Accident and healthTraditional life
2023202220232022
Weighted-average duration (in years)3.94.014.013.0
Weighted-average interest rates
Interest accretion rate (discount rate at contract issuance)5.08 %5.46 %5.46 %5.67 %
Current discount rate (upper-medium grade fixed income yield)4.79 3.66 5.14 4.55 
Significant assumptions To determine mortality and morbidity assumptions, the Company uses a combination of Company historical experience and industry data. Mortality and morbidity are monitored throughout the year. Historical experience is obtained through annual Company experience studies in the third quarter that consider the Company’s historical claim patterns. The lapse assumption is determined based on historical lapses of the Company’s insurance contracts.
The following table summarizes the ratio of actual to expected lapses used in the determination of the reserve for future policy benefits.
As of June 30,
Accident and healthTraditional life
2023202220232022
Actual to expected lapses102 %104 %93 %91 %
Contractholder funds
Contractholder funds activity
Six months ended June 30,
($ in millions)20232022
Beginning balance$879 $890 
Deposits66 69 
Interest credited17 17 
Benefits(6)(11)
Surrenders and partial withdrawals(10)(11)
Contract charges(60)(58)
Other adjustments(5)(4)
Ending balance$881 $892 
Components of contractholder funds
Interest-sensitive life insurance$833 $839 
Fixed annuities48 53 
Total $881 $892 
Weighted-average crediting rate4.27 %4.28 %
Net amount at risk (1)
$11,640 $11,934 
Cash surrender value$725 $727 
(1)Guaranteed benefit amounts in excess of the current account balances.
Account values: comparison of current crediting rate to guaranteed minimum crediting rate (1)
($ in millions)

Range of guaranteed minimum crediting rates
At guaranteed minimum
1-50 basis points above
Total
June 30, 2023
Less than 3.00%
$— $— $— 
3.00% - 3.49%
— 23 23 
3.50% - 3.99%
11 — 11 
4.00% - 4.49%
433 — 433 
4.50% - 4.99%
265 — 265 
5.00% or greater
69 — 69 
Non-account balances (2)
80 
Total$778 $23 $881 
June 30, 2022
Less than 3.00%
$— $— $— 
3.00% - 3.49%
— 10 10 
3.50% - 3.99%
12 — 12 
4.00% - 4.49%
437 — 437 
4.50% - 4.99%
270 — 270 
5.00% or greater
71 — 71 
Non-account balances (2)
92 
Total$790 $10 $892 
(1)Difference, in basis points, between rates being credited to contractholders and the respective guaranteed minimum crediting rates.
(2)Non-account balances include unearned revenue and amounts related to policies where a claim is either in the course of settlement or incurred but not reported. A claim on a life insurance policy results in the accrual of interest at a rate and over a period of time that is specified by state insurance regulations.