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Reserve for Future Policy Benefits and Contractholder Funds
 9 Months Ended
Sep. 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)
Nine months ended September 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)— 34 — 22 — 
Effect of actual variances from expected experience(4)(138)4 35 — (103)
Adjusted beginning balance1,533 1,466 284 250 1,817 1,716 
Issuances378 301 53 7 431 308 
Interest accrual48 36 8 5 56 41 
Net premiums collected(260)(254)(37)(34)(297)(288)
Ending balance at original discount rate1,699 1,549 308 228 2,007 1,777 
Effect of changes in discount rate assumptions(113)(96)(19)(8)(132)(104)
Ending balance1,586 1,453 289 220 1,875 1,673 
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 assumptions21 (44)30 — 51 (44)
Effect of actual variances from expected experience(24)(120)3 26 (21)(94)
Adjusted beginning balance2,313 2,262 567 537 2,880 2,799 
Issuances368 293 68 8 436 301 
Interest accrual75 62 18 15 93 77 
Benefit payments(297)(294)(30)(53)(327)(347)
Ending balance at original discount rate2,459 2,323 623 507 3,082 2,830 
Effect of changes in discount rate assumptions(126)(105)(38)(11)(164)(116)
Ending balance$2,333 $2,218 $585 $496 $2,918 $2,714 
Net reserve for future policy benefits (1)
$747 $765 $296 $276 $1,043 $1,041 
Less: reinsurance recoverables82 75 2 2 84 77 
Net reserve for future policy benefits, after reinsurance recoverables
$665 $690 $294 $274 $959 $964 
(1)Excludes $266 million and $277 million of reserves related to short-duration and other contracts as of September 30, 2023 and 2022, respectively.
Revenue and interest recognized in the condensed consolidated statements of operations
($ in millions)Nine months ended September 30,
20232022
Revenues (1)
Accident and health$600 $629 
Traditional life77 72 
Total$677 $701 
Interest expense (2)
Accident and health$27 $26 
Traditional life10 10 
Total$37 $36 
(1) Total revenues reflects gross premiums used in the calculation for reserve for future policy benefits. Revenues included in Accident and health insurance premiums and contract charges on the Condensed Consolidated Statements of Operations reflect premium revenue recognized for traditional life insurance and long-duration and short-duration accident and health insurance contracts.
(2) Total interest expense presented as part of Accident, health and other policy benefits on the Condensed Consolidated Statements of Operations.
The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for nonparticipating traditional and limited-payment contracts.
As of September 30,
20232022
($ in millions)UndiscountedDiscountedUndiscountedDiscounted
Accident and health
Expected future gross premiums$5,263 $3,600 $4,963 $3,533 
Expected future benefits and expenses3,503 2,333 3,253 2,218 
Traditional life
Expected future gross premiums813 553 624 422 
Expected future benefits and expenses1,153 585 932 496 
Key assumptions used in calculating the reserve for future policy benefits
As of September 30,
Accident and healthTraditional life
2023202220232022
Weighted-average duration (in years)4.33.714.813.4
Weighted-average interest rates
Interest accretion rate (discount rate at contract issuance)4.73 %4.69 %5.43 %5.60 %
Current discount rate (upper-medium grade fixed income yield)5.28 4.73 5.56 5.38 
Significant assumptions To determine mortality and morbidity assumptions, the Company uses a combination of its 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 its historical claim patterns. The lapse assumption is determined based on historical lapses of the Company’s insurance contracts.
The Company performed the annual review of the mortality, morbidity and lapse experience assumptions in the third quarter of 2023 and 2022 resulting in an increase of less than $1 million and a decrease of $4 million, respectively, to the reserve for future policy benefits.
The following table summarizes the ratio of actual to expected experience used in the determination of the reserve for future policy benefits.
As of September 30,
Accident and healthTraditional life
2023202220232022
Actual to expected experience
Mortality
n/an/a95 %238 %
Morbidity92 %94 %n/an/a
Lapses116 %123 %89 %75 %
n/a = not applicable
Contractholder funds
Contractholder funds activity
Nine months ended September 30,
($ in millions)20232022
Beginning balance$879 $890 
Deposits99 102 
Interest credited25 25 
Benefits(8)(15)
Surrenders and partial withdrawals(15)(16)
Contract charges(90)(88)
Other adjustments(6)(5)
Ending balance$884 $893 
Components of contractholder funds
Interest-sensitive life insurance$837 $841 
Fixed annuities47 52 
Total $884 $893 
Weighted-average crediting rate4.26 %4.28 %
Net amount at risk (1)
$11,550 $11,796 
Cash surrender value728 728 
(1)Guaranteed benefit amounts in excess of the current account balances.
Account values: comparison of current crediting rate to guaranteed minimum crediting rate (1)
($ in millions)

Range of guaranteed minimum crediting rates
At guaranteed minimum
1-50 basis points above
Total
September 30, 2023
Less than 3.00%
$— $— $— 
3.00% - 3.49%
— 27 27 
3.50% - 3.99%
11 — 11 
4.00% - 4.49%
437 — 437 
4.50% - 4.99%
263 — 263 
5.00% or greater
68 — 68 
Non-account balances (2)
78 
Total$779 $27 $884 
September 30, 2022
Less than 3.00%
$— $— $— 
3.00% - 3.49%
— 13 13 
3.50% - 3.99%
12 — 12 
4.00% - 4.49%
438 — 438 
4.50% - 4.99%
269 — 269 
5.00% or greater
70 — 70 
Non-account balances (2)
91 
Total$789 $13 $893 
(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.