5 | |
6 | |
10 | |
10 | |
13 | |
16 | |
17 | |
17 | |
17 | |
17 | |
18 | |
18 | |
18 | |
19 | |
19 | |
19 | |
19 | |
20 | |
20 | |
20 | |
20 | |
20 | |
20 | |
21 | |
21 | |
21 | |
22 | |
22 | |
25 | |
26 | |
26 | |
26 | |
26 | |
28 | |
29 | |
30 | |
30 | |
35 | |
37 | |
37 | |
37 | |
38 | |
38 | |
38 | |
38 | |
40 | |
40 | |
40 | |
40 | |
40 | |
41 |
57 | |
58 | |
58 | |
58 | |
58 | |
61 | |
62 | |
63 | |
63 | |
72 | |
72 | |
72 | |
89 | |
89 | |
89 | |
89 | |
89 | |
89 | |
90 | |
90 | |
91 | |
94 | |
99 | |
111 | |
115
| |
117 | |
117
| |
117 | |
118
| |
A-1 | |
B-1 | |
C-1 | |
D-1 |
Contract |
Individual single premium deferred index-linked separate account annuity
contract. |
Purchase Payment |
The minimum Purchase Payment: $25,000. Prior approval required for a
Purchase Payment of less than $25,000 or $1,000,000 or more. |
Owner and Annuitant Issue Ages |
0-75 |
Contract Periods |
The Contract has two periods: •The Accumulation Period, the period prior to the Annuity Date; and •The Income Period, which begins on the Annuity Date and during which Income Payments are provided. |
Account Value |
The total of the Fixed Account Value and the value of the Shield Option(s) under
the Contract during the Accumulation Period. |
Shield Option |
Each Shield Option offered through this Contract has a Term of 1 year and the
Shield 10 Shield Rate. For each Shield Option, you select (i) which
Securities Index you want the performance of your Contract to be
based on and (ii) the Rate Crediting Type. |
Term |
1 year in length. |
Index |
The current Indices are as follows: •S&P 500® Index (Price Return Index); •Russell 2000® Index (Price Return Index); and •MSCI EAFE Index (Price Return Index). |
Shield Rate |
Shield 10 — A Shield Rate where negative Index Performance of up to 10% of your Investment Amount is absorbed by us at the Term End Date, which would
leave you to absorb any remaining negative Index Performance of up to 90% of
your Investment Amount. |
Rate Crediting Type |
A Shield Option can only have one associated Rate Crediting Type: either a Cap
Rate or a Step Rate. |
Interim Value |
The Interim Value is the amount that is available for annuitization, death
benefits, withdrawals, and Surrenders. For each Shield Option, we
assign the value of Interim Value on any Business Day prior to the
Term End Date. The Interim Value of a Shield Option is equal to the
Investment Amount in the Shield Option, adjusted for the Index
Performance of the associated Index and subject to the applicable
Accrued Shield Rate, Accrued Cap Rate or Accrued Step Rate. |
Transfers |
During the Accumulation Period you may make transfers to the Fixed Account
and/or to new Shield Option(s) during the Transfer Period. The
effective date of such transfer is the first day of the Interest
Rate Term and/or the Term in which the transfer is
made. |
Fixed Account |
See Appendix D. |
Access to Your Money |
You may withdraw some or all of your money at any time prior to the Annuity
Date. For any withdrawal, a Performance Rate Adjustment, as of the
date of the withdrawal, will apply and may be substantial. In
addition, a withdrawal taken in excess of the Free Withdrawal Amount
may be subject to a Withdrawal Charge. |
Withdrawal Charge |
A percentage charge applied to withdrawals in excess of the Free Withdrawal
Amount. The Free Withdrawal Amount is 0% in the first Contract Year,
and 10% of Account Value in each subsequent Contract Year to the
extent that amount has not already been withdrawn that Contract
Year. The Withdrawal Charge is calculated at the time of each
withdrawal in accordance with the following: |
|
|
|
|
|
|
|
Number of
Complete
Contract Years
since Issue Date |
Withdrawal
Charge
percentage |
|
|
|
0 |
7% |
|
|
|
1 |
7% |
|
|
|
2 |
6% |
|
|
|
3 |
5% |
|
|
|
4 |
4% |
|
|
|
5 |
3% |
|
|
|
6 or more |
0% |
|
|
See “WITHDRAWAL PROVISIONS — When No Withdrawal Charge Applies”
for a list of Withdrawal Charge waivers |
Systematic Withdrawal Program |
You may elect the Systematic Withdrawal Program to
provide automated processing of amounts withdrawn from your
Contract, subject to program terms. We do not assess a charge
for the program and you may terminate your
participation in the program at any time. Withdrawals
under the Systematic Withdrawal Program are subject
to the same Withdrawal Charge provisions and risks as any other
withdrawals under the Contract. Moreover, since Withdrawal Amounts
from a Shield Option will reduce the Investment Amount for that
Shield Option by the percentage reduction in the Interim Value of that Shield
Option, a withdrawal when Index Performance is negative will cause a
greater percentage reduction in the Investment Amount relative to
the percentage reduction for the same Withdrawal Amount when Index
Performance is positive. Since withdrawals
under the Systematic Withdrawal Program are automatic,
you will have no control over the timing of those withdrawals. See
“WITHDRAWAL PROVISIONS – Systematic Withdrawal Program” for
availability and other restrictions. |
Death Benefit |
The death benefit is the greater of the Account Value or your Purchase Payment
(reduced proportionally by the percentage reduction in Account Value
of the Shield Option(s) and the Fixed Account for each partial
withdrawal (including any applicable Withdrawal Charge)) determined
as of the end of the Business Day on which we receive Notice of due
proof of death and an acceptable election for the payment
method. |
Annuity Options |
You can choose an Annuity Option. After Income Payments begin, you cannot
change the Annuity Option. You can choose one of the following
Annuity Options on a fixed payment basis or any other Annuity Option
acceptable to us: (i)Life Annuity; (ii)Life Annuity with 10 Years of Income Payments Guaranteed; (iii)Joint and Last Survivor Annuity; and (iv)Joint and Last Survivor Annuity with 10 Years of Income Payments Guaranteed. The Annuity Options may be limited due to the requirements of the Code. |
Charges and Expenses |
You will bear the following charges and expenses: (i)Withdrawal Charges; and (ii)Premium and Other Taxes. |
Your Right to Cancel |
You may cancel the Contract within 10 days after receiving it by mailing or
delivering the Contract to either us or the financial representative
who sold it. This is known as a “Free Look.” You will
receive (i) whatever your Contract is worth, plus (ii) the sum of
all fees, taxes and charges deducted from the Purchase Payment
during the Free Look period, as of the effective date of the Free
Look, on the Business Day we receive your Contract and we will not
deduct a Withdrawal Charge. The amount you receive may be more or less than
your Purchase Payment depending on the Shield Options you allocated
your Purchase Payment to during the Free Look period.
|
Shield Option type: |
If Index Performance (can be positive,
zero or negative) is: |
Performance Rate will equal: |
Shield 10 with a Cap Rate |
less than or equal to zero |
the lesser of: zero or the Index Performance increased by the Shield Rate (For example: a -15% Index Performance with a Shield 10 will result in a -5% Performance Rate. The Performance Rate can never be greater than zero if the Index Performance is negative.) |
|
greater than zero and less than the
Cap Rate |
the Index Performance |
|
greater than zero and equals or
exceeds the Cap Rate |
the Cap Rate |
Shield 10 with a Step Rate |
less than zero |
the lesser of: zero or the Index Performance increased by the Shield Rate (For example: a -15% Index Performance with a Shield 10 will result in a -5% Performance Rate. The Performance Rate can never be greater than zero if the Index Performance is negative.) |
|
equal to or greater than zero |
the Step Rate |
Contract Year |
1 |
2 |
3 |
4 |
5 |
Term Start Date | |||||
Investment Amount(1) |
$50,000 |
$55,000 |
$57,750 |
$57,750 |
$57,750 |
Index Value |
1,000 |
1,200 |
1,260 |
1,260 |
1,197 |
Term End Date | |||||
Index Value |
1,200 |
1,260 |
1,260 |
1,197 |
1,017 |
Index Performance(2) |
20% |
5% |
0% |
-5% |
-15% |
Cap Rate |
10% |
10% |
10% |
10% |
10% |
Shield Rate |
10% |
10% |
10% |
10% |
10% |
Performance Rate (one year)(3) |
10% |
5% |
0% |
0% |
-5% |
Performance Rate Adjustment(4) |
$5,000 |
$2,750 |
$0 |
$0 |
-$2,888 |
Investment Amount(5) |
$55,000 |
$57,750 |
$57,750 |
$57,750 |
$54,862 |
Contract Year |
1 |
2 |
3 |
4 |
5 |
Term Start Date | |||||
Investment Amount(1) |
$50,000 |
$54,000 |
$58,320 |
$62,986 |
$62,986 |
Index Value |
1,000 |
1,050 |
1,260 |
1,260 |
1,134 |
Term End Date | |||||
Index Value |
1,050 |
1,260 |
1,260 |
1,134 |
964 |
Index Performance(2) |
5% |
20% |
0% |
-10% |
-15% |
Step Rate |
8% |
8% |
8% |
8% |
8% |
Shield Rate |
10% |
10% |
10% |
10% |
10% |
Performance Rate (one year)(3) |
8% |
8% |
8% |
0% |
-5% |
Performance Rate Adjustment(4) |
$4,000 |
$4,320 |
$4,666 |
$0 |
-$3,149 |
Investment Amount(5) |
$54,000 |
$58,320 |
$62,986 |
$62,986 |
$59,837 |
Term Start Date | |
Investment Amount |
$50,000 |
Shield Rate |
Shield 10 |
Cap Rate |
10% |
Index Value |
500 |
Interim Value Calculation Halfway Through Term | |
Index Value |
600 |
Index Performance(1) |
20% |
Accrued Cap Rate(2) |
5% |
Performance Rate(3) |
5% |
Performance Rate Adjustment(4) |
$2,500 |
Interim Value(5) |
$52,500 |
Term Start Date | |
Investment Amount |
$50,000 |
Shield Rate |
Shield 10 |
Cap Rate |
10% |
Index Value |
500 |
Interim Value Calculation Halfway Through Term | |
Index Value |
400 |
Index Performance(1) |
–20% |
Accrued Shield Rate(2) |
5% |
Performance Rate(3) |
–15% |
Performance Rate Adjustment(4) |
–$7,500 |
Interim Value(5) |
$42,500 |
Number of
Complete Contract Years since Issue Date |
Withdrawal Charge
percentage |
0 |
7% |
1 |
7% |
2 |
6% |
3 |
5% |
4 |
4% |
5 |
3% |
6 or more |
0% |
Term Start Date | |
Investment Amount |
$50,000 |
Shield Rate |
Shield 10 |
Cap Rate |
10% |
Index Value |
500 |
Interim Value Calculation Halfway Through Term | |
Index Value |
600 |
Index Performance(1) |
20% |
Accrued Cap Rate(2) |
5% |
Performance Rate(3) |
5% |
Performance Rate Adjustment(4) |
$2,500 |
Interim Value(5) |
$52,500 |
Withdrawal Amount taken |
$20,000 |
Investment Amount adjusted for any withdrawals(6) |
$30,952 |
Net Proceeds from withdrawal paid to Contract Owner(7) |
$20,000 |
Term End Date | |
Index Value |
700 |
Index Performance(8) |
40% |
Performance Rate(9) |
10% |
Performance Rate Adjustment(10) |
$3,095 |
Investment Amount(11) |
$34,047 |
Term Start Date | |
Investment Amount |
$50,000 |
Shield Rate |
Shield 10 |
Cap Rate |
10% |
Index Value |
500 |
Interim Value Calculation Halfway Through Term | |
Index Value |
400 |
Index Performance(1) |
–20% |
Accrued Shield Rate(2) |
5% |
Performance Rate(3) |
–15% |
Performance Rate Adjustment(4) |
–$7,500 |
Interim Value Halfway Through Term(5) |
$42,500 |
Withdrawal Amount taken |
$20,000 |
Investment Amount adjusted for any withdrawals(6) |
$26,471 |
Free Withdrawal Amount(7) |
$5,000 |
Withdrawal Charge Amount(8) |
$1,050 |
Net Proceeds from Withdrawal paid to Contract Owner(9) |
$18,950 |
Term End Date | |
Index Value |
450 |
Index Performance(10) |
–10% |
Performance Rate(11) |
0% |
Performance Rate Adjustment(12) |
$0 |
Investment Amount(13) |
$26,471 |
Contract Year |
1 |
Term Start Date | |
Investment Amount |
$50,000 |
Index Value |
1,000 |
Term End Date | |
Index Value |
1,200 |
Index Performance(1) |
20% |
Cap Rate |
10% |
Shield Rate |
Shield 10 |
Performance Rate (one year)(2) |
10% |
Performance Rate Adjustment(3) |
$5,000 |
Investment Amount(4) |
$55,000 |
Contract Year |
2 | |
|
1-Year Term / Shield 10 / S&P 500® Index with a Cap Rate of 10% |
1-Year Term / Shield 10 / Russell
2000® Index with a Cap Rate of 12% |
Investment Amount at Term Start Date
(second term)(1) |
$27,500 |
$27,500 |
If you… |
Your “Applicable Age”
is… |
Were born on or before June 30, 1949 |
70½ |
Were born on or after July 1, 1949 (and attain age 72 prior to
January 1, 2023) |
72 |
Attain age 72 on or after January 1, 2023 (and attain age 73 on or
before December 31, 2032) |
73* |
Attain age 74 on or after January 1, 2033 |
75* |
Plan Type |
Elective Contribution |
Catch-up Contribution |
IRA |
$6,500 |
$1,000 |
SIMPLE IRA |
$15,500 |
$3,500 |
401(k) |
$22,500 |
$7,500 |
SEP/401(a) |
(Employer contributions only) |
|
403(b) [TSA] |
$22,500 |
$7,500 |
457(b) |
$22,500 |
$7,500 |
Component of Adjusted Earnings |
How Derived from GAAP (1) | ||
(i) |
Fee income |
(i) |
Universal life and investment-type product policy fees (excluding (a) unearned revenue adjustments related to net investment gains (losses) and net derivative gains (losses) and (b) GMIB Fees) plus Other revenues and amortization of deferred gains on reinsurance. |
(ii) |
Net investment spread |
(ii) |
Net investment income plus Investment Hedge Adjustments
and interest received on ceded fixed annuity reinsurance
deposit funds reduced by Interest credited to policyholder account balances and interest on future policy
benefits. |
(iii) |
Insurance-related activities |
(iii) |
Premiums less Policyholder benefits and claims (excluding
(a) GMIB Costs, (b) Market Value Adjustments, (c) interest on
future policy benefits and (d) amortization of deferred gains
on reinsurance) plus the pass through of performance of
ceded separate account assets. |
(iv) |
Amortization of DAC |
(iv) |
Amortization of DAC (excluding amounts related to (a) net
investment gains (losses), (b) net derivative gains (losses)
and (c) GMIB Fees and GMIB Costs). |
Component of Adjusted Earnings |
How Derived from GAAP (1) | ||
(v) |
Other expenses, net of DAC capitalization |
(v) |
Other expenses reduced by capitalization of DAC.
|
(vi) |
Provision for income tax expense (benefit) |
(vi) |
Tax impact of the above items. |
|
Years Ended
December 31, | |
|
2022 |
2021 |
|
(In millions) | |
Revenues |
|
|
Premiums |
$8
|
$13 |
Universal life and investment-type product policy fees |
90 |
105 |
Net investment income |
188 |
157 |
Other revenues |
(81) |
(96) |
Net investment gains (losses) |
(12) |
(3) |
Net derivative gains (losses) |
(137)
|
(76) |
Total revenues |
56 |
100 |
Expenses |
|
|
Policyholder benefits and claims |
30 |
(11) |
Interest credited to policyholder account balances |
63 |
60 |
Capitalization of DAC |
(55) |
(58) |
Amortization of DAC |
26 |
(2) |
Interest expense on debt |
3 |
— |
Other expenses |
133 |
135 |
Total expenses |
200 |
124 |
Income (loss) before provision for income tax |
(144) |
(24) |
Provision for income tax expense (benefit) |
(38)
|
(6) |
Net income (loss) |
$(106) |
$(18) |
|
Years Ended
December 31, | |
|
2022 |
2021 |
|
(In millions) | |
GMLB Riders |
$(161)
|
$(17) |
Other derivative instruments |
10 |
1 |
Net investment gains (losses) |
(12) |
(3) |
Other adjustments |
— |
(3) |
Pre-tax adjusted earnings |
19 |
(2) |
Income (loss) before provision for income tax |
(144) |
(24) |
Provision for income tax expense (benefit) |
(38)
|
(6) |
Net income (loss) |
$(106) |
$(18) |
|
Years Ended
December 31, | |
|
2022 |
2021 |
|
(In millions) | |
Net income (loss) |
$(106)
|
$(18) |
Add: Provision for income tax expense (benefit) |
(38)
|
(6) |
Income (loss) before provision for income tax |
(144) |
(24) |
Less: GMLB Riders |
(161) |
(17) |
Less: Other derivative instruments |
10 |
1 |
Less: Net investment gains (losses) |
(12) |
(3) |
Less: Other adjustments |
— |
(3) |
Pre-tax adjusted earnings |
19 |
(2) |
Less: Provision for income tax expense (benefit) |
(4)
|
(1) |
Adjusted earnings |
$23 |
$(1) |
|
Years Ended
December 31, | |
|
2022 |
2021 |
|
(In millions) | |
Fee income |
$114
|
$137 |
Net investment spread |
106 |
78 |
Insurance-related activities |
(94) |
(103) |
Amortization of DAC |
(26) |
(37) |
Other expenses, net of DAC capitalization |
(81)
|
(77) |
Pre-tax adjusted earnings |
19 |
(2) |
Provision for income tax expense (benefit)
|
(4)
|
(1) |
Adjusted earnings |
$23 |
$(1) |
|
Years Ended
December 31, | |||||
|
2022 |
2021 |
2020 | |||
|
Yield
% |
Amount |
Yield
% |
Amount |
Yield
% |
Amount |
|
(Dollars in millions) | |||||
Investment income (1) |
3.33% |
$195
|
3.28% |
$163
|
3.54% |
$140 |
Investment fees and expenses (2) |
(0.12) |
(7)
|
(0.11) |
(6)
|
(0.13) |
(6) |
Adjusted net investment income (3) |
3.21%
|
$188 |
3.17%
|
$157 |
3.41%
|
$134
|
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Net investment income |
$188
|
$157
|
$134 |
Less: Investment hedge adjustments |
— |
— |
— |
Adjusted net investment income — in the above yield table |
$188 |
$157 |
$134
|
|
December 31,
2022 |
December 31,
2021 | ||
|
Estimated
Fair Value |
% of
Total |
Estimated
Fair Value |
% of Total |
|
(Dollars in millions) | |||
Publicly-traded |
$3,326
|
82.6% |
$3,948
|
84.1% |
Privately-placed |
699 |
17.4 |
749 |
15.9 |
Total fixed maturity securities |
$4,025 |
100.0% |
$4,697 |
100.0% |
Percentage of cash and invested assets |
66.2% |
|
73.4% |
|
NAIC
Designation |
NRSRO
Rating |
December 31,
2022 |
|
December
31, 2021 | |||||||
Amortized Cost |
Allowance for Credit
Losses |
Unrealized Gain (Loss) |
Estimated Fair Value |
%
of Total |
Amortized Cost |
Allowance for Credit
Losses |
Unrealized Gain (Loss) |
Estimated Fair Value |
% of Total | ||
|
(In millions) | ||||||||||
1 |
Aaa/Aa/A |
$2,678
|
$—
|
$(315)
|
$2,363
|
58.7% |
$2,476
|
$—
|
$141
|
$2,617
|
55.7% |
2 |
Baa |
1,764 |
— |
(248)
|
1,516 |
37.7 |
1,761 |
— |
88 |
1,849 |
39.4 |
Subtotal investment grade |
|
4,442 |
— |
(563) |
3,879 |
96.4 |
4,237 |
— |
229 |
4,466 |
95.1 |
3 |
Ba |
96 |
— |
(11) |
85 |
2.1 |
128 |
— |
3 |
131 |
2.8 |
4 |
B |
57 |
— |
(6) |
51 |
1.3 |
89 |
— |
1 |
90 |
1.9 |
5 |
Caa and lower |
10 |
— |
— |
10 |
0.2 |
10 |
— |
— |
10 |
0.2 |
6 |
In or near default |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
Subtotal below investment grade |
163 |
— |
(17)
|
146 |
3.6 |
227 |
— |
4 |
231 |
4.9 | |
Total fixed maturity securities |
$4,605 |
$— |
$(580) |
$4,025 |
100.0% |
$4,464 |
$— |
$233 |
$4,697 |
100.0% |
|
Fixed
Maturity Securities — by Sector & Credit Quality Rating | ||||||
NAIC Designation |
1 |
2 |
3 |
4 |
5 |
6 |
Total Estimated Fair
Value |
NRSRO
Rating |
Aaa/Aa/A |
Baa |
Ba |
B |
Caa
and Lower |
In or
Near Default | |
|
(In millions) | ||||||
December 31, 2022 |
|
|
|
|
|
|
|
U.S. corporate |
$836
|
$1,073 |
$72 |
$49 |
$—
|
$—
|
$2,030 |
Foreign corporate |
259 |
398 |
12 |
2 |
— |
— |
671 |
CMBS |
316 |
1 |
— |
— |
— |
— |
317 |
ABS |
247 |
24 |
— |
— |
10 |
— |
281 |
RMBS |
268 |
7 |
— |
— |
— |
— |
275 |
State and political subdivision |
234 |
11 |
— |
— |
— |
— |
245 |
U.S. government and agency |
192 |
— |
— |
— |
— |
— |
192 |
Foreign government |
11 |
2 |
1 |
— |
— |
— |
14 |
Total fixed maturity securities |
$2,363 |
$1,516 |
$85 |
$51 |
$10 |
$— |
$4,025
|
December 31, 2021 |
|
|
|
|
|
|
|
U.S. corporate |
$887
|
$1,373 |
$102 |
$81 |
$—
|
$—
|
$2,443 |
Foreign corporate |
246 |
421 |
17 |
9 |
— |
— |
693 |
CMBS |
348 |
1 |
— |
— |
— |
— |
349 |
ABS |
279 |
24 |
— |
— |
10 |
— |
313 |
RMBS |
269 |
1 |
9 |
— |
— |
— |
279 |
State and political subdivision |
282 |
21 |
— |
— |
— |
— |
303 |
U.S. government and agency |
292 |
— |
— |
— |
— |
— |
292 |
Foreign government |
14 |
8 |
3 |
— |
— |
— |
25 |
Total fixed maturity securities |
$2,617 |
$1,849 |
$131 |
$90 |
$10 |
$— |
$4,697
|
|
December 31,
2022 |
December 31,
2021 | ||
|
Estimated Fair Value
|
%
of Total |
Estimated Fair Value
|
% of Total |
|
(Dollars in millions) | |||
Industrial |
$836
|
31.0% |
$977
|
31.2% |
Finance |
809 |
30.0 |
900 |
28.7 |
Consumer |
685 |
25.3 |
825 |
26.3 |
Utility |
217 |
8.0 |
240 |
7.6 |
Communications |
154 |
5.7 |
194 |
6.2 |
Total |
$2,701 |
100.0% |
$3,136 |
100.0% |
|
December 31,
2022 |
December 31,
2021 | ||||
|
Estimated Fair Value |
%
of Total |
Net
Unrealized Gains (Losses) |
Estimated Fair Value |
%
of Total |
Net Unrealized Gains (Losses)
|
|
(Dollars in millions) | |||||
Security type: |
|
|
|
|
|
|
Collateralized mortgage obligations |
$152
|
55.3% |
$(16)
|
$167
|
59.9% |
$8 |
Pass-through securities |
123 |
44.7 |
(13)
|
112 |
40.1 |
1 |
Total RMBS |
$275 |
100.0% |
$(29) |
$279 |
100.0% |
$9 |
Risk profile: |
|
|
|
|
|
|
Agency |
$174
|
63.3% |
$(21)
|
$177
|
63.5% |
$5 |
Prime |
11 |
4.0 |
(2) |
5 |
1.8 |
— |
Alt-A |
43 |
15.6 |
(4) |
38 |
13.6 |
1 |
Sub-prime |
47 |
17.1 |
(2)
|
59 |
21.1 |
3 |
Total RMBS |
$275 |
100.0% |
$(29) |
$279 |
100.0% |
$9 |
Ratings profile: |
|
|
|
|
|
|
Rated Aaa |
$218
|
79.3% |
|
$173
|
73.3% |
|
Designated NAIC 1 |
$268 |
97.5% |
|
$220 |
93.2% |
|
|
December 31,
2022 |
December 31,
2021 | ||
|
Amortized
Cost |
Estimated Fair Value |
Amortized
Cost |
Estimated Fair Value |
|
(In millions) | |||
2012 |
$—
|
$—
|
$2
|
$2 |
2013 |
5 |
5 |
6 |
6 |
2014 |
3 |
2 |
3 |
3 |
2015 |
24 |
21 |
24 |
25 |
2016 |
8 |
7 |
8 |
8 |
2017 |
63 |
56 |
63 |
67 |
2018 |
110 |
102 |
114 |
123 |
2019 |
65 |
56 |
63 |
66 |
2020 |
30 |
23 |
33 |
32 |
2021 |
21 |
18 |
17 |
17 |
2022 |
29 |
27 |
— |
— |
Total |
$358 |
$317 |
$333 |
$349
|
|
December 31,
2022 |
December 31,
2021 | ||||
|
Estimated Fair Value |
%
of Total |
Net
Unrealized Gains (Losses) |
Estimated Fair Value |
%
of Total |
Net Unrealized Gains (Losses)
|
|
(Dollars in millions) | |||||
Collateral type: |
|
|
|
|
|
|
Collateralized obligations |
$222
|
79.0% |
$(8) |
$259
|
82.7% |
$1 |
Consumer loans |
13 |
4.6 |
(1) |
8 |
2.6 |
— |
Automobile loans |
12 |
4.3 |
(1) |
13 |
4.2 |
— |
Student loans |
10 |
3.6 |
(1) |
7 |
2.2 |
— |
Other loans |
24 |
8.5 |
(3)
|
26 |
8.3 |
— |
Total |
$281 |
100.0% |
$(14) |
$313 |
100.0% |
$1 |
Ratings profile: |
|
|
|
|
|
|
Rated Aaa |
$156
|
55.5% |
$174
|
55.6% |
|
|
Designated NAIC 1 |
$247 |
87.9% |
$279 |
89.1% |
|
|
|
|
December 31,
2022 |
|
|
December 31,
2021 | |||
|
Recorded Investment |
%
of Total |
Valuation Allowance |
%
of Recorded Investment |
Recorded Investment |
%
of Total |
Valuation Allowance |
% of Recorded
Investment |
|
(Dollars in millions) | |||||||
Commercial |
$940
|
76.9% |
$4
|
0.4% |
$593
|
72.9% |
$1
|
0.2% |
Agricultural |
283 |
23.1 |
1 |
0.4% |
220 |
27.1 |
1 |
0.5% |
Total |
$1,223 |
100.0% |
$5 |
0.4% |
$813 |
100.0% |
$2 |
0.2% |
|
December 31,
2022 |
December 31,
2021 | ||
|
Amount |
%
of Total |
Amount |
% of Total |
|
(Dollars in millions) | |||
Geographic region: |
|
|
|
|
South Atlantic |
$338
|
36.0% |
$179
|
30.2% |
Pacific |
210 |
22.3 |
152 |
25.6 |
New England |
72 |
7.7 |
72 |
12.1 |
West South Central |
70 |
7.5 |
16 |
2.7 |
East South Central |
69 |
7.3 |
18 |
3.0 |
East North Central |
63 |
6.7 |
27 |
4.6 |
Middle Atlantic |
62 |
6.6 |
70 |
11.8 |
Mountain |
48 |
5.1 |
47 |
7.9 |
International |
7 |
0.7 |
11 |
1.9 |
West North Central |
1 |
0.1 |
1 |
0.2 |
Total recorded investment |
940 |
100.0% |
593 |
100.0% |
Less: allowance for credit losses |
4 |
|
1 |
|
Carrying value, net of allowance for credit
losses |
$936 |
|
$592 |
|
Property type: |
|
|
|
|
Apartment |
$558
|
59.3% |
$228
|
38.5% |
Office |
178 |
18.9 |
193 |
32.4 |
Retail |
90 |
9.6 |
95 |
16.0 |
Industrial |
58 |
6.2 |
21 |
3.6 |
Hotel |
56 |
6.0 |
56 |
9.5 |
Total recorded investment |
940 |
100.0% |
593 |
100.0% |
Less: allowance for credit losses |
4 |
|
1 |
|
Carrying value, net of allowance for credit losses |
$936 |
|
$592 |
|
|
A.M. Best
(1) |
Fitch |
Moody’s |
S&P (2) |
Current outlook |
Stable |
NR |
NR |
Stable |
Brighthouse Life Insurance Company of NY |
A |
NR |
NR |
A+ |
|
December 31,
2022 | ||
|
Notional Amount |
Estimated Fair Value (1)
|
100 Basis Point Increase in the
Yield Curve |
|
(In millions) | ||
Financial assets with interest rate risk |
|
|
|
Fixed maturity securities |
|
$4,025
|
$(249) |
Mortgage loans |
|
$1,078
|
(54) |
Premiums, reinsurance and other receivables |
|
$440
|
(4) |
Embedded derivatives within asset host contracts (2) |
|
$255
|
(76) |
Increase (decrease) in estimated fair value of assets |
|
|
(383) |
|
|
|
|
Financial liabilities with interest rate risk (3) |
|
|
|
Policyholder account balances |
|
$764
|
— |
Other liabilities |
|
$478
|
(4) |
Embedded derivatives within liability host contracts (2) |
|
$508
|
(6) |
(Increase) decrease in estimated fair value of liabilities |
|
|
(10) |
Derivative instruments with interest rate risk |
|
|
|
Interest rate contracts |
$800
|
$12
|
11 |
Equity contracts |
$5,153
|
$123
|
7 |
Foreign currency contracts |
$180
|
$23
|
(2) |
Increase (decrease) in estimated fair value of derivative instruments |
|
|
16 |
Net change |
|
|
$(377) |
Name |
Position with Brighthouse Life Insurance Company of NY |
David A. Rosenbaum |
Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) (March 24,
2022 - present) |
Kristine H. Toscano |
Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
(September 2021 - present) |
David W. Chamberlin |
Director (October 11, 2016 - present) |
Jeffrey P. Halperin |
Director (June 28, 2022 - present) |
Michael J. Inserra |
Director (October 12, 2021 - present) |
Mayer Naiman |
Director (October 26, 2017 - present) |
Richard C. Pearson |
Director (May 7, 2002 - present) |
Douglas A. Rayvid |
Director (September 12, 2019 - present) |
|
2022 Director Compensation Table |
|
Name |
Fees Earned or
Paid in Cash (1) |
Total |
Kimberly A. Berwanger (2) |
— |
— |
David W. Chamberlin |
— |
— |
Jeffrey P. Halperin |
— |
— |
Michael J. Inserra |
$30,000 |
$30,000 |
Conor E. Murphy (3) |
— |
— |
Mayer Naiman |
— |
— |
Richard C. Pearson |
$30,000 |
$30,000 |
Douglas A. Rayvid (4) |
$35,000 |
$35,000 |
David A. Rosenbaum |
— |
— |
|
Report of Independent Registered Public Accounting Firm |
Financial Statements at December 31, 2022 and 2021 and for the Years Ended December 31, 2022, 2021 and 2020: |
Balance Sheets |
Statements of Operations |
Statements of Comprehensive Income (Loss) |
Statements of Stockholder’s Equity |
Statements of Cash Flows |
Notes to the Financial Statements |
Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies |
Note 2 — Segment Information |
Note 3 — Insurance |
Note 4 — Deferred Policy Acquisition Costs and Deferred Sales Inducements |
Note 5 — Reinsurance |
Note 6 — Investments |
Note 7 — Derivatives |
Note 8 — Fair Value |
Note 9 — Short-term Debt |
Note 10 — Equity |
Note 11 — Other Revenues and Other Expenses |
Note 12 — Income Tax |
Note 13 — Contingencies, Commitments and Guarantees |
Note 14 — Related Party Transactions |
Note 15 — Subsequent Events |
Financial Statement Schedules at December 31, 2022 and 2021 and for the Years Ended December 31, 2022, 2021 and
2020: |
Schedule I — Summary of Investments — Other Than Investments in Related Parties |
Schedule III — Supplementary Insurance Information |
Schedule IV — Reinsurance |
|
2022 |
2021 |
Assets |
|
|
Investments: |
|
|
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $4,605 and $4,464,
respectively; allowance for credit losses of $0 and $0, respectively) |
$4,025 |
$4,697 |
Equity securities, at estimated fair value |
4 |
3 |
Mortgage loans (net of allowance for credit losses of $5 and $2, respectively) |
1,218 |
811 |
Limited liability companies |
7 |
— |
Short-term investments, principally at estimated fair value |
— |
13 |
Other invested assets, principally at estimated fair value |
266 |
342 |
Total investments |
5,520 |
5,866 |
Cash and cash equivalents |
559 |
535 |
Accrued investment income |
40 |
56 |
Premiums, reinsurance and other receivables |
996 |
1,122 |
Deferred policy acquisition costs |
325 |
224 |
Deferred income tax asset |
168 |
— |
Other assets |
21 |
26 |
Separate account assets |
3,922 |
5,149 |
Total assets |
$11,551 |
$12,978 |
Liabilities and Stockholder’s Equity |
|
|
Liabilities |
|
|
Future policy benefits |
$857 |
$846 |
Policyholder account balances |
4,828 |
4,360 |
Other policy-related balances |
13 |
12 |
Payables for collateral under derivative transactions |
194 |
331 |
Short-term debt |
125 |
— |
Current income tax payable |
94 |
35 |
Deferred income tax liability |
— |
107 |
Other liabilities |
921 |
987 |
Separate account liabilities |
3,922 |
5,149 |
Total liabilities |
10,954 |
11,827 |
Contingencies, Commitments and Guarantees (Note 13) |
|
|
Stockholder’s Equity |
|
|
Common stock, par value $10 per share; 200,000 shares authorized, issued and outstanding |
2 |
2 |
Additional paid-in capital |
591 |
491 |
Retained earnings (deficit) |
417 |
523 |
Accumulated other comprehensive income (loss) |
(413)
|
135 |
Total stockholder’s equity |
597 |
1,151 |
Total liabilities and stockholder’s equity |
$11,551 |
$12,978 |
|
2022 |
2021 |
2020 |
Revenues |
|
|
|
Premiums |
$8 |
$13 |
$22 |
Universal life and investment-type product policy fees |
90 |
105 |
93 |
Net investment income |
188 |
157 |
134 |
Other revenues |
(81) |
(96) |
(83) |
Net investment gains (losses) |
(12) |
(3) |
13 |
Net derivative gains (losses) |
(137)
|
(76)
|
129 |
Total revenues |
56 |
100 |
308 |
Expenses |
|
|
|
Policyholder benefits and claims |
30 |
(11) |
23 |
Interest credited to policyholder account balances |
63 |
60 |
38 |
Amortization of deferred policy acquisition costs |
26 |
(2) |
38 |
Other expenses |
81 |
77 |
77 |
Total expenses |
200 |
124 |
176 |
Income (loss) before provision for income tax |
(144) |
(24) |
132 |
Provision for income tax expense (benefit) |
(38) |
(6)
|
25 |
Net income (loss) |
$(106) |
$(18) |
$107 |
|
2022 |
2021 |
2020 |
Net income (loss) |
$(106) |
$(18) |
$107 |
Other comprehensive income (loss): |
|
|
|
Unrealized investment gains (losses), net of related offsets |
(706) |
(161) |
177 |
Unrealized gains (losses) on derivatives |
12 |
6 |
(5) |
Other comprehensive income (loss), before income tax |
(694) |
(155) |
172 |
Income tax (expense) benefit related to items of other comprehensive income (loss) |
146 |
32 |
(36) |
Other comprehensive income (loss), net of income tax |
(548)
|
(123)
|
136 |
Comprehensive income (loss) |
$(654) |
$(141) |
$243 |
|
Common Stock |
Additional Paid-in Capital
|
Retained Earnings
(Deficit) |
Accumulated Other
Comprehensive Income (Loss) |
Total Stockholder’s
Equity |
Balance at December 31, 2019 |
$2 |
$491 |
$434 |
$122 |
$1,049 |
Net income (loss) |
|
|
107 |
|
107 |
Other comprehensive income (loss), net of income tax |
|
|
|
136 |
136 |
Balance at December 31, 2020 |
2 |
491 |
541 |
258 |
1,292 |
Net income (loss) |
|
|
(18) |
|
(18) |
Other comprehensive income (loss), net of income tax |
|
|
|
(123)
|
(123) |
Balance at December 31, 2021 |
2 |
491 |
523 |
135 |
1,151 |
Capital contribution |
|
100 |
|
|
100 |
Net income (loss) |
|
|
(106) |
|
(106) |
Other comprehensive income (loss), net of income tax |
|
|
|
(548)
|
(548) |
Balance at December 31, 2022 |
$2 |
$591 |
$417 |
$(413) |
$597 |
|
2022 |
2021 |
2020 |
Cash flows from operating activities |
|
|
|
Net income (loss) |
$(106) |
$(18) |
$107 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
Amortization of premiums and accretion of discounts associated with investments, net |
— |
(2) |
1 |
(Gains) losses on investments, net |
12 |
3 |
(13) |
(Gains) losses on derivatives, net |
130 |
37 |
(124) |
Interest credited to policyholder account balances |
63 |
60 |
38 |
Universal life and investment-type product policy fees |
(90) |
(105) |
(93) |
Change in accrued investment income |
7 |
(27) |
(3) |
Change in premiums, reinsurance and other receivables |
28 |
(23) |
(35) |
Change in deferred policy acquisition costs |
(29) |
(60) |
(4) |
Change in income tax |
(71) |
(5) |
— |
Change in other assets |
87 |
98 |
90 |
Change in future policy benefits and other policy-related balances |
47 |
6 |
68 |
Change in other liabilities |
(66) |
7 |
(37) |
Net cash provided by (used in) operating activities |
12 |
(29)
|
(5) |
Cash flows from investing activities |
|
|
|
Sales, maturities and repayments of: |
|
|
|
Fixed maturity securities |
699 |
490 |
480 |
Mortgage loans |
42 |
77 |
60 |
Purchases of: |
|
|
|
Fixed maturity securities |
(815) |
(1,499) |
(1,023) |
Equity securities |
(1) |
(3) |
— |
Mortgage loans |
(457) |
(249) |
(80) |
Cash received in connection with freestanding derivatives |
110 |
466 |
313 |
Cash paid in connection with freestanding derivatives |
(437) |
(119) |
(231) |
Net change in short-term investments |
13 |
58 |
(20) |
Net change in other invested assets |
— |
— |
1 |
Net cash provided by (used in) investing activities |
(846)
|
(779)
|
(500) |
Cash flows from financing activities |
|
|
|
Policyholder account balances: |
|
|
|
Deposits |
947 |
980 |
672 |
Withdrawals |
(182) |
(106) |
(100) |
Net change in payables for collateral under derivative transactions |
(137) |
194 |
52 |
Short-term debt issued |
125 |
— |
100 |
Short-term debt repaid |
— |
— |
(100) |
Capital contribution |
100 |
— |
— |
Financing element on certain derivative instruments and other derivative related transactions,
net |
5 |
— |
8 |
Net cash provided by (used in) financing activities |
858 |
1,068 |
632 |
Change in cash, cash equivalents and restricted cash |
24 |
260 |
127 |
Cash, cash equivalents and restricted cash, beginning of year |
535 |
275 |
148 |
Cash, cash equivalents and restricted cash, end of year |
$559 |
$535 |
$275 |
|
2022 |
2021 |
2020 |
Supplemental disclosures of cash flow information |
|
|
|
Net cash paid (received) for: |
|
|
|
Interest |
$2 |
$— |
$1 |
Income tax |
$33 |
$(5) |
$25 |
|
Year Ended
December 31, 2022 | |||
Annuities |
Life |
Corporate & Other |
Total | |
(In millions) | ||||
Pre-tax adjusted earnings |
$14 |
$7 |
$(2) |
$19 |
Provision for income tax expense (benefit) |
1 |
1 |
(6)
|
(4) |
Adjusted earnings |
$13 |
$6 |
$4 |
23 |
Adjustments for: |
|
|
|
|
Net investment gains (losses) |
|
|
|
(12) |
Net derivative gains (losses) |
|
|
|
(137) |
Other adjustments to net income (loss) |
|
|
|
(14) |
Provision for income tax (expense) benefit |
|
|
|
34 |
Net income (loss) |
|
|
|
$(106) |
Interest revenue |
$153 |
$33 |
$2 |
|
Interest expense |
$— |
$— |
$3 |
|
|
Year Ended
December 31, 2021 | |||
|
Annuities |
Life |
Corporate & Other |
Total |
|
(In millions) | |||
Pre-tax adjusted earnings |
$(22) |
$16 |
$4 |
$(2) |
Provision for income tax expense (benefit) |
(6)
|
4 |
1 |
(1) |
Adjusted earnings |
$(16) |
$12 |
$3 |
(1) |
Adjustments for: |
|
|
|
|
Net investment gains (losses) |
|
|
|
(3) |
Net derivative gains (losses) |
|
|
|
(76) |
Other adjustments to net income (loss) |
|
|
|
57 |
Provision for income tax (expense) benefit |
|
|
|
5 |
Net income (loss) |
|
|
|
$(18) |
Interest revenue |
$121 |
$35 |
$1 |
|
|
Year Ended
December 31, 2020 | |||
|
Annuities |
Life |
Corporate & Other |
Total |
|
(In millions) | |||
Pre-tax adjusted earnings |
$(11) |
$33 |
$(6) |
$16 |
Provision for income tax expense (benefit) |
(4)
|
7 |
(2)
|
1 |
Adjusted earnings |
$(7) |
$26 |
$(4) |
15 |
Adjustments for: |
|
|
|
|
Net investment gains (losses) |
|
|
|
13 |
Net derivative gains (losses) |
|
|
|
129 |
Other adjustments to net income (loss) |
|
|
|
(26) |
Provision for income tax (expense) benefit |
|
|
|
(24) |
Net income (loss) |
|
|
|
$107 |
Interest revenue |
$97 |
$36 |
$1 |
|
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Annuities |
$156 |
$125 |
$104 |
Life |
34 |
39 |
48 |
Corporate & Other |
2 |
2 |
2 |
Adjustments |
(136)
|
(66)
|
154 |
Total |
$56 |
$100 |
$308 |
|
December
31, | |
|
2022 |
2021 |
|
(In millions) | |
Annuities |
$9,165 |
$10,745 |
Life |
1,767 |
1,863 |
Corporate & Other |
619 |
370 |
Total |
$11,551 |
$12,978 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Annuity products |
$16 |
$16 |
$20 |
Life insurance products |
1 |
6 |
12 |
Total |
$17 |
$22 |
$32 |
|
Variable Annuity Contracts |
| |
|
GMDBs |
GMIBs |
Total |
|
(In millions) | ||
Direct |
|
|
|
Balance at January 1, 2020 |
$14 |
$202 |
$216 |
Incurred guaranteed benefits |
(1) |
64 |
63 |
Paid guaranteed benefits |
(1)
|
— |
(1) |
Balance at December 31, 2020 |
12 |
266 |
278 |
Incurred guaranteed benefits |
6 |
(8) |
(2) |
Paid guaranteed benefits |
— |
— |
— |
Balance at December 31, 2021 |
18 |
258 |
276 |
Incurred guaranteed benefits |
7 |
37 |
44 |
Paid guaranteed benefits |
1 |
— |
1 |
Balance at December 31, 2022 |
$26 |
$295 |
$321 |
Ceded |
|
|
|
Balance at January 1, 2020 |
$12 |
$74 |
$86 |
Incurred guaranteed benefits |
— |
34 |
34 |
Paid guaranteed benefits |
(1)
|
— |
(1) |
Balance at December 31, 2020 |
11 |
108 |
119 |
Incurred guaranteed benefits |
5 |
(2) |
3 |
Paid guaranteed benefits |
— |
— |
— |
Balance at December 31, 2021 |
16 |
106 |
122 |
Incurred guaranteed benefits |
10 |
14 |
24 |
Paid guaranteed benefits |
(2)
|
1 |
(1) |
Balance at December 31, 2022 |
$24 |
$121 |
$145 |
Net |
|
|
|
Balance at January 1, 2020 |
$2 |
$128 |
$130 |
Incurred guaranteed benefits |
(1) |
30 |
29 |
Paid guaranteed benefits |
— |
— |
— |
Balance at December 31, 2020 |
1 |
158 |
159 |
Incurred guaranteed benefits |
1 |
(6) |
(5) |
Paid guaranteed benefits |
— |
— |
— |
Balance at December 31, 2021 |
2 |
152 |
154 |
Incurred guaranteed benefits |
(3) |
23 |
20 |
Paid guaranteed benefits |
3 |
(1)
|
2 |
Balance at December 31, 2022 |
$2 |
$174 |
$176 |
|
December
31, | |||
|
2022 |
2021 | ||
|
In the Event of Death |
At Annuitization |
In the Event of Death |
At Annuitization |
|
(Dollars in millions) | |||
Annuity Contracts (1), (2) |
|
|
|
|
Variable Annuity Guarantees |
|
|
|
|
Total account value (3) |
$3,924 |
$2,814 |
$5,154 |
$3,799 |
Separate account value |
$3,919 |
$2,814 |
$5,146 |
$3,796 |
Net amount at risk |
$ 396 (4) |
$ 271 (5) |
$ 4 (4) |
$ 319 (5) |
Average attained age of contract holders |
70 years |
70 years |
70 years |
69 years |
|
December
31, | |
|
2022 |
2021 |
|
(In millions) | |
Fund Groupings: |
|
|
Balanced |
$2,330 |
$3,095 |
Equity |
1,118 |
1,471 |
Bond |
474 |
583 |
Total |
$3,922 |
$5,149 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
DAC: |
|
|
|
Balance at January 1, |
$224 |
$160 |
$175 |
Capitalizations |
55 |
58 |
42 |
Amortization related to net investment gains (losses) and net derivative gains (losses) |
3 |
34 |
18 |
All other amortization |
(29)
|
(32)
|
(56) |
Total amortization |
(26)
|
2 |
(38) |
Unrealized investment gains (losses) |
72 |
4 |
(19) |
Balance at December 31, |
$325 |
$224 |
$160 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
DSI: |
|
|
|
Balance at January 1, |
$18 |
$18 |
$25 |
Amortization |
(2)
|
— |
(7) |
Balance at December 31, |
$16 |
$18 |
$18 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Premiums |
|
|
|
Direct premiums |
$71 |
$75 |
$82 |
Reinsurance ceded |
(63)
|
(62)
|
(60) |
Net premiums |
$8 |
$13 |
$22 |
Universal life and investment-type product policy fees |
|
|
|
Direct universal life and investment-type product policy fees |
$94 |
$109 |
$97 |
Reinsurance ceded |
(4)
|
(4)
|
(4) |
Net universal life and investment-type product policy fees |
$90 |
$105 |
$93 |
Other revenues |
|
|
|
Direct other revenues |
$12 |
$16 |
$13 |
Reinsurance ceded |
(93)
|
(112)
|
(96) |
Net other revenues |
$(81) |
$(96) |
$(83) |
Policyholder benefits and claims |
|
|
|
Direct policyholder benefits and claims |
$129 |
$71 |
$149 |
Reinsurance ceded |
(99)
|
(82)
|
(126) |
Net policyholder benefits and claims |
$30 |
$(11) |
$23 |
Other expenses |
|
|
|
Direct other expenses |
$83 |
$80 |
$80 |
Reinsurance ceded |
(2)
|
(3)
|
(3) |
Net other expenses |
$81 |
$77 |
$77 |
|
December
31, | |||||
|
2022 |
2021 | ||||
|
Direct |
Ceded |
Total Balance Sheet
|
Direct |
Ceded |
Total Balance Sheet
|
|
(In millions) | |||||
Assets |
|
|
|
|
|
|
Premiums, reinsurance and other receivables |
$18 |
$978 |
$996 |
$22 |
$1,100 |
$1,122 |
Liabilities |
|
|
|
|
|
|
Other liabilities |
$239 |
$682 |
$921 |
$197 |
$790 |
$987 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Premiums |
$(47) |
$(45) |
$(43) |
Universal life and investment-type product policy fees |
$(3) |
$(3) |
$(4) |
Other revenues |
$(93) |
$(112) |
$(96) |
Policyholder benefits and claims |
$(90) |
$(76) |
$(120) |
Other expenses |
$(7) |
$(8) |
$(7) |
|
December
31, | |
|
2022 |
2021 |
|
(In millions) | |
Assets |
|
|
Premiums, reinsurance and other receivables |
$523 |
$637 |
Liabilities |
|
|
Other liabilities |
$248 |
$347 |
|
December 31,
2022 |
December 31,
2021 | ||||||||
Amortized Cost |
Allowance for Credit
Losses |
Gross
Unrealized |
Estimated Fair Value
|
Amortized Cost |
Allowance for Credit
Losses |
Gross
Unrealized |
Estimated Fair Value
| |||
Gains |
Losses |
Gains |
Losses | |||||||
|
(In millions) | |||||||||
U.S. corporate |
$2,349 |
$— |
$2 |
$321 |
$2,030 |
$2,315 |
$— |
$143 |
$15 |
$2,443 |
Foreign corporate |
779 |
— |
1 |
109 |
671 |
669 |
— |
31 |
7 |
693 |
CMBS |
358 |
— |
— |
41 |
317 |
333 |
— |
18 |
2 |
349 |
ABS |
295 |
— |
— |
14 |
281 |
312 |
— |
1 |
— |
313 |
RMBS |
304 |
— |
2 |
31 |
275 |
270 |
— |
11 |
2 |
279 |
State and political subdivision |
298 |
— |
1 |
54 |
245 |
290 |
— |
15 |
2 |
303 |
U.S. government and agency |
205 |
— |
— |
13 |
192 |
252 |
— |
40 |
— |
292 |
Foreign government |
17 |
— |
— |
3 |
14 |
23 |
— |
2 |
— |
25 |
Total fixed maturity securities |
$4,605 |
$— |
$6 |
$586 |
$4,025 |
$4,464 |
$— |
$261 |
$28 |
$4,697 |
|
Due in One Year or Less |
Due After One Year Through Five
Years |
Due After Five Years Through
Ten Years |
Due After Ten Years |
Structured Securities |
Total Fixed Maturity
Securities |
|
(In millions) | |||||
Amortized cost |
$72 |
$1,022 |
$1,411 |
$1,143 |
$957 |
$4,605 |
Estimated fair value |
$71 |
$951 |
$1,220 |
$910 |
$873 |
$4,025 |
|
December 31,
2022 |
December 31,
2021 | ||||||
|
Less than 12
Months |
12 Months or
Greater |
Less than 12
Months |
12 Months or
Greater | ||||
|
Estimated Fair Value
|
Gross Unrealized
Losses |
Estimated Fair Value
|
Gross Unrealized
Losses |
Estimated Fair Value
|
Gross Unrealized
Losses |
Estimated Fair Value
|
Gross Unrealized
Losses |
|
(Dollars in millions) | |||||||
U.S. corporate |
$1,605 |
$217 |
$362 |
$104 |
$583 |
$13 |
$21 |
$2 |
Foreign corporate |
500 |
64 |
160 |
45 |
193 |
5 |
11 |
2 |
CMBS |
254 |
26 |
63 |
15 |
72 |
2 |
10 |
— |
ABS |
164 |
8 |
107 |
6 |
138 |
— |
2 |
— |
RMBS |
165 |
16 |
79 |
15 |
114 |
2 |
— |
— |
State and political subdivision |
139 |
33 |
85 |
21 |
107 |
2 |
— |
— |
U.S. government and agency |
178 |
13 |
— |
— |
— |
— |
— |
— |
Foreign government |
13 |
2 |
1 |
1 |
6 |
— |
2 |
— |
Total fixed maturity securities |
$3,018 |
$379 |
$857 |
$207 |
$1,213 |
$24 |
$46 |
$4 |
Total number of securities in an unrealized loss position |
1,293 |
|
497 |
|
602 |
|
20 |
|
|
December
31, | |||
|
2022 |
2021 | ||
|
Carrying Value |
% of Total |
Carrying Value |
% of Total |
|
(Dollars in millions) | |||
Commercial |
$940 |
77.2% |
$593 |
73.1% |
Agricultural |
283 |
23.2 |
220 |
27.1 |
Total mortgage loans |
1,223 |
100.4 |
813 |
100.2 |
Allowance for credit losses |
(5)
|
(0.4)
|
(2)
|
(0.2) |
Total mortgage loans, net |
$1,218 |
100.0% |
$811 |
100.0% |
|
Commercial |
Agricultural |
Total |
|
(In millions) | ||
Balance at January 1, 2020 |
$1 |
$1 |
$2 |
Current period provision |
— |
— |
— |
Balance at December 31, 2020 |
1 |
1 |
2 |
Current period provision |
— |
— |
— |
Balance at December 31, 2021 |
1 |
1 |
2 |
Current period provision |
3 |
— |
3 |
Balance at December 31, 2022 |
$4 |
$1 |
$5 |
|
2022 |
2021 |
2020 |
2019 |
2018 |
Prior |
Total |
|
(In millions) | ||||||
December 31, 2022 |
|
|
|
|
|
|
|
Commercial mortgage loans |
|
|
|
|
|
|
|
Loan-to-value ratios: |
|
|
|
|
|
|
|
Less than 65% |
$345 |
$171 |
$31 |
$108 |
$10 |
$135 |
$800 |
65% to 75% |
37 |
— |
— |
25 |
13 |
41 |
116 |
76% to 80% |
— |
— |
— |
5 |
— |
— |
5 |
Greater than 80% |
— |
— |
— |
10 |
5 |
4 |
19 |
Total commercial mortgage loans |
382 |
171 |
31 |
148 |
28 |
180 |
940 |
Agricultural mortgage loans |
|
|
|
|
|
|
|
Loan-to-value ratios: |
|
|
|
|
|
|
|
Less than 65% |
48 |
41 |
43 |
31 |
16 |
36 |
215 |
65% to 75% |
26 |
34 |
— |
7 |
1 |
— |
68 |
Total agricultural mortgage loans |
74 |
75 |
43 |
38 |
17 |
36 |
283 |
Total |
$456 |
$246 |
$74 |
$186 |
$45 |
$216 |
$1,223 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Prior |
Total |
|
(In millions) | ||||||
December 31, 2021 |
|
|
|
|
|
|
|
Commercial mortgage loans |
|
|
|
|
|
|
|
Loan-to-value ratios: |
|
|
|
|
|
|
|
Less than 65% |
$121 |
$31 |
$100 |
$16 |
$13 |
$158 |
$439 |
65% to 75% |
50 |
— |
52 |
13 |
7 |
16 |
138 |
76% to 80% |
— |
— |
— |
— |
— |
1 |
1 |
Greater than 80% |
— |
— |
— |
5 |
— |
10 |
15 |
Total commercial mortgage loans |
171 |
31 |
152 |
34 |
20 |
185 |
593 |
Agricultural mortgage loans |
|
|
|
|
|
|
|
Loan-to-value ratios: |
|
|
|
|
|
|
|
Less than 65% |
42 |
45 |
33 |
17 |
6 |
35 |
178 |
65% to 75% |
34 |
— |
7 |
1 |
— |
— |
42 |
Total agricultural mortgage loans |
76 |
45 |
40 |
18 |
6 |
35 |
220 |
Total |
$247 |
$76 |
$192 |
$52 |
$26 |
$220 |
$813 |
|
December
31, | |||
|
2022 |
2021 | ||
|
Amortized Cost |
% of Total |
Amortized Cost |
% of Total |
|
(Dollars in millions) | |||
Debt service coverage ratios: |
|
|
|
|
Greater than 1.20x |
$894 |
95.1% |
$510 |
86.0% |
1.00x - 1.20x |
21 |
2.2 |
46 |
7.8 |
Less than 1.00x |
25 |
2.7 |
37 |
6.2 |
Total |
$940 |
100.0% |
$593 |
100.0% |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Fixed maturity securities |
$(580) |
$233 |
$383 |
Derivatives |
19 |
7 |
1 |
Subtotal |
(561)
|
240 |
384 |
Amounts allocated from: |
|
|
|
Future policy benefits |
— |
(35) |
(20) |
DAC |
38 |
(34)
|
(38) |
Subtotal |
38 |
(69) |
(58) |
Deferred income tax benefit (expense) |
110 |
(36)
|
(68) |
Net unrealized investment gains (losses) |
$(413) |
$135 |
$258 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Balance at January 1, |
$135 |
$258 |
$122 |
Unrealized investment gains (losses) during the year |
(801) |
(144) |
208 |
Unrealized investment gains (losses) relating to: |
|
|
|
Future policy benefits |
35 |
(15) |
(17) |
DAC |
72 |
4 |
(19) |
Deferred income tax benefit (expense) |
146 |
32 |
(36) |
Balance at December 31, |
$(413) |
$135 |
$258 |
Change in net unrealized investment gains (losses) |
$(548) |
$(123) |
$136 |
|
December
31, | |
|
2022 |
2021 |
|
(In millions) | |
Invested assets on deposit (regulatory deposits) |
$1 |
$2 |
Invested assets pledged as collateral (1) |
236 |
161 |
Total invested assets on deposit and pledged as collateral (2) |
$237 |
$163 |
|
December
31, | |||
|
2022 |
2021 | ||
|
Carrying Amount |
Maximum Exposure to Loss
|
Carrying Amount |
Maximum Exposure to Loss
|
|
(In millions) | |||
Fixed maturity securities |
$342 |
$373 |
$326 |
$308 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Investment income: |
|
|
|
Fixed maturity securities |
$149 |
$135 |
$112 |
Mortgage loans |
40 |
26 |
26 |
Cash, cash equivalents and short-term investments |
6 |
— |
1 |
Other |
2 |
2 |
1 |
Total investment income |
197 |
163 |
140 |
Less: Investment expenses |
9 |
6 |
6 |
Net investment income |
$188 |
$157 |
$134 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Fixed maturity securities |
$(10) |
$(2) |
$13 |
Mortgage loans |
(2) |
— |
— |
Other |
— |
(1)
|
— |
Total net investment gains (losses) |
$(12) |
$(3) |
$13 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Proceeds |
$459 |
$153 |
$321 |
Gross investment gains |
$7 |
$1 |
$14 |
Gross investment losses |
(17)
|
(3)
|
(1) |
Net investment gains (losses) |
$(10) |
$(2) |
$13 |
|
Primary
Underlying Risk Exposure |
December
31, | |||||
2022 |
2021 | ||||||
Gross Notional Amount
|
Estimated Fair
Value |
Gross Notional Amount
|
Estimated Fair
Value | ||||
Assets |
Liabilities |
Assets |
Liabilities | ||||
|
|
(In
millions) | |||||
Derivatives Designated as Hedging Instruments: | |||||||
Cash flow hedges: |
|
|
|
|
|
|
|
Foreign currency swaps |
Foreign currency exchange rate |
$164 |
$19 |
$— |
$125 |
$7 |
$1 |
Total qualifying hedges |
|
164 |
19 |
— |
125 |
7 |
1 |
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | |||||||
Interest rate caps |
Interest rate |
800 |
12 |
— |
800 |
2 |
— |
Foreign currency swaps |
Foreign currency exchange rate |
16 |
4 |
— |
16 |
4 |
— |
Equity index options |
Equity market |
2,761 |
171 |
72 |
2,576 |
268 |
137 |
Equity total return swaps |
Equity market |
2,392 |
59 |
35 |
2,089 |
61 |
3 |
Total non-designated or non-qualifying derivatives |
5,969 |
246 |
107 |
5,481 |
335 |
140 | |
Embedded derivatives: |
|
|
|
|
|
|
|
Ceded guaranteed minimum income benefits |
Other |
N/A |
255 |
— |
N/A |
351 |
— |
Direct guaranteed minimum benefits |
Other |
N/A |
— |
(21) |
N/A |
— |
(30) |
Direct index-linked annuities |
Other |
N/A |
— |
529 |
N/A |
— |
792 |
Total embedded derivatives |
Other |
N/A |
255 |
508 |
N/A |
351 |
762 |
Total |
|
$6,133 |
$520 |
$615 |
$5,606 |
$693 |
$903 |
|
Year Ended
December 31, 2022 | |||
|
Net Derivative Gains (Losses) Recognized
for Derivatives |
Net Derivative Gains (Losses) Recognized
for Hedged Items |
Net Investment
Income |
Amount of Gains (Losses) Deferred
in AOCI |
|
(In millions) | |||
Derivatives Designated as Hedging Instruments: | ||||
Cash flow hedges: |
|
|
|
|
Foreign currency exchange rate |
$— |
$— |
$2 |
$12 |
Total cash flow hedges |
— |
— |
2 |
12 |
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Interest rate |
10 |
— |
— |
— |
Foreign currency exchange rate |
1 |
(1) |
— |
— |
Equity market |
(426) |
— |
— |
— |
Embedded |
279 |
— |
— |
— |
Total non-qualifying hedges |
(136)
|
(1)
|
— |
— |
Total |
$(136) |
$(1) |
$2 |
$12 |
|
Year Ended
December 31, 2021 | |||
|
Net Derivative Gains (Losses) Recognized
for Derivatives |
Net Derivative Gains (Losses) Recognized
for Hedged Items |
Net Investment
Income |
Amount of Gains (Losses)
Deferred in AOCI |
|
(In millions) | |||
Derivatives Designated as Hedging Instruments: | ||||
Cash flow hedges: |
|
|
|
|
Foreign currency exchange rate |
$— |
$— |
$1 |
$6 |
Total cash flow hedges |
— |
— |
1 |
6 |
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Interest rate |
1 |
— |
— |
— |
Foreign currency exchange rate |
— |
— |
— |
— |
Equity market |
368 |
— |
— |
— |
Embedded |
(445)
|
— |
— |
— |
Total non-qualifying hedges |
(76)
|
— |
— |
— |
Total |
$(76) |
$— |
$1 |
$6 |
|
Year Ended
December 31, 2020 | |||
|
Net Derivative Gains (Losses) Recognized
for Derivatives |
Net Derivative Gains (Losses)
Recognized for Hedged Items
|
Net Investment
Income |
Amount of Gains (Losses)
Deferred in AOCI |
|
(In millions) | |||
Derivatives Designated as Hedging Instruments: | ||||
Cash flow hedges: |
|
|
|
|
Foreign currency exchange rate |
$— |
$— |
$1 |
$(5) |
Total cash flow hedges |
— |
— |
1 |
(5) |
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Interest rate |
(1) |
— |
— |
— |
Foreign currency exchange rate |
1 |
— |
— |
— |
Equity market |
195 |
— |
— |
— |
Embedded |
(66)
|
— |
— |
— |
Total non-qualifying hedges |
129 |
— |
— |
— |
Total |
$129 |
$— |
$1 |
$(5) |
|
|
Gross Amounts
Not Offset on the Balance Sheets |
|
|
| |
|
Gross Amount Recognized |
Financial Instruments (1) |
Collateral Received/Pledged (2) |
Net Amount |
Securities Collateral Received/Pledged
(3) |
Net Amount After Securities
Collateral |
|
(In millions) | |||||
December 31, 2022 |
|
|
|
|
|
|
Derivative assets |
$260 |
$(65) |
$(189) |
$6 |
$(5) |
$1 |
Derivative liabilities |
$111 |
$(65) |
$— |
$46 |
$(45) |
$1 |
December 31, 2021 |
|
|
|
|
|
|
Derivative assets |
$342 |
$(33) |
$(305) |
$4 |
$(3) |
$1 |
Derivative liabilities |
$141 |
$(33) |
$— |
$108 |
$(108) |
$— |
|
December
31, | |
|
2022 |
2021 |
|
(In millions) | |
Estimated fair value of derivatives in a net liability position (1) |
$46 |
$108 |
Estimated Fair Value of Collateral Provided (2): |
|
|
Fixed maturity securities |
$235 |
$162 |
Level 1 |
Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets
based on average trading volume for equity securities. The size of the bid/ask spread is used as an
indicator of market activity for fixed maturity securities. |
Level 2 |
Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. These inputs
can include quoted prices for similar assets or liabilities other than quoted prices in Level 1,
quoted prices in markets that are not active, or other significant inputs that are
observable or can be derived principally from or corroborated by observable market data
for substantially the full term of the assets or liabilities. |
Level 3 |
Unobservable inputs that are supported by little or no market activity and are significant to the determination of
estimated fair value of the assets or liabilities. Unobservable inputs reflect the reporting
entity’s own assumptions about the assumptions that market participants would use
in pricing the asset or liability. |
|
December 31,
2022 | |||
|
Fair Value
Hierarchy |
| ||
|
Level 1 |
Level 2 |
Level 3 |
Total Estimated Fair Value |
|
(In millions) | |||
Assets |
|
|
|
|
Fixed maturity securities: |
|
|
|
|
U.S. corporate |
$— |
$2,015 |
$15 |
$2,030 |
Foreign corporate |
— |
649 |
22 |
671 |
CMBS |
— |
317 |
— |
317 |
ABS |
— |
270 |
11 |
281 |
RMBS |
— |
275 |
— |
275 |
State and political subdivision |
— |
245 |
— |
245 |
U.S. government and agency |
144 |
48 |
— |
192 |
Foreign government |
— |
13 |
1 |
14 |
Total fixed maturity securities |
144 |
3,832 |
49 |
4,025 |
Equity securities |
— |
— |
4 |
4 |
Short-term investments |
— |
— |
— |
— |
Derivative assets: (1) |
|
|
|
|
Interest rate |
— |
12 |
— |
12 |
Foreign currency exchange rate |
— |
23 |
— |
23 |
Equity market |
— |
230 |
— |
230 |
Total derivative assets |
— |
265 |
— |
265 |
Embedded derivatives within asset host contracts (2) |
— |
— |
255 |
255 |
Separate account assets |
— |
3,922 |
— |
3,922 |
Total assets |
$144 |
$8,019 |
$308 |
$8,471 |
Liabilities |
|
|
|
|
Derivative liabilities: (1) |
|
|
|
|
Foreign currency exchange rate |
$— |
$— |
$— |
$— |
Equity market |
— |
107 |
— |
107 |
Total derivative liabilities |
— |
107 |
— |
107 |
Embedded derivatives within liability host contracts (2) |
— |
— |
508 |
508 |
Total liabilities |
$— |
$107 |
$508 |
$615 |
|
December 31,
2021 | |||
|
Fair Value
Hierarchy |
| ||
|
Level 1 |
Level 2 |
Level 3 |
Total Estimated Fair Value |
|
(In millions) | |||
Assets |
|
|
|
|
Fixed maturity securities: |
|
|
|
|
U.S. corporate |
$— |
$2,422 |
$21 |
$2,443 |
Foreign corporate |
— |
679 |
14 |
693 |
CMBS |
— |
349 |
— |
349 |
ABS |
— |
303 |
10 |
313 |
RMBS |
— |
279 |
— |
279 |
State and political subdivision |
— |
303 |
— |
303 |
U.S. government and agency |
148 |
144 |
— |
292 |
Foreign government |
— |
23 |
2 |
25 |
Total fixed maturity securities |
148 |
4,502 |
47 |
4,697 |
Equity securities |
— |
— |
3 |
3 |
Short-term investments |
13 |
— |
— |
13 |
Derivative assets: (1) |
|
|
|
|
Interest rate |
— |
2 |
— |
2 |
Foreign currency exchange rate |
— |
11 |
— |
11 |
Equity market |
— |
329 |
— |
329 |
Total derivative assets |
— |
342 |
— |
342 |
Embedded derivatives within asset host contracts (2) |
— |
— |
351 |
351 |
Separate account assets |
— |
5,149 |
— |
5,149 |
Total assets |
$161 |
$9,993 |
$401 |
$10,555 |
Liabilities |
|
|
|
|
Derivative liabilities: (1) |
|
|
|
|
Foreign currency exchange rate |
$— |
$1 |
$— |
$1 |
Equity market |
— |
140 |
— |
140 |
Total derivative liabilities |
— |
141 |
— |
141 |
Embedded derivatives within liability host contracts (2) |
— |
— |
762 |
762 |
Total liabilities |
$— |
$141 |
$762 |
$903 |
|
|
|
December 31,
2022 |
December 31,
2021 |
| ||||
|
Valuation Techniques |
Significant Unobservable
Inputs |
Range |
Range |
Impact of Increase in Input
on Estimated Fair Value | ||||
Embedded derivatives |
|
|
|
|
|
|
|
|
|
Direct, assumed and ceded guaranteed minimum benefits |
•Option pricing
techniques |
•Mortality rates |
0.03% |
- |
12.62% |
0.03% |
- |
12.62% |
Decrease (1) |
|
|
•Lapse rates |
0.30% |
- |
14.50% |
0.30% |
- |
14.50% |
Decrease (2) |
|
|
•Utilization
rates |
0.00% |
- |
25.00% |
0.00% |
- |
25.00% |
Increase (3) |
|
|
•Withdrawal
rates |
0.25% |
- |
10.00% |
0.25% |
- |
10.00% |
(4) |
|
|
•Long-term
equity
volatilities |
16.46% |
- |
22.01% |
16.44% |
- |
22.16% |
Increase (5) |
|
|
•Nonperformance
risk spread |
0.00% |
- |
1.98% |
(0.38)% |
- |
1.49% |
Decrease (6) |
|
Fair Value
Measurements Using Significant Unobservable Inputs (Level 3) | ||||
|
Fixed Maturity
Securities |
| |||
|
Corporate (1) |
Structured Securities |
Foreign Government |
Equity Securities |
Net Embedded Derivatives (2) |
|
(In millions) | ||||
Balance, January 1, 2021 |
$26 |
$6 |
$— |
$— |
$70 |
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) |
— |
— |
— |
— |
(445) |
Total realized/unrealized gains (losses) included in AOCI |
— |
— |
— |
— |
— |
Purchases (5) |
19 |
10 |
2 |
3 |
— |
Sales (5) |
— |
(3) |
— |
— |
— |
Issuances (5) |
— |
— |
— |
— |
— |
Settlements (5) |
— |
— |
— |
— |
(36) |
Transfers into Level 3 (6) |
6 |
— |
— |
— |
— |
Transfers out of Level 3 (6) |
(16)
|
(3)
|
— |
— |
— |
Balance, December 31, 2021 |
35 |
10 |
2 |
3 |
(411) |
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) |
— |
— |
— |
— |
279 |
Total realized/unrealized gains (losses) included in AOCI |
(6) |
— |
(1) |
— |
— |
Purchases (5) |
15 |
1 |
— |
1 |
— |
Sales (5) |
(5) |
— |
— |
— |
— |
Issuances (5) |
— |
— |
— |
— |
— |
Settlements (5) |
— |
— |
— |
— |
(121) |
Transfers into Level 3 (6) |
4 |
— |
— |
— |
— |
Transfers out of Level 3 (6) |
(6)
|
— |
— |
— |
— |
Balance, December 31, 2022 |
$37 |
$11 |
$1 |
$4 |
$(253) |
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2020 (7) |
$— |
$— |
$— |
$— |
$(111) |
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2021 (7) |
$— |
$— |
$— |
$— |
$(475) |
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2022 (7) |
$— |
$— |
$— |
$— |
$154 |
Changes in unrealized gains (losses) included in OCI for the instruments still held at December 31, 2020 (7) |
$— |
$— |
$— |
$— |
$— |
Changes in unrealized gains (losses) included in OCI for the instruments still held at December 31, 2021 (7) |
$— |
$— |
$— |
$— |
$— |
Changes in unrealized gains (losses) included in OCI for the instruments still held at December 31, 2022 (7) |
$(6) |
$— |
$— |
$— |
$— |
|
Fair Value
Measurements Using Significant Unobservable Inputs (Level 3) | ||||
|
Fixed Maturity
Securities |
| |||
|
Corporate (1) |
Structured Securities |
Foreign Government |
Equity Securities |
Net Embedded Derivatives (2) |
|
(In millions) | ||||
Gains (Losses) Data for the year ended December 31, 2020: |
|
|
|
|
|
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) |
$— |
$— |
$— |
$— |
$(66) |
Total realized/unrealized gains (losses) included in AOCI |
$— |
$— |
$— |
$— |
$— |
|
December 31,
2022 | ||||
|
|
Fair Value
Hierarchy |
| ||
|
Carrying Value |
Level 1 |
Level 2 |
Level 3 |
Total Estimated Fair
Value |
|
(In millions) | ||||
Assets |
|
|
|
|
|
Mortgage loans |
$1,218 |
$— |
$— |
$1,078 |
$1,078 |
Premiums, reinsurance and other receivables |
$440 |
$— |
$2 |
$438 |
$440 |
Liabilities |
|
|
|
|
|
Policyholder account balances |
$784 |
$— |
$— |
$764 |
$764 |
Short term debt |
$125 |
$— |
$— |
$125 |
$125 |
Other liabilities |
$478 |
$— |
$49 |
$429 |
$478 |
|
December 31,
2021 | ||||
|
|
Fair Value
Hierarchy |
| ||
|
Carrying Value |
Level 1 |
Level 2 |
Level 3 |
Total Estimated Fair
Value |
|
(In millions) | ||||
Assets |
|
|
|
|
|
Mortgage loans |
$811 |
$— |
$— |
$839 |
$839 |
Premiums, reinsurance and other receivables |
$448 |
$— |
$3 |
$445 |
$448 |
Liabilities |
|
|
|
|
|
Policyholder account balances |
$853 |
$— |
$— |
$845 |
$845 |
Other liabilities |
$438 |
$— |
$2 |
$436 |
$438 |
|
|
Years Ended
December 31, | ||
Company |
State of Domicile |
2022 |
2021 |
2020 |
|
|
(In millions) | ||
Brighthouse Life Insurance Company of NY |
New York |
$(152) |
$(52) |
$(390) |
|
December
31, | |
Company |
2022 |
2021 |
|
(In millions) | |
Brighthouse Life Insurance Company of NY |
$223 |
$357 |
|
Unrealized Investment Gains (Losses),
Net of Related Offsets (1) |
Unrealized Gains (Losses) on
Derivatives |
Total |
|
(In millions) | ||
Balance at December 31, 2019 |
$116 |
$6 |
$122 |
OCI before reclassifications |
190 |
(5) |
185 |
Deferred income tax benefit (expense) (2) |
(40)
|
1 |
(39) |
AOCI before reclassifications, net of income tax |
266 |
2 |
268 |
Amounts reclassified from AOCI |
(13) |
— |
(13) |
Deferred income tax benefit (expense) (2) |
3 |
— |
3 |
Amounts reclassified from AOCI, net of income tax |
(10)
|
— |
(10) |
Balance at December 31, 2020 |
256 |
2 |
258 |
OCI before reclassifications |
(163) |
6 |
(157) |
Deferred income tax benefit (expense) (2) |
33 |
(1)
|
32 |
AOCI before reclassifications, net of income tax |
126 |
7 |
133 |
Amounts reclassified from AOCI |
2 |
— |
2 |
Amounts reclassified from AOCI, net of income tax |
2 |
— |
2 |
Balance at December 31, 2021 |
128 |
7 |
135 |
OCI before reclassifications |
(717) |
12 |
(705) |
Deferred income tax benefit (expense) (2) |
151 |
(3)
|
148 |
AOCI before reclassifications, net of income tax |
(438) |
16 |
(422) |
Amounts reclassified from AOCI |
11 |
— |
11 |
Deferred income tax benefit (expense) (2) |
(2)
|
— |
(2) |
Amounts reclassified from AOCI, net of income tax |
9 |
— |
9 |
Balance at December 31, 2022 |
$(429) |
$16 |
$(413) |
AOCI Components |
Amounts
Reclassified from AOCI |
Statements of
Operations Locations | ||
Years Ended
December 31, | ||||
2022 |
2021 |
2020 | ||
|
(In millions) |
| ||
Net unrealized investment gains (losses): |
|
|
|
|
Net unrealized investment gains (losses) |
$(11) |
$(2) |
$13 |
Net investment gains (losses) |
Net unrealized investment gains (losses), before income tax |
(11) |
(2) |
13 |
|
Income tax (expense) benefit |
2 |
— |
(3)
|
|
Net unrealized investment gains (losses), net of income tax |
(9)
|
(2)
|
10 |
|
Total reclassifications, net of income tax |
$(9) |
$(2) |
$10 |
|
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Compensation |
$24 |
$24 |
$20 |
Contracted services and other labor costs |
18 |
16 |
16 |
Transition services agreements |
3 |
6 |
6 |
Establishment costs |
3 |
4 |
8 |
Premium and other taxes, licenses and fees |
4 |
2 |
— |
Volume related costs, excluding compensation, net of DAC capitalization |
23 |
25 |
22 |
Other |
6 |
— |
5 |
Total other expenses |
$81 |
$77 |
$77 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(In millions) | ||
Current: |
|
|
|
Federal |
$92 |
$32 |
$(3) |
Deferred: |
|
|
|
Federal |
(130)
|
(38)
|
28 |
Provision for income tax expense (benefit) |
$(38) |
$(6) |
$25 |
|
Years Ended
December 31, | ||
|
2022 |
2021 |
2020 |
|
(Dollars in millions) | ||
Tax provision at statutory rate |
$(30) |
$(5) |
$28 |
Tax effect of: |
|
|
|
Resolution of prior years |
(4) |
— |
— |
Dividends received deduction |
(2) |
(1) |
(2) |
Change in uncertain tax benefits |
(1) |
— |
— |
Tax credits |
(1) |
(1) |
(1) |
Change in valuation allowance |
— |
1 |
— |
Provision for income tax expense (benefit) |
$(38) |
$(6) |
$25 |
Effective tax rate |
26%
|
25%
|
19% |
|
December
31, | |
|
2022 |
2021 |
|
(In millions) | |
Deferred income tax assets: |
|
|
Net unrealized investment losses |
$110 |
$— |
Net operating loss carryforwards |
61 |
61 |
Investments, including derivatives |
51 |
— |
Tax credit carryforwards |
8 |
7 |
Other |
26 |
1 |
Total deferred income tax assets |
256 |
69 |
Less: Valuation allowance |
1 |
1 |
Total net deferred income tax assets |
255 |
68 |
Deferred income tax liabilities: |
|
|
DAC |
51 |
45 |
Policyholder liabilities and receivables |
35 |
44 |
Intangibles |
1 |
1 |
Investments, including derivatives |
— |
49 |
Net unrealized investment gains |
— |
36 |
Total deferred income tax liabilities |
87 |
175 |
Net deferred income tax asset (liability) |
$168 |
$(107) |
|
Foreign Tax Credits Carryforwards |
|
(In millions) |
Expiration |
|
2023-2026 |
$1 |
2027-2031 |
6 |
2032-2036 |
1 |
2037-2041 |
— |
Indefinite |
— |
|
$8 |
Types of Investments |
Cost or Amortized Cost (1) |
Estimated Fair Value |
Amount at Which Shown on Balance
Sheet |
Fixed maturity securities: |
|
|
|
Bonds: |
|
|
|
State and political subdivision |
$298 |
$245 |
$245 |
U.S. government and agency |
205 |
192 |
192 |
Public utilities |
122 |
104 |
104 |
Foreign government |
17 |
14 |
14 |
All other corporate bonds |
2,995 |
2,588 |
2,588 |
Total bonds |
3,637 |
3,143 |
3,143 |
Mortgage-backed and asset-backed securities |
957 |
873 |
873 |
Redeemable preferred stock |
11 |
9 |
9 |
Total fixed maturity securities |
4,605 |
4,025 |
4,025 |
Equity securities: |
|
|
|
Common stock: |
|
|
|
Industrial, miscellaneous and all other |
1 |
1 |
1 |
Non-redeemable preferred stock |
3 |
3 |
3 |
Total equity securities |
4 |
4 |
4 |
Mortgage loans |
1,218 |
|
1,218 |
Limited liability companies |
7 |
|
7 |
Other invested assets |
266 |
|
266 |
Total investments |
$6,100 |
|
$5,520 |
Segment |
DAC |
Future Policy Benefits and Other
Policy-Related Balances |
Policyholder Account Balances
|
Unearned Premiums (1), (2) |
Unearned Revenue (1) |
2022 |
|
|
|
|
|
Annuities |
$310 |
$496 |
$4,817 |
$— |
$2 |
Life |
14 |
362 |
11 |
1 |
— |
Corporate & Other |
1 |
12 |
— |
— |
— |
Total |
$325 |
$870 |
$4,828 |
$1 |
$2 |
2021 |
|
|
|
|
|
Annuities |
$208 |
$461 |
$4,349 |
$— |
$2 |
Life |
16 |
386 |
11 |
1 |
— |
Corporate & Other |
— |
11 |
— |
— |
— |
Total |
$224 |
$858 |
$4,360 |
$1 |
$2 |
Segment |
Premiums and Universal Life and
Investment-Type Product Policy Fees |
Net Investment Income
(1) |
Policyholder Benefits and Claims
and Interest Credited to Policyholder Account
Balances |
Amortization of DAC |
Other Expenses |
2022 |
|
|
|
|
|
Annuities |
$97 |
$153 |
$79 |
$24 |
$66 |
Life |
1 |
33 |
15 |
2 |
10 |
Corporate & Other |
— |
2 |
(1)
|
— |
5 |
Total |
$98 |
$188 |
$93 |
$26 |
$81 |
2021 |
|
|
|
|
|
Annuities |
$113 |
$121 |
$42 |
$(4) |
$65 |
Life |
4 |
35 |
10 |
2 |
11 |
Corporate & Other |
1 |
1 |
(3)
|
— |
1 |
Total |
$118 |
$157 |
$49 |
$(2) |
$77 |
2020 |
|
|
|
|
|
Annuities |
$102 |
$97 |
$59 |
$37 |
$57 |
Life |
12 |
36 |
2 |
1 |
12 |
Corporate & Other |
1 |
1 |
— |
— |
8 |
Total |
$115 |
$134 |
$61 |
$38 |
$77 |
|
Gross Amount |
Ceded |
Assumed |
Net Amount |
% Amount Assumed to Net
|
2022 |
|
|
|
|
|
Life insurance in-force |
$37,212 |
$32,121 |
$— |
$5,091 |
—% |
Life insurance premium (1) |
$71 |
$63 |
$— |
$8 |
—% |
2021 |
|
|
|
|
|
Life insurance in-force |
$39,572 |
$33,955 |
$— |
$5,617 |
—% |
Life insurance premium (1) |
$75 |
$62 |
$— |
$13 |
—% |
2020 |
|
|
|
|
|
Life insurance in-force |
$41,707 |
$35,792 |
$— |
$5,915 |
—% |
Life insurance premium (1) |
$82 |
$60 |
$— |
$22 |
—% |
Investment Amount at Term Start Date |
$100,000 |
Term |
1-Year |
Initial Index |
S&P 500® Index |
S&P 500® Index Index Value on Term Start
Date |
1,400 |
Cap Rate |
10% |
Shield Rate |
10% |
Index substitution |
|
Number of days since Term Start Date |
183 |
Index Value for S&P 500® Index |
1,330 |
Index Performance for S&P 500® Index(1) |
–5% |
Substituted Index |
Russell 2000® Index |
Index Value for Russell 2000® Index on substitution date
|
1,250 |
Index Value for Russell 2000® Index |
1,375 |
Index Performance for S&P 500® Index(1) |
–5% |
Index Performance for Russell 2000® Index(2) |
10% |
Total Index Performance for the Term(3) |
4.5% |
Cap Rate |
10% |
Shield Rate |
10% |
Performance Rate(4) |
4.5% |
Performance Rate Adjustment(5) |
$4,500 |
Investment Amount at Term End Date(6) |
$104,500 |
|
|
Date |
Amount |
A |
Purchase Payment |
Issue Date |
$100,000 |
B |
Account Value |
First Contract Anniversary |
$90,000 |
C |
Death Benefit |
First Contract Anniversary |
$100,000
(= greater of A and B) |
D |
Withdrawal |
One Day after the First Contract Anniversary |
$9,000 |
E |
Percentage Reduction in Account
Value |
One Day after the First Contract Anniversary |
10% (= D/B) |
F |
Account Value after Withdrawal |
One Day after the First Contract Anniversary |
$81,000 (= B-D) |
G |
Purchase Payment Reduced for
Withdrawal |
One Day after the First Contract Anniversary |
$90,000
(= A-(A × E)) |
H |
Death Benefit |
One Day after the First Contract Anniversary |
$90,000
(= greater of F and G) |