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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended		~~March 31,~~September 30, 2023
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from_______________________to_______________________


Commission File No.			033-28976


RIVERSOURCE LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)

Minnesota

41-0823832

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1099 Ameriprise Financial Center

Minneapolis

Minnesota

55474

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

(612)

671-3131


			Former name, former address and former fiscal year, if changed since last report:			Not Applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock (par value $30 per share)

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

☒

Smaller reporting company

☐

Emerging growth company

☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Outstanding at ~~May~~November 2, 2023

Common Stock (par value $30 per share)

100,000 shares

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1) (a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

FORM 10-Q

INDEX


Part I. Financial Information	Part I. Financial Information				Part I. Financial Information
Item 1. Financial Statements (Unaudited)	Item 1. Financial Statements (Unaudited)				Item 1. Financial Statements (Unaudited)
						Consolidated Balance Sheets — September 30, 2023 and December 31, 2022		3
		Consolidated Balance Sheets — March 31, 2023 and December 31, 2022		3		Consolidated Statements of Income — Three and nine months ended September 30, 2023 and 2022		4
		Consolidated Statements of Income — Three months ended March 31, 2023 and 2022		4		Consolidated Statements of Comprehensive Income — Three and nine months ended September 30, 2023 and 2022		4
		Consolidated Statements of Comprehensive Income — Three months ended March 31, 2023 and 2022		4		Consolidated Statements of Shareholder’s Equity — Three and nine months ended September 30, 2023 and 2022		5
		Consolidated Statements of Shareholder’s Equity — Three months ended March 31, 2023 and 2022		5		Consolidated Statements of Cash Flows — Nine months ended September 30, 2023 and 2022		6
		Consolidated Statements of Cash Flows — Three months ended March 31, 2023 and 2022		6		Notes to Consolidated Financial Statements		8
		Notes to Consolidated Financial Statements		8		1.	Basis of Presentation	8
		1.	Basis of Presentation	8		2.	Summary of Significant Accounting Policies	8
		2.	Summary of Significant Accounting Policies	8		3.	Recent Accounting Pronouncements	11
		3.	Recent Accounting Pronouncements	11		4.	Revenue from Contracts with Customers	15
		4.	Revenue from Contracts with Customers	14		5.	Variable Interest Entities	16
		5.	Variable Interest Entities	15		6.	Investments	20
		6.	Investments	19		7.	Financing Receivables	24
		7.	Financing Receivables	22		8.	Deferred Acquisition Costs and Deferred Sales Inducement Costs	27
		8.	Deferred Acquisition Costs and Deferred Sales Inducement Costs	25		9.	Policyholder Account Balances, Future Policy Benefits and Claims	29
		9.	Policyholder Account Balances, Future Policy Benefits and Claims	27		10.	Separate Account Assets and Liabilities	41
		10.	Separate Account Assets and Liabilities	38		11.	Market Risk Benefits	41
		11.	Market Risk Benefits	39		12.	Debt	46
		12.	Debt	43		13.	Related Party Transactions	46
		13.	Fair Values of Assets and Liabilities	43		14.	Fair Values of Assets and Liabilities	47
		14.	Offsetting Assets and Liabilities	51		15.	Offsetting Assets and Liabilities	56
		15.	Derivatives and Hedging Activities	53		16.	Derivatives and Hedging Activities	58
		16.	Shareholders’ Equity	55		17.	Shareholders’ Equity	61
		17.	Income Taxes	56		18.	Income Taxes	62
		18.	Contingencies	57		19.	Contingencies	63
Item 2. Management’s Narrative Analysis	Item 2. Management’s Narrative Analysis			59	Item 2. Management’s Narrative Analysis			65
Item 4. Controls and Procedures	Item 4. Controls and Procedures			70	Item 4. Controls and Procedures			77

Part II. Other Information	Part II. Other Information			71	Part II. Other Information			78
Item 1. Legal Proceedings	Item 1. Legal Proceedings			71	Item 1. Legal Proceedings			78
Item 1A. Risk Factors	Item 1A. Risk Factors			71	Item 1A. Risk Factors			78
Item 6. Exhibits	Item 6. Exhibits			71	Item 6. Exhibits			78
Signatures	Signatures			72	Signatures			79

Index

RIVERSOURCE LIFE INSURANCE COMPANY

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED BALANCE SHEETS (UNAUDITED)


		March 31, 2023		December 31, 2022 (1)			September 30, 2023		December 31, 2022 (1)
		(in millions, except share amounts)					(in millions, except share amounts)
Assets	Assets					Assets
Investments:	Investments:					Investments:
Available-for-Sale: Fixed maturities, at fair value (amortized cost: 2023, $17,975; 2022, $17,331) (allowance for credit losses: 2023, $25; 2022, $22)		$	17,160	$	16,135
Available-for-Sale: Fixed maturities, at fair value (amortized cost: 2023, $19,278; 2022, $17,331) (allowance for credit losses: 2023, $1; 2022, $22)						Available-for-Sale: Fixed maturities, at fair value (amortized cost: 2023, $19,278; 2022, $17,331) (allowance for credit losses: 2023, $1; 2022, $22)	$	17,675	$	16,135

Mortgage loans, at amortized cost (allowance for credit losses: 2023, $10; 2022, $11)	Mortgage loans, at amortized cost (allowance for credit losses: 2023, $10; 2022, $11)	1,749		1,768		Mortgage loans, at amortized cost (allowance for credit losses: 2023, $10; 2022, $11)	1,719		1,768
Policy loans	Policy loans	861		847		Policy loans	890		847

Other investments (allowance for credit losses: 2023, nil; 2022, nil)	Other investments (allowance for credit losses: 2023, nil; 2022, nil)	196		207		Other investments (allowance for credit losses: 2023, nil; 2022, nil)	177		207
Total investments	Total investments	19,966		18,957		Total investments	20,461		18,957
Investments of consolidated investment entities, at fair value	Investments of consolidated investment entities, at fair value	2,294		2,354		Investments of consolidated investment entities, at fair value	2,166		2,354
Cash and cash equivalents	Cash and cash equivalents	2,490		2,611		Cash and cash equivalents	1,888		2,611
Cash of consolidated investment entities	Cash of consolidated investment entities	162		133		Cash of consolidated investment entities	91		133

Market risk benefits	Market risk benefits	990		1,015		Market risk benefits	1,644		1,015
Reinsurance recoverables (allowance for credit losses: 2023, $23; 2022, $23)		4,310		4,228
Reinsurance recoverables (allowance for credit losses: 2023, $25; 2022, $23)						Reinsurance recoverables (allowance for credit losses: 2023, $25; 2022, $23)	3,974		4,228
Receivables	Receivables	7,339		7,577		Receivables	6,989		7,577
Receivables of consolidated investment entities, at fair value	Receivables of consolidated investment entities, at fair value	23		20		Receivables of consolidated investment entities, at fair value	29		20
Accrued investment income	Accrued investment income	158		145		Accrued investment income	181		145
Deferred acquisition costs	Deferred acquisition costs	2,736		2,759		Deferred acquisition costs	2,708		2,759
Other assets	Other assets	5,346		4,726		Other assets	6,057		4,726
Other assets of consolidated investment entities, at fair value	Other assets of consolidated investment entities, at fair value	1		2		Other assets of consolidated investment entities, at fair value	—		2
Separate account assets	Separate account assets	72,844		70,876		Separate account assets	69,592		70,876
Total assets	Total assets	$	118,659	$	115,403	Total assets	$	115,780	$	115,403

Liabilities and Shareholder’s Equity	Liabilities and Shareholder’s Equity					Liabilities and Shareholder’s Equity
Liabilities:	Liabilities:					Liabilities:
Policyholder account balances, future policy benefits and claims	Policyholder account balances, future policy benefits and claims	$	34,921	$	34,122	Policyholder account balances, future policy benefits and claims	$	35,514	$	34,122
Market risk benefits	Market risk benefits	2,123		2,118		Market risk benefits	1,525		2,118
Short-term borrowings	Short-term borrowings	201		201		Short-term borrowings	201		201
Long-term debt	Long-term debt	500		500		Long-term debt	500		500
Debt of consolidated investment entities, at fair value	Debt of consolidated investment entities, at fair value	2,367		2,363		Debt of consolidated investment entities, at fair value	2,222		2,363

Other liabilities	Other liabilities	4,645		4,131		Other liabilities	5,294		4,131
Other liabilities of consolidated investment entities, at fair value	Other liabilities of consolidated investment entities, at fair value	86		119		Other liabilities of consolidated investment entities, at fair value	37		119
Separate account liabilities	Separate account liabilities	72,844		70,876		Separate account liabilities	69,592		70,876
Total liabilities	Total liabilities	117,687		114,430		Total liabilities	114,885		114,430

Shareholder’s equity:	Shareholder’s equity:					Shareholder’s equity:
Common stock, $30 par value; 100,000 shares authorized, issued and outstanding	Common stock, $30 par value; 100,000 shares authorized, issued and outstanding	3		3		Common stock, $30 par value; 100,000 shares authorized, issued and outstanding	3		3
Additional paid-in capital	Additional paid-in capital	2,466		2,466		Additional paid-in capital	2,466		2,466
Accumulated deficit	Accumulated deficit	(802)		(412)		Accumulated deficit	(385)		(412)
Accumulated other comprehensive income (loss), net of tax	Accumulated other comprehensive income (loss), net of tax	(695)		(1,084)		Accumulated other comprehensive income (loss), net of tax	(1,189)		(1,084)
Total shareholder’s equity	Total shareholder’s equity	972		973		Total shareholder’s equity	895		973
Total liabilities and shareholder’s equity	Total liabilities and shareholder’s equity	$	118,659	$	115,403	Total liabilities and shareholder’s equity	$	115,780	$	115,403

(1) Certain prior period amounts have been restated. See Note 3 for more information.

See Notes to Consolidated Financial Statements.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


		Three Months Ended March 31,			Three Months Ended September 30,						Nine Months Ended September 30,
			2023			2022 (1)			2023		2022 (1)		2023		2022 (1)
			(in millions)						(in millions)
Revenues	Revenues							Revenues
Premiums	Premiums		$	96		$	73	Premiums	$	115	$	76	$	323	$	223
Net investment income	Net investment income		292			159		Net investment income	332		224		950		568
Policy and contract charges	Policy and contract charges		496			534		Policy and contract charges	509		516		1,510		1,567
Other revenues	Other revenues		150			173		Other revenues	148		155		447		492
Net realized investment gains (losses)	Net realized investment gains (losses)		(3)			18		Net realized investment gains (losses)	(48)		(92)		(58)		(90)
Total revenues	Total revenues		1,031			957		Total revenues	1,056		879		3,172		2,760
Benefits and expenses	Benefits and expenses							Benefits and expenses
Benefits, claims, losses and settlement expenses	Benefits, claims, losses and settlement expenses		300			31		Benefits, claims, losses and settlement expenses	119		80		746		(85)
Interest credited to fixed accounts	Interest credited to fixed accounts		164			141		Interest credited to fixed accounts	139		157		464		443
Remeasurement (gains) losses of future policy benefit reserves	Remeasurement (gains) losses of future policy benefit reserves		(5)			(6)		Remeasurement (gains) losses of future policy benefit reserves	(12)		(1)		(17)		(6)
Change in fair value of market risk benefits	Change in fair value of market risk benefits		489			100		Change in fair value of market risk benefits	168		(321)		558		298
Amortization of deferred acquisition costs	Amortization of deferred acquisition costs		60			62		Amortization of deferred acquisition costs	60		56		180		181
Interest and debt expense	Interest and debt expense		45			19		Interest and debt expense	49		29		143		71
Other insurance and operating expenses	Other insurance and operating expenses		180			174		Other insurance and operating expenses	169		178		525		518
Total benefits and expenses	Total benefits and expenses		1,233			521		Total benefits and expenses	692		178		2,599		1,420
Pretax income (loss)	Pretax income (loss)		(202)			436		Pretax income (loss)	364		701		573		1,340
Income tax provision (benefit)	Income tax provision (benefit)		(12)			58		Income tax provision (benefit)	35		137		46		213
Net income (loss)	Net income (loss)		$	(190)		$	378	Net income (loss)	$	329	$	564	$	527	$	1,127

(1) Certain prior period amounts have been restated. See Note 3 for more information.

See Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


		Three Months Ended March 31,			Three Months Ended September 30,						Nine Months Ended September 30,
			2023			2022 (1)			2023		2022 (1)		2023		2022 (1)
			(in millions)						(in millions)
Net income (loss)	Net income (loss)		$	(190)		$	378	Net income (loss)	$	329	$	564	$	527	$	1,127
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:							Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities	Net unrealized gains (losses) on securities		293			(886)		Net unrealized gains (losses) on securities	(427)		(580)		(326)		(2,208)

Effect of changes in discount rate assumptions on certain long-duration contracts	Effect of changes in discount rate assumptions on certain long-duration contracts		(65)			362		Effect of changes in discount rate assumptions on certain long-duration contracts	174		241		168		931
Effect of changes in instrument-specific credit risk on market risk benefits	Effect of changes in instrument-specific credit risk on market risk benefits		161			303		Effect of changes in instrument-specific credit risk on market risk benefits	18		(3)		53		657
Total other comprehensive income (loss), net of tax	Total other comprehensive income (loss), net of tax		389			(221)		Total other comprehensive income (loss), net of tax	(235)		(342)		(105)		(620)
Total comprehensive income (loss)	Total comprehensive income (loss)		$	199		$	157	Total comprehensive income (loss)	$	94	$	222	$	422	$	507

(1) Certain prior period amounts have been restated. See Note 3 for more information.

See Notes to Consolidated Financial Statements.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY (UNAUDITED)


		Common Shares		Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Total			Common Shares		Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Total
		(in millions)											(in millions)
Balances at July 1, 2023												Balances at July 1, 2023	$	3	$	2,466	$	(614)	$	(954)	$	901

Net income (loss)												Net income (loss)	—		—		329		—		329
Other comprehensive income (loss), net of tax												Other comprehensive income (loss), net of tax	—		—		—		(235)		(235)

Cash dividends to Ameriprise Financial, Inc.												Cash dividends to Ameriprise Financial, Inc.	—		—		(100)		—		(100)
Balances at September 30, 2023												Balances at September 30, 2023	$	3	$	2,466	$	(385)	$	(1,189)	$	895

Balances at July 1, 2022												Balances at July 1, 2022	$	3	$	2,466	$	(1,051)	$	(595)	$	823

Net income (loss)												Net income (loss)	—		—		564		—		564
Other comprehensive income (loss), net of tax												Other comprehensive income (loss), net of tax	—		—		—		(342)		(342)

Cash dividends to Ameriprise Financial, Inc.												Cash dividends to Ameriprise Financial, Inc.	—		—		(100)		—		(100)
Balances at September 30, 2022 (1)												Balances at September 30, 2022 (1)	$	3	$	2,466	$	(587)	$	(937)	$	945

Balances at January 1, 2023	Balances at January 1, 2023	$	3	$	2,466	$	(412)	$	(1,084)	$	973	Balances at January 1, 2023	$	3	$	2,466	$	(412)	$	(1,084)	$	973

Net income (loss)	Net income (loss)	—		—		(190)		—		(190)		Net income (loss)	—		—		527		—		527
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	—		—		—		389		389		Other comprehensive income (loss), net of tax	—		—		—		(105)		(105)

Cash dividends to Ameriprise Financial, Inc.	Cash dividends to Ameriprise Financial, Inc.	—		—		(200)		—		(200)		Cash dividends to Ameriprise Financial, Inc.	—		—		(500)		—		(500)
Balances at March 31, 2023		$	3	$	2,466	$	(802)	$	(695)	$	972
Balances at September 30, 2023												Balances at September 30, 2023	$	3	$	2,466	$	(385)	$	(1,189)	$	895

Balances at January 1, 2022 ~~(1)~~	Balances at January 1, 2022 ~~(1)~~	$	3	$	2,466	$	(1,114)	$	(317)	$	1,038	Balances at January 1, 2022 ~~(1)~~	$	3	$	2,466	$	(1,114)	$	(317)	$	1,038

Net income (loss)	Net income (loss)	—		—		378		—		378		Net income (loss)	—		—		1,127		—		1,127
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	—		—		—		(221)		(221)		Other comprehensive income (loss), net of tax	—		—		—		(620)		(620)

Cash dividends to Ameriprise Financial, Inc.	Cash dividends to Ameriprise Financial, Inc.	—		—		(300)		—		(300)		Cash dividends to Ameriprise Financial, Inc.	—		—		(600)		—		(600)
Balances at March 31, 2022		$	3	$	2,466	$	(1,036)	$	(538)	$	895
Balances at September 30, 2022 (1)												Balances at September 30, 2022 (1)	$	3	$	2,466	$	(587)	$	(937)	$	945

(1) Certain prior period amounts have been restated. See Note 3 for more information.

See Notes to Consolidated Financial Statements.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


		Three Months Ended March 31,					Nine Months Ended September 30,
		2023		2022 (1)			2023		2022 (1)
		(in millions)					(in millions)
Cash Flows from Operating Activities	Cash Flows from Operating Activities					Cash Flows from Operating Activities
Net income	Net income	$	(190)	$	378	Net income	$	527	$	1,127
Adjustments to reconcile net income to net cash provided by (used in) operating activities:	Adjustments to reconcile net income to net cash provided by (used in) operating activities:					Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion, net	Depreciation, amortization and accretion, net	(52)		(47)		Depreciation, amortization and accretion, net	(155)		(147)
Deferred income tax (benefit) expense	Deferred income tax (benefit) expense	(70)		73		Deferred income tax (benefit) expense	129		237
Contractholder and policyholder charges, non-cash	Contractholder and policyholder charges, non-cash	(100)		(98)		Contractholder and policyholder charges, non-cash	(300)		(295)
Loss from equity method investments	Loss from equity method investments	9		15		Loss from equity method investments	20		37
Net realized investment (gains) losses	Net realized investment (gains) losses	(9)		(17)		Net realized investment (gains) losses	47		(4)
Impairments and provision for loan losses	Impairments and provision for loan losses	4		(1)		Impairments and provision for loan losses	(21)		87
Net losses (gains) of consolidated investment entities	Net losses (gains) of consolidated investment entities	6		3		Net losses (gains) of consolidated investment entities	18		5
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Deferred acquisition costs	Deferred acquisition costs	23		14		Deferred acquisition costs	51		44

Policyholder account balances, future policy benefits and claims, and market risk benefits, net	Policyholder account balances, future policy benefits and claims, and market risk benefits, net	1,172		(138)		Policyholder account balances, future policy benefits and claims, and market risk benefits, net	1,531		619

Derivatives, net of collateral	Derivatives, net of collateral	(223)		(20)		Derivatives, net of collateral	(426)		446
Reinsurance recoverables	Reinsurance recoverables	33		(1)		Reinsurance recoverables	79		71
Receivables	Receivables	95		73		Receivables	247		213
Accrued investment income	Accrued investment income	(13)		(11)		Accrued investment income	(36)		(21)
Current income tax, net	Current income tax, net	58		(15)		Current income tax, net	(261)		(77)

Other operating assets and liabilities of consolidated investment entities	Other operating assets and liabilities of consolidated investment entities	(6)		8		Other operating assets and liabilities of consolidated investment entities	(8)		1
Other, net	Other, net	43		(39)		Other, net	137		63
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	780		177		Net cash provided by (used in) operating activities	1,579		2,406

Cash Flows from Investing Activities	Cash Flows from Investing Activities					Cash Flows from Investing Activities
Available-for-Sale securities:	Available-for-Sale securities:					Available-for-Sale securities:
Proceeds from sales	Proceeds from sales	200		3		Proceeds from sales	610		741
Maturities, sinking fund payments and calls	Maturities, sinking fund payments and calls	263		394		Maturities, sinking fund payments and calls	714		1,349
Purchases	Purchases	(1,069)		(1,016)		Purchases	(3,226)		(4,235)
Proceeds from sales, maturities and repayments of mortgage loans	Proceeds from sales, maturities and repayments of mortgage loans	35		27		Proceeds from sales, maturities and repayments of mortgage loans	86		93
Funding of mortgage loans	Funding of mortgage loans	(16)		(50)		Funding of mortgage loans	(36)		(109)
Proceeds from sales and collections of other investments	Proceeds from sales and collections of other investments	5		5		Proceeds from sales and collections of other investments	18		15
Purchase of other investments	Purchase of other investments	(2)		(1)		Purchase of other investments	(9)		(44)
Purchase of investments by consolidated investment entities	Purchase of investments by consolidated investment entities	(122)		(190)		Purchase of investments by consolidated investment entities	(347)		(763)
Proceeds from sales, maturities and repayments of investments by consolidated investment entities	Proceeds from sales, maturities and repayments of investments by consolidated investment entities	182		183		Proceeds from sales, maturities and repayments of investments by consolidated investment entities	492		466
Purchase of equipment and software	Purchase of equipment and software	(2)		(4)		Purchase of equipment and software	(7)		(10)
Change in policy loans, net	Change in policy loans, net	(14)		1		Change in policy loans, net	(43)		(4)

Cash paid for deposit receivable	Cash paid for deposit receivable	(10)		(12)		Cash paid for deposit receivable	(30)		(34)
Cash received for deposit receivable	Cash received for deposit receivable	210		134		Cash received for deposit receivable	579		393
Advance on line of credit to Ameriprise Financial, Inc.	Advance on line of credit to Ameriprise Financial, Inc.	(400)		(450)		Advance on line of credit to Ameriprise Financial, Inc.	(400)		(1,034)
Repayment from Ameriprise Financial, Inc. on line of credit	Repayment from Ameriprise Financial, Inc. on line of credit	400		450		Repayment from Ameriprise Financial, Inc. on line of credit	400		1,034
Cash paid for written options with deferred premiums						Cash paid for written options with deferred premiums	(59)		(411)
Cash received from written options with deferred premiums	Cash received from written options with deferred premiums	24		12		Cash received from written options with deferred premiums	43		141
Cash paid for written options with deferred premiums		(59)		—
Other, net	Other, net	(1)		—		Other, net	(39)		(42)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	$	(376)	$	(514)	Net cash provided by (used in) investing activities	$	(1,254)	$	(2,454)
See Notes to Consolidated Financial Statements.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

														CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (continued)
	CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (continued)
									Three Months Ended March 31,						Nine Months Ended September 30,
	2023			2022 (1)		2023					2022 (1)
	(in millions)					(in millions)
Cash Flows from Financing Activities	Cash Flows from Financing Activities								Cash Flows from Financing Activities
Policyholder account balances:	Policyholder account balances:							Policyholder account balances:
Deposits and other additions	Deposits and other additions	$	339		$	285	Deposits and other additions		$	1,033		$	766
Net transfers from (to) separate accounts	Net transfers from (to) separate accounts	(19)			(57)		Net transfers from (to) separate accounts		(89)			(128)
Surrenders and other benefits	Surrenders and other benefits	(569)			(328)		Surrenders and other benefits		(1,539)			(989)

Cash paid for purchased options with deferred premiums							Cash paid for purchased options with deferred premiums		(49)			(159)
Cash received for purchased options with deferred premiums	Cash received for purchased options with deferred premiums	8			168		Cash received for purchased options with deferred premiums		251			230
Cash paid for purchased options with deferred premiums		(24)			(71)

Borrowings by consolidated investment entities							Borrowings by consolidated investment entities		—			341
Repayments of debt by consolidated investment entities	Repayments of debt by consolidated investment entities	(31)			(1)		Repayments of debt by consolidated investment entities		(197)			(1)
Cash dividends to Ameriprise Financial, Inc.	Cash dividends to Ameriprise Financial, Inc.	(200)			(300)		Cash dividends to Ameriprise Financial, Inc.		(500)			(600)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(496)			(304)		Net cash provided by (used in) financing activities		(1,090)			(540)
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	(92)			(641)		Net increase (decrease) in cash and cash equivalents		(765)			(588)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	2,744			3,321		Cash and cash equivalents at beginning of period		2,744			3,321
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	2,652		$	2,680	Cash and cash equivalents at end of period		$	1,979		$	2,733

Supplemental Disclosures:	Supplemental Disclosures:						Supplemental Disclosures:

Income taxes paid (received), net							Income taxes paid (received), net		$	179		$	56
Interest paid excluding consolidated investment entities	Interest paid excluding consolidated investment entities	$	2		$	—	Interest paid excluding consolidated investment entities		25			1
Interest paid by consolidated investment entities	Interest paid by consolidated investment entities	44			13		Interest paid by consolidated investment entities		132			49

(1) Certain prior period amounts have been restated. See Note 3 for more information.

See Notes to Consolidated Financial Statements.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

RiverSource Life Insurance Company is a stock life insurance company with one wholly owned stock life insurance company subsidiary, RiverSource Life Insurance Co. of New York (“RiverSource Life of NY”). RiverSource Life Insurance Company is a wholly owned subsidiary of Ameriprise Financial, Inc. (“Ameriprise Financial”).

•RiverSource Life Insurance Company is domiciled in Minnesota and holds Certificates of Authority in American Samoa, the District of Columbia and all states except New York. RiverSource Life Insurance Company issues insurance and annuity products.

•RiverSource Life of NY is domiciled and holds a Certificate of Authority in New York. RiverSource Life of NY issues insurance and annuity products.

RiverSource Life Insurance Company also wholly owns RiverSource Tax Advantaged Investments, Inc. (“RTA”) and Columbia Cent CLO Advisors, LLC (“Columbia Cent”). RTA is a stock company domiciled in Delaware and is a limited partner in affordable housing partnership investments. Columbia Cent provides asset management services to collateralized loan obligations (“CLOs”).

The accompanying Consolidated Financial Statements include the accounts of RiverSource Life Insurance Company and companies in which it directly or indirectly has a controlling financial interest and variable interest entities (“VIEs”) in which it is the primary beneficiary (collectively, the “Company”). All intercompany transactions and balances have been eliminated in consolidation.

The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for fair statement of the consolidated financial position and results of operations for the interim periods have been made. All adjustments made were of a normal recurring nature.

The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Recast 2022 Annual Report for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on September 27, 2023 (“Recast 2022 Annual Report”). The Company’s Recast 2022 Annual Report updated certain sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the ~~Securities and Exchange Commission~~SEC on February 23, 2023, (“as amended by the Amendment No. 1 on Form 10-K/A filed with the SEC on March 10, 2023, (collectively, the “2022 Annual Report”) and should be read in conjunction with the Company’s 2022 ~~10-K”).~~Annual Report in its entirety for a complete description of events, trends, uncertainties, and risks affecting the Company.

The Company evaluated events or transactions that may have occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued. NoOther than disclosed in Note 13, no other subsequent events or transactions requiring recognition or disclosure were identified.

2. Summary of Significant Accounting Policies

The Company adopted accounting standard, Financial Services – Insurance – Targeted Improvements to the Accounting for Long-Duration Contracts, on January 1, 2023. The significant accounting policies for market risk benefits (“MRB”); deferred acquisition costs (“DAC”); deferred sales inducement costs (“DSIC”); reinsurance; policyholder account balances, future policy benefits and claims; and unearned revenue liability were added or updated as a result of adopting the new accounting standard. See Note 3 for additional information related to the transition approach and adoption impact.

Amounts Based on Estimates and Assumptions

Accounting estimates are an integral part of the Consolidated Financial Statements. In part, they are based upon assumptions concerning future events. Among the more significant are those that relate to investment securities valuation and the recognition of credit losses or impairments, valuation of derivative instruments, litigation reserves, future policy benefits, market risk benefits, and income taxes and the recognition of deferred tax assets and liabilities. These accounting estimates reflect the best judgment of management and actual results could differ.

Market Risk Benefits

Market risk benefits are contracts or contract features that both provide protection to the contractholder from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. Market risk benefits include certain contract features on variable annuity products that provide minimum guarantees to contractholders. Guarantees accounted for as market risk benefits include guaranteed minimum death ~~benefits~~benefit (“GMDB”), guaranteed minimum income ~~benefits~~benefit (“GMIB”), guaranteed minimum withdrawal ~~benefits~~benefit (“GMWB”) and guaranteed minimum accumulation ~~benefits~~benefit (“GMAB”). If a contract contains multiple market risk benefits, those market risk benefits are bundled together as a single compound market risk benefit.

Market risk benefits are measured at fair value, at the individual contract level, using a non-option-based valuation approach or an option-based valuation approach dependent upon the fee structure of the contract. Changes in fair value are recognized in net income

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

each period with the exception of the portion of the change in fair value due to a change in the instrument-specific credit risk, which is recognized in other comprehensive income (“OCI”).

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

Deferred Acquisition Costs

The Company incurs costs in connection with acquiring new and renewal insurance and annuity businesses. The portion of these costs which are incremental and direct to the acquisition of a new or renewal insurance policy or annuity contract are deferred. Significant costs capitalized include sales based compensation related to the acquisition of new and renewal insurance policies and annuity contracts, medical inspection costs for successful sales, and a portion of employee compensation and benefit costs based upon the amount of time spent on successful sales. Sales based compensation paid to Ameriprise Financial’s advisors and employees and third-party distributors is capitalized. Employee compensation and benefits costs which are capitalized relate primarily to sales efforts, underwriting and processing. All other costs which are not incremental direct costs of acquiring an insurance policy or annuity contract are expensed as incurred. The DAC associated with insurance policies or annuity contracts that are significantly modified or internally replaced with another contract are accounted for as write-offs. These transactions are anticipated in establishing amortization periods and other valuation assumptions.

The Company monitors other DAC amortization assumptions, such as persistency, mortality, morbidity, and variable annuity benefit utilization each quarter and, when assessed independently, each could impact the Company’s DAC balances. Unamortized DAC is reduced for actual experience in excess of expected experience.

The analysis of DAC balances and the corresponding amortization considers all relevant factors and assumptions described previously. Unless the Company’s management identifies a significant deviation over the course of the quarterly monitoring, management reviews and updates these DAC amortization assumptions annually in the third quarter of each year.

DAC is amortized on a constant-level basis for the grouped contracts over the expected contract term to approximate straight-line amortization. Contracts are grouped by contract type and issue year into cohorts consistent with the grouping used in estimating the associated liability for future policy benefits. DAC related to all long-duration product types (except for life contingent payout annuities) is grouped on a calendar-year annual basis for each legal entity. Further disaggregation is reported for any contracts that include an additional liability for death or other insurance benefit. DAC related to life contingent payout annuities is grouped on a calendar-year annual basis for each legal entity for policies issued prior to 2021 and on a quarterly basis for each legal entity thereafter.

DAC related to annuity products (including variable deferred annuities, structured variable annuities, fixed deferred annuities, and life contingent payout annuities) is amortized based on initial premium. DAC related to life insurance products (including universal life (“UL”) insurance, variable universal life (“VUL”) insurance, indexed universal life (“IUL”) insurance, term life insurance, and whole life insurance) is amortized based on original specified amount (i.e., face amount). DAC related to disability income (“DI”) insurance is amortized based on original monthly benefit.

The accounting contract term for annuity products (except for life contingent payout annuities) is over the projected accumulation period. Life contingent payout annuities are amortized over the period which annuity payments are expected to be paid. The accounting contract term for life insurance products is over the projected life of the contract. DI insurance is amortized over the projected life of the contract, including the claim paying period.

Deferred Sales Inducement Costs

Deferred sales inducements are contract features that are intended to attract new customers or to persuade existing customers to keep their current policy. Sales inducement costs consist of bonus interest credits and premium credits added to certain annuity contract and insurance policy values. These benefits are capitalized to the extent they are incremental to amounts that would be credited on similar contracts without the applicable feature. The amounts capitalized are amortized using the same methodology and assumptions used to amortize DAC. DSIC is recorded in Other assets and amortization of DSIC is recorded in Benefits, claims, losses and settlement expenses.

Reinsurance

The Company cedes insurance risk to other insurers under reinsurance agreements.

Reinsurance premiums paid and benefits received are accounted for consistently with the basis used in accounting for the policies from which risk is reinsured and consistently with the terms of the reinsurance contracts. Reinsurance premiums paid for traditional life, long term care (“LTC”), DI and life contingent ~~immediate~~payout annuities, net of the change in any prepaid reinsurance asset, are reported as a reduction of Premiums. Reinsurance recoveries are reported as components of Benefits, claims, losses and settlement expenses.

UL and VUL reinsurance premiums are reported as a reduction of Policy and contract charges. In addition, for UL and VUL insurance policies, the net cost of reinsurance ceded, which represents the discounted amount of the expected cash flows between the reinsurer and the Company, is classified as an asset and amortized based on estimated gross profits over the period the reinsured policies are ~~in-force.~~in force. Changes in the net cost of reinsurance are reflected as a component of Policy and contract charges.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Insurance liabilities are reported before the effects of reinsurance. Policyholder account balances, future policy benefits and claims recoverable under reinsurance contracts are recorded within Reinsurance recoverables, net of the allowance for credit losses. The

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

Company evaluates the financial condition of its reinsurers prior to entering into new reinsurance contracts and on a periodic basis during the contract term. The allowance for credit losses related to reinsurance recoverable is based on applying observable industry data including insurer ratings, default and loss severity data to the Company’s reinsurance recoverable balances. Management evaluates the results of the calculation and considers differences between the industry data and the Company’s data. Such differences include that the Company has no actual history of losses and that industry data may contain non-life insurers. This evaluation is inherently subjective as it requires estimates, which may be susceptible to significant change given the long-term nature of these receivables. In addition, the Company has a reinsurance protection agreement that provides credit protections for its reinsured long term care business. The allowance for credit losses on reinsurance recoverable is recorded through provisions charged to Benefits, claims, losses and settlement expenses.

The Company also assumes life insurance and fixed annuity risk from other insurers in limited circumstances. Reinsurance premiums received and benefits paid are accounted for consistently with the basis used in accounting for the policies from which risk is reinsured and consistently with the terms of the reinsurance contracts. Liabilities for assumed business are recorded within Policyholder account balances, future policy benefits and claims.

Policyholder Account Balances, Future Policy Benefits and Claims

Non-Traditional Long-Duration Products

The liabilities for non-traditional long-duration products include fixed account values on variable and fixed annuities and UL and VUL policies, non-life contingent payout annuities, liabilities for guaranteed benefits associated with variable annuities (including structured variable annuities), and embedded derivatives for structured variable annuities, indexed annuities, and IUL products.

Liabilities for fixed account values on variable annuities, structured variable annuities, fixed deferred annuities, and UL and VUL policies are equal to accumulation values, which are the cumulative gross deposits and credited interest less withdrawals and various charges. The liability for non-life contingent payout annuities is recognized as the present value of future payments using the effective yield at inception of the contract.

A portion of the Company’s UL and VUL policies have product features that result in profits followed by losses from the insurance component of the contract. These profits followed by losses can be generated by the cost structure of the product or secondary guarantees in the contract. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges. The liability for these future losses is determined at the reporting date by estimating the death benefits in excess of account value and recognizing the excess over the estimated life based on expected assessments (e.g. cost of insurance charges, contractual administrative charges, similar fees and investment margin). See Note 9 for information regarding the liability for contracts with secondary guarantees. Liabilities for fixed deferred indexed annuity, structured variable annuity and IUL products are equal to the accumulation of host contract values, guaranteed benefits, and the fair value of embedded derivatives.

See Note 11 for information regarding variable annuity guarantees.

Embedded Derivatives

The fair value of embedded derivatives related to structured variable annuities, indexed annuities and IUL fluctuate based on equity markets and interest rates and the estimate of the Company’s nonperformance risk and is recorded in Policyholder ~~Account~~account balances, ~~Future Policy Benefits~~future policy benefits and ~~Claims Liabilities.~~claims. See Note 1314 for information regarding the fair value measurement of embedded derivatives.

Traditional Long-Duration Products

The liabilities for traditional long-duration products include cash flows related to unpaid amounts on reported claims, estimates of benefits payable on claims incurred but not yet reported and estimates of benefits that will become payable on term life, whole life, DI, LTC, and life contingent payout annuity policies as claims are incurred in the future. The claim liability (also referred to as disabled life reserves) is presented together as one liability for future policy benefits.

A liability for future policy benefits, which is the present value of estimated future policy benefits to be paid to or on behalf of policyholders and certain related expenses less the present value of estimated future net premiums to be collected from policyholders, is accrued as premium revenue is recognized. Expected insurance benefits are accrued over the life of the contract in proportion to premium revenue recognized (referred to as the net premium approach). The net premium ratio reflects cash flows from contract inception to contract termination (i.e., through the claim paying period) and cannot exceed 100%.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Assumptions utilized in the net premium approach, including mortality, morbidity and terminations, are reviewed as part of experience studies at least annually or more frequently if suggested by evidence. Expense assumptions and actual expenses are updated within the net premium calculation consistent with other policyholder assumptions.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

The updated cash flows used in the calculation are discounted using a forward rate curve. The discount rate represents an upper-medium-grade (i.e., low credit risk) fixed-income instrument yield (i.e., an A rating) that reflects the duration characteristics of the liability. Discount rates will be locked in annually, at the end of each year for all products, except life contingent payout annuities, and calculated as the monthly average discount rate curves for the year. For life contingent payout annuities, the discount rates will be locked in quarterly at the end of each quarter based on the average of the three months for the quarter. 

The liability for future policy benefits will be updated for actual experience at least on an annual basis and concurrent with changes to cash flow assumptions. When net premiums are updated for cash flow changes, the estimated cash flows over the entire life of a group of contracts are updated using historical experience and updated future cash flow assumptions.

The revised net premiums are used to calculate an updated liability for future policy benefits as of the beginning of the reporting period, discounted at the original locked in rate (i.e., contract issuance rate). The updated liability for future policy benefits as of the beginning of the reporting period is then compared with the carrying amount of the liability as of that date prior to updating cash flow assumptions to determine the current period remeasurement gain or loss reflected in current period earnings. The revised net premiums are then applied as of the beginning of the quarter to calculate the benefit expense for the current reporting period.

The difference between the updated carrying amount of the liability for future policy benefits measured using the current discount rate assumption and the original discount rate assumption is recognized in ~~other comprehensive income.~~OCI. The interest accretion rate remains the original discount rate used at contract issue date.

If the updating of cash flow assumptions results in the present value of future benefits and expenses exceeding the present value of future gross premiums, a charge to net income is recorded for the current reporting period such that net premiums are set equal to gross premiums. In subsequent periods, the liability for future policy benefits is accrued with net premiums set equal to gross premiums.

Contracts (except for life contingent payout annuities sold subsequent to December 31, 2020) are grouped into cohorts by contract type and issue year, as well as by legal entity and reportable segment. Life contingent payout annuities sold in periods beginning in 2021 are grouped into quarterly cohorts.

See Note 9 for information regarding the liabilities for traditional long-duration products.

Deferred Profit Liability

For limited-payment products, gross premiums received in excess of net premiums are deferred at initial recognition as a deferred profit liability (“DPL”). Gross premiums are measured using assumptions consistent with those used in the measurement of the liability for future policy benefits, including discount rate, mortality, lapses and expenses.

The DPL is amortized and recognized as premium revenue in proportion to expected future benefit payments from annuity contracts. Interest is accreted on the balance of the DPL using the discount rate determined at contract issuance. The Company reviews and updates its estimate of cash flows from the DPL at the same time as the estimates of cash flows for the liability for future policy benefits. When cash flows are updated, the updated estimates are used to recalculate the DPL at contract issuance. The recalculated DPL as of the beginning of the current reporting period is compared to the carrying amount of the DPL as of the beginning of the current reporting period, and any difference is recognized as either a charge or credit to premium revenue.

DPL is recorded in Policyholder account balances, future policy benefits and claims and included as a reconciling item within the disaggregated rollforwards.

Unearned Revenue Liability

The Company’s UL and VUL policies require payment of fees or other policyholder assessments in advance for services to be provided in future periods. These charges are deferred as unearned revenue and amortized consistent with DAC amortization factors. The unearned revenue liability is recorded in Other liabilities and the amortization is recorded in Policy and contract charges.

3. Recent Accounting Pronouncements

Adoption of New Accounting Standards

Financial Instruments – Credit Losses – Troubled Debt Restructurings and Vintage Disclosures

In March 2022, the Financial Accounting Standards Board (“FASB”) proposed amendments to Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (“Topic 326”). The update removes the recognition and measurement guidance for Troubled Debt Restructurings (“TDRs”) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, and modifies the disclosure requirements for certain loan

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

refinancing and restructuring by creditors when a borrower is experiencing financial difficulty. Rather than applying the recognition and measurement for TDRs, an entity must apply the loan refinancing and restructuring guidance to determine whether a modification results in a new loan or a continuation of an existing loan. The update also requires entities to disclose current-period gross write-offs

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The amendments are to be applied prospectively, but entities may apply a modified retrospective transition for changes to the recognition and measurement of TDRs. For entities that have adopted Topic 326, the amendments are effective for interim and annual periods beginning after December 15, 2022. The Company adopted the standard on January 1, 2023. The adoption of this update did not have an impact on the Company’s consolidated financial condition and results of operations and modifications to disclosures are immaterial in the current period.

Financial Services – Insurance – Targeted Improvements to the Accounting for Long-Duration Contracts

In August 2018, the FASB updated the accounting standard related to long-duration insurance contracts (ASU 2018-12). The guidance changes elements of the measurement models and disclosure requirements for an insurer’s long-duration insurance contract benefits and acquisition costs by expanding the use of fair value accounting to certain contract benefits, requiring updates, if any, and at least annually, to assumptions used to measure liabilities for future policy benefits, ~~and~~ changing the amortization pattern of deferred acquisition costs to a constant-level ~~basis.~~basis and removing certain shadow adjustments previously recorded in accumulated other comprehensive income (loss) (“AOCI”). Adoption of the accounting standard ~~will~~did not impact overall cash flows, insurance subsidiaries’ dividend capacity, or regulatory capital requirements.

When the Company adopted the standard aseffective January 1, 2023 with a transition date of January 1, 2021 (the “transition date”), opening equity was adjusted for the adoption impacts to retained earnings and ~~accumulated other comprehensive income (loss) (“AOCI”)~~AOCI and prior periods presented (i.e. 2021 and 2022) were restated. The adoption impact as of January 1, 2021 was a reduction in total equity of $1.9 billion, of which $0.9 billion and $1.0 billion were reflected in retained earnings and AOCI, respectively.

The following table presents the effects of the adoption of the above new accounting standard to the Company’s previously reported Consolidated Balance Sheets:


		As Filed December 31, 2022		Adjustment		Post adoption Post-adoption December 31, 2022		As Filed December 31, 2021		Adjustment		Post adoption Post-adoption December 31, 2021			As Filed December 31, 2022		Adjustment		Post-adoption December 31, 2022		As Filed December 31, 2021		Adjustment		Post-adoption December 31, 2021
		(in millions)													(in millions)
Assets	Assets													Assets
Market risk benefits	Market risk benefits	$	—	$	1,015	$	1,015	$	—	$	539	$	539	Market risk benefits	$	—	$	1,015	$	1,015	$	—	$	539	$	539
Reinsurance recoverables (allowance for credit losses: 2022, $23; 2021, $11)	Reinsurance recoverables (allowance for credit losses: 2022, $23; 2021, $11)	4,412		(184)		4,228		4,529		927		5,456		Reinsurance recoverables (allowance for credit losses: 2022, $23; 2021, $11)	4,412		(184)		4,228		4,529		927		5,456
Deferred acquisition costs	Deferred acquisition costs	3,141		(382)		2,759		2,757		64		2,821		Deferred acquisition costs	3,141		(382)		2,759		2,757		64		2,821
Other assets	Other assets	4,791		(65)		4,726		7,015		296		7,311		Other assets	4,791		(65)		4,726		7,015		296		7,311
Total assets	Total assets	$	115,019	$	384	$	115,403	$	139,427	$	1,826	$	141,253	Total assets	$	115,019	$	384	$	115,403	$	139,427	$	1,826	$	141,253

Liabilities and Shareholder’s Equity	Liabilities and Shareholder’s Equity													Liabilities and Shareholder’s Equity
Liabilities:	Liabilities:													Liabilities:
Policyholder account balances, future policy benefits and claims	Policyholder account balances, future policy benefits and claims	$	36,057	$	(1,935)	$	34,122	$	35,744	$	(727)	$	35,017	Policyholder account balances, future policy benefits and claims	$	36,057	$	(1,935)	$	34,122	$	35,744	$	(727)	$	35,017
Market risk benefits	Market risk benefits	—		2,118		2,118		—		3,440		3,440		Market risk benefits	—		2,118		2,118		—		3,440		3,440
Other liabilities	Other liabilities	4,120		11		4,131		6,303		216		6,519		Other liabilities	4,120		11		4,131		6,303		216		6,519
Total liabilities	Total liabilities	114,236		194		114,430		137,286		2,929		140,215		Total liabilities	114,236		194		114,430		137,286		2,929		140,215

Shareholder’s equity:	Shareholder’s equity:													Shareholder’s equity:
Accumulated deficit	Accumulated deficit	(799)		387		(412)		(912)		(202)		(1,114)		Accumulated deficit	(799)		387		(412)		(912)		(202)		(1,114)
Accumulated other comprehensive income (loss), net of tax	Accumulated other comprehensive income (loss), net of tax	(887)		(197)		(1,084)		584		(901)		(317)		Accumulated other comprehensive income (loss), net of tax	(887)		(197)		(1,084)		584		(901)		(317)
Total shareholder’s equity	Total shareholder’s equity	783		190		973		2,141		(1,103)		1,038		Total shareholder’s equity	783		190		973		2,141		(1,103)		1,038
Total liabilities and shareholder’s equity	Total liabilities and shareholder’s equity	$	115,019	$	384	$	115,403	$	139,427	$	1,826	$	141,253	Total liabilities and shareholder’s equity	$	115,019	$	384	$	115,403	$	139,427	$	1,826	$	141,253

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables present the effects of the adoption of the above new accounting standard to the Company’s previously reported Consolidated Statements of Income:



	Three Months Ended September 30,
	As Filed 2022		Adjustment		Post-adoption 2022		As Filed 2021		Adjustment		Post-adoption 2021
	(in millions)
Revenues
Policy and contract charges	$	522	$	(6)	$	516	$	590	$	(4)	$	586
Total revenues	885		(6)		879		395		(4)		391
Benefits and expenses
Benefits, claims, losses and settlement expenses	368		(288)		80		(719)		(267)		(986)
Remeasurement (gains) losses of future policy benefit reserves	—		(1)		(1)		—		(2)		(2)
Change in fair value of market risk benefits	—		(321)		(321)		—		341		341
Amortization of deferred acquisition costs	104		(48)		56		6		55		61
Other insurance and operating expenses	175		3		178		179		4		183
Total benefits and expenses	833		(655)		178		(319)		131		(188)
Pretax income (loss)	52		649		701		714		(135)		579
Income tax provision (benefit)	1		136		137		111		(30)		81
Net income (loss)	$	51	$	513	$	564	$	603	$	(105)	$	498


		Three Months Ended March 31,													Nine Months Ended September 30,
		As Filed 2022		Adjustment		Post-adoption 2022		As Filed 2021		Adjustment		Post-adoption 2021			As Filed 2022		Adjustment		Post-adoption 2022		As Filed 2021		Adjustment		Post-adoption 2021
		(in millions)													(in millions)
Revenues	Revenues													Revenues
Policy and contract charges	Policy and contract charges	$	564	$	(30)	$	534	$	547	$	(10)	$	537	Policy and contract charges	$	1,626	$	(59)	$	1,567	$	1,715	$	(36)	$	1,679
Total revenues	Total revenues	987		(30)		957		1,048		(10)		1,038		Total revenues	2,819		(59)		2,760		2,459		(36)		2,423
Benefits and expenses	Benefits and expenses													Benefits and expenses
Benefits, claims, losses and settlement expenses	Benefits, claims, losses and settlement expenses	210		(179)		31		652		(413)		239		Benefits, claims, losses and settlement expenses	660		(745)		(85)		337		(816)		(479)
Remeasurement gains and losses of future policy benefit reserves		—		(6)		(6)		—		(40)		(40)
Remeasurement (gains) losses of future policy benefit reserves														Remeasurement (gains) losses of future policy benefit reserves	—		(6)		(6)		—		(47)		(47)
Change in fair value of market risk benefits	Change in fair value of market risk benefits	—		100		100		—		(887)		(887)		Change in fair value of market risk benefits	—		298		298		—		(135)		(135)
Amortization of deferred acquisition costs	Amortization of deferred acquisition costs	92		(30)		62		2		60		62		Amortization of deferred acquisition costs	343		(162)		181		69		116		185
Other insurance and operating expenses	Other insurance and operating expenses	171		3		174		194		3		197		Other insurance and operating expenses	509		9		518		553		10		563
Total benefits and expenses	Total benefits and expenses	633		(112)		521		1,028		(1,277)		(249)		Total benefits and expenses	2,026		(606)		1,420		1,498		(872)		626
Pretax income (loss)	Pretax income (loss)	354		82		436		20		1,267		1,287		Pretax income (loss)	793		547		1,340		961		836		1,797
Income tax provision (benefit)	Income tax provision (benefit)	39		19		58		2		270		272		Income tax provision (benefit)	98		115		213		121		177		298
Net income (loss)	Net income (loss)	$	315	$	63	$	378	$	18	$	997	$	1,015	Net income (loss)	$	695	$	432	$	1,127	$	840	$	659	$	1,499

Years Ended December 31,
As Filed 2022 Adjustment Post-adoption 2022 As Filed 2021 Adjustment Post-adoption 2021
(in millions)
Revenues
Policy and contract charges $ 2,091 $ (13) $ 2,078 $ 2,304 $ (54) $ 2,250
Total revenues 3,768 (13) 3,755 3,471 (54) 3,417
Benefits and expenses
Benefits, claims, losses and settlement expenses 1,366 (1,130) 236 715 (872) (157)
Remeasurement gains and losses of future policy benefit reserves — 1 1 — (52) (52)
Change in fair value of market risk benefits — 311 311 — (113) (113)
Amortization of deferred acquisition costs 196 45 241 112 133 245
Other insurance and operating expenses 670 12 682 738 13 751
Total benefits and expenses 3,005 (761) 2,244 2,270 (891) 1,379
Pretax income (loss) 763 748 1,511 1,201 837 2,038
Income tax provision (benefit) 50 159 209 137 179 316
Net income (loss) $ 713 $ 589 $ 1,302 $ 1,064 $ 658 $ 1,722

~~Future Adoption~~Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


	Years Ended December 31,
	As Filed 2022		Adjustment		Post-adoption 2022		As Filed 2021		Adjustment		Post-adoption 2021
	(in millions)
Revenues
Policy and contract charges	$	2,091	$	(13)	$	2,078	$	2,304	$	(54)	$	2,250
Total revenues	3,768		(13)		3,755		3,471		(54)		3,417
Benefits and expenses
Benefits, claims, losses and settlement expenses	1,366		(1,130)		236		715		(872)		(157)
Remeasurement (gains) losses of future policy benefit reserves	—		1		1		—		(52)		(52)
Change in fair value of market risk benefits	—		311		311		—		(113)		(113)
Amortization of deferred acquisition costs	196		45		241		112		133		245
Other insurance and operating expenses	670		12		682		738		13		751
Total benefits and expenses	3,005		(761)		2,244		2,270		(891)		1,379
Pretax income (loss)	763		748		1,511		1,201		837		2,038
Income tax provision (benefit)	50		159		209		137		179		316
Net income (loss)	$	713	$	589	$	1,302	$	1,064	$	658	$	1,722

The adoption of ~~New Accounting Standards~~the standard did not affect the previously reported totals for net cash flows provided by (used in) operating, investing, or financing activities.

Leases – Common Control Arrangements

In March 2023, the FASB proposed amendments to ASU 2016-02, Leases (“Topic 842”). The update applicable to all entities ~~provides requirements for~~requires leasehold improvements associated with common control leases to be amortized over the useful life of the leasehold improvements to the common control group as long as the lessee controls the use of the underlying asset through a lease and to be accounted for as a transfer between entities under common control through an adjustment to equity if, and when, the lessee no longer controls the use of the underlying asset. The amendment is to be applied either prospectively to all new leasehold improvements recognized on or after the date that the entity first applies the amendments, prospectively to all new and existing leasehold improvements recognized on or after the date that the entity first applies the amendments with any remaining unamortized balance of existing leasehold improvements amortized over their remaining useful life to the common control group determined at that date, or retrospectively to the beginning of the period in which the entity first applied Topic 842 with any leasehold improvements that otherwise would not have been amortized or impaired recognized through a cumulative-effect adjustment to the opening balance of

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

~~retained earnings at the beginning of the earliest period presented in accordance with ASC 842.~~ The amendment is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. The Company ~~is in~~early adopted the ~~process~~update during the second quarter of ~~evaluating~~2023 and will apply the ~~amendment~~amendments prospectively as of the beginning of 2023 to all new and ~~assessing~~existing leasehold improvements recognized on or after that date with any remaining unamortized balance of existing leasehold improvements amortized over their remaining useful life to the common control group determined at that date. The adoption of this update did not have a material impact on ~~its~~the Company’s consolidated financial condition and results of ~~operations..~~operations.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

4. Revenue from Contracts with Customers

The following table presents disaggregated revenue from contracts with customers and a reconciliation to total revenues reported on the Consolidated Statements of Income.


		Three Months Ended March 31,			Three Months Ended September 30,						Nine Months Ended September 30,
			2023			2022			2023		2022		2023		2022
			(in millions)						(in millions)
Policy and contract charges	Policy and contract charges							Policy and contract charges
Affiliated	Affiliated		$	38		$	44	Affiliated	$	38	$	40	$	114	$	126
Unaffiliated	Unaffiliated		3			4		Unaffiliated	4		3		11		11
Total	Total		41			48		Total	42		43		125		137

Other revenues	Other revenues							Other revenues
Administrative fees	Administrative fees							Administrative fees
Affiliated	Affiliated		10			12		Affiliated	10		10		29		32
Unaffiliated	Unaffiliated		4			5		Unaffiliated	4		5		13		14
			14			17			14		15		42		46
Other fees	Other fees							Other fees
Affiliated	Affiliated		77			93		Affiliated	77		80		232		258
Unaffiliated	Unaffiliated		1			1		Unaffiliated	1		1		3		3
			78			94			78		81		235		261
Total	Total		92			111		Total	92		96		277		307
Total revenue from contracts with customers	Total revenue from contracts with customers		133			159		Total revenue from contracts with customers	134		139		402		444
Revenue from other sources (1)	Revenue from other sources (1)		898			798		Revenue from other sources (1)	922		740		2,770		2,316
Total revenues	Total revenues		$	1,031		$	957	Total revenues	$	1,056	$	879	$	3,172	$	2,760

(1) Amounts primarily consist of revenue associated with insurance and annuity products orand investment income from financial instruments.

The following discussion describes the nature, timing, and uncertainty of revenues and cash flows arising from the Company’s contracts with customers.

Policy and Contract Charges

The Company earns revenue for providing distribution-related services to affiliated and unaffiliated mutual funds that are available as underlying investments in its variable annuity and variable life insurance products. The performance obligation is satisfied at the time the mutual fund is distributed. Revenue is recognized over the time the mutual fund is held in the variable product and is generally earned based on a fixed rate applied, as a percentage, to the net asset value of the fund. The revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control, including market volatility and how long the fund(s) remain in the insurance policy or annuity contract. The revenue will not be recognized until it is probable that a significant reversal will not occur. These fees are accrued and collected on a monthly basis.

Other Revenues

Administrative Fees

The Company earns revenue for providing customer support, contract servicing and administrative services for affiliated and unaffiliated mutual funds that are available as underlying instruments in its variable annuity and variable life insurance products. The transfer agent and administration revenue is earned daily based on a fixed rate applied, as a percentage, to assets under management. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are accrued and collected on a monthly basis.

Other Fees

The Company earns revenue for providing affiliated and unaffiliated partners an opportunity to educate the financial advisors of its affiliate, Ameriprise Financial Services, LLC (“AFS”), that sell the Company's products as well as product and marketing personnel to support the offer, sale and servicing of funds within the Company's variable annuity and variable life insurance products. These payments allow the parties to train and support the advisors, explain the features of their products, and distribute marketing and

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

educational materials. The affiliated revenue is earned based on a rate, updated at least annually, which is applied, as a percentage, to the market value of assets invested. The unaffiliated revenue is earned based on a fixed rate applied, as a percentage, to the market value of assets invested. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are accrued and collected on a monthly basis.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Receivables

Receivables for revenue from contracts with customers are recognized when the performance obligation is satisfied and the Company has an unconditional right to the revenue. Receivables related to revenues from contracts with customers were $47 million and $48 million as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively.

5. Variable Interest Entities

The Company provides asset management services to collateralized loan obligations (“CLOs”) which are considered to be VIEs that are sponsored by the Company. In addition, the Company invests in structured investments other than CLOs and certain affordable housing partnerships which are considered VIEs. The Company consolidates the CLOs if the Company is deemed to be the primary beneficiary. The Company has no obligation to provide financial or other support to the non-consolidated VIEs beyond its initial investment and existing future funding commitments, and the Company has not provided any additional support to these entities. The Company has unfunded commitments related to consolidated CLOs of ~~$28~~$24 million and $30 million as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively.

CLOs

CLOs are asset backed financing entities collateralized by a pool of assets, primarily syndicated loans and, to a lesser extent, high-yield bonds. Multiple tranches of debt securities are issued by a CLO, offering investors various maturity and credit risk characteristics. The debt securities issued by the CLOs are non-recourse to the Company. The CLO’s debt holders have recourse only to the assets of the CLO. The assets of the CLOs cannot be used by the Company. Scheduled debt payments are based on the performance of the CLO’s collateral pool. The Company earns management fees from the CLOs based on the value of the CLO’s collateral pool and, in certain instances, may also receive incentive fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company has invested in a portion of the unrated, junior subordinated notes and highly rated senior notes of certain CLOs. The Company consolidates certain CLOs where it is the primary beneficiary and has the power to direct the activities that most significantly impact the economic performance of the CLO.

The Company’s maximum exposure to loss with respect to non-consolidated CLOs is limited to its amortized cost, which was $1 million as of both ~~March 31,~~September 30, 2023 and December 31, 2022. The Company classifies these investments as Available-for-Sale securities. See Note 6 for additional information on these investments.

Affordable Housing Partnerships and Other Real Estate Partnerships

The Company is a limited partner in affordable housing partnerships that qualify for government-sponsored low income housing tax credit programs and partnerships that invest in multi-family residential properties that were originally developed with an affordable housing component. The Company has determined it is not the primary beneficiary and therefore does not consolidate these partnerships.

A majority of the limited partnerships are VIEs. The Company’s maximum exposure to loss as a result of its investment in the VIEs is limited to the carrying value. The carrying value is reflected in Other investments and was ~~$85~~$77 million and $92 million as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively. The Company had a liability of $6 million and $7 million as of ~~both March 31,~~September 30, 2023 and December 31, 2022, respectively, related to original purchase commitments not yet remitted to the VIEs. The Company has not provided any additional support and is not contractually obligated to provide additional support to the VIEs beyond the funding commitments.

Structured Investments

The Company invests in structured investments which are considered VIEs for which it is not the sponsor. These structured investments typically invest in fixed income instruments and are managed by third parties and include asset backed securities and commercial and residential mortgage backed securities. The Company classifies these investments as Available-for-Sale securities. The Company has determined that it is not the primary beneficiary of these structures due to the size of the Company’s investment in the entities and position in the capital structure of these entities. The Company’s maximum exposure to loss as a result of its investment in these structured investments is limited to its amortized cost. See Note 6 for additional information on these structured investments.

Fair Value of Assets and Liabilities

The Company categorizes its fair value measurements according to a three-level hierarchy. See Note 1314 for the definition of the three levels of the fair value hierarchy.

1516

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables present the balances of assets and liabilities held by consolidated investment entities measured at fair value on a recurring basis:


		March 31, 2023									September 30, 2023
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
		(in millions)									(in millions)
Assets	Assets									Assets
Investments:	Investments:									Investments:
Corporate debt securities	Corporate debt securities	$	—	$	34	$	—	$	34	Corporate debt securities	$	—	$	39	$	—	$	39
Common stocks	Common stocks	—		4		—		4		Common stocks	—		6		—		6
Syndicated loans	Syndicated loans	—		2,206		50		2,256		Syndicated loans	—		2,067		54		2,121
Total investments	Total investments	—		2,244		50		2,294		Total investments	—		2,112		54		2,166
Receivables	Receivables	—		23		—		23		Receivables	—		29		—		29
Other assets	Other assets	—		1		—		1		Other assets	—		—		—		—
Total assets at fair value	Total assets at fair value	$	—	$	2,268	$	50	$	2,318	Total assets at fair value	$	—	$	2,141	$	54	$	2,195

Liabilities	Liabilities									Liabilities
Debt (1)	Debt (1)	$	—	$	2,367	$	—	$	2,367	Debt (1)	$	—	$	2,222	$	—	$	2,222
Other liabilities	Other liabilities	—		86		—		86		Other liabilities	—		37		—		37
Total liabilities at fair value	Total liabilities at fair value	$	—	$	2,453	$	—	$	2,453	Total liabilities at fair value	$	—	$	2,259	$	—	$	2,259


	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Investments:
Corporate debt securities	$	—	$	35	$	—	$	35
Common stocks	—		3		—		3
Syndicated loans	—		2,191		125		2,316
Total investments	—		2,229		125		2,354
Receivables	—		20		—		20
Other assets	—		1		1		2
Total assets at fair value	$	—	$	2,250	$	126	$	2,376

Liabilities
Debt (1)	$	—	$	2,363	$	—	$	2,363
Other liabilities	—		119		—		119
Total liabilities at fair value	$	—	$	2,482	$	—	$	2,482

(1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.4 billion as of ~~both March 31,~~September 30, 2023 and December 31, ~~2022.~~2022, respectively.

1617

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables provide a summary of changes in Level 3 assets held by consolidated investment entities measured at fair value on a recurring basis:



			Syndicated Loans
			(in millions)
Balance at July 1, 2023			$	67


Purchases
	4

Settlements			(1)
Transfers into Level 3			22
Transfers out of Level 3			(38)

Balance at September 30, 2023			$	54

Changes in unrealized gains (losses) included in net income relating to assets held at September 30, 2023			$




		2



	Common Stocks		Syndicated Loans
	(in millions)
Balance at July 1, 2022	$	2	$	95
Total gains (losses) included in:
Net income	—		(4)		(1)
Purchases	—		42
Sales	—		(3)
Settlements	—		(1)
Transfers into Level 3	—		61
Transfers out of Level 3	(2)		(25)

Balance at September 30, 2022	$	—	$	165

Changes in unrealized gains (losses) included in net income relating to assets held at September 30, 2022	$	—	$	(5)	(1)


		Syndicated Loans			Other Assets			Syndicated Loans			Other Assets
		(in millions)						(in millions)
Balance at January 1, 2023	Balance at January 1, 2023	$	125		$	1	Balance at January 1, 2023	$	125		$	1
Total gains (losses) included in:	Total gains (losses) included in:						Total gains (losses) included in:
Net income	Net income	(1)		(1)	—		Net income	(3)		(1)	—
Purchases	Purchases	17			—		Purchases	31			—
Sales	Sales	(7)			—		Sales	(10)			—
Settlements	Settlements	(15)			—		Settlements	(16)			—
Transfers into Level 3	Transfers into Level 3	21			—		Transfers into Level 3	82			—
Transfers out of Level 3	Transfers out of Level 3	(90)			(1)		Transfers out of Level 3	(155)			(1)

Balance at March 31, 2023		$	50		$	—
Balance at September 30, 2023							Balance at September 30, 2023	$	54		$	—

Changes in unrealized gains (losses) included in net income relating to assets held at March 31, 2023		$	—	(1)	$	—
Changes in unrealized gains (losses) included in net income relating to assets held at September 30, 2023							Changes in unrealized gains (losses) included in net income relating to assets held at September 30, 2023	$	2	(1)	$	—

Syndicated Loans Other Assets
(in millions)
Balance at January 1, 2022 $ 64 $ 3
Total gains (losses) included in:
Net income (1) (1) —
Purchases 15 —
Sales (1) —
Transfers into Level 3 62 —
Transfers out of Level 3 (42) (3)
Balance at March 31, 2022 $ 97 $ —
Changes in unrealized gains (losses) included in net income relating to assets held at March 31, 2022 $ (1) (1) $ —

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


	Common Stocks		Syndicated Loans			Other Assets
	(in millions)
Balance at January 1, 2022	$	—	$	64		$	3
Total gains (losses) included in:
Net income	—		(7)		(1)	—
Purchases	—		64			—
Sales	—		(4)			—
Settlements	—		(8)			—
Transfers into Level 3	2		173			—
Transfers out of Level 3	(2)		(117)			(3)

Balance at September 30, 2022	$	—	$	165		$	—

Changes in unrealized gains (losses) included in net income relating to assets held at September 30, 2022	$	—	$	(5)	(1)	$	—

(1) Included in Net investment income.

Securities and loans transferred from Level 3 primarily represent assets with fair values that are now obtained from a third-party pricing service with observable inputs or priced in active markets. Securities and loans transferred to Level 3 represent assets with fair values that are now based on a single non-binding broker quote.

All Level 3 measurements as of ~~March 31,~~September 30, 2023 and December 31, 2022 were obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company.

Determination of Fair Value

Assets

Investments

The fair value of syndicated loans obtained from third-party pricing services using a market approach with observable inputs is classified as Level 2. The fair value of syndicated loans obtained from third-party pricing services with a single non-binding broker quote as the underlying valuation source is classified as Level 3. The underlying inputs used in non-binding broker quotes are not readily available to the Company. See Note 1314 for a description of the Company’s determination of the fair value of corporate debt securities, common stocks and other investments.

Receivables

For receivables of the consolidated CLOs, the carrying value approximates fair value as the nature of these assets has historically been short-term and the receivables have been collectible. The fair value of these receivables is classified as Level 2.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

Liabilities

Debt

The fair value of the CLOs’ assets, typically syndicated bank loans, is more observable than the fair value of the CLOs’ debt tranches for which market activity is limited and less transparent. As a result, the fair value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets and is classified as Level 2.

Other Liabilities

Other liabilities consist primarily of securities purchased but not yet settled held by consolidated CLOs. The carrying value approximates fair value as the nature of these liabilities has historically been short-term. The fair value of these liabilities is classified as Level 2. Other liabilities also include accrued interest on CLO debt.

Fair Value Option

The Company has elected the fair value option for the financial assets and liabilities of the consolidated CLOs. Management believes that the use of the fair value option better matches the changes in fair value of assets and liabilities related to the CLOs.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table presents the fair value and unpaid principal balance of loans and debt for which the fair value option has been elected:


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
		(in millions)					(in millions)
Syndicated loans	Syndicated loans					Syndicated loans
Unpaid principal balance	Unpaid principal balance	$	2,427	$	2,525	Unpaid principal balance	$	2,260	$	2,525
Excess unpaid principal over fair value	Excess unpaid principal over fair value	(171)		(209)		Excess unpaid principal over fair value	(139)		(209)
Fair value	Fair value	$	2,256	$	2,316	Fair value	$	2,121	$	2,316

Fair value of loans more than 90 days past due	Fair value of loans more than 90 days past due	$	—	$	—	Fair value of loans more than 90 days past due	$	—	$	—
Fair value of loans in nonaccrual status	Fair value of loans in nonaccrual status	22		23		Fair value of loans in nonaccrual status	13		23
Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both	Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both	53		48		Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both	47		48

Debt	Debt					Debt
Unpaid principal balance	Unpaid principal balance	$	2,605	$	2,636	Unpaid principal balance	$	2,440	$	2,636
Excess unpaid principal over fair value	Excess unpaid principal over fair value	(238)		(273)		Excess unpaid principal over fair value	(218)		(273)
Carrying value (1)	Carrying value (1)	$	2,367	$	2,363	Carrying value (1)	$	2,222	$	2,363

Interest income from syndicated loans, bonds and structured investments is recorded based on contractual rates in Net investment income. Gains and losses related to changes in the fair value of investments are recorded in Net investment income and gains and losses on sales of investments are recorded in Net realized investment gains (losses). Interest expense on debt is recorded in Interest and debt expense with gains and losses related to changes in the fair value of debt recorded in Net investment income.

Total net gains (losses) recognized in Net investment income related to the changes in fair value of investments the Company owns in the consolidated CLOs where it has elected the fair value option and collateralized financing entity accounting were immaterial for both the three and nine months ended ~~March 31,~~September 30, 2023 and 2022.

Debt of the consolidated investment entities and the stated interest rates were as follows:


		Carrying Value				Weighted Average Interest Rate					Carrying Value				Weighted Average Interest Rate
		March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
		(in millions)									(in millions)
Debt of consolidated CLOs due 2028-2034	Debt of consolidated CLOs due 2028-2034	$	2,367	$	2,363	5.9	%	5.3	%	Debt of consolidated CLOs due 2028-2034	$	2,222	$	2,363	6.6	%	5.3	%

The debt of the consolidated CLOs has both fixed and floating interest rates, which range from nil to ~~14.0%~~14.8%. The interest rates on the debt of CLOs are weighted average rates based on the outstanding principal and contractual interest rates.

6. Investments

Available-for-Sale securities distributed by type were as follows:


Description of Securities	September 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Fixed maturities:
Corporate debt securities	$	10,408	$	104	$	(1,000)	$	—	$	9,512
Residential mortgage backed securities	3,834		2		(405)		—		3,431
Commercial mortgage backed securities	2,784		—		(267)		—		2,517
State and municipal obligations	725		31		(29)		(1)		726
Asset backed securities	1,513		4		(41)		—		1,476
Foreign government bonds and obligations	13		—		(1)		—		12
U.S. government and agency obligations	1		—		—		—		1
Total	$	19,278	$	141	$	(1,743)	$	(1)	$	17,675

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

~~6. Investments~~

~~Available-for-Sale securities distributed by type were as follows:~~

Description of Securities March 31, 2023
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value
(in millions)
Fixed maturities:
Corporate debt securities $ 9,548 $ 285 $ (607) $ (23) $ 9,203
Residential mortgage backed securities 3,531 9 (268) — 3,272
Commercial mortgage backed securities 2,923 2 (236) — 2,689
State and municipal obligations 759 73 (20) (2) 810
Asset backed securities 1,190 2 (29) — 1,163
Foreign government bonds and obligations 23 — (1) — 22
U.S. government and agency obligations 1 — — — 1
Total $ 17,975 $ 371 $ (1,161) $ (25) $ 17,160


Description of Securities	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Fixed maturities:
Corporate debt securities	$	9,349	$	180	$	(803)	$	(20)	$	8,706
Residential mortgage backed securities	3,254		8		(303)		—		2,959
Commercial mortgage backed securities	2,904		2		(255)		—		2,651
State and municipal obligations	761		53		(26)		(2)		786
Asset backed securities	1,025		10		(38)		—		997
Foreign government bonds and obligations	37		—		(2)		—		35
U.S. government and agency obligations	1		—		—		—		1
Total	$	17,331	$	253	$	(1,427)	$	(22)	$	16,135

As of ~~March 31,~~September 30, 2023 and December 31, 2022, accrued interest of ~~$151~~$174 million and $139 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in Accrued investment income.

As of March 31, 2023 and December 31, 2022, investment securities with a fair value of $2.5 billion and $2.6 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which $175 million and $302 million, respectively, may be sold, pledged or rehypothecated by the counterparty.

~~As of March 31,~~September 30, 2023 and December 31, 2022, fixed maturity securities comprised approximately 86% and 85%, respectively, of the Company’s total ~~investments, respectively.~~investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings Ltd. (“Fitch”). The Company uses the median of available ratings from Moody’s, S&P and Fitch, or if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. As of ~~March 31,~~September 30, 2023 and December 31, 2022, ~~$243~~$261 million and $257 million, respectively, of securities were internally rated by Columbia Management Investment Advisers, LLC, an affiliate of the Company, using criteria similar to those used by NRSROs.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

A summary of fixed maturity securities by rating was as follows:


Ratings	Ratings	March 31, 2023						December 31, 2022						Ratings	September 30, 2023						December 31, 2022
		Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value			Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value
		(in millions, except percentages)													(in millions, except percentages)
AAA	AAA	$	6,545	$	6,045	35	%	$	6,313	$	5,754	36	%	AAA	$	4,406	$	4,072	23	%	$	6,313	$	5,754	36	%
AA	AA	1,294		1,346		8		1,159		1,188		7		AA	3,924		3,588		20		1,159		1,188		7
A	A	1,673		1,738		10		1,572		1,594		10		A	2,075		1,997		11		1,572		1,594		10
BBB	BBB	7,872		7,488		44		7,646		7,023		43		BBB	8,544		7,707		44		7,646		7,023		43
Below investment grade (1)	Below investment grade (1)	591		543		3		641		576		4		Below investment grade (1)	329		311		2		641		576		4
Total fixed maturities	Total fixed maturities	$	17,975	$	17,160	100	%	$	17,331	$	16,135	100	%	Total fixed maturities	$	19,278	$	17,675	100	%	$	17,331	$	16,135	100	%

(1) The amortized cost of below investment grade securities includes interest in non-consolidated CLOs managed by the Company of $1 million as of both September 30, 2023 and December 31, 2022. The fair value of below investment grade securities includes interest in non-consolidated CLOs managed by the Company of $1 million ~~and $1 million, respectively,~~ as of both ~~March 31,~~September 30, 2023 and December 31, 2022. These securities are not rated but are included in below investment grade due to their risk characteristics.

As of ~~both March 31,~~September 30, 2023, approximately 61% of securities rated AA were GNMA, FNMA and FHLMC mortgage backed securities. These issuers were downgraded in the third quarter of 2023 from AAA to AA due to the downgrade of the U.S. Government long-term credit rating. As of December 31, 2022, approximately 36% of securities rated AAA were GNMA, FNMA and FHLMC mortgage backed ~~securities, respectively.~~securities. As of ~~March 31,~~September 30, 2023, the Company had holdings in Ameriprise Advisor Financing 2, LLC (“AAF2”), an affiliate of the Company, totaling ~~$550~~$539 million that was ~~57%~~60% of the Company’s total shareholder’s equity. Also, the Company had an additional 3343 issuers with holdings totaling ~~$4.9~~$6.0 billion that individually were between 10% and ~~23%~~24% of the Company’s total shareholder’s equity as of ~~March 31,~~September 30, 2023. As of December 31, 2022, the Company had holdings in AAF2 totaling $544 million that was ~~70%~~56% of the Company’s total shareholder’s equity. Also, the Company had an additional 4630 issuers with holdings totaling ~~$5.7~~$4.4 billion that individually were between 10% and ~~27%~~22% of the Company’s total shareholder’s equity as of December 31, 2022. There were no other holdings of any other issuer greater than 10% of the Company’s total shareholder’s equity as of ~~March 31,~~September 30, 2023 and December 31, 2022.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables summarize the fair value and gross unrealized losses on Available-for-Sale securities, aggregated by major investment type and the length of time that individual securities have been in a continuous unrealized loss position for which no allowance for credit losses has been recorded:

Description of Securities March 31, 2023
Less than 12 Months 12 Months or More Total
Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value
Unrealized Losses
Number of Securities Fair Value
Unrealized Losses
(in millions, except number of securities)
Corporate debt securities 232 $ 3,015 $ (148) 215 $ 2,825 $ (459) 447 $ 5,840 $ (607)
Residential mortgage backed securities 122 1,191 (41) 117 1,387 (227) 239 2,578 (268)
Commercial mortgage backed securities 60 748 (22) 175 1,795 (214) 235 2,543 (236)
State and municipal obligations 17 72 (5) 44 102 (15) 61 174 (20)
Asset backed securities 40 887 (19) 11 83 (10) 51 970 (29)
Foreign government bonds and obligations 7 17 (1) 1 4 — 8 21 (1)
Total 478 $ 5,930 $ (236) 563 $ 6,196 $ (925) 1,041 $ 12,126 $ (1,161)

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~


Description of Securities	September 30, 2023
	Less than 12 Months					12 Months or More					Total
	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
	(in millions, except number of securities)
Corporate debt securities	222	$	3,554	$	(193)	354	$	4,583	$	(807)	576	$	8,137	$	(1,000)
Residential mortgage backed securities	101	1,141		(34)		202	2,033		(371)		303	3,174		(405)
Commercial mortgage backed securities	27	404		(12)		200	2,033		(255)		227	2,437		(267)
State and municipal obligations	11	77		(3)		54	137		(26)		65	214		(29)
Asset backed securities	15	241		(3)		29	659		(38)		44	900		(41)
Foreign government bonds and obligations	1	5		—		2	6		(1)		3	11		(1)
U.S. government and agency obligations	3	1		—		—	—		—		3	1		—

Total	380	$	5,423	$	(245)	841	$	9,451	$	(1,498)	1,221	$	14,874	$	(1,743)


Description of Securities	December 31, 2022
	Less than 12 Months					12 Months or More					Total
	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
	(in millions, except number of securities)
Corporate debt securities	405	$	5,028	$	(443)	100	$	1,532	$	(360)	505	$	6,560	$	(803)
Residential mortgage backed securities	189	1,643		(117)		52	826		(186)		241	2,469		(303)
Commercial mortgage backed securities	176	1,746		(149)		58	666		(106)		234	2,412		(255)
State and municipal obligations	40	126		(15)		26	59		(11)		66	185		(26)
Asset backed securities	39	808		(28)		4	60		(10)		43	868		(38)

Foreign government bonds and obligations	10	32		(1)		1	1		(1)		11	33		(2)

Total	859	$	9,383	$	(753)	241	$	3,144	$	(674)	1,100	$	12,527	$	(1,427)

As part of the Company’s ongoing monitoring process, management determined that the ~~decrease~~increase in total gross unrealized losses on its Available-for-Sale securities for which an allowance for credit losses has not been recognized during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 is primarily attributable to the impact of ~~lower~~higher interest ~~rates partially offset by wider credit spreads given ongoing market volatility with no specific credit concerns.~~rates. As of ~~March 31,~~September 30, 2023, the Company did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors. The Company does not intend to sell these securities and does not believe that it is more likely than not that the Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost basis. As of ~~March 31,~~September 30, 2023 and December 31, 2022, approximately 94% and 93%, respectively, of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table presents rollforwards of the allowance for credit losses on Available-for-Sale securities:


		Corporate Debt Securities		State and Municipal Obligations		Total			Corporate Debt Securities		State and Municipal Obligations		Total
		(in millions)							(in millions)
Balance at July 1, 2023								Balance at July 1, 2023	$	7	$	2	$	9

Reductions for securities sold during the period (realized)								Reductions for securities sold during the period (realized)	(7)		(1)		(8)

Balance at September 30, 2023								Balance at September 30, 2023	$	—	$	1	$	1

Balance at July 1, 2022								Balance at July 1, 2022	$	—	$	1	$	1
Additions for which credit losses were not previously recorded								Additions for which credit losses were not previously recorded	20		—		20

Additional increases (decreases) on securities that had an allowance recorded in a previous period								Additional increases (decreases) on securities that had an allowance recorded in a previous period	—		1		1

Balance at September 30, 2022								Balance at September 30, 2022	$	20	$	2	$	22

Balance at January 1, 2023	Balance at January 1, 2023	$	20	$	2	$	22	Balance at January 1, 2023	$	20	$	2	$	22

Charge-offs		—		—		—
Additional increases (decreases) on securities that had an allowance recorded in a previous period		3		—		3
Balance at March 31, 2023		$	23	$	2	$	25
Reductions for securities sold during the period (realized)								Reductions for securities sold during the period (realized)	(20)		(1)		(21)

Balance at September 30, 2023								Balance at September 30, 2023	$	—	$	1	$	1

Balance at January 1, 2022	Balance at January 1, 2022	$	—	$	1	$	1	Balance at January 1, 2022	$	—	$	1	$	1
Additions for which credit losses were not previously recorded								Additions for which credit losses were not previously recorded	20		—		20

Charge-offs		—		—		—
Balance at March 31, 2022		$	—	$	1	$	1
Additional increases (decreases) on securities that had an allowance recorded in a previous period								Additional increases (decreases) on securities that had an allowance recorded in a previous period	—		1		1

Balance at September 30, 2022								Balance at September 30, 2022	$	20	$	2	$	22

Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in Net realized investment gains (losses) were as follows:


		Three Months Ended March 31,			Three Months Ended September 30,						Nine Months Ended September 30,
			2023			2022			2023		2022		2023		2022
			(in millions)						(in millions)
Gross realized investment gains	Gross realized investment gains		$	10		$	20	Gross realized investment gains	$	—	$	2	$	10	$	24
Gross realized investment losses	Gross realized investment losses		(1)			(3)		Gross realized investment losses	(46)		(6)		(57)		(20)
Credit losses			(3)			—
Credit reversals (losses)								Credit reversals (losses)	8		(21)		21		(21)

Other impairments	Other impairments		(1)			—		Other impairments	—		(61)		(1)		(67)
Total	Total		$	5		$	17	Total	$	(38)	$	(86)	$	(27)	$	(84)

Previously recorded allowance for credit losses was reversed during the three and nine months ended September 30, 2023 primarily due to the sale of a corporate debt security in the communications industry. Credit losses for the three and nine months ended ~~March 31, 2023~~September 30, 2022 primarily related to recording an allowance for credit losses on a corporate debt ~~security~~securities in the communications industry. Other impairments for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and three and nine months ended September 30, 2022 related to Available-for-Sale securities which the Company intended to sell.

See Note 1617 for a rollforward of net unrealized investment gains (losses) included in AOCI.

2123

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Available-for-Sale securities by contractual maturity as of ~~March 31,~~September 30, 2023 were as follows:


		Amortized Cost		Fair Value			Amortized Cost		Fair Value
		(in millions)					(in millions)
Due within one year	Due within one year	$	240	$	238	Due within one year	$	362	$	357
Due after one year through five years	Due after one year through five years	1,729		1,681		Due after one year through five years	1,777		1,690
Due after five years through 10 years	Due after five years through 10 years	3,692		3,308		Due after five years through 10 years	3,969		3,439
Due after 10 years	Due after 10 years	4,670		4,809		Due after 10 years	5,039		4,765
		10,331		10,036			11,147		10,251
Residential mortgage backed securities	Residential mortgage backed securities	3,531		3,272		Residential mortgage backed securities	3,834		3,431
Commercial mortgage backed securities	Commercial mortgage backed securities	2,923		2,689		Commercial mortgage backed securities	2,784		2,517
Asset backed securities	Asset backed securities	1,190		1,163		Asset backed securities	1,513		1,476
Total	Total	$	17,975	$	17,160	Total	$	19,278	$	17,675

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities were not included in the maturities distribution.

The following is a summary of Net investment income:


		Three Months Ended March 31,			Three Months Ended September 30,						Nine Months Ended September 30,
			2023			2022			2023		2022		2023		2022
			(in millions)						(in millions)
Fixed maturities	Fixed maturities		$	191		$	136	Fixed maturities	$	214	$	156	$	604	$	435
Mortgage loans	Mortgage loans		17			19		Mortgage loans	17		18		51		55
Other investments	Other investments		90			9		Other investments	107		55		314		92
			298			164			338		229		969		582
Less: investment expenses	Less: investment expenses		6			5		Less: investment expenses	6		5		19		14
Total	Total		$	292		$	159	Total	$	332	$	224	$	950	$	568

7. Financing Receivables

Financing receivables are comprised of commercial loans, policy loans and deposit receivables.

Allowance for Credit Losses

The following tables present a rollforward of the allowance for credit losses:


	Commercial Loans
	(in millions)


Balance at January 1, 2023	$	11
Provisions	(1)


Balance at ~~March 31,~~September 30, 2023	$	10

Balance at January 1, 2022	$	12
Provisions	(1)


Balance at ~~March 31,~~September 30, 2022	$	11

As of ~~March 31,~~September 30, 2023 and December 31, 2022, accrued interest on commercial loans was $16 million and $14 million, respectively, and is recorded in Accrued investment income and excluded from the amortized cost basis of commercial loans.

Purchases and Sales

During the three months ended ~~March 31,~~September 30, 2023 and 2022, the Company purchased nil syndicated loans, and sold $1 million and nil, respectively, of syndicated loans. During the nine months ended September 30, 2023 and 2022, the Company purchased $1 million and ~~nil,~~$42 million, respectively, of syndicated loans, and sold ~~nil~~$1 million and nil, respectively, of syndicated loans.

The Company has not acquired any loans with deteriorated credit quality as of the acquisition date.

Credit Quality Information

There were no nonperforming loans as of both ~~March 31,~~September 30, 2023 and December 31, 2022. All loans were considered to be performing.

2224

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Commercial Loans

Commercial Mortgage Loans

The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review.

Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates when credit risk changes. Commercial mortgage loans which management has assigned its highest risk rating were less than 1% of total commercial mortgage loans as of both ~~March 31,~~September 30, 2023 and December 31, 2022. Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. There were no commercial mortgage loans past due as of both ~~March 31,~~September 30, 2023 and December 31, 2022.

The tables below present the amortized cost basis of commercial mortgage loans by year of origination and loan-to-value ratio:


		March 31, 2023															September 30, 2023
Loan-to-Value Ratio	Loan-to-Value Ratio	2023		2022		2021		2020		2019		Prior		Total		Loan-to-Value Ratio	2023		2022		2021		2020		2019		Prior		Total
		(in millions)															(in millions)
> 100%	> 100%	$	—	$	—	$	—	$	2	$	2	$	38	$	42	> 100%	$	—	$	—	$	—	$	—	$	2	$	22	$	24
80% - 100%	80% - 100%	—		2		6		2		18		38		66		80% - 100%	—		—		—		2		11		50		63
60% - 80%	60% - 80%	11		39		59		17		41		97		264		60% - 80%	19		27		6		14		40		117		223
40% - 60%	40% - 60%	3		33		96		51		80		459		722		40% - 60%	6		46		130		49		65		364		660
< 40%	< 40%	—		31		22		32		53		527		665		< 40%	7		30		44		38		72		568		759
Total	Total	$	14	$	105	$	183	$	104	$	194	$	1,159	$	1,759	Total	$	32	$	103	$	180	$	103	$	190	$	1,121	$	1,729


	December 31, 2022
Loan-to-Value Ratio	2022		2021		2020		2019		2018		Prior		Total
	(in millions)
> 100%	$	—	$	—	$	2	$	2	$	—	$	39	$	43
80% - 100%	1		9		2		20		7		30		69
60% - 80%	39		85		17		52		9		104		306
40% - 60%	49		84		64		80		55		426		758
< 40%	16		8		27		42		78		432		603
Total	$	105	$	186	$	112	$	196	$	149	$	1,031	$	1,779

Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capitalization rate assumptions based on property type. For the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company did not have any write-offs of commercial mortgage loans.

In addition, the Company reviews the concentrations of credit risk by region and property type. Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows:


		Loans				Percentage					Loans				Percentage
		March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
		(in millions)									(in millions)
East North Central	East North Central	$	190	$	192	11	%	11	%	East North Central	$	183	$	192	11	%	11	%
East South Central	East South Central	51		51		3		3		East South Central	50		51		3		3
Middle Atlantic	Middle Atlantic	98		100		6		6		Middle Atlantic	98		100		6		6
Mountain	Mountain	126		120		7		7		Mountain	128		120		7		7
New England	New England	16		17		1		1		New England	15		17		1		1
Pacific	Pacific	597		601		34		34		Pacific	600		601		35		34
South Atlantic	South Atlantic	453		467		26		26		South Atlantic	436		467		25		26
West North Central	West North Central	114		115		6		6		West North Central	109		115		6		6
West South Central	West South Central	114		116		6		6		West South Central	110		116		6		6
		1,759		1,779		100	%	100	%		1,729		1,779		100	%	100	%
Less: allowance for credit losses	Less: allowance for credit losses	10		11						Less: allowance for credit losses	10		11
Total	Total	$	1,749	$	1,768					Total	$	1,719	$	1,768

2325

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Concentrations of credit risk of commercial mortgage loans by property type were as follows:


		Loans				Percentage					Loans				Percentage
		March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
		(in millions)									(in millions)
Apartments	Apartments	$	460	$	465	26	%	26	%	Apartments	$	454	$	465	26	%	26	%
Hotel	Hotel	14		14		1		1		Hotel	13		14		1		1
Industrial	Industrial	285		295		16		17		Industrial	285		295		17		17
Mixed use	Mixed use	57		55		3		3		Mixed use	56		55		3		3
Office	Office	240		243		14		14		Office	232		243		13		14
Retail	Retail	563		576		32		32		Retail	550		576		32		32
Other	Other	140		131		8		7		Other	139		131		8		7
		1,759		1,779		100	%	100	%		1,729		1,779		100	%	100	%
Less: allowance for credit losses	Less: allowance for credit losses	10		11						Less: allowance for credit losses	10		11
Total	Total	$	1,749	$	1,768					Total	$	1,719	$	1,768

Syndicated Loans

The investment in syndicated loans as of ~~March 31,~~September 30, 2023 and December 31, 2022 was ~~$69~~$63 million and $72 million, respectively. The Company’s syndicated loan portfolio is diversified across industries and issuers. ~~Total~~There were no syndicated loans past due ~~were nil~~ as of both ~~March 31,~~September 30, 2023 and December 31, 2022. The Company assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality. For the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company did not have any write-offs of syndicated loans.

The tables below present the amortized cost basis of syndicated loans by origination year and internal risk rating:


		March 31, 2023															September 30, 2023
Internal Risk Rating	Internal Risk Rating	2023		2022		2021		2020		2019		Prior		Total		Internal Risk Rating	2023		2022		2021		2020		2019		Prior		Total
		(in millions)															(in millions)
Risk 5	Risk 5	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Risk 5	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Risk 4	Risk 4	—		—		—		—		—		—		—		Risk 4	—		—		—		—		—		—		—
Risk 3	Risk 3	—		—		5		—		—		3		8		Risk 3	—		—		6		—		—		3		9
Risk 2	Risk 2	—		5		12		2		6		9		34		Risk 2	2		5		7		1		6		6		27
Risk 1	Risk 1	1		2		5		1		4		14		27		Risk 1	4		2		8		1		3		9		27
Total	Total	$	1	$	7	$	22	$	3	$	10	$	26	$	69	Total	$	6	$	7	$	21	$	2	$	9	$	18	$	63


	December 31, 2022
Internal Risk Rating	2022		2021		2020		2019		2018		Prior		Total
	(in millions)
Risk 5	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Risk 4	—		—		—		—		—		—		—
Risk 3	—		5		—		3		—		2		10
Risk 2	5		13		2		5		—		11		36
Risk 1	3		5		1		3		5		9		26
Total	$	8	$	23	$	3	$	11	$	5	$	22	$	72

Policy Loans

Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, there is no allowance for credit losses.

Deposit Receivables

Deposit receivables were ~~$7.1~~$6.7 billion and $7.4 billion as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively. Deposit receivables are collateralized by the fair value of the assets held in trusts. Based on management’s evaluation of the collateral value relative to the deposit receivables, the allowance for credit losses for deposit receivables was not material as of both ~~March 31,~~September 30, 2023 and December 31, 2022.

2426

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Modifications with Borrowers Experiencing Financial Difficulty

~~There were no modifications~~Modifications of financing receivables with borrowers experiencing financial difficulty by the Company were not material during the three and nine months ended ~~March 31,~~September 30, 2023.

8. Deferred Acquisition Costs and Deferred Sales Inducement Costs

The following tables summarize the balances of and changes in DAC, including the January 1, 2021 adoption of ASU 2018-12:


		Variable Annuities		Structured Variable Annuities		Fixed Annuities		Fixed Indexed Annuities		Universal Life Insurance		Variable Universal Life Insurance			Variable Annuities		Structured Variable Annuities		Fixed Annuities		Fixed Indexed Annuities		Universal Life Insurance		Variable Universal Life Insurance
		(in millions)													(in millions)
Pre-adoption balance at December 31, 2020	Pre-adoption balance at December 31, 2020	$	1,671	$	22	$	43	$	7	$	100	$	452	Pre-adoption balance at December 31, 2020	$	1,671	$	22	$	43	$	7	$	100	$	452
Effect of shadow reserve adjustments	Effect of shadow reserve adjustments	42		4		18		1		31		53		Effect of shadow reserve adjustments	42		4		18		1		31		53
Post-adoption balance at January 1, 2021	Post-adoption balance at January 1, 2021	1,713		26		61		8		131		505		Post-adoption balance at January 1, 2021	1,713		26		61		8		131		505
Capitalization of acquisition costs	Capitalization of acquisition costs	110		71		—		—		3		54		Capitalization of acquisition costs	110		71		—		—		3		54
Amortization	Amortization	(145)		(6)		(8)		(1)		(9)		(47)		Amortization	(145)		(6)		(8)		(1)		(9)		(47)
Balance at December 31, 2021	Balance at December 31, 2021	$	1,678	$	91	$	53	$	7	$	125	$	512	Balance at December 31, 2021	$	1,678	$	91	$	53	$	7	$	125	$	512

		Indexed Universal Life Insurance		Other Life Insurance		Life Contingent Payout Annuities		Term and Whole Life Insurance		Disability Insurance		Total, All Products			Indexed Universal Life Insurance		Other Life Insurance		Life Contingent Payout Annuities		Term and Whole Life Insurance		Disability Insurance		Total, All Products
		(in millions)													(in millions)
Pre-adoption balance at December 31, 2020	Pre-adoption balance at December 31, 2020	$	108	$	(3)	$	—	$	19	$	89	2,508		Pre-adoption balance at December 31, 2020	$	108	$	(3)	$	—	$	19	$	89	$	2,508
Effect of shadow reserve adjustments	Effect of shadow reserve adjustments	149		6		—		—		—		304		Effect of shadow reserve adjustments	149		6		—		—		—		304
Post-adoption balance at January 1, 2021	Post-adoption balance at January 1, 2021	257		3		—		19		89		2,812		Post-adoption balance at January 1, 2021	257		3		—		19		89		2,812
Capitalization of acquisition costs	Capitalization of acquisition costs	9		—		1		2		4		254		Capitalization of acquisition costs	9		—		1		2		4		254
Amortization	Amortization	(18)		—		—		(2)		(9)		(245)		Amortization	(18)		—		—		(2)		(9)		(245)
Balance at December 31, 2021	Balance at December 31, 2021	$	248	$	3	$	1	$	19	$	84	$	2,821	Balance at December 31, 2021	$	248	$	3	$	1	$	19	$	84	$	2,821


	Variable Annuities		Structured Variable Annuities		Fixed Annuities		Fixed Indexed Annuities		Universal Life Insurance		Variable Universal Life Insurance
	(in millions)
Balance at January 1, 2022	$	1,678	$	91	$	53	$	7	$	125	$	512
Capitalization of acquisition costs	39		73		—		—		1		55
Amortization	(135)		(15)		(8)		(1)		(8)		(46)
Balance at December 31, 2022	$	1,582	$	149	$	45	$	6	$	118	$	521

	Indexed Universal Life Insurance		Other Life Insurance		Life Contingent Payout Annuities		Term and Whole Life Insurance		Disability Insurance		Total, All Products
	(in millions)
Balance at January 1, 2022	$	248	$	3	$	1	$	19	$	84	$	2,821
Capitalization of acquisition costs	5		—		1		1		4		179
Amortization	(17)		—		—		(2)		(9)		(241)
Balance at December 31, 2022	$	236	$	3	$	2	$	18	$	79	$	2,759

2527

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


		Variable Annuities		Structured Variable Annuities		Fixed Annuities		Fixed Indexed Annuities		Universal Life Insurance		Variable Universal Life Insurance			Variable Annuities		Structured Variable Annuities		Fixed Annuities		Fixed Indexed Annuities		Universal Life Insurance		Variable Universal Life Insurance
		(in millions)													(in millions)
Balance at January 1, 2023	Balance at January 1, 2023	$	1,582	$	149	$	45	$	6	$	118	$	521	Balance at January 1, 2023	$	1,582	$	149	$	45	$	6	$	118	$	521
Capitalization of acquisition costs	Capitalization of acquisition costs	5		18		—		—		—		11		Capitalization of acquisition costs	17		61		—		—		—		41
Amortization	Amortization	(32)		(5)		(3)		—		(2)		(12)		Amortization	(95)		(18)		(8)		(1)		(6)		(33)
Balance at March 31, 2023		$	1,555	$	162	$	42	$	6	$	116	$	520
Balance at September 30, 2023														Balance at September 30, 2023	$	1,504	$	192	$	37	$	5	$	112	$	529

		Indexed Universal Life Insurance		Other Life Insurance		Life Contingent Payout Annuities		Term and Whole Life Insurance		Disability Insurance		Total, All Products			Indexed Universal Life Insurance		Other Life Insurance		Life Contingent Payout Annuities		Term and Whole Life Insurance		Disability Insurance		Total, All Products
		(in millions)													(in millions)
Balance at January 1, 2023	Balance at January 1, 2023	$	236	$	3	$	2	$	18	$	79	$	2,759	Balance at January 1, 2023	$	236	$	3	$	2	$	18	$	79	$	2,759
Capitalization of acquisition costs	Capitalization of acquisition costs	1		—		1		—		1		37		Capitalization of acquisition costs	3		—		3		1		3		129
Amortization	Amortization	(4)		—		—		—		(2)		(60)		Amortization	(12)		—		—		(1)		(6)		(180)
Balance at March 31, 2023		$	233	$	3	$	3	$	18	$	78	$	2,736
Balance at September 30, 2023														Balance at September 30, 2023	$	227	$	3	$	5	$	18	$	76	$	2,708

The following tables summarize the balances of and changes in DSIC, including the January 1, 2021 adoption of ASU 2018-12:


	Variable Annuities		Fixed Annuities		Total, All Products
	(in millions)
Pre-adoption balance at December 31, 2020	$	173	$	14	$	187
Effect of shadow reserve adjustments	8		8		16
Post-adoption balance at January 1, 2021	181		22		203
Capitalization of sales inducement costs	1		—		1
Amortization	(18)		(3)		(21)
Balance at December 31, 2021	$	164	$	19	$	183


	Variable Annuities		Fixed Annuities		Total, All Products
	(in millions)
Balance at January 1, 2022	$	164	$	19	$	183
Capitalization of sales inducement costs	1		—		1
Amortization	(16)		(3)		(19)
Balance at December 31, 2022	$	149	$	16	$	165


		Variable Annuities		Fixed Annuities			Total, All Products			Variable Annuities		Fixed Annuities		Total, All Products
		(in millions)				(in millions)
Balance at January 1, 2023	Balance at January 1, 2023	$	149	$	16		$	165	Balance at January 1, 2023	$	149	$	16	$	165

Amortization	Amortization	(4)		(1)			(5)		Amortization	(11)		(3)		(14)
Balance at March 31, 2023		$	145	$	15		$	160
Balance at September 30, 2023									Balance at September 30, 2023	$	138	$	13	$	151

2628

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

9. Policyholder Account Balances, Future Policy Benefits and Claims

Policyholder account balances, future policy benefits and claims consisted of the following:


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
		(in millions)					(in millions)
Policyholder account balances	Policyholder account balances					Policyholder account balances

Policyholder account balances	Policyholder account balances	$	25,545	$	24,986	Policyholder account balances	$	26,712	$	24,986

Future policy benefits	Future policy benefits					Future policy benefits

Reserve for future policy benefits	Reserve for future policy benefits	7,687		7,495		Reserve for future policy benefits	7,142		7,495
Deferred profit liability	Deferred profit liability	64		62		Deferred profit liability	77		62
Additional liabilities for insurance guarantees	Additional liabilities for insurance guarantees	1,224		1,186		Additional liabilities for insurance guarantees	1,246		1,186
Other insurance and annuity liabilities	Other insurance and annuity liabilities	181		177		Other insurance and annuity liabilities	169		177

Total future policy benefits	Total future policy benefits	9,156		8,920		Total future policy benefits	8,634		8,920
Policy claims and other policyholders’ funds	Policy claims and other policyholders’ funds	220		216		Policy claims and other policyholders’ funds	168		216
Total policyholder account balances, future policy benefits and claims	Total policyholder account balances, future policy benefits and claims	$	34,921	$	34,122	Total policyholder account balances, future policy benefits and claims	$	35,514	$	34,122

Variable Annuities

Purchasers of variable annuities can select from a variety of investment options and can elect to allocate a portion to a fixed account. A vast majority of the premiums received for variable annuity contracts are held in separate accounts where the assets are held for the exclusive benefit of those contractholders.

Most of the variable annuity contracts issued by the Company contain a GMDB. The Company previously offered contracts with GMAB, GMWB, and GMIB provisions. See Note 2 and Note 11 for additional information regarding the Company’s variable annuity guarantees. See Note 1314 and Note 1516 for additional information regarding the Company’s derivative instruments used to hedge risks related to these guarantees.

Structured Variable Annuities

Structured variable annuities provide contractholders the option to allocate a portion of their account value to an indexed account held in a non-insulated separate account with the contractholder’s rate of return, which may be positive or negative, tied to selected indices. The amount allocated by a contractholder to the indexed account creates an embedded derivative which is measured at fair value. The Company hedges the equity and interest rate risk related to the indexed account with freestanding derivative instruments.

Fixed Annuities

Fixed annuities include deferred, payout and fixed deferred indexed annuity contracts. In 2020, the Company discontinued sales of fixed deferred and fixed deferred indexed annuities.

Deferred contracts offer a guaranteed minimum rate of interest and security of the principal invested. Payout contracts guarantee a fixed income payment for life or the term of the contract. Liabilities for fixed annuities in a benefit or payout status are based on future estimated payments using established industry mortality tables and interest rates.

The Company’s fixed index annuity product is a fixed annuity that includes an indexed account. The rate of interest credited above the minimum guarantee for funds allocated to the indexed account is linked to the performance of the specific index for the indexed account (subject to a cap). The amount allocated by a contractholder to the indexed account creates an embedded derivative which is measured at fair value. ~~The Company hedges the interest credited rate including equity and interest rate risk related to the indexed account with freestanding derivative instruments.~~

See Note 1516 for additional information regarding the Company’s derivative instruments used to hedge the risk related to indexed accounts.

Insurance Liabilities

Purchasers of UL accumulate cash value that increases by a fixed interest rate. Purchasers of VUL can select from a variety of investment options and can elect to allocate a portion of their account balance to a fixed account or a separate account. A vast majority of the premiums received for VUL policies are held in separate accounts where the assets are held for the exclusive benefit of those policyholders.

IUL is a UL policy that includes an indexed account. The rate of credited interest for funds allocated by a contractholder to the indexed account is linked to the performance of the specific index for the indexed account (subject to stated account parameters, which include a cap and floor, or a spread). The policyholder may allocate all or a portion of the policy value to a fixed or any available

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

indexed account. The amount allocated by a contractholder to the indexed account creates an embedded derivative which is measured

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

at fair value. The Company hedges the interest credited rate including equity and interest rate risk related to the indexed account with freestanding derivative instruments.

See Note 1516 for additional information regarding the Company’s derivative instruments used to hedge the risk related to IUL.

The Company also offers term life insurance as well as DI products. The Company no longer offers standalone LTC products and whole life insurance but has in force policies from prior years.

Insurance liabilities include accumulation values, incurred but not reported claims, obligations for anticipated future claims, unpaid reported claims and claim adjustment expenses.

The balances of and changes in policyholder account balances were as follows:


		Variable Annuities			Structured Variable Annuities			Fixed Annuities			Fixed Indexed Annuities			Non-Life Contingent Payout Annuities			Variable Annuities			Structured Variable Annuities			Fixed Annuities			Fixed Indexed Annuities			Non-Life Contingent Payout Annuities
		(in millions, except percentages)															(in millions, except percentages)
Balance at January 1, 2023	Balance at January 1, 2023	$	4,752		$	6,410		$	6,799		$	312		$	471	Balance at January 1, 2023	$	4,752		$	6,410		$	6,799		$	312		$	471
Contract deposits	Contract deposits	17			656			13			—			22		Contract deposits	51			2,217			36			—			67
Policy charges	Policy charges	(2)			—			—			—			—		Policy charges	(7)			—			—			—			—
Surrenders and other benefits	Surrenders and other benefits	(185)			(18)			(320)			(2)			(32)		Surrenders and other benefits	(527)			(100)			(820)			(8)			(87)

Net transfer from (to) separate account liabilities	Net transfer from (to) separate account liabilities	(5)			—			—			—			—		Net transfer from (to) separate account liabilities	(18)			—			—			—			—
Other variable account adjustments	Other variable account adjustments	—			333			—			—			—		Other variable account adjustments	—			602			—			—			—
Interest credited	Interest credited	37			—			57			—			(1)		Interest credited	108			1			168			4			5
Balance at March 31, 2023		$	4,614		$	7,381		$	6,549		$	310		$	460
Balance at September 30, 2023																Balance at September 30, 2023	$	4,359		$	9,130		$	6,183		$	308		$	456

Weighted-average crediting rate	Weighted-average crediting rate	3.2		%	1.3		%	3.5		%	1.9		%	N/A		Weighted-average crediting rate	3.3		%	1.7		%	3.6		%	2.0		%	N/A

Cash surrender value (1)	Cash surrender value (1)	$	4,584		$	6,911		$	6,538		$	278		N/A		Cash surrender value (1)	$	4,330		$	8,586		$	6,175		$	274		N/A

		Universal Life Insurance			Variable Universal Life Insurance			Indexed Universal Life Insurance			Other Life Insurance			Total, All Products			Universal Life Insurance			Variable Universal Life Insurance			Indexed Universal Life Insurance			Other Life Insurance			Total, All Products
		(in millions, except percentages)															(in millions, except percentages)
Balance at January 1, 2023	Balance at January 1, 2023	$	1,544		$	1,520		$	2,654		$	524		$	24,986	Balance at January 1, 2023	$	1,544		$	1,520		$	2,654		$	524		$	24,986
Contract deposits	Contract deposits	31			54			49			(1)			841		Contract deposits	93			197			143			—			2,804
Policy charges	Policy charges	(44)			(24)			(30)			—			(100)		Policy charges	(133)			(70)			(90)			—			(300)
Surrenders and other benefits	Surrenders and other benefits	(17)			(23)			(13)			(11)			(621)		Surrenders and other benefits	(53)			(56)			(40)			(29)			(1,720)

Net transfer from (to) separate account liabilities	Net transfer from (to) separate account liabilities	—			(14)			—			—			(19)		Net transfer from (to) separate account liabilities	—			(71)			—			—			(89)
Other variable account adjustments	Other variable account adjustments	—			—			—			—			333		Other variable account adjustments	—			—			—			—			602
Interest credited	Interest credited	13			12			2			5			125		Interest credited	39			41			50			13			429
Balance at March 31, 2023		$	1,527		$	1,525		$	2,662		$	517		$	25,545
Balance at September 30, 2023																Balance at September 30, 2023	$	1,490		$	1,561		$	2,717		$	508		$	26,712

Weighted-average crediting rate	Weighted-average crediting rate	3.5		%	3.9		%	2.0		%	4.0		%			Weighted-average crediting rate	3.6		%	3.9		%	2.0		%	4.0		%
Net amount at risk	Net amount at risk	$	9,080		$	57,134		$	14,874		$	147				Net amount at risk	$	8,845		$	57,563		$	14,607		$	142
Cash surrender value (1)	Cash surrender value (1)	$	1,369		$	1,053		$	2,162		$	342				Cash surrender value (1)	$	1,343		$	1,060		$	2,229		$	333

2830

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


	Variable Annuities			Structured Variable Annuities			Fixed Annuities			Fixed Indexed Annuities			Non-Life Contingent Payout Annuities
	(in millions, except percentages)
Balance at January 1, 2022	$	4,972		$	4,458		$	7,251		$	323		$	527
Contract deposits	146			2,784			55			—			53
Policy charges	(8)			—			—			—			—
Surrenders and other benefits	(450)			(41)			(744)			(17)			(124)

Net transfer from (to) separate account liabilities	(60)			—			—			—			—
Other variable account adjustments	—			(791)			—			—			—
Interest credited	152			—			237			6			15
Balance at December 31, 2022	$	4,752		$	6,410		$	6,799		$	312		$	471

Weighted-average crediting rate	3.2		%	1.1		%	3.5		%	1.9		%	N/A

Cash surrender value (1)	$	4,720		$	5,986		$	6,786		$	277		N/A

	Universal Life Insurance			Variable Universal Life Insurance			Indexed Universal Life Insurance			Other Life Insurance			Total, All Products
	(in millions, except percentages)
Balance at January 1, 2022	$	1,602		$	1,493		$	2,534		$	563		$	23,723
Contract deposits	134			233			218			(3)			3,620
Policy charges	(178)			(91)			(116)			—			(393)
Surrenders and other benefits	(67)			(70)			(50)			(56)			(1,619)

Net transfer from (to) separate account liabilities	—			(102)			—			—			(162)
Other variable account adjustments	—			—			—			—			(791)
Interest credited	53			57			68			20			608
Balance at December 31, 2022	$	1,544		$	1,520		$	2,654		$	524		$	24,986

Weighted-average crediting rate	3.6		%	3.9		%	2.0		%	4.0		%
Net amount at risk	$	9,187		$	57,354		$	15,043		$	149
Cash surrender value (1)	$	1,382		$	1,054		$	2,148		$	348

(1) Cash surrender value represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges. For variable annuities and VUL, the cash surrender value shown is the proportion of the total cash surrender value related to their fixed account liabilities.

Refer to Note 11 for the net amount at risk for market risk benefits associated with variable and structured variable annuities. Fixed, fixed indexed, and non-life contingent payout annuities do not have net amount at risk in excess of account value. Net amount at risk for insurance products is calculated as the death benefit amount in excess of applicable account values, host, embedded derivative, and separate account liabilities.

2931

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables present the account values of fixed deferred annuities, fixed insurance, and the fixed portion of variable annuities and variable insurance contracts by range of guaranteed minimum interest rates (“GMIRs”) and the range of the difference between rates credited to policyholders and contractholders as of ~~March 31,~~September 30, 2023 and December 31, 2022 and the respective guaranteed minimums, as well as the percentage of account values subject to rate reset in the time period indicated. Rates are reset at management’s discretion, subject to guaranteed minimums.


March 31, 2023
September 30, 2023																		September 30, 2023
						Account Values with Crediting Rates																	Account Values with Crediting Rates
		Range of Guaranteed Minimum Crediting Rates				At Guaranteed Minimum		1-49 bps above Guaranteed Minimum		50-99 bps above Guaranteed Minimum		100-150 bps above Guaranteed Minimum		Greater than 150 bps above Guaranteed Minimum		Total			Range of Guaranteed Minimum Crediting Rates				At Guaranteed Minimum		1-49 bps above Guaranteed Minimum		50-99 bps above Guaranteed Minimum		100-150 bps above Guaranteed Minimum		Greater than 150 bps above Guaranteed Minimum		Total
						(in millions, except percentages)																	(in millions, except percentages)
Fixed accounts of variable annuities	Fixed accounts of variable annuities	1	%	–	1.99%	$	125	$	130	$	19	$	2	$	—	$	276	Fixed accounts of variable annuities	1	%	–	1.99%	$	66	$	149	$	32	$	6	$	1	$	254
		2	%	–	2.99%	167		—		—		—		—		167			2	%	–	2.99%	148		—		—		—		—		148
		3	%	–	3.99%	2,513		—		—		1		—		2,514			3	%	–	3.99%	2,336		—		—		1		—		2,337
		4	%	–	5.00%	1,598		—		—		—		—		1,598			4	%	–	5.00%	1,562		—		—		—		—		1,562
		Total				$	4,403	$	130	$	19	$	3	$	—	$	4,555		Total				$	4,112	$	149	$	32	$	7	$	1	$	4,301

Fixed accounts of structured variable annuities	Fixed accounts of structured variable annuities	1	%	–	1.99%	$	8	$	12	$	3	$	1	$	2	$	26	Fixed accounts of structured variable annuities	1	%	–	1.99%	$	1	$	19	$	3	$	1	$	—	$	24
		2	%	–	2.99%	—		—		—		—		—		—			2	%	–	2.99%	8		—		—		—		—		8
		3	%	–	3.99%	—		—		—		—		—		—			3	%	–	3.99%	—		—		—		—		—		—
		4	%	–	5.00%	—		—		—		—		—		—			4	%	–	5.00%	—		—		—		—		—		—
		Total				$	8	$	12	$	3	$	1	$	2	$	26		Total				$	9	$	19	$	3	$	1	$	—	$	32

Fixed annuities	Fixed annuities	1	%	–	1.99%	$	234	$	538	$	137	$	31	$	10	$	950	Fixed annuities	1	%	–	1.99%	$	116	$	455	$	221	$	21	$	8	$	821
		2	%	–	2.99%	63		—		—		—		—		63			2	%	–	2.99%	51		4		—		—		—		55
		3	%	–	3.99%	3,196		—		—		—		—		3,196			3	%	–	3.99%	2,959		—		—		—		—		2,959
		4	%	–	5.00%	2,322		—		—		—		—		2,322			4	%	–	5.00%	2,333		—		—		—		—		2,333
		Total				$	5,815	$	538	$	137	$	31	$	10	$	6,531		Total				$	5,459	$	459	$	221	$	21	$	8	$	6,168

Non-indexed accounts of fixed indexed annuities	Non-indexed accounts of fixed indexed annuities	1	%	–	1.99%	$	—	$	3	$	7	$	14	$	—	$	24	Non-indexed accounts of fixed indexed annuities	1	%	–	1.99%	$	—	$	3	$	7	$	13	$	—	$	23
		2	%	–	2.99%	—		—		—		—		—		—			2	%	–	2.99%	—		—		—		—		—		—
		3	%	–	3.99%	—		—		—		—		—		—			3	%	–	3.99%	—		—		—		—		—		—
		4	%	–	5.00%	—		—		—		—		—		—			4	%	–	5.00%	—		—		—		—		—		—
		Total				$	—	$	3	$	7	$	14	$	—	$	24		Total				$	—	$	3	$	7	$	13	$	—	$	23

Universal life insurance	Universal life insurance	1	%	–	1.99%	$	—	$	—	$	—	$	—	$	—	$	—	Universal life insurance	1	%	–	1.99%	$	—	$	—	$	—	$	—	$	—	$	—
		2	%	–	2.99%	54		—		4		—		—		58			2	%	–	2.99%	53		1		7		—		—		61
		3	%	–	3.99%	877		—		3		2		—		882			3	%	–	3.99%	860		1		4		3		—		868
		4	%	–	5.00%	556		—		—		—		—		556			4	%	–	5.00%	532		—		—		—		—		532
		Total				$	1,487	$	—	$	7	$	2	$	—	$	1,496		Total				$	1,445	$	2	$	11	$	3	$	—	$	1,461

3032

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


						Account Values with Crediting Rates																							Account Values with Crediting Rates
		Range of Guaranteed Minimum Crediting Rates				At Guaranteed Minimum			1-49 bps above Guaranteed Minimum			50-99 bps above Guaranteed Minimum			100-150 bps above Guaranteed Minimum			Greater than 150 bps above Guaranteed Minimum			Total				Range of Guaranteed Minimum Crediting Rates				At Guaranteed Minimum			1-49 bps above Guaranteed Minimum			50-99 bps above Guaranteed Minimum			100-150 bps above Guaranteed Minimum			Greater than 150 bps above Guaranteed Minimum			Total
						(in millions, except percentages)																							(in millions, except percentages)
Fixed accounts of variable universal life insurance	Fixed accounts of variable universal life insurance	1	%	–	1.99%	$	—		$	4		$	3		$	—		$	13		$	20		Fixed accounts of variable universal life insurance	1	%	–	1.99%	$	—		$	3		$	4		$	—		$	26		$	33
		2	%	–	2.99%	26			3			—			1			4			34				2	%	–	2.99%	17			8			—			2			5			32
		3	%	–	3.99%	131			1			2			2			—			136				3	%	–	3.99%	125			1			4			4			—			134
		4	%	–	5.00%	639			—			—			—			—			639				4	%	–	5.00%	623			—			—			—			—			623
		Total				$	796		$	8		$	5		$	3		$	17		$	829			Total				$	765		$	12		$	8		$	6		$	31		$	822

Non-indexed accounts of indexed universal life insurance	Non-indexed accounts of indexed universal life insurance	1	%	–	1.99%	$	—		$	—		$	3		$	—		$	—		$	3		Non-indexed accounts of indexed universal life insurance	1	%	–	1.99%	$	—		$	—		$	2		$	—		$	—		$	2
		2	%	–	2.99%	128			—			—			—			—			128				2	%	–	2.99%	128			—			—			—			—			128
		3	%	–	3.99%	—			—			—			—			—			—				3	%	–	3.99%	—			—			—			—			—			—
		4	%	–	5.00%	—			—			—			—			—			—				4	%	–	5.00%	—			—			—			—			—			—
		Total				$	128		$	—		$	3		$	—		$	—		$	131			Total				$	128		$	—		$	2		$	—		$	—		$	130

Other life insurance	Other life insurance	1	%	–	1.99%	$	—		$	—		$	—		$	—		$	—		$	—		Other life insurance	1	%	–	1.99%	$	—		$	—		$	—		$	—		$	—		$	—
		2	%	–	2.99%	—			—			—			—			—			—				2	%	–	2.99%	—			—			—			—			—			—
		3	%	–	3.99%	32			—			—			—			—			32				3	%	–	3.99%	31			—			—			—			—			31
		4	%	–	5.00%	309			—			—			—			—			309				4	%	–	5.00%	301			—			—			—			—			301
		Total				$	341		$	—		$	—		$	—		$	—		$	341			Total				$	332		$	—		$	—		$	—		$	—		$	332

Total	Total	1	%	–	1.99%	$	367		$	687		$	172		$	48		$	25		$	1,299		Total	1	%	–	1.99%	$	183		$	629		$	269		$	41		$	35		$	1,157
		2	%	–	2.99%	438			3			4			1			4			450				2	%	–	2.99%	405			13			7			2			5			432
		3	%	–	3.99%	6,749			1			5			5			—			6,760				3	%	–	3.99%	6,311			2			8			8			—			6,329
		4	%	–	5.00%	5,424			—			—			—			—			5,424				4	%	–	5.00%	5,351			—			—			—			—			5,351
		Total				$	12,978		$	691		$	181		$	54		$	29		$	13,933			Total				$	12,250		$	644		$	284		$	51		$	40		$	13,269

Percentage of total account values that reset in:	Percentage of total account values that reset in:																							Percentage of total account values that reset in:
Next 12 months	Next 12 months					99.9		%	96.6		%	97.5		%	100.0		%	100.0		%	99.7		%	Next 12 months					99.9		%	99.1		%	99.3		%	100.0		%	100.0		%	99.9		%
> 12 months to 24 months	> 12 months to 24 months					—			3.2			2.4			—			—			0.2			> 12 months to 24 months					—			0.9			0.6			—			—			0.1
> 24 months	> 24 months					0.1			0.2			0.1			—			—			0.1			> 24 months					0.1			—			0.1			—			—			—
Total	Total					100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	Total					100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%


December 31, 2022
					Account Values with Crediting Rates
	Range of Guaranteed Minimum Crediting Rates				At Guaranteed Minimum		1-49 bps above Guaranteed Minimum		50-99 bps above Guaranteed Minimum		100-150 bps above Guaranteed Minimum		Greater than 150 bps above Guaranteed Minimum		Total
					(in millions, except percentages)
Fixed accounts of variable annuities	1	%	–	1.99%	$	169	$	102	$	18	$	—	$	—	$	289
	2	%	–	2.99%	177		—		—		—		—		177
	3	%	–	3.99%	2,611		—		—		1		—		2,612
	4	%	–	5.00%	1,611		—		—		—		—		1,611
	Total				$	4,568	$	102	$	18	$	1	$	—	$	4,689

3133

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


					Account Values with Crediting Rates
	Range of Guaranteed Minimum Crediting Rates				At Guaranteed Minimum		1-49 bps above Guaranteed Minimum		50-99 bps above Guaranteed Minimum		100-150 bps above Guaranteed Minimum		Greater than 150 bps above Guaranteed Minimum		Total
					(in millions, except percentages)
Fixed accounts of structured variable annuities	1	%	–	1.99%	$	12	$	7	$	3	$	1	$	—	$	23
	2	%	–	2.99%	—		—		—		—		—		—
	3	%	–	3.99%	—		—		—		—		—		—
	4	%	–	5.00%	—		—		—		—		—		—
	Total				$	12	$	7	$	3	$	1	$	—	$	23

Fixed annuities	1	%	–	1.99%	$	460	$	402	$	132	$	33	$	10	$	1,037
	2	%	–	2.99%	67		—		—		—		—		67
	3	%	–	3.99%	3,344		—		—		—		—		3,344
	4	%	–	5.00%	2,333		—		—		—		—		2,333
	Total				$	6,204	$	402	$	132	$	33	$	10	$	6,781

Non-indexed accounts of fixed indexed annuities	1	%	–	1.99%	$	1	$	3	$	7	$	14	$	—	$	25
	2	%	–	2.99%	—		—		—		—		—		—
	3	%	–	3.99%	—		—		—		—		—		—
	4	%	–	5.00%	—		—		—		—		—		—
	Total				$	1	$	3	$	7	$	14	$	—	$	25

Universal life insurance	1	%	–	1.99%	$	—	$	—	$	—	$	—	$	—	$	—
	2	%	–	2.99%	55		—		1		—		—		56
	3	%	–	3.99%	885		1		2		—		—		888
	4	%	–	5.00%	569		—		—		—		—		569
	Total				$	1,509	$	1	$	3	$	—	$	—	$	1,513

Fixed accounts of variable universal life insurance	1	%	–	1.99%	$	4	$	3	$	2	$	—	$	9	$	18
	2	%	–	2.99%	30		—		1		2		2		35
	3	%	–	3.99%	134		1		1		1		—		137
	4	%	–	5.00%	648		—		—		—		—		648
	Total				$	816	$	4	$	4	$	3	$	11	$	838

Non-indexed accounts of indexed universal life insurance	1	%	–	1.99%	$	—	$	—	$	3	$	—	$	—	$	3
	2	%	–	2.99%	126		—		—		—		—		126
	3	%	–	3.99%	—		—		—		—		—		—
	4	%	–	5.00%	—		—		—		—		—		—
	Total				$	126	$	—	$	3	$	—	$	—	$	129

3234

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


					Account Values with Crediting Rates
	Range of Guaranteed Minimum Crediting Rates				At Guaranteed Minimum			1-49 bps above Guaranteed Minimum			50-99 bps above Guaranteed Minimum			100-150 bps above Guaranteed Minimum			Greater than 150 bps above Guaranteed Minimum			Total
					(in millions, except percentages)
Other life insurance	1	%	–	1.99%	$	—		$	—		$	—		$	—		$	—		$	—
	2	%	–	2.99%	—			—			—			—			—			—
	3	%	–	3.99%	32			—			—			—			—			32
	4	%	–	5.00%	314			—			—			—			—			314
	Total				$	346		$	—		$	—		$	—		$	—		$	346

Total	1	%	–	1.99%	$	646		$	517		$	165		$	48		$	19		$	1,395
	2	%	–	2.99%	455			—			2			2			2			461
	3	%	–	3.99%	7,006			2			3			2			—			7,013
	4	%	–	5.00%	5,475			—			—			—			—			5,475
	Total				$	13,582		$	519		$	170		$	52		$	21		$	14,344

Percentage of total account values that reset in:
Next 12 months					99.8		%	96.3		%	93.8		%	100.0		%	100.0		%	99.6		%
> 12 months to 24 months					0.1			3.0			5.8			—			—			0.3
> 24 months					0.1			0.7			0.4			—			—			0.1
Total					100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

The following tables summarize the balances of and changes in the liability for future policy benefits, including the January 1, 2021 adoption of ASU 2018-12:


	Life Contingent Payout Annuities		Term and Whole Life Insurance		Disability Insurance		Long Term Care Insurance		Total, All Products
	(in millions)
Pre-adoption balance at December 31, 2020	$	1,536	$	633	$	530	$	5,749	$	8,448
Effect of shadow reserve adjustments	(175)		—		—		(566)		(741)
Adjustments for loss contracts (with premiums in excess of gross premiums) under the modified retrospective approach	4		—		—		35		39
Effect of change in deferred profit liability	(43)		—		—		—		(43)
Effect of remeasurement of the liability at the current single A discount rate	215		265		238		1,965		2,683
Post-adoption balance at January 1, 2021	1,537		898		768		7,183		10,386
Less: reinsurance recoverable	—		601		24		3,623		4,248
Post-adoption balance at January 1, 2021, after reinsurance recoverable	$	1,537	$	297	$	744	$	3,560	$	6,138

3335

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


	Life Contingent Payout Annuities			Term and Whole Life Insurance			Disability Insurance			Long Term Care Insurance			Total, All Products
	(in millions, except percentages)
Present Value of Expected Net Premiums:
Balance at January 1, 2021	$	—		$	702		$	238		$	1,831		$	2,771
Beginning balance at original discount rate	—			536			183			1,498			2,217
Effect of changes in cash flow assumptions	—			—			—			(6)			(6)
Effect of actual variances from expected experience	—			56			(35)			(61)			(40)
Adjusted beginning of year balance	$	—		$	592		$	148		$	1,431		$	2,171
Issuances	38			78			18			—			134
Interest accrual	—			29			9			73			111
Net premiums collected	(38)			(63)			(20)			(184)			(305)
Derecognition (lapses)	—			—			—			—			—
Ending balance at original discount rate	$	—		$	636		$	155		$	1,320		$	2,111
Effect of changes in discount rate assumptions	—			141			33			227			401
Balance at December 31, 2021	$	—		$	777		$	188		$	1,547		$	2,512

Present Value of Future Policy Benefits:
Balance at January 1, 2021	$	1,537		$	1,600		$	1,006		$	9,014		$	13,157
Beginning balance at original discount rate	1,321			1,169			714			6,716			9,920
Effect of changes in cash flow assumptions	—			—			—			(8)			(8)
Effect of actual variances from expected experience	(14)			58			(40)			(124)			(120)
Adjusted beginning of year balance	$	1,307		$	1,227		$	674		$	6,584		$	9,792
Issuances	39			78			18			—			135
Interest accrual	53			70			39			347			509
Benefit payments	(168)			(120)			(43)			(336)			(667)
Derecognition (lapses)	—			—			—			—			—
Ending balance at original discount rate	$	1,231		$	1,255		$	688		$	6,595		$	9,769
Effect of changes in discount rate assumptions	139			343			226			1,755			2,463
Balance at December 31, 2021	$	1,370		$	1,598		$	914		$	8,350		$	12,232

Adjustment due to reserve flooring	$	—		$	1		$	—		$	—		$	1

Net liability for future policy benefits	$	1,370		$	822		$	726		$	6,803		$	9,721
Less: reinsurance recoverable	1,265			558			25			3,443			5,291
Net liability for future policy benefits, after reinsurance recoverable	$	105		$	264		$	701		$	3,360		$	4,430

Discounted expected future gross premiums	$	—		$	2,005		$	1,158		$	1,623		$	4,786
Expected future gross premiums	$	—		$	2,815		$	1,395		$	1,905		$	6,115
Expected future benefit payments	$	1,707		$	2,159		$	1,217		$	11,568		$	16,651

Weighted average interest accretion rate	4.2		%	6.5		%	5.9		%	5.3		%
Weighted average discount rate	2.6		%	2.8		%	2.8		%	2.9		%

Weighted average duration of liability (in years)	7			8			9			10

3436

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


	Life Contingent Payout Annuities			Term and Whole Life Insurance			Disability Insurance			Long Term Care Insurance			Total, All Products
	(in millions, except percentages)
Present Value of Expected Net Premiums:
Balance at January 1, 2022	$	—		$	777		$	188		$	1,547		$	2,512
Beginning balance at original discount rate	—			636			155			1,320			2,111
Effect of changes in cash flow assumptions	—			1			1			52			54
Effect of actual variances from expected experience	—			47			(22)			(48)			(23)
Adjusted beginning of year balance	$	—		$	684		$	134		$	1,324		$	2,142
Issuances	42			57			12			—			111
Interest accrual	—			34			7			65			106
Net premiums collected	(42)			(67)			(16)			(169)			(294)
Derecognition (lapses)	—			—			—			—			—
Ending balance at original discount rate	$	—		$	708		$	137		$	1,220		$	2,065
Effect of changes in discount rate assumptions	—			(22)			(3)			(13)			(38)
Balance at December 31, 2022	$	—		$	686		$	134		$	1,207		$	2,027

Present Value of Future Policy Benefits:
Balance at January 1, 2022	$	1,370		$	1,598		$	914		$	8,350		$	12,232
Beginning balance at original discount rate	1,231			1,255			688			6,595			9,769
Effect of changes in cash flow assumptions	—			(8)			1			42			35
Effect of actual variances from expected experience	(13)			52			(28)			(36)			(25)
Adjusted beginning of year balance	$	1,218		$	1,299		$	661		$	6,601		$	9,779
Issuances	42			57			12			—			111
Interest accrual	49			73			38			336			496
Benefit payments	(154)			(116)			(42)			(368)			(680)
Derecognition (lapses)	—			—			—			—			—
Ending balance at original discount rate	$	1,155		$	1,313		$	669		$	6,569		$	9,706
Effect of changes in discount rate assumptions	(90)			6			27			(130)			(187)
Balance at December 31, 2022	$	1,065		$	1,319		$	696		$	6,439		$	9,519

Adjustment due to reserve flooring	$	—		$	3		$	—		$	—		$	3

Net liability for future policy benefits	$	1,065		$	636		$	562		$	5,232		$	7,495
Less: reinsurance recoverable	949			443			19			2,649			4,060
Net liability for future policy benefits, after reinsurance recoverable	$	116		$	193		$	543		$	2,583		$	3,435

Discounted expected future gross premiums	$	—		$	1,855		$	926		$	1,381		$	4,162
Expected future gross premiums	$	—		$	3,183		$	1,331		$	1,908		$	6,422
Expected future benefit payments	$	1,595		$	2,234		$	1,169		$	11,229		$	16,227

Weighted average interest accretion rate	4.1		%	6.4		%	6.1		%	5.2		%
Weighted average discount rate	5.2		%	5.5		%	5.4		%	5.4		%

Weighted average duration of liability (in years)	6			7			8			9

3537

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


		Life Contingent Payout Annuities			Term and Whole Life Insurance			Disability Insurance			Long Term Care Insurance			Total, All Products			Life Contingent Payout Annuities			Term and Whole Life Insurance			Disability Insurance			Long Term Care Insurance			Total, All Products
		(in millions, except percentages)															(in millions, except percentages)
Present Value of Expected Net Premiums:	Present Value of Expected Net Premiums:															Present Value of Expected Net Premiums:
Balance at January 1, 2023	Balance at January 1, 2023	$	—		$	686		$	134		$	1,207		$	2,027	Balance at January 1, 2023	$	—		$	686		$	134		$	1,207		$	2,027
Beginning balance at original discount rate	Beginning balance at original discount rate	—			708			137			1,220			2,065		Beginning balance at original discount rate	—			708			137			1,220			2,065
Effect of changes in cash flow assumptions	Effect of changes in cash flow assumptions	—			1			—			(1)			—		Effect of changes in cash flow assumptions	—			(19)			(19)			19			(19)
Effect of actual variances from expected experience	Effect of actual variances from expected experience	—			3			(6)			(21)			(24)		Effect of actual variances from expected experience	—			(5)			(17)			(5)			(27)
Adjusted beginning of year balance	Adjusted beginning of year balance	$	—		$	712		$	131		$	1,198		$	2,041	Adjusted beginning of year balance	$	—		$	684		$	101		$	1,234		$	2,019
Issuances	Issuances	31			13			3			—			47		Issuances	120			42			9			—			171
Interest accrual	Interest accrual	—			8			2			15			25		Interest accrual	1			27			4			44			76
Net premiums collected	Net premiums collected	(31)			(17)			(4)			(39)			(91)		Net premiums collected	(121)			(52)			(9)			(117)			(299)
Derecognition (lapses)	Derecognition (lapses)	—			—			—			—			—		Derecognition (lapses)	—			—			—			—			—
Ending balance at original discount rate	Ending balance at original discount rate	$	—		$	716		$	132		$	1,174		$	2,022	Ending balance at original discount rate	$	—		$	701		$	105		$	1,161		$	1,967
Effect of changes in discount rate assumptions	Effect of changes in discount rate assumptions	—			(5)			—			6			1		Effect of changes in discount rate assumptions	—			(53)			(8)			(50)			(111)
Balance at March 31, 2023		$	—		$	711		$	132		$	1,180		$	2,023
Balance at September 30, 2023																Balance at September 30, 2023	$	—		$	648		$	97		$	1,111		$	1,856

Present Value of Future Policy Benefits:	Present Value of Future Policy Benefits:															Present Value of Future Policy Benefits:
Balance at January 1, 2023	Balance at January 1, 2023	$	1,065		$	1,319		$	696		$	6,439		$	9,519	Balance at January 1, 2023	$	1,065		$	1,319		$	696		$	6,439		$	9,519
Beginning balance at original discount rate	Beginning balance at original discount rate	1,155			1,313			669			6,569			9,706		Beginning balance at original discount rate	1,155			1,313			669			6,569			9,706
Effect of changes in cash flow assumptions	Effect of changes in cash flow assumptions	—			1			—			(2)			(1)		Effect of changes in cash flow assumptions	—			(18)			(25)			9			(34)
Effect of actual variances from expected experience	Effect of actual variances from expected experience	—			3			(9)			(23)			(29)		Effect of actual variances from expected experience	(9)			(5)			(25)			5			(34)
Adjusted beginning of year balance	Adjusted beginning of year balance	$	1,155		$	1,317		$	660		$	6,544		$	9,676	Adjusted beginning of year balance	$	1,146		$	1,290		$	619		$	6,583		$	9,638
Issuances	Issuances	31			13			3			—			47		Issuances	120			42			9			—			171
Interest accrual	Interest accrual	12			18			9			83			122		Interest accrual	37			54			28			247			366
Benefit payments	Benefit payments	(40)			(37)			(10)			(97)			(184)		Benefit payments	(112)			(96)			(32)			(300)			(540)
Derecognition (lapses)	Derecognition (lapses)	—			—			—			—			—		Derecognition (lapses)	—			—			—			—			—
Ending balance at original discount rate	Ending balance at original discount rate	$	1,158		$	1,311		$	662		$	6,530		$	9,661	Ending balance at original discount rate	$	1,191		$	1,290		$	624		$	6,530		$	9,635
Effect of changes in discount rate assumptions	Effect of changes in discount rate assumptions	(68)			36			43			33			44		Effect of changes in discount rate assumptions	(127)			(58)			(8)			(449)			(642)
Balance at March 31, 2023		$	1,090		$	1,347		$	705		$	6,563		$	9,705
Balance at September 30, 2023																Balance at September 30, 2023	$	1,064		$	1,232		$	616		$	6,081		$	8,993

Adjustment due to reserve flooring	Adjustment due to reserve flooring	$	—		$	5		$	—		$	—		$	5	Adjustment due to reserve flooring	$	—		$	5		$	—		$	—		$	5

Net liability for future policy benefits	Net liability for future policy benefits	$	1,090		$	641		$	573		$	5,383		$	7,687	Net liability for future policy benefits	$	1,064		$	589		$	519		$	4,970		$	7,142
Less: reinsurance recoverable	Less: reinsurance recoverable	943			447			21			2,724			4,135		Less: reinsurance recoverable	847			415			19			2,514			3,795
Net liability for future policy benefits, after reinsurance recoverable	Net liability for future policy benefits, after reinsurance recoverable	$	147		$	194		$	552		$	2,659		$	3,552	Net liability for future policy benefits, after reinsurance recoverable	$	217		$	174		$	500		$	2,456		$	3,347

Discounted expected future gross premiums	Discounted expected future gross premiums	$	—		$	1,887		$	932		$	1,370		$	4,189	Discounted expected future gross premiums	$	—		$	1,654		$	865		$	1,287		$	3,806
Expected future gross premiums	Expected future gross premiums	$	—		$	3,165		$	1,314		$	1,857		$	6,336	Expected future gross premiums	$	—		$	2,966		$	1,284		$	1,833		$	6,083
Expected future benefit payments	Expected future benefit payments	$	1,603		$	2,231		$	1,153		$	11,100		$	16,087	Expected future benefit payments	$	1,670		$	2,166		$	1,077		$	10,961		$	15,874

Weighted average interest accretion rate	Weighted average interest accretion rate	4.2		%	6.4		%	6.2		%	5.2		%			Weighted average interest accretion rate	4.2		%	6.2		%	6.1		%	5.1		%
Weighted average discount rate	Weighted average discount rate	5.0		%	5.1		%	5.1		%	5.1		%			Weighted average discount rate	5.9		%	6.1		%	6.1		%	6.1		%

Weighted average duration of liability (in years)	Weighted average duration of liability (in years)	6			7			8			9					Weighted average duration of liability (in years)	6			7			8			8

The annual review of LTC future policy benefit reserves in the third quarter of 2023 resulted in assumption updates that decreased the net liability for future policy benefits by $9 million, partially offset by a $4 million decrease to reinsurance recoverable, primarily reflecting updates to premium rate increase assumptions. The annual review of LTC future policy benefit reserves in the third quarter

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

of 2022 resulted in assumption updates that decreased the net liability for future policy benefits by $10 million, partially offset by a $4 million decrease to reinsurance recoverable, primarily reflecting updates to morbidity, premium rate increase and benefit reduction assumptions.

The annual review of disability insurance future policy benefit reserves in the third quarter of 2023 resulted in assumption updates that decreased the net liability for future policy benefits by $6 million, offset by a $1 million decrease to reinsurance recoverable, primarily reflecting updates to claim termination assumptions.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

The annual review of term life insurance future policy benefit reserves in the third quarter of 2023 resulted in assumption updates that increased the net liability for future policy benefits by $2 million, offset by a $2 million increase to reinsurance recoverable, reflecting updates to lapse assumptions.The annual review of term life insurance future policy benefit reserves in the third quarter of 2022 resulted in assumption updates that decreased the net liability for future policy benefits $9 million, offset by a $16 million decrease to reinsurance recoverable, reflecting updates to lapse assumptions.

Reinsurance recoverables include approximately $2.5 billion and $2.7 billion related to LTC risk ceded to Genworth as of ~~both March 31,~~September 30, 2023 and December 31, ~~2022.~~2022, respectively.

The balances of and changes in additional liabilities related to insurance guarantees were as follows:


		Universal Life Insurance			Variable Universal Life Insurance			Other Life Insurance			Total, All Products			Universal Life Insurance			Variable Universal Life Insurance			Other Life Insurance			Total, All Products
		(in millions, except percentages)												(in millions, except percentages)
Balance at January 1, 2023	Balance at January 1, 2023	$	1,100		$	74		$	12		$	1,186	Balance at January 1, 2023	$	1,100		$	74		$	12		$	1,186
Interest accrual	Interest accrual	8			1			—			9		Interest accrual	26			4			—			30
Benefit accrual	Benefit accrual	33			2			1			36		Benefit accrual	95			6			1			102
Benefit payments	Benefit payments	(12)			(4)			(1)			(17)		Benefit payments	(38)			(12)			(2)			(52)
Effect of actual variances from expected experience	Effect of actual variances from expected experience	(5)			—			(1)			(6)		Effect of actual variances from expected experience	(11)			8			(2)			(5)
Impact of change in net unrealized (gains) losses on securities	Impact of change in net unrealized (gains) losses on securities	12			1			3			16		Impact of change in net unrealized (gains) losses on securities	(13)			(1)			(1)			(15)
Balance at March 31, 2023		$	1,136		$	74		$	14		$	1,224
Balance at September 30, 2023													Balance at September 30, 2023	$	1,159		$	79		$	8		$	1,246

Weighted average interest accretion rate	Weighted average interest accretion rate	2.9		%	7.1		%	3.9		%			Weighted average interest accretion rate	3.0		%	6.8		%	3.9		%
Weighted average discount rate	Weighted average discount rate	3.2		%	7.1		%	4.0		%			Weighted average discount rate	3.2		%	7.1		%	4.0		%

Weighted average duration of reserves (in years)	Weighted average duration of reserves (in years)	10			8			6					Weighted average duration of reserves (in years)	10			8			6


	Universal Life Insurance			Variable Universal Life Insurance			Other Life Insurance			Total, All Products
	(in millions, except percentages)
Balance at January 1, 2022	$	1,120		$	76		$	46		$	1,242
Interest accrual	32			5			1			38
Benefit accrual	108			8			—			116
Benefit payments	(43)			(14)			(4)			(61)
Effect of actual variances from expected experience	(19)			2			(2)			(19)
Impact of change in net unrealized (gains) losses on securities	(98)			(3)			(29)			(130)
Balance at December 31, 2022	$	1,100		$	74		$	12		$	1,186

Weighted average interest accretion rate	2.9		%	7.0		%	4.1		%
Weighted average discount rate	3.2		%	7.1		%	4.0		%

Weighted average duration of reserves (in years)	10			8			6

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The amount of revenue and interest recognized in the Statement of Income was as follows:

Three Months Ended March 31,
2023
Gross Premiums Interest Expense
(in millions)
Life contingent payout annuities $ 33 $ 12
Term and whole life insurance 42 10
Disability insurance 31 7
Long term care insurance 45 68
Total $ 151 $ 97

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~


	Nine Months Ended September 30,
	2023
	Gross Premiums		Interest Expense
	(in millions)
Life contingent payout annuities	$	134	$	36
Term and whole life insurance	126		27
Disability insurance	93		24
Long term care insurance	137		203
Total	$	490	$	290


	Years Ended December 31,
	2022				2021
	Gross Premiums		Interest Expense		Gross Premiums		Interest Expense
	(in millions)
Life contingent payout annuities	$	45	$	49	$	39	$	53
Term and whole life insurance	169		39		166		41
Disability insurance	127		31		131		30
Long term care insurance	189		271		192		274
Total	$	530	$	390	$	528	$	398

The following tables summarize the balances of and changes in unearned revenue, including the January 1, 2021 adoption of ASU 2018-12:


		Universal Life Insurance		Variable Universal Life Insurance		Indexed Universal Life Insurance			Total, All Products			Universal Life Insurance		Variable Universal Life Insurance		Indexed Universal Life Insurance		Total, All Products
		(in millions)						(in millions)
Pre-adoption balance at December 31, 2020	Pre-adoption balance at December 31, 2020	$	19	$	76	$	—		$	95	Pre-adoption balance at December 31, 2020	$	19	$	76	$	—	$	95
Effect of shadow reserve adjustments	Effect of shadow reserve adjustments	5		10		153			168		Effect of shadow reserve adjustments	5		10		153		168
Post-adoption balance at January 1, 2021	Post-adoption balance at January 1, 2021	24		86		153			263		Post-adoption balance at January 1, 2021	24		86		153		263
Deferral of revenue	Deferral of revenue	3		34		55			92		Deferral of revenue	3		34		55		92
Amortization	Amortization	(1)		(8)		(13)			(22)		Amortization	(1)		(8)		(13)		(22)
Balance at December 31, 2021	Balance at December 31, 2021	$	26	$	112	$	195		$	333	Balance at December 31, 2021	$	26	$	112	$	195	$	333

Balance at January 1, 2022	Balance at January 1, 2022	$	26	$	112	$	195		$	333	Balance at January 1, 2022	$	26	$	112	$	195	$	333
Deferral of revenue	Deferral of revenue	2		48		54			104		Deferral of revenue	2		48		54		104
Amortization	Amortization	(1)		(10)		(16)			(27)		Amortization	(1)		(10)		(16)		(27)
Balance at December 31, 2022	Balance at December 31, 2022	$	27	$	150	$	233		$	410	Balance at December 31, 2022	$	27	$	150	$	233	$	410

Balance at January 1, 2023	Balance at January 1, 2023	$	27	$	150	$	233		$	410	Balance at January 1, 2023	$	27	$	150	$	233	$	410
Deferral of revenue	Deferral of revenue	—		14		13			27		Deferral of revenue	1		44		39		84
Amortization	Amortization	—		(3)		(5)			(8)		Amortization	(1)		(10)		(14)		(25)
Balance at March 31, 2023		$	27	$	161	$	241		$	429
Balance at September 30, 2023											Balance at September 30, 2023	$	27	$	184	$	258	$	469

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

10. Separate Account Assets and Liabilities

The fair value of separate account assets is invested exclusively in mutual funds.

The balances of and changes in separate account liabilities were as follows:

Variable Annuities Variable Universal Life Total
(in millions)
Balance at January 1, 2023 $ 63,223 $ 7,653 $ 70,876
Premiums and deposits 204 111 315
Policy charges (331) (71) (402)
Surrenders and other benefits (1,250) (71) (1,321)
Investment return 2,963 407 3,370
Net transfer from (to) general account 5 1 6
Other charges — — —
Balance at March 31, 2023 $ 64,814 $ 8,030 $ 72,844
Cash surrender value $ 63,086 $ 7,560 $ 70,646

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~


	Variable Annuities		Variable Universal Life		Total
	(in millions)
Balance at January 1, 2023	$	63,223	$	7,653	$	70,876
Premiums and deposits	645		337		982
Policy charges	(1,002)		(218)		(1,220)
Surrenders and other benefits	(3,925)		(238)		(4,163)

Investment return	2,636		440		3,076
Net transfer from (to) general account	18		23		41

Balance at September 30, 2023	$	61,595	$	7,997	$	69,592

Cash surrender value	$	60,001	$	7,497	$	67,498


	Variable Annuities		Variable Universal Life		Total
	(in millions)
Balance at January 1, 2022	$	82,862	$	9,376	$	92,238
Premiums and deposits	1,067		425		1,492
Policy charges	(1,396)		(278)		(1,674)
Surrenders and other benefits	(4,923)		(286)		(5,209)

Investment return	(14,450)		(1,654)		(16,104)
Net transfer from (to) general account	63		70		133

Balance at December 31, 2022	$	63,223	$	7,653	$	70,876

Cash surrender value	$	61,461	$	7,200	$	68,661

11. Market Risk Benefits

Market risk benefits are contracts or contract features that both provide protection to the contractholder from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. Most of the variable annuity contracts issued by the Company contain a GMDB provision. The Company previously offered contracts containing GMWB, GMAB, or GMIB provisions.

The GMDB provisions provide a specified minimum return upon death of the contractholder. The death benefit payable is the greater of (i) the contract value less any purchase payment credits subject to recapture less a pro-rata portion of any rider fees, or (ii) the GMDB provisions specified in the contract. The Company has the following primary GMDB provisions:

•Return of premium — provides purchase payments minus adjusted partial surrenders.

•Reset — provides that the value resets to the account value ~~every sixth~~at specified contract anniversary intervals minus adjusted partial surrenders. This provision was often provided in combination with the return of premium provision and is no longer offered.

•Ratchet — provides that the value ratchets up to the maximum account value at specified anniversary intervals, plus subsequent purchase payments less adjusted partial surrenders.

The variable annuity contracts with GMWB riders typically have account values that are based on an underlying portfolio of mutual funds, the values of which fluctuate based on fund performance. At contract issue, the guaranteed amount is equal to the amount deposited but the guarantee may be increased annually to the account value (a “step-up”) in the case of favorable market performance or by a benefit credit if the contract includes this provision.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The Company has GMWB riders in force, which contain one or more of the following provisions:

•Withdrawals at a specified rate per year until the amount withdrawn is equal to the guaranteed amount.

•Withdrawals at a specified rate per year for the life of the contractholder (“GMWB for life”).

•Withdrawals at a specified rate per year for joint contractholders while either is alive.

•Withdrawals based on performance of the contract.

•Withdrawals based on the age withdrawals begin.

•Credits are applied annually for a specified number of years to increase the guaranteed amount as long as withdrawals have not been taken.

Variable annuity contractholders age 79 or younger at contract issue could obtain a principal-back guarantee by purchasing the optional GMAB rider for an additional charge. The GMAB rider guarantees that, regardless of market performance at the end of the 10-year waiting period, the contract value will be no less than the original investment or a specified percentage of the highest anniversary value, adjusted for withdrawals. If the contract value is less than the guarantee at the end of the 10-year period, a lump sum will be added to the contract value to make the contract value equal to the guarantee value.

Individual variable annuity contracts may have both a death benefit and a living benefit. Net amount at risk is quantified for each benefit and a composite net amount at risk is calculated using the greater of the death benefit or living benefit for each individual contract. The net amount at risk for GMDB and GMAB is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB is defined as the greater of the present value of the minimum guaranteed annuity payments less the current contract value or zero. The net amount at risk for GMWB is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

The following tables summarize the balances of and changes in market risk benefits, including the January 1, 2021 adoption of ASU 2018-12:


	(in millions)
Pre-adoption balance at December 31, 2020	$	3,084
Effect of shadow reserve adjustments	(3)
Adjustments for the cumulative effect of the changes in instrument-specific credit risk on market risk benefits between the original contract issuance date and the transition date	670
Adjustments to the host contract for differences between previous carrying amount and fair value measurement for the market risk benefits under the option-based method of valuation	20
Adjustments for the remaining difference (exclusive of the instrument-specific credit risk change and host contract adjustments) between previous carrying amount and fair value measurements for the market risk benefits	1,058
Post-adoption balance at January 1, 2021	$	4,829

Years Ended December 31,
2022 2021
(in millions, except age)
Balance at beginning of period $ 2,901 $ 4,829
Issuances 27 45
Interest accrual and time decay (237) (294)
Reserve increase from attributed fees collected 810 819
Reserve release for benefit payments and derecognition (29) (8)
Effect of changes in interest rates and bond markets (4,193) (1,053)
Effect of changes in equity markets and subaccount performance 2,258 (1,558)
Effect of changes in equity index volatility 205 73
Actual policyholder behavior different from expected behavior 17 52
Effect of changes in other future expected assumptions (139) 123
Effect of changes in the instrument-specific credit risk on market risk benefits (517) (127)
Balance at end of period $ 1,103 $ 2,901
Reconciliation of the gross balances in an asset or liability position:
Asset position $ 1,015 $ 539
Liability position (2,118) (3,440)
Net asset (liability) position $ (1,103) $ (2,901)
Guaranteed benefit amount in excess of current account balances (net amount at risk):
Death benefits $ 2,781 $ 251
Living benefits $ 3,364 $ 195
Composite (greater of) $ 5,830 $ 441
Weighted average attained age of contractholders 68 68
Changes in unrealized (gains) losses in net income relating to liabilities held at end of period $ (2,044) $ (2,502)
Changes in unrealized (gains) losses in other comprehensive income relating to liabilities held at end of period $ (505) $ (102)

4042

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


								Years Ended December 31,
								2022		2021
								(in millions, except age)

		Three Months Ended March 31,
			2023		2022
		(in millions, except age)
Balance at beginning of period	Balance at beginning of period		$	1,103	$	2,901	Balance at beginning of period	$	2,901	$	4,829
Issuances	Issuances		4		8		Issuances	27		45
Interest accrual and time decay	Interest accrual and time decay		(26)		(86)		Interest accrual and time decay	(237)		(294)
Reserve increase from attributed fees collected	Reserve increase from attributed fees collected		189		199		Reserve increase from attributed fees collected	810		819
Reserve release for benefit payments and derecognition	Reserve release for benefit payments and derecognition		(9)		(3)		Reserve release for benefit payments and derecognition	(29)		(8)
Effect of changes in interest rates and bond markets	Effect of changes in interest rates and bond markets		504		(1,454)		Effect of changes in interest rates and bond markets	(4,193)		(1,053)
Effect of changes in equity markets and subaccount performance	Effect of changes in equity markets and subaccount performance		(392)		586		Effect of changes in equity markets and subaccount performance	2,258		(1,558)
Effect of changes in equity index volatility	Effect of changes in equity index volatility		(43)		55		Effect of changes in equity index volatility	205		73
Actual policyholder behavior different from expected behavior	Actual policyholder behavior different from expected behavior		7		20		Actual policyholder behavior different from expected behavior	17		52
Effect of changes in other future expected assumptions	Effect of changes in other future expected assumptions		—		—		Effect of changes in other future expected assumptions	(139)		123

Effect of changes in the instrument-specific credit risk on market risk benefits	Effect of changes in the instrument-specific credit risk on market risk benefits		(204)		(385)		Effect of changes in the instrument-specific credit risk on market risk benefits	(517)		(127)
Balance at end of period	Balance at end of period		$	1,133	$	1,841	Balance at end of period	$	1,103	$	2,901

Reconciliation of the gross balances in an asset or liability position:	Reconciliation of the gross balances in an asset or liability position:						Reconciliation of the gross balances in an asset or liability position:
Asset position	Asset position		$	990	$	742	Asset position	$	1,015	$	539
Liability position	Liability position		(2,123)		(2,583)		Liability position	(2,118)		(3,440)
Net asset (liability) position	Net asset (liability) position		$	(1,133)	$	(1,841)	Net asset (liability) position	$	(1,103)	$	(2,901)

Guaranteed benefit amount in excess of current account balances (net amount at risk):	Guaranteed benefit amount in excess of current account balances (net amount at risk):						Guaranteed benefit amount in excess of current account balances (net amount at risk):
Death benefits	Death benefits		$	1,956	$	714	Death benefits	$	2,781	$	251
Living benefits	Living benefits		$	2,836	$	586	Living benefits	$	3,364	$	195
Composite (greater of)	Composite (greater of)		$	4,596	$	1,274	Composite (greater of)	$	5,830	$	441

Weighted average attained age of contractholders	Weighted average attained age of contractholders		68		68		Weighted average attained age of contractholders	68		68

Changes in unrealized (gains) losses in net income relating to liabilities held at end of period	Changes in unrealized (gains) losses in net income relating to liabilities held at end of period		$	59	$	(868)	Changes in unrealized (gains) losses in net income relating to liabilities held at end of period	$	(2,044)	$	(2,502)
Changes in unrealized (gains) losses in other comprehensive income relating to liabilities held at end of period	Changes in unrealized (gains) losses in other comprehensive income relating to liabilities held at end of period		$	(204)	$	(382)	Changes in unrealized (gains) losses in other comprehensive income relating to liabilities held at end of period	$	(505)	$	(102)

4143

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in millions, except age)
Balance at beginning of period	$	360	$	1,937	$	1,103	$	2,901
Issuances	5		6		13		22
Interest accrual and time decay	(15)		(38)		(36)		(175)
Reserve increase from attributed fees collected	202		206		585		605
Reserve release for benefit payments and derecognition	(6)		(6)		(24)		(15)
Effect of changes in interest rates and bond markets	(1,241)		(1,147)		(1,325)		(3,949)
Effect of changes in equity markets and subaccount performance	500		643		(402)		2,943
Effect of changes in equity index volatility	(13)		47		(83)		123
Actual policyholder behavior different from expected behavior	(16)		(21)		(10)		11
Effect of changes in other future expected assumptions	128		(139)		128		(139)

Effect of changes in the instrument-specific credit risk on market risk benefits	(23)		4		(68)		(835)
Balance at end of period	$	(119)	$	1,492	$	(119)	$	1,492

Reconciliation of the gross balances in an asset or liability position:
Asset position	$	1,644	$	845	$	1,644	$	845
Liability position	(1,525)		(2,337)		(1,525)		(2,337)
Net asset (liability) position	$	119	$	(1,492)	$	119	$	(1,492)

Guaranteed benefit amount in excess of current account balances (net amount at risk):
Death benefits	$	2,091	$	3,987	$	2,091	$	3,987
Living benefits	$	3,693	$	3,354	$	3,693	$	3,354
Composite (greater of)	$	5,470	$	6,905	$	5,470	$	6,905

Weighted average attained age of contractholders	69		68		69		68

Changes in unrealized (gains) losses in net income relating to liabilities held at end of period	$	(650)	$	(649)	$	(1,681)	$	(1,151)
Changes in unrealized (gains) losses in other comprehensive income relating to liabilities held at end of period	$	(23)	$	2	$	(67)	$	(826)

The following tables provide a summary of the significant inputs and assumptions used in the fair value measurements developed by the Company or reasonably available to the Company of market risk benefits:

March 31, 2023
Fair Value Valuation Technique Significant Inputs and Assumptions Range Weighted
Average
(in millions)
Market risk benefits $ 1,133 Discounted cash flow
Utilization of guaranteed withdrawals (1)
0.0% – 48.0% 11.1%
Surrender rate (2)
0.2% – 45.6% 3.6%
Market volatility (3)
0.0% – 25.1% 11.1%
Nonperformance risk (4)
115 bps 115 bps
Mortality rate (5)
0.0% – 41.6% 1.5%


	September 30, 2023
	Fair Value		Valuation Technique	Significant Inputs and Assumptions	Range			Weighted Average
	(in millions)










Market risk benefits	$	(119)	Discounted cash flow	Utilization of guaranteed withdrawals (1)	0.0%	–	48.0%	11.5%
				Surrender rate (2)	0.3%	–	75.0%	3.6%
				Market volatility (3)	0.0%	–	25.2%	10.8%
				Nonperformance risk (4)	105 bps			105 bps
				Mortality rate (5)	0.0%	–	41.6%	1.6%

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


	December 31, 2022
	Fair Value		Valuation Technique	Significant Inputs and Assumptions	Range			Weighted Average
	(in millions)










Market risk benefits	$	1,103	Discounted cash flow	Utilization of guaranteed withdrawals (1)	0.0%	–	48.0%	11.0%
				Surrender rate (2)	0.2%	–	45.6%	3.6%
				Market volatility (3)	0.0%	–	26.6%	12.1%
				Nonperformance risk (4)	95 bps			95 bps
				Mortality rate (5)	0.0%	–	41.6%	1.5%

(1) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. The weighted average utilization rate represents the average assumption, weighted based on the benefit base. The calculation excludes policies that have already started taking withdrawals.

(2) The weighted average surrender rate represents the average assumption weighted based on the account value of each contract.

(3) Market volatility represents the implied volatility of each contractholder’s mix of funds. The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit.

(4) The nonperformance risk is the spread added to the U.S. Treasury curve.

(5)(5) The weighted average mortality rate represents the average assumption weighted based on the account value of each contract.

Changes to Significant Inputs and Assumptions:

During the nine months ended September 30, 2023 and year ended December 31, 2022, the Company updated inputs and assumptions based on management’s review of experience studies. These updates resulted in the following notable changes in the fair value estimates of market risk benefits calculations:

Nine months ended September 30, 2023

•Updates to utilization of guaranteed withdrawals assumptions resulted in a decrease to pre-tax income of $18 million.

•Updates to surrender assumptions resulted in a decrease to pre-tax income of $110 million.

Year ended December 31, 2022

•Updates to utilization of guaranteed withdrawals assumptions resulted in a decrease to pre-tax income of $39 million.

•Updates to surrender ~~rates~~assumptions resulted in a decrease to pre-tax income of $200 million.

•Updates to mortality ~~rates~~assumptions resulted in a decrease to pre-tax income of $49 million.

Refer to the rollforward of market risk benefits for the impacts of changes to interest rate, equity market, volatility and nonperformance risk assumptions.

Uncertainty of Fair Value Measurements

Significant increases (decreases) in utilization and volatility used in the fair value measurement of market risk benefits in isolation would have resulted in a significantly higher (lower) liability value.

Significant increases (decreases) in nonperformance risk and surrender ~~rates~~assumptions used in the fair value measurement of market risk benefits in isolation would have resulted in a significantly lower (higher) liability value.

Significant increases (decreases) in mortality rates used in the fair value measurement of the death benefit portion of market risk benefits in isolation would have resulted in a significantly higher (lower) liability value whereas significant increases (decreases) in mortality rates used in the fair values measurement of the life contingent portion of market risk benefits in isolation would have resulted in a significantly lower (higher) liability value.

Surrender ~~rates,~~assumptions, utilization ~~rates~~assumptions and mortality ~~rates~~assumptions vary with the type of base product, type of rider, duration of the policy, age of the contractholder, calendar year of the projection, previous withdrawal history, and the relationship between the value of the guaranteed benefit and the contract accumulation value.

Determination of Fair Value

The Company values market risk benefits using internal valuation models. These models include observable capital market assumptions and significant unobservable inputs related to implied volatility as well as contractholder behavior assumptions that include margins for risk, all of which the Company believes a market participant would expect. The fair value also reflects a current estimate of the Company’s nonperformance risk. Given the significant unobservable inputs to this valuation, these measurements are classified as Level 3.

4245

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

12. Debt

Short-Term Borrowings

RiverSource Life Insurance Company is a member of the Federal Home Loan Bank (“FHLB”) of Des Moines which provides access to collateralized borrowings. ~~The~~As of September 30, 2023 and December 31, 2022, the Company ~~has~~had accessed collateralized borrowings and pledged ~~Available-for-Sale securities consisting of~~(granted a lien on) certain investments, primarily commercial mortgage backed securities, ~~to collateralize its obligation under these borrowings. The~~with an aggregate fair value of ~~the securities pledged is recorded in Investments~~$994 million and ~~was~~ $962 million, ~~as of both March 31, 2023 and December 31, 2022.~~respectively. The amount of the Company’s liability including accrued interest was $201 million as of both ~~March 31,~~September 30, 2023 and December 31, 2022. The remaining maturity of outstanding FHLB advances was less than three months as of both ~~March 31,~~September 30, 2023 and December 31, 2022. The weighted average annualized interest rate on the FHLB advances held as of ~~March 31,~~September 30, 2023 and December 31, 2022 was ~~5.1%~~5.5% and 4.6%, respectively.

Lines of Credit

RiverSource Life Insurance Company, as the borrower, has amended its revolving credit agreement with Ameriprise Financial as the lender. The aggregate amount outstanding under this line of credit may not exceed 3% of RiverSource Life Insurance Company’s statutory admitted assets (excluding separate accounts) as of the prior year end. Prior to June 1, 2023, the interest rate for any borrowing under the agreement was established by reference to London Interbank Offered Rate (“LIBOR”) for U.S. dollar deposits with maturities comparable to the relevant interest period, plus an applicable margin subject to adjustment based on debt ratings of the senior unsecured debt of Ameriprise Financial. In June 2023, in anticipation of the end of the publication of U.S. dollar LIBOR, an amendment to the agreement changed the interest rate to Daily Simple Secured Overnight Financing Rate plus 0.1% (“Adjusted Daily Simple SOFR”) plus an applicable margin subject to adjustment based on debt ratings of the senior unsecured debt of Ameriprise Financial. Amounts borrowed may be repaid at any time with no prepayment penalty. There were no amounts outstanding on this line of credit as of both September 30, 2023 and December 31, 2022.

RiverSource Life of NY, as the borrower, has amended its revolving credit agreement with Ameriprise Financial as the lender. The aggregate amount outstanding under this line of credit may not exceed the lesser of $25 million or 3% of RiverSource Life of NY’s statutory admitted assets (excluding separate accounts) as of the prior year end. Prior to July 1, 2023, the interest rate for any borrowing under the agreement was established by reference to LIBOR for U.S. dollar deposits with maturities comparable to the relevant interest period. In July 2023, in anticipation of the end of the publication of U.S. dollar LIBOR, an amendment to the agreement changed the interest rate to Adjusted Daily Simple SOFR plus an applicable margin subject to adjustment based on debt ratings of the senior unsecured debt of Ameriprise Financial. Amounts borrowed may be repaid at any time with no prepayment penalty. The credit agreement is amended to extend the maturity on an annual basis with Ameriprise Financial, subject to the New York Department of Financial Services’ non-disapproval. There were no amounts outstanding on this line of credit as of both September 30, 2023 and December 31, 2022.

RTA, as the borrower, has amended its revolving credit agreement with Ameriprise Financial as the lender not to exceed $100 million. Prior to June 1, 2023, the interest rate for any borrowing under the agreement was established by reference to LIBOR for U.S. dollar deposits with maturities comparable to the relevant interest period, plus an applicable margin subject to adjustment based on debt ratings of the senior unsecured debt of Ameriprise Financial. In June 2023, in anticipation of the end of the publication of U.S. dollar LIBOR, an amendment to the agreement changed the interest rate to Adjusted Daily Simple SOFR plus an applicable margin subject to adjustment based on debt ratings of the senior unsecured debt of Ameriprise Financial. Amounts borrowed may be repaid at any time with no prepayment penalty. This line of credit is automatically renewed annually with Ameriprise Financial. There were no amounts outstanding on this line of credit as of both September 30, 2023 and December 31, 2022.

Long-Term Debt

The Company has a $500 million unsecured 3.5% surplus note due December 31, 2050 to Ameriprise Financial. The outstanding balance was $500 million as of both ~~March 31,~~September 30, 2023 and December 31, 2022 and is recorded in Long-term debt.

13. Related Party Transactions

Lines of Credit

RiverSource Life Insurance Company, as the lender, has amended its revolving credit agreement with Ameriprise Financial as the borrower. This line of credit is not to exceed 3% of RiverSource Life Insurance Company’s statutory admitted assets as of the prior year end. Prior to June 1, 2023, the interest rate for any borrowing under the agreement was established by reference to LIBOR for U.S. dollar deposits with maturities comparable to the relevant interest period, plus an applicable margin subject to adjustment based on debt ratings of the senior unsecured debt of Ameriprise Financial. In June 2023, in anticipation of the end of the publication of U.S. dollar LIBOR, an amendment to the agreement changed the interest rate to Adjusted Daily Simple SOFR plus an applicable margin subject to adjustment based on debt ratings of the senior unsecured debt of Ameriprise Financial. In the event of default, an additional 1% interest will accrue during such period of default. There were no amounts outstanding on this revolving credit agreement as of both September 30, 2023 and December 31, 2022. See Note 12 for information about additional lines of credit with an affiliate.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Subsequent Event

On October 24, 2023, RiverSource Life Insurance Company’s Board of Directors declared a cash dividend of up to $300 million to Ameriprise Financial, payable on or after November 24, 2023, pending approval by the Minnesota Department of Commerce.

14. Fair Values of Assets and Liabilities

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale.

Valuation Hierarchy

The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety.

The three levels of the fair value hierarchy are defined as follows:

Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.

Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.

Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

4347

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables present the balances of assets and liabilities measured at fair value on a recurring basis (See Note 5 for the balances of assets and liabilities for consolidated investment entities):


		March 31, 2023										September 30, 2023
		Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
		(in millions)										(in millions)
Assets	Assets										Assets
Available-for-Sale securities:	Available-for-Sale securities:										Available-for-Sale securities:
Corporate debt securities	Corporate debt securities	$	—	$	8,778	$	425	$	9,203		Corporate debt securities	$	—	$	9,069	$	443	$	9,512
Residential mortgage backed securities	Residential mortgage backed securities	—		3,272		—		3,272			Residential mortgage backed securities	—		3,431		—		3,431
Commercial mortgage backed securities	Commercial mortgage backed securities	—		2,689		—		2,689			Commercial mortgage backed securities	—		2,517		—		2,517
State and municipal obligations	State and municipal obligations	—		810		—		810			State and municipal obligations	—		726		—		726
Asset backed securities	Asset backed securities	—		612		551		1,163			Asset backed securities	—		936		540		1,476
Foreign government bonds and obligations	Foreign government bonds and obligations	—		22		—		22			Foreign government bonds and obligations	—		12		—		12
U.S. government and agency obligations	U.S. government and agency obligations	1		—		—		1			U.S. government and agency obligations	1		—		—		1
Total Available-for-Sale securities	Total Available-for-Sale securities	1		16,183		976		17,160			Total Available-for-Sale securities	1		16,691		983		17,675
Cash equivalents	Cash equivalents	890		1,580		—		2,470			Cash equivalents	528		1,330		—		1,858
Market risk benefits	Market risk benefits	—		—		990		990		(1)	Market risk benefits	—		—		1,644		1,644		(1)
Receivables:	Receivables:										Receivables:
Fixed deferred indexed annuity ceded embedded derivatives	Fixed deferred indexed annuity ceded embedded derivatives	—		—		48		48			Fixed deferred indexed annuity ceded embedded derivatives	—		—		48		48
Other assets:	Other assets:										Other assets:
Interest rate derivative contracts	Interest rate derivative contracts	6		330		—		336			Interest rate derivative contracts	2		255		—		257
Equity derivative contracts	Equity derivative contracts	137		3,082		—		3,219			Equity derivative contracts	107		3,790		—		3,897
Foreign exchange derivative contracts	Foreign exchange derivative contracts	5		28		—		33			Foreign exchange derivative contracts	—		30		—		30

Credit derivative contracts											Credit derivative contracts	—		95		—		95
Total other assets	Total other assets	148		3,440		—		3,588			Total other assets	109		4,170		—		4,279
Separate account assets at net asset value (“NAV”)	Separate account assets at net asset value (“NAV”)							72,844		(2)	Separate account assets at net asset value (“NAV”)							69,592		(2)
Total assets at fair value	Total assets at fair value	$	1,039	$	21,203	$	2,014	$	97,100		Total assets at fair value	$	638	$	22,191	$	2,675	$	95,096

Liabilities	Liabilities										Liabilities
Policyholder account balances, future policy benefits and claims:	Policyholder account balances, future policy benefits and claims:										Policyholder account balances, future policy benefits and claims:
Fixed deferred indexed annuity embedded derivatives	Fixed deferred indexed annuity embedded derivatives	$	—	$	3	$	44	$	47		Fixed deferred indexed annuity embedded derivatives	$	—	$	3	$	45	$	48
IUL embedded derivatives	IUL embedded derivatives	—		—		771		771			IUL embedded derivatives	—		—		787		787

Structured variable annuity embedded derivatives	Structured variable annuity embedded derivatives	—		—		142		142			Structured variable annuity embedded derivatives	—		—		300		300
Total policyholder account balances, future policy benefits and claims	Total policyholder account balances, future policy benefits and claims	—		3		957		960		(3)	Total policyholder account balances, future policy benefits and claims	—		3		1,132		1,135		(3)
Market risk benefits	Market risk benefits	—		—		2,123		2,123		(1)	Market risk benefits	—		—		1,525		1,525		(1)
Other liabilities:	Other liabilities:										Other liabilities:
Interest rate derivative contracts	Interest rate derivative contracts	9		318		—		327			Interest rate derivative contracts	3		493		—		496
Equity derivative contracts	Equity derivative contracts	181		2,515		—		2,696			Equity derivative contracts	74		2,612		—		2,686
Foreign exchange derivative contracts	Foreign exchange derivative contracts	—		4		—		4			Foreign exchange derivative contracts	1		4		—		5
Credit derivative contracts		—		52		—		52

Total other liabilities	Total other liabilities	190		2,889		—		3,079			Total other liabilities	78		3,109		—		3,187
Total liabilities at fair value	Total liabilities at fair value	$	190	$	2,892	$	3,080	$	6,162		Total liabilities at fair value	$	78	$	3,112	$	2,657	$	5,847

4448

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Available-for-Sale securities:
Corporate debt securities	$	—	$	8,311	$	395	$	8,706
Residential mortgage backed securities	—		2,959		—		2,959
Commercial mortgage backed securities	—		2,651		—		2,651
State and municipal obligations	—		786		—		786
Asset backed securities	—		452		545		997
Foreign government bonds and obligations	—		35		—		35
U.S. government and agency obligations	1		—		—		1
Total Available-for-Sale securities	1		15,194		940		16,135
Cash equivalents	1,063		1,529		—		2,592
Market risk benefits	—		—		1,015		1,015		(1)
Receivables:
Fixed deferred indexed annuity ceded embedded derivatives	—		—		48		48
Other assets:
Interest rate derivative contracts	7		260		—		267
Equity derivative contracts	129		2,564		—		2,693
Foreign exchange derivative contracts	—		34		—		34
Credit derivative contracts	—		13		—		13
Total other assets	136		2,871		—		3,007
Separate account assets at NAV							70,876		(2)
Total assets at fair value	$	1,200	$	19,594	$	2,003	$	93,673

Liabilities
Policyholder account balances, future policy benefits and claims:
Fixed deferred indexed annuity embedded derivatives	$	—	$	3	$	44	$	47
IUL embedded derivatives	—		—		739		739

Structured variable annuity embedded derivatives	—		—		(137)		(137)		(4)
Total policyholder account balances, future policy benefits and claims	—		3		646		649		(5)
Market risk benefits	—		—		2,118		2,118		(1)
Other liabilities:
Interest rate derivative contracts	4		351		—		355
Equity derivative contracts	138		2,228		—		2,366
Foreign exchange derivative contracts	6		4		—		10

Total other liabilities	148		2,583		—		2,731
Total liabilities at fair value	$	148	$	2,586	$	2,764	$	5,498

(1) See Note 11 for additional information related to market risk benefits, including the balances of and changes in market risk benefits as well as the significant inputs and assumptions used in the fair value measurements of market risk benefits.

(2) Amounts are comprised of ~~certain~~ financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy.

(3) The Company’s adjustment for nonperformance risk resulted in a ~~$200~~$184 million cumulative decrease to the embedded derivatives as of ~~March 31,~~September 30, 2023.

(4) The fair value of the structured variable annuity embedded derivatives was a net asset as of December 31, 2022 and the amount is presented as a contra liability.

(5) The Company’s adjustment for nonperformance risk resulted in a $139 million cumulative decrease to the embedded derivatives as of December 31, 2022.

4549

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables provide a summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis:



	Available-for-Sale Securities				Receivables
	Corporate Debt Securities		Asset Backed Securities			Total			Fixed Differed Indexed Annuity Ceded Embedded Derivatives
	(in millions)
Balance at July 1, 2023	$	433	$	545		$	978		$	49
Total gains (losses) included in:
Net income	(1)		—			(1)		(1)	—
Other comprehensive income (loss)	(3)		(5)			(8)			—
Purchases	30		—			30			—

Settlements	(16)		—			(16)			(1)


Balance at September 30, 2023	$	443	$	540		$	983		$	48

Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2023	$	(1)	$	—		$	(1)	(1)	$	—
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2023	$	(4)	$	(5)		$	(9)		$	—



	Policyholder Account Balances, Future Policy Benefits and Claims
	Fixed Deferred Indexed Annuity Embedded Derivatives			IUL Embedded Derivatives			Structured Variable Annuity Embedded Derivatives			Total
	(in millions)
Balance at July 1, 2023	$	46		$	809		$	557		$	1,412
Total (gains) losses included in:
Net income	—		(2)	2		(2)	(246)		(3)	(244)
Issues	—			6			35			41
Settlements	(1)			(30)			(46)			(77)
Balance at September 30, 2023	$	45		$	787		$	300		$	1,132

Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2023	$	—		$	2	(2)	$	(246)	(3)	$	(244)

Available-for-Sale Securities Receivables
Corporate Debt Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives
(in millions)
Balance at January 1, 2023 $ 395 $ 545 940 48
Total gains (losses) included in:
Other comprehensive income (loss) 8 6 14 —
Purchases 50 — 50 —
Settlements (28) — (28) —
Balance at March 31, 2023 $ 425 $ 551 $ 976 $ 48
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at March 31, 2023 $ 8 $ 6 $ 14 $ —

Policyholder Account Balances, Future Policy Benefits and Claims
Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total
(in millions)
Balance at January 1, 2023 $ 44 $ 739 $ (137) (3) $ 646
Total (gains) losses included in:
Net income 1 (1) 38 (1) 263 (2) 302
Issues — 24 12 36
Settlements (1) (30) 4 (27)
Balance at March 31, 2023 $ 44 $ 771 $ 142 $ 957
Changes in unrealized (gains) losses in net income relating to liabilities held at March 31, 2023 $ — $ 38 (1) $ 263 (2) $ 301


		Available-for-Sale Securities						Receivables
		Corporate Debt Securities		Commercial Mortgage Backed Securities		Asset Backed Securities		Total			Fixed Deferred Indexed Annuity Ceded Embedded Derivatives			Available-for-Sale Securities			Receivables
		(in millions)								Corporate Debt Securities						Asset Backed Securities	Total		Fixed Deferred Indexed Annuity Ceded Embedded Derivatives
Balance at January 1, 2022		$	496	$	—	$	291	$	787		$	59
														(in millions)
Balance at July 1, 2022													Balance at July 1, 2022	$	458		$	236	$	694		$	49
Total gains (losses) included in:	Total gains (losses) included in:												Total gains (losses) included in:
Net income	Net income	—		—		—		—			(3)		Net income	—			—		—		(1)	(2)
Other comprehensive income (loss)	Other comprehensive income (loss)	(22)		—		(7)		(29)			—		Other comprehensive income (loss)	(13)			(3)		(16)			—
Purchases	Purchases	23		30		—		53			—		Purchases	6			564		570			—

Settlements	Settlements	—		—		(21)		(21)			(1)		Settlements	(57)			(241)		(298)			—

Balance at March 31, 2022		$	497	$	30	$	263	$	790		$	55
Balance at September 30, 2022													Balance at September 30, 2022	$	394		$	556	$	950		$	47

Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at March 31, 2022		$	(22)	$	—	$	(7)	$	(29)		$	—
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2022													Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2022	$	(13)		$	(10)	$	(23)		$	—

4650

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


		Policyholder Account Balances, Future Policy Benefits and Claims
		Fixed Deferred Indexed Annuity Embedded Derivatives			IUL Embedded Derivatives			Structured Variable Annuity Embedded Derivatives			Total				Policyholder Account Balances, Future Policy Benefits and Claims
		(in millions)											Fixed Deferred Indexed Annuity Embedded Derivatives		IUL Embedded Derivatives						Structured Variable Annuity Embedded Derivatives	Total
Balance at January 1, 2022		$	56		905			$	406		$	1,367
															(in millions)
Balance at July 1, 2022														Balance at July 1, 2022	$	45		$	719			$	(362)		$	402
Total (gains) losses included in:	Total (gains) losses included in:													Total (gains) losses included in:
Net income	Net income	(3)		(1)	(32)		(1)	(124)		(2)	(159)			Net income	(1)		(2)	(22)		(2)		(173)		(3)	(196)
Issues	Issues	—			—			4			4			Issues	—			18				19			37
Settlements	Settlements	(1)			(25)			(6)			(32)			Settlements	(1)			(26)				3			(24)
Balance at March 31, 2022		$	52		$	848		$	280		$	1,180
Balance at September 30, 2022														Balance at September 30, 2022	$	43		$	689			$	(513)	(4)	$	219

Changes in unrealized (gains) losses in net income relating to liabilities held at March 31, 2022		$	—		$	(32)	(1)	$	—		$	(32)
Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2022														Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2022	$	—		$	(22)	(2)		$	(173)	(3)	$	(195)


	Available-for-Sale Securities		Receivables
	Corporate Debt Securities		Asset Backed Securities		Total			Fixed Deferred Indexed Annuity Ceded Embedded Derivatives
	(in millions)
Balance at January 1, 2023	$	395	$	545	$	940		$	48
Total gains (losses) included in:
Net income	(1)		—		(1)		(1)	2
Other comprehensive income (loss)	(2)		(5)		(7)			—
Purchases	105		—		105			—

Settlements	(54)		—		(54)			(2)


Balance at September 30, 2023	$	443	$	540	$	983		$	48

Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2023	$	(1)	$	—	$	(1)	(1)	$	—
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2023	$	(2)	$	(5)	$	(7)		$	—


	Policyholder Account Balances, Future Policy Benefits and Claims
	Fixed Deferred Indexed Annuity Embedded Derivatives			IUL Embedded Derivatives			Structured Variable Annuity Embedded Derivatives			Total
	(in millions)
Balance at January 1, 2023	$	44		$	739		$	(137)	(4)	$	646
Total (gains) losses included in:
Net income	3		(2)	94		(2)	443		(3)	540
Issues	—			46			66			112
Settlements	(2)			(92)			(72)			(166)
Balance at September 30, 2023	$	45		$	787		$	300		$	1,132

Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2023	$	—		$	94	(2)	$	443	(3)	$	537

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


	Available-for-Sale Securities						Receivables
	Corporate Debt Securities		Commercial Mortgage Backed Securities		Asset Backed Securities		Total			Fixed Deferred Indexed Annuity Ceded Embedded Derivatives
	(in millions)
Balance at January 1, 2022	$	496	$	—	$	291	$	787		$	59
Total gains (losses) included in:
Net income	(1)		—		—		(1)		(1)	(10)
Other comprehensive income (loss)	(46)		—		(14)		(60)			—
Purchases	29		30		564		623			—

Settlements	(84)		—		(285)		(369)			(2)

Transfers out of Level 3	—		(30)		—		(30)			—
Balance at September 30, 2022	$	394	$	—	$	556	$	950		$	47

Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2022	$	(1)	$	—	$	—	$	(1)	(1)	$	—
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2022	$	(45)	$	—	$	(10)	$	(55)		$	—


	Policyholder Account Balances, Future Policy Benefits and Claims
	Fixed Deferred Indexed Annuity Embedded Derivatives			IUL Embedded Derivatives			Structured Variable Annuity Embedded Derivatives			Total
	(in millions)
Balance at January 1, 2022	$	56		$	905		$	406		$	1,367
Total (gains) losses included in:
Net income	(10)		(2)	(162)		(2)	(939)		(3)	(1,111)
Issues	—			26			37			63
Settlements	(3)			(80)			(17)			(100)
Balance at September 30, 2022	$	43		$	689		$	(513)	(4)	$	219

Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2022	$	—		$	(162)	(2)	$	(939)	(3)	$	(1,101)

(1) Included in Net investment income.

(2) Included in Interest credited to fixed accounts.

~~(2)~~(3) Included in Benefits, claims, losses and settlement expenses.

~~(3)~~(4) The fair value of the structured variable annuity embedded derivatives was a net asset as of January 1, 2023 and September 30, 2022 and the ~~amount is~~amounts are presented as a contra ~~liability.~~liabilities.

The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was ~~$57~~$(17) million and ~~$33~~$6 million, net of the reinsurance accrual, for the three months ended ~~March 31,~~September 30, 2023 and 2022, respectively.

The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $44 million and $126 million, net of the reinsurance accrual, for the nine months ended September 30, 2023 and 2022, respectively.

Securities transferred from Level 3 primarily represent securities with fair values that are now obtained from a third-party pricing service with observable inputs or fair values that were included in an observable transaction with a market participant. Securities transferred to Level 3 represent securities with fair values that are now based on a single non-binding broker quote.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities:

March 31, 2023
Fair Value Valuation Technique Unobservable Input Range Weighted Average
(in millions)
Corporate debt securities (private placements) $ 425 Discounted cash flow
Yield/spread to U.S. Treasuries (1)
1.0% – 2.8% 1.4%
Asset backed securities $ 551 Discounted cash flow Annual default rate 2.6% 2.6%
Loss severity 25.0% 25.0%
Yield/spread to U.S. Treasuries (2)
325 bps – 600 bps 335 bps
Fixed deferred indexed annuity ceded embedded derivatives $ 48 Discounted cash flow
Surrender rate (3)
0.0% – 66.8% 1.4%
Fixed deferred indexed annuity embedded derivatives $ 44 Discounted cash flow
Surrender rate (3)
0.0% – 66.8% 1.4%
Nonperformance risk (4)
115 bps 115 bps
IUL embedded derivatives $ 771 Discounted cash flow
Nonperformance risk (4)
115 bps 115 bps
Structured variable annuity embedded derivatives $ 142 Discounted cash flow
Surrender rate (3)
2.4% – 49.5% 2.8%
Nonperformance risk (4)
115 bps 115 bps

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

September 30, 2023

Fair Value

Valuation Technique

Unobservable Input

Range

Weighted Average

(in millions)

Corporate debt securities (private placements)

442

Discounted cash flow

Yield/spread to U.S. Treasuries (1)

1.0%

–

2.5%

1.3%

Asset backed securities

540

Discounted cash flow

Annual default rate

3.0%

Loss severity

25.0%

Yield/spread to U.S. Treasuries (2)

295 bps

–

525 bps

304 bps

Fixed deferred indexed annuity ceded embedded derivatives

Discounted cash flow

Surrender rate (3)

0.0%

–

66.8%

1.4%

Fixed deferred indexed annuity embedded derivatives

Discounted cash flow

Surrender rate (3)

0.0%

–

66.8%

1.4%

Nonperformance risk (4)

105 bps

IUL embedded derivatives

787

Discounted cash flow

Nonperformance risk (4)

105 bps

Structured variable annuity embedded derivatives

300

Discounted cash flow

Surrender rate (3)

0.5%

–

75.0%

2.8%

Nonperformance risk (4)

105 bps


	December 31, 2022
	Fair Value			Valuation Technique	Unobservable Input	Range			Weighted Average
	(in millions)
Corporate debt securities (private placements)	$	395		Discounted cash flow	Yield/spread to U.S. Treasuries (1)	1.1%	–	2.3%	1.4%
Asset backed securities	$	545		Discounted cash flow	Annual default rate	2.4%			2.4%
					Loss severity	25.0%			25.0%
					Yield/spread to U.S. Treasuries (2)	320 bps	–	550 bps	329 bps
Fixed deferred indexed annuity ceded embedded derivatives	$	48		Discounted cash flow	Surrender rate (3)	0.0%	–	66.8%	1.4%
Fixed deferred indexed annuity embedded derivatives	$	44		Discounted cash flow	Surrender rate (3)	0.0%	–	66.8%	1.4%
					Nonperformance risk (4)	95 bps			95 bps
IUL embedded derivatives	$	739		Discounted cash flow	Nonperformance risk (4)	95 bps			95 bps




Structured variable annuity embedded derivatives	$	(137)	(5)	Discounted cash flow	Surrender rate (3)	0.8%	–	40.0%	0.9%
					Nonperformance risk (4)	95 bps			95 bps

(1) The weighted average for the yield/spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities.

(2) The weighted average for the yield/spread to U.S. Treasuries for asset backed securities is calculated as the sum of each tranche’s balance multiplied by its spread to U.S. Treasuries divided by the aggregate balances of the tranches.

(3) The weighted average surrender rate represents the average assumption weighted based on the account value of each contract.

(4) The nonperformance risk is the spread added to the U.S. Treasury curve.

(5) The fair value of the structured variable annuity embedded derivatives was a net asset as of December 31, 2022 and the amount is presented as a contra liability.

Level 3 measurements not included in the tables above are obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Uncertainty of Fair Value Measurements

Significant increases (decreases) in the yield/spread to U.S. Treasuries used in the fair value measurement of Level 3 corporate debt securities and asset backed securities in isolation would have resulted in a significantly lower (higher) fair value measurement.

Significant increases (decreases) in the annual default rate used in the fair value measurement of Level 3 asset backed securities in isolation, generally, would have resulted in a significantly lower (higher) fair value measurement and significant increases (decreases) in loss severity in isolation would have resulted in a significantly lower (higher) fair value measurement.

Significant increases (decreases) in the surrender ~~rate~~assumption used in the fair value measurement of the fixed deferred indexed annuity ceded embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement.

Significant increases (decreases) in nonperformance risk used in the fair value measurement of the IUL embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement.

Significant increases (decreases) in nonperformance risk and surrender ~~rate~~assumption used in the fair value measurements of the fixed deferred indexed annuity embedded derivatives and structured variable annuity embedded derivatives in isolation would have resulted in a significantly lower (higher) liability value.

Determination of Fair Value

The Company uses valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The Company’s market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company’s income approach uses valuation techniques to convert future projected cash flows to a single discounted present value amount. When applying either approach, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

Assets

Available-for-Sale Securities

When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from third-party pricing services, non-binding broker quotes, or other model-based valuation techniques.

Level 1 securities primarily include U.S. Treasuries.

Level 2 securities primarily include corporate bonds, residential mortgage backed securities, commercial mortgage backed securities, state and municipal obligations, asset backed securities and foreign government securities. The fair value of these Level 2 securities is based on a market approach with prices obtained from third-party pricing services. Observable inputs used to value these securities can include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes. The fair value of securities included in an observable transaction with a market participant are also considered Level 2 when the market is not active.

Level 3 securities primarily include certain corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and asset backed securities with fair value typically based on a single non-binding broker quote. The underlying inputs used for some of the non-binding broker quotes are not readily available to the Company. The Company’s privately placed corporate bonds are typically based on a single non-binding broker quote. The fair value of affiliated asset backed securities is determined using a discounted cash flow model. Inputs used to determine the expected cash flows include assumptions about discount rates and default, prepayment and recovery rates of the underlying assets. Given the significance of the unobservable inputs to this fair value measurement, the fair value of the investment in the affiliated asset backed securities is classified as Level 3.

~~In consideration of the above, management~~Management is responsible for the fair values recorded on the financial statements. Prices received from third-party pricing services are subjected to exception reporting that identifies investments with significant daily price movements as well as no movements. The Company reviews the exception reporting and resolves the exceptions through reaffirmation of the price or recording an appropriate fair value estimate. The Company also performs subsequent transaction testing. The Company performs annual due diligence of third-party pricing services. The Company’s due diligence procedures include assessing the vendor’s valuation qualifications, control environment, analysis of asset-class specific valuation methodologies, and understanding of sources of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. The Company also considers the results of its exception reporting controls and any resulting price challenges that arise.

Cash Equivalents

Cash equivalents include time deposits and other highly liquid investments with original or remaining maturities at the time of purchase of 90 days or less. Actively traded money market funds are measured at their NAV and classified as Level 1. U.S. Treasuries are also classified as Level 1. The Company’s remaining cash equivalents are classified as Level 2 and measured at amortized cost,

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization.

Receivables

The Company reinsured its fixed deferred indexed annuity products which have an indexed account that is accounted for as an embedded derivative. The Company uses discounted cash flow models to determine the fair value of these ceded embedded derivatives. The fair value of fixed deferred indexed annuity ceded embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates. Given the significance of the unobservable surrender rates, these embedded derivatives are classified as Level 3.

Other Assets

Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active over-the-counter (“OTC”) markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps and the majority of options. The counterparties’ nonperformance risk associated with uncollateralized derivative assets was immaterial as of both ~~March 31,~~September 30, 2023 and December 31, 2022. See Note 1415 and Note 1516 for further information on the credit risk of derivative instruments and related collateral.

Separate Account Assets

The fair value of assets held by separate accounts is determined by the NAV of the funds in which those separate accounts are invested. The NAV is used as a practical expedient for fair value and represents the exit price for the separate account. Separate account assets are excluded from classification in the fair value hierarchy.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

Liabilities

Policyholder Account Balances, Future Policy Benefits and Claims

There is no active market for the transfer of the Company’s embedded derivatives attributable to the provisions of fixed deferred indexed annuity, structured variable annuity and IUL products.

The Company uses a discounted cash flow model to determine the fair value of the embedded derivatives associated with the provisions of its equity index annuity product. The projected cash flows generated by this model are based on significant observable inputs related to interest rates, volatilities and equity index levels and, therefore, are classified as Level 2.

The Company uses discounted cash flow models to determine the fair value of the embedded derivatives associated with the provisions of its fixed deferred indexed annuity, structured variable annuity and IUL products. The structured variable annuity product is a limited flexible purchase payment annuity that offers 45 different indexed account options providing equity market exposure and a fixed account. Each indexed account includes a protection option (a buffer or a floor). If the index has a negative return, contractholder losses will be reduced by a buffer or limited to a floor. The portion allocated to an indexed account is accounted for as an embedded derivative. The fair value of fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates and the estimate of the Company’s nonperformance risk. Given the significance of the unobservable surrender rates and the nonperformance risk assumption, the fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives are classified as Level 3.

The embedded derivatives attributable to these provisions are recorded in Policyholder account balances, future policy benefits and claims.

Other Liabilities

Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active OTC markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps and the majority of options. The Company’s nonperformance risk associated with uncollateralized derivative liabilities was immaterial as of both ~~March 31,~~September 30, 2023 and December 31, 2022. See Note 1415 and Note 1516 for further information on the credit risk of derivative instruments and related collateral.

Fair Value on a Nonrecurring Basis

The Company assesses its investment in affordable housing partnerships for impairment. The investments that are determined to be impaired are written down to their fair value. The Company uses a discounted cash flow model to measure the fair value of these investments. Inputs to the discounted cash flow model are estimates of future net operating losses and tax credits available to the Company and discount rates based on market condition and the financial strength of the syndicator (general partner). The balance of

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

affordable housing partnerships measured at fair value on a nonrecurring basis was ~~$54~~$44 million and $58 million as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively, and is classified as Level 3 in the fair value hierarchy.

Assets and Liabilities Not Reported at Fair Value

The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair value:

March 31, 2023
Carrying Value Fair Value
Level 1 Level 2 Level 3 Total
(in millions)
Financial Assets
Mortgage loans, net $ 1,749 $ — $ — $ 1,606 $ 1,606
Policy loans 861 — 861 — 861
Other investments 87 — 69 18 87
Receivables 7,135 — — 6,124 6,124
Financial Liabilities
Policyholder account balances, future policy benefits and claims $ 14,828 $ — $ — $ 13,014 $ 13,014
Short-term borrowings 201 — 201 — 201
Long-term debt 500 — 328 — 328
Other liabilities 8 — — 7 7
Separate account liabilities — investment contracts 313 — 313 — 313

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~


	September 30, 2023
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3		Total
	(in millions)
Financial Assets
Mortgage loans, net	$	1,719	$	—	$	—	$	1,525	$	1,525
Policy loans	890		—		890		—		890
Other investments	81		—		61		20		81
Receivables	6,737		—		—		5,377		5,377

Financial Liabilities
Policyholder account balances, future policy benefits and claims	$	15,996	$	—	$	—	$	13,124	$	13,124
Short-term borrowings	201		—		201		—		201
Long-term debt	500		—		299		—		299
Other liabilities	6		—		—		6		6
Separate account liabilities — investment contracts	311		—		311		—		311


	December 31, 2022
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3		Total
	(in millions)
Financial Assets
Mortgage loans, net	$	1,768	$	—	$	—	$	1,600	$	1,600
Policy loans	847		—		847		—		847
Other investments	89		—		69		20		89
Receivables	7,372		—		—		6,174		6,174

Financial Liabilities
Policyholder account balances, future policy benefits and claims	$	14,450	$	—	$	—	$	12,470	$	12,470
Short-term borrowings	201		—		201		—		201
Long-term debt	500		—		315		—		315
Other liabilities	8		—		—		7		7
Separate account liabilities — investment contracts	298		—		298		—		298

Other investments include syndicated loans and the Company’s membership in the FHLB. Receivables include deposit receivables. See Note 7 for additional information on mortgage loans, policy loans, syndicated loans and deposit receivables.

Policyholder account balances, future policy benefits and claims include fixed annuities in deferral status, non-life contingent fixed annuities in payout status, indexed and structured variable annuity host contracts, and the fixed portion of a small number of variable annuity contracts classified as investment contracts. See Note 9 for additional information on these liabilities. Short-term borrowings include FHLB borrowings. Long-term debt includes the surplus note with Ameriprise Financial. See Note 12 for further information on short-term borrowings and long-term debt. Other liabilities include future funding commitments to affordable housing partnerships and other real estate partnerships. Separate account liabilities are related to certain annuity products that are classified as investment contracts.

~~14.~~15. Offsetting Assets and Liabilities

Certain financial instruments and derivative instruments are eligible for offset in the Consolidated Balance Sheets. The Company’s derivative instruments are subject to master netting and collateral arrangements and qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. The Company’s policy is to recognize amounts subject to master netting arrangements on a gross basis in the Consolidated Balance Sheets.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables present the gross and net information about the Company’s assets subject to master netting arrangements:

March 31, 2023
Gross Amounts of Recognized Assets Gross Amounts Offset in the
Consolidated Balance Sheets Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount
Financial Instruments (1)
Cash Collateral Securities Collateral
(in millions)
Derivatives:
OTC $ 3,393 $ — $ 3,393 $ (2,706) $ (589) $ (77) $ 21
OTC cleared 105 — 105 (47) — — 58
Exchange-traded 90 — 90 (90) — — —
Total $ 3,588 $ — $ 3,588 $ (2,843) $ (589) $ (77) $ 79

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~


	September 30, 2023
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
							Financial Instruments (1)		Cash Collateral		Securities Collateral
	(in millions)
Derivatives:
OTC	$	4,175	$	—	$	4,175	$	(2,870)	$	(1,078)	$	(199)	$	28
OTC cleared	37		—		37		(13)		—		—		24
Exchange-traded	67		—		67		(49)		—		—		18
Total	$	4,279	$	—	$	4,279	$	(2,932)	$	(1,078)	$	(199)	$	70


	December 31, 2022
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
							Financial Instruments (1)		Cash Collateral		Securities Collateral
	(in millions)
Derivatives:
OTC	$	2,887	$	—	$	2,887	$	(2,313)	$	(565)	$	(5)	$	4
OTC cleared	23		—		23		(9)		—		—		14
Exchange-traded	97		—		97		(75)		—		—		22
Total	$	3,007	$	—	$	3,007	$	(2,397)	$	(565)	$	(5)	$	40

(1) Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets.

The following tables present the gross and net information about the Company’s liabilities subject to master netting arrangements:


		March 31, 2023															September 30, 2023
		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount			Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
								Financial Instruments (1)		Cash Collateral		Securities Collateral											Financial Instruments (1)		Cash Collateral		Securities Collateral
		(in millions)															(in millions)
Derivatives:	Derivatives:															Derivatives:
OTC	OTC	$	2,896	$	—	$	2,896	$	(2,706)	$	(50)	$	(133)	$	7	OTC	$	3,125	$	—	$	3,125	$	(2,870)	$	(7)	$	(247)	$	1
OTC cleared	OTC cleared	47		—		47		(47)		—		—		—		OTC cleared	13		—		13		(13)		—		—		—
Exchange-traded	Exchange-traded	136		—		136		(90)		—		(4)		42		Exchange-traded	49		—		49		(49)		—		—		—
Total	Total	$	3,079	$	—	$	3,079	$	(2,843)	$	(50)	$	(137)	$	49	Total	$	3,187	$	—	$	3,187	$	(2,932)	$	(7)	$	(247)	$	1


	December 31, 2022
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
							Financial Instruments (1)		Cash Collateral		Securities Collateral
	(in millions)
Derivatives:
OTC	$	2,630	$	—	$	2,630	$	(2,313)	$	(38)	$	(277)	$	2
OTC cleared	9		—		9		(9)		—		—		—
Exchange-traded	92		—		92		(75)		—		(17)		—
Total	$	2,731	$	—	$	2,731	$	(2,397)	$	(38)	$	(294)	$	2

(1) Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets.

In the tables above, the amount of assets or liabilities presented are offset first by financial instruments that have the right of offset under master netting or similar arrangements, then any remaining amount is reduced by the amount of cash and securities collateral. The actual collateral may be greater than amounts presented in the tables.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

When the fair value of collateral accepted by the Company is less than the amount due to the Company, there is a risk of loss if the counterparty fails to perform or provide additional collateral. To mitigate this risk, the Company monitors collateral values regularly and requires additional collateral when necessary. When the value of collateral pledged by the Company declines, it may be required to post additional collateral.

Freestanding derivative instruments are reflected in Other assets and Other liabilities. Cash collateral pledged by the Company is reflected in Other assets and cash collateral accepted by the Company is reflected in Other liabilities. See Note 1516 for additional disclosures related to the Company’s derivative instruments.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

~~15.~~16. Derivatives and Hedging Activities

Derivative instruments enable the Company to manage its exposure to various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including equity and interest rate indices or prices. The Company primarily enters into derivative agreements for risk management purposes related to the Company’s products and operations.

Certain of the Company’s freestanding derivative instruments are subject to master netting arrangements. The Company’s policy on the recognition of derivatives on the Consolidated Balance Sheets is to not offset fair value amounts recognized for derivatives and collateral arrangements executed with the same counterparty under the same master netting arrangement. See Note 1415 for additional information regarding the estimated fair value of the Company’s freestanding derivatives after considering the effect of master netting arrangements and collateral.

Generally, the Company uses derivatives as economic hedges and accounting hedges. The following table presents the notional value and gross fair value of derivative instruments, including embedded derivatives:


		March 31, 2023						December 31, 2022									September 30, 2023												December 31, 2022
		Notional		Gross Fair Value				Notional		Gross Fair Value							Notional				Gross Fair Value								Notional		Gross Fair Value
				Assets (1)		Liabilities (2)				Assets (1)				Liabilities (2)							Assets (1)				Liabilities (2)						Assets (1)			Liabilities (2)
		(in millions)												(in millions)
Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments													Derivatives not designated as hedging instruments
Interest rate contracts	Interest rate contracts	$	89,169	$	336	$	327	$	101,302			$	267				$	355	Interest rate contracts	$	46,265			$	257			$	496		$	101,302		$	267		$	355
Equity contracts	Equity contracts	75,696		3,219		2,696		67,416				2,693				2,366		Equity contracts	79,246				3,897				2,686				67,416			2,693			2,366
Credit contracts	Credit contracts	2,814		—		52		1,802		13				—		Credit contracts	3,353				95				—				1,802				13			—
Foreign exchange contracts	Foreign exchange contracts	2,883		33		4		2,870		34				10		Foreign exchange contracts	3,162				30				5				2,870		34			10
Total non-designated hedges	Total non-designated hedges	170,562		3,588		3,079		173,390		3,007				2,731		Total non-designated hedges	132,026				4,279				3,187				173,390		3,007			2,731

Embedded derivatives	Embedded derivatives															Embedded derivatives

IUL	IUL	N/A		—		771		N/A		—				739		IUL	N/A				—				787				N/A		—			739
Fixed deferred indexed annuities and deposit receivables	Fixed deferred indexed annuities and deposit receivables	N/A		48		47		N/A		48				47		Fixed deferred indexed annuities and deposit receivables	N/A				48				48				N/A		48			47
Structured variable annuities (3)	Structured variable annuities (3)	N/A		—		142		N/A		—				(137)		Structured variable annuities (3)	N/A				—				300				N/A		—			(137)
Total embedded derivatives	Total embedded derivatives	N/A		48		960		N/A		48				649		Total embedded derivatives	N/A				48				1,135				N/A		48			649
Total derivatives	Total derivatives	$	170,562	$	3,636	$	4,039	$	173,390	$	3,055			$	3,380	Total derivatives	$	132,026			$	4,327			$	4,322			$	173,390	$	3,055		$	3,380

N/A Not applicable.

(1) The fair value of freestanding derivative assets is included in Other assets and the fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables.

(2) The fair value of freestanding derivative liabilities is included in Other liabilities. The fair value of IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims.

(3) The fair value of the structured variable annuity embedded derivatives as of ~~March 31,~~September 30, 2023 included ~~$337~~$459 million of individual contracts in a liability position and ~~$195~~$159 million of individual contracts in an asset position. The fair value of the structured variable annuity embedded derivatives as of December 31, 2022 included $194 million of individual contracts in a liability position and $331 million of individual contracts in an asset position.

See Note 1314 for additional information regarding the Company’s fair value measurement of derivative instruments.

As of ~~March 31,~~September 30, 2023 and December 31, 2022, investment securities with a fair value of ~~$77~~$1.6 billion and $1.7 billion, respectively, were pledged to meet contractual obligations under derivative contracts, of which $264 million and $302 million, respectively, may be sold, pledged or rehypothecated by the counterparty. As of September 30, 2023 and December 31, 2022, investment securities with a fair value of $212 million and $14 million, respectively, were received as collateral to meet contractual obligations under derivative contracts, of which ~~$77~~$211 million and $5 million, respectively, may be sold, pledged or rehypothecated by the Company. As of both ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had sold, pledged, or rehypothecated none of

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

these securities. In addition, as of both ~~March 31,~~September 30, 2023 and December 31, 2022, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

The following ~~table presents~~tables present a summary of the impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income:



	Benefits, Claims, Losses and Settlement Expenses		Interest Credited to Fixed Accounts		Change in Fair Value of Market Risk Benefits
	(in millions)
Three Months Ended September 30, 2023
Interest rate contracts	$	(7)	$	—	$	(1,073)
Equity contracts	(119)		(19)		245
Credit contracts	—		—		154
Foreign exchange contracts	—		—		51


IUL embedded derivatives	—		28		—

Structured variable annuity embedded derivatives	246		—		—
Total gain (loss)	$	120	$	9	$	(623)

Three Months Ended September 30, 2022
Interest rate contracts	$	(19)	$	—	$	(734)
Equity contracts	(61)		(23)		402
Credit contracts	—		—		92
Foreign exchange contracts	—		—		112


IUL embedded derivatives	—		48		—

Structured variable annuity embedded derivatives	173		—		—
Total gain (loss)	$	93	$	25	$	(128)


		Benefits, Claims, Losses and Settlement Expenses		Interest Credited to Fixed Accounts		Change in Fair Value of Market Risk Benefits			Benefits, Claims, Losses and Settlement Expenses		Interest Credited to Fixed Accounts		Change in Fair Value of Market Risk Benefits
		(in millions)							(in millions)
Three Months Ended March 31, 2023
Nine Months Ended September 30, 2023								Nine Months Ended September 30, 2023
Interest rate contracts	Interest rate contracts	$	6	$	—	$	247	Interest rate contracts	$	(15)	$	—	$	(1,307)
Equity contracts	Equity contracts	164		19		(462)		Equity contracts	391		35		(655)
Credit contracts	Credit contracts	—		—		(33)		Credit contracts	—		—		187
Foreign exchange contracts	Foreign exchange contracts	—		—		(8)		Foreign exchange contracts	—		—		63

IUL embedded derivatives	IUL embedded derivatives	—		(8)		—		IUL embedded derivatives	—		(2)		—
Fixed deferred indexed annuity and deposit receivables embedded derivatives	Fixed deferred indexed annuity and deposit receivables embedded derivatives	—		(1)		—		Fixed deferred indexed annuity and deposit receivables embedded derivatives	—		(2)		—
Structured variable annuity embedded derivatives	Structured variable annuity embedded derivatives	(263)		—		—		Structured variable annuity embedded derivatives	(443)		—		—
Total gain (loss)	Total gain (loss)	$	(93)	$	10	$	(256)	Total gain (loss)	$	(67)	$	31	$	(1,712)

Three Months Ended March 31, 2022
Nine Months Ended September 30, 2022								Nine Months Ended September 30, 2022
Interest rate contracts	Interest rate contracts	$	—	$	—	$	(1,118)	Interest rate contracts	$	(20)	$	—	$	(2,795)
Equity contracts	Equity contracts	8		(16)		216		Equity contracts	(350)		(135)		1,416
Credit contracts	Credit contracts	—		—		97		Credit contracts	—		—		288
Foreign exchange contracts	Foreign exchange contracts	—		—		31		Foreign exchange contracts	—		—		219

IUL embedded derivatives	IUL embedded derivatives	—		57		—		IUL embedded derivatives	—		242		—
Fixed deferred indexed annuity and deposit receivables embedded derivatives	Fixed deferred indexed annuity and deposit receivables embedded derivatives	—		1		—		Fixed deferred indexed annuity and deposit receivables embedded derivatives	—		3		—
Structured variable annuity embedded derivatives	Structured variable annuity embedded derivatives	123		—		—		Structured variable annuity embedded derivatives	939		—		—
Total gain (loss)	Total gain (loss)	$	131	$	42	$	(774)	Total gain (loss)	$	569	$	110	$	(872)

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The Company holds derivative instruments that either do not qualify or are not designated for hedge accounting treatment. These derivative instruments are used as economic hedges of equity, interest rate, credit and foreign currency exchange rate risk related to various products and transactions of the Company.

The deferred premium associated with certain of the above options is paid or received semi-annually over the life of the contract or at maturity. The following is a summary of the payments the Company is scheduled to make and receive for these options as of ~~March 31,~~September 30, 2023:


		Premiums Payable		Premiums Receivable			Premiums Payable		Premiums Receivable
		(in millions)					(in millions)
2023 (1)	2023 (1)	$	29	$	19	2023 (1)	$	4	$	—
2024	2024	132		23		2024	129		23
2025	2025	121		21		2025	119		20
2026	2026	248		88		2026	247		88
2027	2027	20		—		2027	19		—
2028 - 2030	2028 - 2030	220		—		2028 - 2030	408		—
Total	Total	$	770	$	151	Total	$	926	$	131

(1) 2023 amounts represent the amounts payable and receivable for the period from ~~April~~October 1, 2023 to December 31, 2023.

Actual timing and payment amounts may differ due to future settlements, modifications or exercises of the contracts prior to the full premium being paid or received.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

Structured variable annuity and IUL products have returns tied to the performance of equity markets. As a result of fluctuations in equity markets, the obligation incurred by the Company related to structured variable annuity and IUL products will positively or negatively impact earnings over the life of these products. The equity ~~component~~components of structured variable annuity and IUL product obligations are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. As a means of economically hedging its obligations under the provisions of these products, the Company enters into index options and futures contracts.

As discussed in Note 11, the Company issues variable annuity contracts that provide protection to contractholders from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. The Company economically hedges its obligations under these market risk benefits using options, swaptions, swaps and futures.

~~Cash Flow Hedges~~

~~During the three months ended March 31, 2023 and 2022, the Company held no derivatives that were designated as cash flow hedges.~~

Credit Risk

Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting and collateral arrangements whenever practical. See Note 1415 for additional information on the Company’s credit exposure related to derivative assets.

Certain of the Company’s derivative contracts contain provisions that adjust the level of collateral the Company is required to post based on the Company’s financial strength rating (or based on the debt rating of the Company’s parent, Ameriprise Financial). Additionally, certain of the Company’s derivative contracts contain provisions that allow the counterparty to terminate the contract if the Company does not maintain a specific financial strength rating or Ameriprise Financial’s debt does not maintain a specific credit rating (generally an investment grade rating). If these termination provisions were to be triggered, the Company’s counterparty could require immediate settlement of any net liability position. As of ~~March 31,~~September 30, 2023 and December 31, 2022, the aggregate fair value of derivative contracts in a net liability position containing such credit contingent provisions was ~~$142~~$192 million and $234 million, respectively. The aggregate fair value of assets posted as collateral for such instruments as of ~~March 31,~~September 30, 2023 and December 31, 2022 was ~~$142~~$191 million and $232 million, respectively. If the credit contingent provisions of derivative contracts in a net liability position as of ~~March 31,~~September 30, 2023 and December 31, 2022 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been ~~nil~~$1 million and $2 million as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively.

~~16.~~

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

17. Shareholder’s Equity

The following ~~table presents~~tables present the amounts related to each component of OCI:



	Three Months Ended September 30,
	2023						2022
	Pretax		Income Tax Benefit (Expense)		Net of Tax		Pretax		Income Tax Benefit (Expense)		Net of Tax
	(in millions)
Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period (1)	$	(595)	$	127	$	(468)	$	(842)	$	178	$	(664)
Reclassification of net (gains) losses on securities included in net income (2)	38		(8)		30		86		(19)		67
Impact of benefit reserves and reinsurance recoverables	14		(3)		11		20		(3)		17
Net unrealized gains (losses) on securities	(543)		116		(427)		(736)		156		(580)
Effect of changes in discount rate assumptions on certain long-duration contracts	221		(47)		174		306		(65)		241
Effect of changes in instrument-specific credit risk on MRBs	23		(5)		18		(4)		1		(3)
Total other comprehensive income (loss)	$	(299)	$	64	$	(235)	$	(434)	$	92	$	(342)


		Three Months Ended March 31,													Nine Months Ended September 30,
		2023						2022							2023						2022
		Pretax		Income Tax Benefit (Expense)		Net of Tax		Pretax		Income Tax Benefit (Expense)		Net of Tax			Pretax		Income Tax Benefit (Expense)		Net of Tax		Pretax		Income Tax Benefit (Expense)		Net of Tax
		(in millions)													(in millions)
Net unrealized gains (losses) on securities:	Net unrealized gains (losses) on securities:													Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period (1)	Net unrealized gains (losses) on securities arising during the period (1)	$	389	$	(82)	$	307	$	(1,155)	$	241	$	(914)	Net unrealized gains (losses) on securities arising during the period (1)	$	(455)	$	102	$	(353)	$	(3,004)	$	639	$	(2,365)
Reclassification of net (gains) losses on securities included in net income (2)	Reclassification of net (gains) losses on securities included in net income (2)	(5)		1		(4)		(17)		4		(13)		Reclassification of net (gains) losses on securities included in net income (2)	27		(6)		21		84		(18)		66
Impact of benefit reserves and reinsurance recoverables	Impact of benefit reserves and reinsurance recoverables	(12)		2		(10)		50		(9)		41		Impact of benefit reserves and reinsurance recoverables	8		(2)		6		110		(19)		91
Net unrealized gains (losses) on securities	Net unrealized gains (losses) on securities	372		(79)		293		(1,122)		236		(886)		Net unrealized gains (losses) on securities	(420)		94		(326)		(2,810)		602		(2,208)
Effect of changes in discount rate assumptions on certain long-duration contracts	Effect of changes in discount rate assumptions on certain long-duration contracts	(83)		18		(65)		460		(98)		362		Effect of changes in discount rate assumptions on certain long-duration contracts	213		(45)		168		1,183		(252)		931
Effect of changes in instrument-specific credit risk on MRBs	Effect of changes in instrument-specific credit risk on MRBs	204		(43)		161		385		(82)		303		Effect of changes in instrument-specific credit risk on MRBs	68		(15)		53		835		(178)		657
Total other comprehensive income (loss)	Total other comprehensive income (loss)	$	493	$	(104)	$	389	$	(277)	$	56	$	(221)	Total other comprehensive income (loss)	$	(139)	$	34	$	(105)	$	(792)	$	172	$	(620)

(1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period.

(2) Reclassification amounts are recorded in Net realized investment gains (losses).

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

Other comprehensive income (loss) related to net unrealized gains (losses) on securities includes three components: (i) unrealized gains (losses) that arose from changes in the fair value of securities that were held during the period; (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit losses to credit losses; and (iii) other adjustments primarily consisting of changes in insurance and annuity asset and liability balances, such as benefit reserves and reinsurance recoverables, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table presents the changes in the balances of each component of AOCI, net of tax:


		Net Unrealized Gains (Losses) on Securities		Effect of Changes in Discount Rate Assumptions on Certain Long-Duration Contracts		Effect of Changes in Instrument-Specific Credit Risk on MRBs		Other		Total				Net Unrealized Gains (Losses) on Securities		Effect of Changes in Discount Rate Assumptions on Certain Long-Duration Contracts		Effect of Changes in Instrument-Specific Credit Risk on MRBs		Other		Total
		(in millions)										(in millions)
Balance at July 1, 2023													Balance at July 1, 2023	$	(890)	$	(78)	$	15	$	(1)	$	(954)
OCI before reclassifications													OCI before reclassifications	(457)		174		18		—		(265)
Amounts reclassified from AOCI													Amounts reclassified from AOCI	30		—		—		—		30
Total OCI													Total OCI	(427)		174		18		—		(235)
Balance at September 30, 2023													Balance at September 30, 2023	$	(1,317)	$	96	$	33	$	(1)	$	(1,189)

Balance at July 1, 2022													Balance at July 1, 2022	$	(584)	$	(243)	$	233	$	(1)	$	(595)
OCI before reclassifications													OCI before reclassifications	(647)		241		(3)		—		(409)
Amounts reclassified from AOCI													Amounts reclassified from AOCI	67		—		—		—		67
Total OCI													Total OCI	(580)		241		(3)		—		(342)
Balance at September 30, 2022													Balance at September 30, 2022	$	(1,164)	$	(2)	$	230	$	(1)	$	(937)

Balance at January 1, 2023	Balance at January 1, 2023	$	(991)	$	(72)	$	(20)	$	(1)	$	(1,084)		Balance at January 1, 2023	$	(991)	$	(72)	$	(20)	$	(1)	$	(1,084)
OCI before reclassifications	OCI before reclassifications	297		(65)		161		—		393			OCI before reclassifications	(347)		168		53		—		(126)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	(4)		—		—		—		(4)			Amounts reclassified from AOCI	21		—		—		—		21
Total OCI	Total OCI	293		(65)		161		—		389			Total OCI	(326)		168		53		—		(105)
Balance at March 31, 2023		$	(698)	$	(137)	$	141	$	(1)	$	(695)
Balance at September 30, 2023													Balance at September 30, 2023	$	(1,317)	$	96	$	33	$	(1)	$	(1,189)

Balance at January 1, 2022	Balance at January 1, 2022	$	1,044	$	(933)	$	(427)	$	(1)	$	(317)		Balance at January 1, 2022	$	1,044	$	(933)	$	(427)	$	(1)	$	(317)
OCI before reclassifications	OCI before reclassifications	(873)		362		303		—		(208)			OCI before reclassifications	(2,274)		931		657		—		(686)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	(13)		—		—		—		(13)			Amounts reclassified from AOCI	66		—		—		—		66
Total OCI	Total OCI	(886)		362		303		—		(221)			Total OCI	(2,208)		931		657		—		(620)
Balance at March 31, 2022		$	158	$	(571)	$	(124)	$	(1)	$	(538)
Balance at September 30, 2022													Balance at September 30, 2022	$	(1,164)	$	(2)	$	230	$	(1)	$	(937)

~~17.~~18. Income Taxes

The Company’s effective tax rate was ~~5.9%~~9.4% and ~~13.3%~~19.5% for the three months ended ~~March 31,~~September 30, 2023 and 2022, respectively. The Company’s effective tax rate was 7.9% and 15.9% for the nine months ended September 30, 2023 and 2022, respectively.

The effective tax rate for the three months ended ~~March 31,~~September 30, 2023 was lower than the statutory rate primarily due to ~~the tax impact of pretax losses for the quarter, partially offset by~~ tax preferred items including ~~foreign tax credits, the dividends received deduction, and~~ low income housing tax ~~credits.~~credits and the dividends received deduction. The effective tax rate for the ~~three~~nine months ended ~~March 31, 2022~~September 30, 2023 was lower than the statutory rate as a result of tax preferred items including foreign tax credits, net of addback, the dividends received deduction, and low income housing tax ~~credits.~~credits, as well as the benefit of an audit closure partially offset by an increase in unrecognized tax benefits.

The effective tax rate for the three months ended September 30, 2022 was lower than the statutory rate as a result of tax preferred items including low income housing tax credits and the dividends received deduction. The effective tax rate for the nine months ended September 30, 2022 was lower than the statutory rate as a result of tax preferred items including low income housing tax credits, foreign tax credits, and the dividends received deduction.

The decrease in the effective tax rate for the three months ended ~~March 31,~~September 30, 2023 compared to the three months ended ~~March 31,~~September 30, 2022 was primarily ~~the result of pretax losses in the current quarter compared~~due to lower pretax income in the current period compared to the prior period. The decrease in the effective tax rate for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily due to lower pretax income in the current period compared to the prior period, as well as the benefit of an audit closure partially offset by an increase in unrecognized tax benefits and ~~the related impact on~~a decrease in low income housing tax ~~preferred items.~~credits.

Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of ~~$27~~$28 million, net of federal benefit, which will expire beginning December 31, 2023.

The Company is required to establish a valuation allowance for any portion of its deferred tax assets that management believes will not be realized. Significant judgment is required in determining if a valuation allowance should be established and the amount of such

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RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

allowance if required. Factors used in making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination: (i) future taxable income exclusive of reversing temporary differences and carryforward; (ii) future reversals of existing taxable temporary differences; (iii) taxable income in prior carryback years; and (iv) tax planning strategies. Based on analysis of the Company’s tax position, management believes it is more likely than not that the Company will not realize certain state net operating losses of $28 million and state deferred tax assets of $2 ~~million;~~million, net of federal benefit; therefore, a valuation allowance of $30 million, net of federal benefit, has been established as of both ~~March 31,~~September 30, 2023 and December 31, 2022.

As of ~~both March 31,~~September 30, 2023 and December 31, 2022, the Company had $28 million and $37 million, respectively, of gross unrecognized tax benefits. If recognized, approximately $19 million and $20 million, net of federal tax benefits, of unrecognized tax benefits as of ~~both March 31,~~September 30, 2023 and December 31, 2022, respectively, would affect the effective tax rate. During the second quarter of 2023, the Company had additions to its gross unrecognized tax benefits for tax positions of prior years of $64 million and reductions to its gross unrecognized tax benefits of prior years of $71 million.

It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits may decrease by approximately ~~$32~~$2 million in the next 12 months primarily due to ~~Internal Revenue Service (“IRS”) settlements.~~state statutes of limitations expirations.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized nil and a net increase of $1$7 million ~~and nil~~ in interest and penalties for the three and nine months ended ~~March 31,~~September 30, 2023, respectively. The Company recognized nil in interest and

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

~~2022, respectively.~~ penalties for both the three and nine months ended September 30, 2022. As of ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had a payable of $4$10 million and $3 million, respectively, related to accrued interest and ~~penalties, respectively.~~penalties.

The Company files income tax returns as part of its inclusion in the consolidated federal income tax return of Ameriprise Financial in the U.S. federal jurisdiction and various state jurisdictions. The federal statute of limitations are closed on years through ~~2015, except for one issue~~2015. A previously open item for 2014 and 2015 ~~which~~ was ~~claimed on amended returns.~~resolved in the second quarter of 2023. Also in the second quarter of 2023, the Internal Revenue Service (“IRS”) audit for tax years 2016 through 2018 was finalized. The IRS is currently auditing Ameriprise Financial’s U.S. income tax returns for ~~2016 through~~2019 and 2020. Ameriprise Financial’s or its subsidiaries’, including the Company’s, state income tax

returns are currently under examination by various jurisdictions for years ranging from ~~2015~~2017 through ~~2020.~~2021.

~~18.~~19. Contingencies

Contingencies

The Company and its affiliates are involved in the normal course of business in legal proceedings which include regulatory inquiries, arbitration and litigation, including class actions, concerning matters arising in connection with the conduct of its activities. These include proceedings specific to the Company as well as proceedings generally applicable to business practices in the industries in which it operates. The Company can also be subject to legal proceedings arising out of its general business activities, such as its investments, contracts and employment relationships. Uncertain economic conditions, heightened and sustained volatility in the financial markets and significant financial reform legislation may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the Company or the insurance industry generally.

As with other insurance companies, the level of regulatory activity and inquiry concerning the Company’s businesses remains elevated. From time to time, the Company and its affiliates, including AFS and RiverSource Distributors, Inc. receive requests for information from, and/or are subject to examination or claims by various state, federal and other domestic authorities. The Company and its affiliates typically have numerous pending matters, which include information requests, exams or inquiries regarding their business activities and practices and other subjects, including from time to time: sales and distribution of, and disclosure practices related to, various products, including the Company’s insurance and annuity products; supervision of associated persons, including AFS financial advisors and RiverSource Distributors, Inc.’s wholesalers; administration of insurance and annuity claims; security of client information; and transaction monitoring systems and controls. The Company and its affiliates ~~have cooperated and will continue to cooperate~~are cooperating with the applicable regulators.

These pending matters are subject to uncertainties and, as such, it is inherently difficult to determine whether any loss is probable or even reasonably possible, or to reasonably estimate the amount of any ~~loss.~~loss that may result from such matters. The Company cannot predict with certainty if, how, or when any such proceedings will be initiated or resolved. Matters frequently need to be more developed before a potential loss or range of loss can be reasonably estimated for any ~~proceeding.~~matter. An adverse outcome in any ~~proceeding~~matter could result in an adverse judgment, a settlement, fine, penalty, or other sanction, and may lead to further claims, examinations, or adverse publicity each of which could have a material adverse effect on the Company’s consolidated financial condition, results of operations, or liquidity.

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RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

In accordance with applicable accounting standards, the Company establishes an accrued liability for contingent litigation and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated. The Company discloses the nature of the contingency when management believes there is at least a reasonable possibility that the outcome may be material to the Company’s consolidated financial statements and, where feasible, an estimate of the possible loss. In such cases, there still may be an exposure to loss in excess of any amounts reasonably estimated and accrued. When a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrued liability, but continues to monitor, in conjunction with any outside counsel handling a matter, further developments that would make such loss contingency both probable and reasonably estimable. Once the Company establishes an accrued liability with respect to a loss contingency, the Company continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established, and any appropriate adjustments are made each quarter.

Guaranty Fund Assessments

RiverSource Life Insurance Company and RiverSource Life of NY are required by law to be a member of the guaranty fund association in every state where they are licensed to do business. In the event of insolvency of one or more unaffiliated insurance companies, the Company could be adversely affected by the requirement to pay assessments to the guaranty fund associations. The Company projects its cost of future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and Health Insurance Guaranty Associations and the amount of its premiums written relative to the industry-wide premium in each state. The Company accrues the estimated cost of future guaranty fund assessments when it is considered probable that an assessment will be imposed, the event obligating the Company to pay the assessment has occurred and the amount of the assessment can be reasonably estimated.

The Company has a liability for estimated guaranty fund assessments and a related premium tax asset. As of ~~March 31,~~September 30, 2023 and December 31, 2022, the estimated liability was $37 million and $12 million, respectively. As of ~~March 31,~~September 30, 2023 and December 31,

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~

2022, the related premium tax asset was $31 million and $10 million, respectively. The expected period over which guaranty fund assessments will be made and the related tax credits recovered is not known.

5864

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RIVERSOURCE LIFE INSURANCE COMPANY

ITEM 2. MANAGEMENT’S NARRATIVE ANALYSIS

Overview

RiverSource Life Insurance Company (“RiverSource Life”) and its subsidiaries are referred to collectively in this Form 10-Q as the “Company”. The following discussion and management’s narrative analysis of the financial condition and results of operations should be read in conjunction with the “Forward-Looking Statements” that follow, the Consolidated Financial Statements and Notes presented in Item 1, ~~and~~ its Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on February 23, 2023, (“as amended by the Amendment No. 1 on Form 10-K/A filed with the SEC on March 10, 2023, (collectively, the “2022 Annual Report”), and its Recast 2022 ~~10-K”~~Annual Report for the year ended December 31, 2022, filed with the SEC on September 27, 2023 (“Recast 2022 Annual Report”), as well as its quarterly reports on Form 10-Q and any current reports on Form ~~8-K~~8-K. The Company’s Recast 2022 Annual Report updated certain sections of the Company’s 2022 Annual Report and ~~other publicly available information.~~should be read in conjunction with the 2022 Annual Report in its entirety for a complete description of events, trends, uncertainties, and risks affecting the Company.

The Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Management’s narrative analysis is presented pursuant to General Instructions H(2)(a) of Form 10-Q in lieu of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

See Note 1 to the Consolidated Financial Statements for additional information.

The Company operates its business in the broader context of the macroeconomic forces around it, including the global and U.S. economies, ~~the coronavirus disease 2019 (“COVID-19”) pandemic,~~ changes in interest and inflation rates, financial market volatility, fluctuations in foreign exchange rates, geopolitical strain, pandemics, the competitive environment, client and customer activities and preferences, and the various regulatory and legislative developments. Financial markets and macroeconomic conditions have had and will continue to have a significant impact on the Company’s operating and performance results. The Company’s success may be affected by the factors discussed in Item 1A, “Risk Factors” in the Company’s 2022 ~~10-K~~Annual Report and other factors as discussed herein.

The Company consolidates certain variable interest entities for which it provides investment management services. These entities are defined as consolidated investment entities (“CIEs”). While the consolidation of the CIEs impacts the Company’s balance sheet and income statement, the exposure to these entities is unchanged and there is no impact to the underlying business results. For further information on CIEs, see Note 5 to the Consolidated Financial Statements. Changes in the fair value of assets and liabilities related to the CIEs, primarily syndicated loans and debt, are reflected in Net investment income.

Critical Accounting Estimates

The accounting and reporting policies that the Company uses affect its Consolidated Financial Statements. Certain of the Company’s accounting and reporting policies are critical to an understanding of the Company’s financial condition and results of operations. In some cases, the application of these policies can be significantly affected by the estimates, judgments and assumptions made by management during the preparation of the Consolidated Financial Statements. The accounting and reporting policies and estimates the Company has identified as fundamental to a full understanding of its consolidated financial condition and results of operations are described below. See Note 2 to the Consolidated Financial Statements for further information about the Company’s accounting policies.

Valuation of Investments

The most significant component of the Company’s investments is its Available-for-Sale securities, which the Company carries at fair value within its Consolidated Balance Sheets. See Note 1314 to the Consolidated Financial Statements for discussion of the fair value of Available-for-Sale securities. Financial markets are subject to significant movements in valuation and liquidity, which can impact the Company’s ability to liquidate and the selling price that can be realized for the Company’s securities and increases the use of judgment in determining the estimated fair value of certain investments. The Company is unable to predict impacts and determine sensitivities in reported amounts reflecting such market movements on its aggregate Available-for-Sale portfolio. Changes to these assumptions do not occur in isolation and it is impracticable to predict such impacts at the individual security unit of measure which are predominately Level 2 fair value and based on observable inputs.

Market Risk Benefits

Market risk benefits are contracts or contract features that both provide protection to the contractholder from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. Market risk benefits include certain contract features on variable annuity products that provide minimum guarantees to policyholders. Guarantees accounted for as market risk benefits include guaranteed minimum death ~~benefits~~benefit (“GMDB”), guaranteed minimum income ~~benefits~~benefit (“GMIB”), guaranteed minimum withdrawal ~~benefits~~benefit (“GMWB”) and guaranteed minimum accumulation ~~benefits~~benefit (“GMAB”).

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RIVERSOURCE LIFE INSURANCE COMPANY

Variable Annuities

The Company has approximately ~~$77~~$75 billion of variable annuity account value that has been issued over a period of more than fifty years. The diversified variable annuity block consists of ~~$33~~$34 billion of account value with no living benefit guarantees and ~~$44~~$41 billion of account value with living benefit guarantees, primarily GMWB provisions. The business is predominately issued through the Ameriprise ~~Financial~~®Financial® advisor network. The majority of the variable annuity contracts currently offered by the Company contain GMDB provisions. The Company discontinued most new sales of GMWB and GMAB at the end of 2021 and new sales were completely

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

discontinued as of mid-2022. The Company also previously offered contracts containing GMIB provisions. See Note 11 to the Company’s Consolidated Financial Statements for further discussion of its variable annuity contracts.

In determining the assets or liabilities for market risk benefits, the Company projects these benefits and contract assessments using actuarial models to simulate various equity market scenarios. Significant assumptions made in projecting future benefits and assessments relate to customer asset value growth rates, mortality, persistency, benefit utilization and investment margins. Management reviews, and where appropriate, adjusts its assumptions each quarter. Unless management identifies a material deviation over the course of quarterly monitoring, management reviews and updates these assumptions annually in the third quarter of each year.

In addition, the valuation of market risk benefits is impacted by an estimate of the Company’s nonperformance risk adjustment. This estimate includes a spread over the U.S. Treasury curve as of the balance sheet date. As the Company’s estimate of this spread over the U.S. Treasury curve widens or tightens, the liability will decrease or increase. The change in fair value due to changes in the Company’s nonperformance risk is recorded in other comprehensive income.

Regarding the exposure to variable annuity living benefit guarantees, ~~the source of~~changes to reserves due to behavioral risk isare driven by changes in policyholder surrenders and utilization of guaranteed withdrawal benefits. The Company has extensive experience studies and analysis to monitor changes and trends in policyholder behavior. A significant volume of company-specific policyholder experience data is available and provides management with the ability to regularly analyze policyholder behavior. On a monthly basis, actual surrender and benefit utilization experience is compared to expectations. Experience data includes detailed policy information providing the opportunity to review impacts of multiple variables. The ability to analyze differences in experience, such as presence of a living benefit rider, existence of surrender charges, and tax qualifications provide us an effective approach in ~~quickly~~ detecting changes in policyholder behavior.

At least annually, the Company performs a thorough policyholder behavior analysis to validate the assumptions included in its market risk benefit reserves. The variable annuity assumptions and resulting reserve computations reflect multiple policyholder variables. Differentiation in assumptions by policyholder age, existence of surrender charges, guaranteed withdrawal utilization, and tax qualification are examples of factors recognized in establishing management’s assumptions used in ~~reserve~~market risk benefit calculations. The extensive data derived from the Company’s variable annuity block informs management in confirming previous assumptions and revising the variable annuity behavior assumptions. Changes in assumptions are governed by a review and approval process to ensure an appropriate measurement of all impacted financial statement balances. Changes in these assumptions can be offsetting and the Company is unable to predict their movement, sensitivities in reported amounts, offsetting impacts, or future impacts to the Consolidated Financial Statements over time or in any given future period.

Future Policy Benefits and Claims

The Company establishes reserves to cover the benefits associated with non-traditional and traditional long-duration products. Non-traditional long-duration products include variable and structured variable annuity contracts, fixed annuity contracts and ULuniversal life (“UL”) and ~~VUL~~variable universal life (“VUL”) policies. Traditional long-duration products include term life insurance, whole life insurance, disability income (“DI”) and long term care (“LTC”) insurance and life contingent payout annuity products. UL and VUL policies with product features that result in profits followed by losses are accounted for as insurance liabilities. The portion of structured variable annuities, indexed annuities and indexed universal life (“IUL”) policies allocated to the indexed account is accounted for as an embedded derivative.

The establishment of reserves is an estimation process using a variety of methods, assumptions and data elements. If actual experience is better than or equal to the results of the estimation process, then reserves should be adequate to provide for future benefits and expenses. If actual experience is worse than the results of the estimation process, additional reserves may be required.

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RIVERSOURCE LIFE INSURANCE COMPANY

Non-Traditional Long-Duration Products, including Embedded Derivatives

UL and VUL

A portion of the Company’s UL and VUL policies have product features that result in profits followed by losses from the insurance component of the contract. These profits followed by losses can be generated by the cost structure of the product or secondary guarantees in the contract. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges. The liability for these future losses is determined at the reporting date using actuarial models to estimate the death benefits in excess of account value and recognizing the excess over the estimated life based on expected assessments (e.g. cost of insurance charges, contractual administrative charges, similar fees and investment margin). Significant assumptions made in projecting future benefits and assessments relate to client asset value growth rates, mortality, persistency and investment margins. Changes in these assumptions can be offsetting and the Company is unable to predict their movement, sensitivities in reported amounts, offsetting impacts, or future impacts to the Consolidated Financial Statements over time or in any given future period. See Note 11 to the Consolidated Financial Statements for information regarding the liability for contracts with secondary guarantees.

Embedded Derivatives

The fair value of embedded derivatives related to structured variable annuities, indexed annuities and IUL fluctuates based on equity markets and interest rates and is a liability. In addition, the valuation of embedded derivatives is impacted by an estimate of the Company’s nonperformance risk adjustment. This estimate includes a spread over the U.S. Treasury curve as of the balance sheet date.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

As the Company’s estimate of this spread over the U.S. Treasury curve widens or tightens, the liability will decrease or increase.

See Note 1314 to the Consolidated Financial Statements for information regarding the fair value measurement of embedded derivatives.

Traditional Long-Duration Products

The liabilities for traditional long-duration products include cash flows related to unpaid amounts on reported claims, estimates of benefits payable on claims incurred but not yet reported and estimates of benefits that will become payable on term life, whole life, DI, LTC, and life contingent payout annuity policies as claims are incurred in the future. Accordingly, the claim liability (also referred to as disabled life reserves) is presented together as one liability for future policy benefits.

The cash flows used in the calculation are discounted using the forward rate curve on the original contract issue date. The discount rate represents an upper-medium-grade (i.e., low credit risk) fixed-income instrument yield (i.e., an A rating) that reflects the duration characteristics of the liability.

Derivative Instruments and Hedging Activities

The Company uses derivative instruments to manage its exposure to various market risks. All derivatives are recorded at fair value. The fair value of the Company’s derivative instruments is determined using either market quotes or valuation models that are based upon the net present value of estimated future cash flows and incorporate current market observable inputs to the extent available. The Company is unable to predict impacts and determine sensitivities in reported amounts reflecting such market movements on its aggregate derivative portfolio. Changes to assumptions do not occur in isolation and it is impracticable to predict such impacts at the individual security unit of measure which are predominately Level 2 fair value and based on observable inputs.

For further details on the types of derivatives the Company uses and how it accounts for them, see Note 2, Note 1314 and Note 1516 to the Consolidated Financial Statements. For discussion of the Company’s market risk exposures and hedging program and related sensitivity testing, see Item 2, “Management’s ~~Discussion and~~Narrative Analysis ~~of Financial Condition and Results of Operations~~ - Market Risk.”

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements and their expected impact on the Company’s future consolidated financial condition or results of operations, see Note 3 to the Consolidated Financial Statements.

6167

Index

RIVERSOURCE LIFE INSURANCE COMPANY

Consolidated Results of Operations for the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2023 and 2022

The following table presents the Company’s consolidated results of operations:


		Three Months Ended March 31,				Change				Nine Months Ended September 30,				Change
		2023		2022						2023		2022
		(in millions)								(in millions)
Revenues	Revenues								Revenues
Premiums	Premiums	$	96	$	73	$	23	32%	Premiums	$	323	$	223	$	100	45	%
Net investment income	Net investment income	292		159		133		84	Net investment income	950		568		382		67
Policy and contract charges	Policy and contract charges	496		534		(38)		(7)	Policy and contract charges	1,510		1,567		(57)		(4)
Other revenues	Other revenues	150		173		(23)		(13)	Other revenues	447		492		(45)		(9)
Net realized investment gains (losses)	Net realized investment gains (losses)	(3)		18		(21)		NM	Net realized investment gains (losses)	(58)		(90)		32		36
Total revenues	Total revenues	1,031		957		74		8	Total revenues	3,172		2,760		412		15

Benefits and expenses	Benefits and expenses								Benefits and expenses
Benefits, claims, losses and settlement expenses	Benefits, claims, losses and settlement expenses	300		31		269		NM	Benefits, claims, losses and settlement expenses	746		(85)		831		NM
Interest credited to fixed accounts	Interest credited to fixed accounts	164		141		23		16	Interest credited to fixed accounts	464		443		21		5
Remeasurement gains and losses of future policy benefit reserves		(5)		(6)		1		17
Remeasurement (gains) losses of future policy benefit reserves									Remeasurement (gains) losses of future policy benefit reserves	(17)		(6)		(11)		NM
Change in fair value of market risk benefits	Change in fair value of market risk benefits	489		100		389		NM	Change in fair value of market risk benefits	558		298		260		87
Amortization of deferred acquisition costs	Amortization of deferred acquisition costs	60		62		(2)		(3)	Amortization of deferred acquisition costs	180		181		(1)		(1)
Interest and debt expense	Interest and debt expense	45		19		26		NM	Interest and debt expense	143		71		72		NM
Other insurance and operating expenses	Other insurance and operating expenses	180		174		6		3	Other insurance and operating expenses	525		518		7		1
Total benefits and expenses	Total benefits and expenses	1,233		521		712		NM	Total benefits and expenses	2,599		1,420		1,179		83
Pretax income (loss)	Pretax income (loss)	(202)		436		(638)		NM	Pretax income (loss)	573		1,340		(767)		(57)
Income tax provision (benefit)	Income tax provision (benefit)	(12)		58		(70)		NM	Income tax provision (benefit)	46		213		(167)		(78)
Net income (loss)	Net income (loss)	$	(190)	$	378	$	(568)	NM	Net income (loss)	$	527	$	1,127	$	(600)	(53)	%
NM Not Meaningful.	NM Not Meaningful.								NM Not Meaningful.

Overall

Net income decreased ~~$568~~$600 million, or 53%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period. Pretax income decreased ~~$638~~$767 million, or 57%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period.

The following impacts were significant drivers of the period-over-period change in pretax income:

•The unfavorable impact of unlocking was $99 million for the nine months ended September 30, 2023 compared to a favorable impact of unlocking of $133 million for the prior year period.

•The market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and ~~universal life (“UL”)~~UL insurance contracts), net of hedges and the reinsurance accrual was an expense of ~~$475~~$137 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to a benefit of ~~$180~~$566 million for the prior year period.

•The favorable impact of the ~~recent~~ trend in rising interest rates on the investment portfolio yield, including from investment portfolio repositioning in the fourth quarter of 2022.

Variable annuity account balances ~~decreased 10%~~increased 5% to ~~$76.8~~$75.1 billion as of ~~March 31,~~September 30, 2023 compared to the prior year period due to market ~~depreciation and~~appreciation, partially offset by net outflows of ~~$2.2~~$2.8 billion. Variable annuity sales decreased ~~16%~~6% for the nine months ended September 30, 2023 compared to the prior year period reflecting a decrease in sales of variable annuities with living benefit guarantees. Account values with living benefit riders declined to ~~57%~~55% as of ~~March 31,~~September 30, 2023 compared to ~~60%~~58% a year ago reflecting management’s actions to optimize the Company’s business mix. This trend is expected to continue and meaningfully shift the mix of business away from products with living benefit guarantees over time.

Fixed deferred annuity account balances declined 9%11% to ~~$6.9~~$6.5 billion as of ~~March 31,~~September 30, 2023 compared to the prior year period as policies continue to lapse and the Company previously discontinued new sales of fixed deferred annuities and fixed index annuities.

In the third quarter of the year, management updated its market-related assumptions and implemented model changes related to the living benefit valuation. In addition, management conducted its annual review of life insurance, annuity and LTC valuation assumptions relative to current experience and management expectations including modeling changes. These aforementioned changes are collectively referred to as unlocking.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

The following table presents the total pretax impacts on the Company’s revenues and expenses attributable to unlocking for the nine months ended September 30:


Pretax Increase (Decrease)	2023		2022
	(in millions)
Policy and contract charges	$	1	$	(1)
Total revenues	1		(1)

Benefits, claims, losses and settlement expenses	(17)		7
Remeasurement (gains) losses of future policy benefit reserves:
LTC unlocking	(5)		(6)
Unlocking impact, excluding LTC	(6)		6
Total remeasurement (gains) losses of future policy benefit reserves	(11)		—
Change in fair value of market risk benefits	128		(139)
Amortization of DAC	—		(2)
Total expenses	100		(134)
Pretax income	$	(99)	$	133

The primary drivers of the year-over-year unlocking impact include the following items:

•The Company lowered its surrender assumptions on variable annuities with living benefits resulting in an expense in the third quarter of 2023.

•Interest rate assumptions resulted in a benefit in the third quarter of 2022, partially offset by lower surrender assumptions and updated mortality assumptions for variable annuities with living benefits.

Revenues

Premiums increased ~~$23~~$100 million, or ~~32%~~45%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period primarily due to higher sales of ~~immediate annuities with a~~ life contingent ~~feature.~~payout annuities.

Net investment income increased ~~$133~~$382 million, or ~~84%~~67%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period reflecting the favorable impact of the ~~recent~~ trend in rising interest rates on the investment portfolio yield, including from investment portfolio repositioning in the fourth quarter of 2022, along with higher average balances due to the growth in structured variable ~~annuities.~~

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

annuities (“SVA”) and higher net investment income of CIEs.

Policy and contract charges decreased ~~$38~~$57 million, or 7%4%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period primarily reflecting lower mortality and expense fees due to market ~~depreciation.~~depreciation and net outflows.

Other revenues decreased ~~$23~~$45 million, or ~~13%~~9%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period primarily reflecting lower fees from decreased account balances due to market depreciation and net outflows, and a decrease in the yield on deposit receivables arising from reinsurance transactions.

Net realized investment losses were $3$58 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to net realized investment ~~gains~~losses of ~~$18~~$90 million for the prior year period. The ~~three~~nine months ended ~~March 31,~~September 30, 2023 included net realized losses of $8$27 million on Available-for-Sale securities, driven by the continued fixed maturity investment portfolio repositioning and net realized losses of $32 million on investments held by ~~CIEs, partially offset by~~CIEs. The net realized ~~gains of $5 million on Available-for-Sale securities. The three~~investment losses for the nine months ended ~~March 31,~~September 30, 2022 ~~included net realized gains~~were primarily driven by impairments on securities as the Company repositioned a portion of ~~$17 million~~its fixed maturity bond portfolio in response to market conditions and credit losses on ~~Available-for-Sale~~corporate debt securities.

Benefits and Expenses

Benefits, claims, losses and settlement expenses increased ~~$269~~$831 million, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period primarily reflecting the following items:

•A ~~$223~~$643 million increase in expense from market impacts on ~~structured variable annuities (“SVA”)~~SVA embedded derivative, net of hedges in place to offset those risks. This increase was the result of a favorable ~~$160~~$746 million change in the market impact on derivatives hedging the SVA embedded derivative and an unfavorable ~~$383 million~~$1.4 billion change in the market impact on SVA embedded derivative. The main market driver contributing to these changes was the equity market impact on the SVA embedded derivative net of the impact on the corresponding hedge assets which resulted in an expense for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to a benefit for the prior year period.

•The impact of higher sales of ~~immediate annuities with a~~ life contingent ~~feature.~~payout annuities.

•The impact of increased volume in ~~structured variable annuities.~~SVAs.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

Interest credited to fixed accounts increased ~~$23~~$21 million, or ~~16%~~5%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period primarily reflecting the following ~~item:~~items:

•A ~~$34~~$48 million increase in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits. The favorable impact of the nonperformance credit spread was $6 million for the nine months ended September 30, 2023 compared to a favorable impact of $54 million for the prior year period.

•A $13 million decrease in expense from other market impacts on IUL benefits, net of hedges, which was an expense of ~~$46~~$16 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to an expense of ~~$12~~$29 million for the prior year period. The ~~increase~~decrease in expense was primarily due to an increase in the IUL embedded derivative in the ~~current~~prior period, which reflected ~~less~~higher option costs due to a higher new money rate, offset by more discounting due to higher ~~treasury~~Treasury rates.

Change in fair value of market risk benefits increased ~~$389~~$260 million, or 87%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period primarily reflecting the following ~~item:~~items:

•The impact of unlocking was an expense of $128 million for nine months ended September 30, 2023 primarily reflecting the impact of lower surrender assumptions on variable annuities with living benefits compared to a benefit of $139 million for the prior year period primarily reflecting the impact of interest rate assumptions, partially offset by lower surrender assumptions and updated mortality assumptions for variable annuities with living benefits.

•A ~~$405~~$29 million ~~increase~~decrease in expense from market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks. This ~~increase~~decrease was the result of a favorable ~~$519~~$870 million change in the market impact on variable annuity guaranteed benefits reserves and an unfavorable $841 million change in the market impact on derivatives hedging the variable annuity guaranteed ~~benefits and an unfavorable $924 million change in the market impact on variable annuity guaranteed benefits reserves.~~benefits. The main market drivers contributing to these changes are summarized below:

•Equity market impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a benefit for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to an expense for the prior year period.

•Interest rate and bond impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in ~~an expense~~a lower benefit for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to ~~a benefit in~~ the prior year period.

•Volatility impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a lower expense for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period.

•Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, transaction costs and various behavioral items, were a lower net expense for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period.

Interest and debt expense increased ~~$26~~$72 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the prior year period reflecting higher interest expense of CIEs.

Income Taxes

The Company’s effective tax rate was ~~5.9%~~7.9% for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to ~~13.3%~~15.9% for the prior year period. The decrease in the effective tax rate for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 compared to the ~~three~~nine months ended ~~March 31,~~September 30, 2022 was primarily ~~the result of pretax losses in the current quarter compared~~due to lower pretax income in the current period compared to the prior year period, as well as the benefit of an audit closure, partially offset by an increase in unrecognized tax benefits and ~~the related impact on~~a decrease in low income housing tax ~~preferred items.~~credits. See Note 1718 to the Consolidated Financial Statements for additional discussion on income taxes.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

Market Risk

The Company’s primary market risk exposures are interest rate, equity price and credit risk. Equity price and interest rate fluctuations can have a significant impact on the Company’s results of operations, primarily due to the effects on asset-based fees and expenses, the “spread” income generated on its fixed deferred annuities, fixed insurance, fixed portion of its variable annuities and variable insurance contracts, the value of market risk benefits and other liabilities associated with its variable annuities and the value of derivatives held to hedge related benefits.

~~The variable annuity guarantees~~Market risk benefits continue to be managed by utilizing a hedging program which attempts to match the sensitivity of the assets with the sensitivity of the benefits. This approach works with the premise that matched sensitivities will produce a highly effective hedging result. The Company’s comprehensive hedging program focuses mainly on first order sensitivities of assets and liabilities: Equity Market Level (Delta), Interest Rate Level (Rho) and Volatility (Vega). Additionally, various second order sensitivities are managed. The Company uses various options, swaptions, swaps and futures to manage risk exposures. The exposures are measured and monitored daily and adjustments to the hedge portfolio are made as necessary.

To evaluate interest rate and equity price risk, the Company performs sensitivity testing which measures the impact on pretax income from the sources listed below for a 12-month period following a hypothetical 100 basis point increase in interest rates or a hypothetical 10% decline in equity prices. The interest rate risk test assumes a sudden 100 basis point parallel shift in the yield curve, with rates then staying at those levels for the next 12 months. The equity price risk test assumes a sudden 10% drop in equity prices, with equity prices then staying at those levels for the next 12 months. In estimating the values of variable annuities, indexed annuities, IUL

Index

RIVERSOURCE LIFE INSURANCE COMPANY

insurance and the associated hedging instruments, the Company assumed no change in implied market volatility despite the 10% drop in equity prices.

The following tables present the Company’s estimate of the impact on pretax income from the above defined hypothetical market movements as of ~~March 31,~~September 30, 2023 and December 31, 2022:


March 31, 2023
September 30, 2023								September 30, 2023
Equity Price Decline 10%	Equity Price Decline 10%	Equity Price Exposure to Pretax Income						Equity Price Decline 10%	Equity Price Exposure to Pretax Income
		Before Hedge Impact		Hedge Impact		Net Impact			Before Hedge Impact		Hedge Impact		Net Impact
		(in millions)							(in millions)
Asset-based fees and expenses (1)	Asset-based fees and expenses (1)	$	(56)	$	—	$	(56)	Asset-based fees and expenses (1)	$	(53)	$	—	$	(53)

Variable annuity and structured variable annuity benefits:	Variable annuity and structured variable annuity benefits:							Variable annuity and structured variable annuity benefits:

Market risk benefits	Market risk benefits	(986)		736		(250)		Market risk benefits	(936)		688		(248)
Indexing feature for structured variable annuities	Indexing feature for structured variable annuities	568		(335)		233		Indexing feature for structured variable annuities	692		(449)		243

Total variable annuity and structured variable annuity benefits	Total variable annuity and structured variable annuity benefits	(418)		401		(17)		Total variable annuity and structured variable annuity benefits	(244)		239		(5)

IUL insurance	IUL insurance	44		(42)		2		IUL insurance	56		(53)		3
Total	Total	$	(430)	$	359	$	(71)	Total	$	(241)	$	186	$	(55)


Interest Rate Increase 100 Basis Points	Interest Rate Increase 100 Basis Points	Interest Rate Exposure to Pretax Income						Interest Rate Increase 100 Basis Points	Interest Rate Exposure to Pretax Income
		Before Hedge Impact		Hedge Impact		Net Impact			Before Hedge Impact		Hedge Impact		Net Impact
		(in millions)							(in millions)
Asset-based fees and expenses (1)	Asset-based fees and expenses (1)	$	(12)	$	—	$	(12)	Asset-based fees and expenses (1)	$	(12)	$	—	$	(12)
Variable annuity and structured variable annuity benefits:	Variable annuity and structured variable annuity benefits:							Variable annuity and structured variable annuity benefits:

Market risk benefits	Market risk benefits	1,602		(1,171)		431		Market risk benefits	1,223		(841)		382
Indexing feature for structured variable annuities	Indexing feature for structured variable annuities	(29)		91		62		Indexing feature for structured variable annuities	12		114		126

Total variable annuity and structured variable annuity benefits	Total variable annuity and structured variable annuity benefits	1,573		(1,080)		493		Total variable annuity and structured variable annuity benefits	1,235		(727)		508

Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	18		—		18		Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	46		—		46
IUL insurance	IUL insurance	12		2		14		IUL insurance	13		2		15
Total	Total	$	1,591	$	(1,078)	$	513	Total	$	1,282	$	(725)	$	557


December 31, 2022
Equity Price Decline 10%	Equity Price Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based fees and expenses (1)	$	(54)	$	—	$	(54)

Variable annuity and structured variable annuity benefits:



Market risk benefits	(870)		648		(222)
Indexing feature for structured variable annuities	494		(291)		203

Total variable annuity and structured variable annuity benefits	(376)		357		(19)


IUL insurance	39		(21)		18
Total	$	(391)	$	336	$	(55)

6471

Index

RIVERSOURCE LIFE INSURANCE COMPANY

December 31, 2022
Equity Price Decline 10% Equity Price Exposure to Pretax Income
Before Hedge Impact Hedge Impact Net Impact
(in millions)
Asset-based fees and expenses (1)
$ (54) $ — $ (54)
Variable annuity and structured variable annuity benefits:
Market risk benefits (870) 648 (222)
Indexing feature for structured variable annuities 494 (291) 203
Total variable annuity and structured variable annuity benefits (376) 357 (19)
IUL insurance 39 (21) 18
Total $ (391) $ 336 $ (55)


Interest Rate Increase 100 Basis Points	Interest Rate Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based fees and expenses (1)	$	(12)	$	—	$	(12)
Variable annuity and structured variable annuity benefits:



Market risk benefits	1,484		(1,028)		456
Indexing feature for structured variable annuities	(29)		82		53

Total variable annuity and structured variable annuity benefits	1,455		(946)		509


Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	25		—		25
IUL insurance	12		1		13
Total	$	1,480	$	(945)	$	535

(1) Excludes incentive income which is impacted by market and fund performance during the period and cannot be readily estimated.

Net impacts shown in the above tables from market risk benefits result largely from differences between the liability valuation basis and the hedging basis. Liabilities are valued using fair value accounting principles, with risk margins incorporated in contractholder behavior assumptions. The Company’s hedging is based on its determination of economic risk, which excludes certain items in the liability valuation.

Actual results could and likely will differ materially from those illustrated above as fair values have a number of estimates and assumptions. For example, the illustration above includes assuming that implied market volatility does not change when equity prices fall by 10% and that the 100 basis point increase in interest rates is a parallel shift of the yield curve. Furthermore, the Company has not tried to anticipate changes in client preferences for different types of assets or other changes in client behavior, nor has the Company tried to anticipate all strategic actions management might take to increase revenues or reduce expenses in the above scenarios.

The selection of a 100 basis point interest rate increase as well as a 10% equity price decline should not be construed as a prediction of future market events. Impacts of larger or smaller changes in interest rates or equity prices will not be proportional to those shown for a 100 basis point increase in interest rates or a 10% decline in equity prices.

~~Asset-Based Fees~~Credit Risk

~~The Company earns asset-based~~oversight of credit risk through a comprehensive enterprise risk management ~~fees on its owned separate account assets partially offset by certain expenses. As~~program that includes members of ~~March 31, 2023, the value~~senior management. Key components of ~~these assets was $72.8 billion. This source~~this program are to require preapproval of ~~revenue is subject to both interest rate and equity price risk since the value of these assets~~counterparties and the ~~fees they earn fluctuate inversely with interest rates~~use of master netting and ~~directly with equity prices. The~~collateral arrangements whenever practical. See Note 15 for additional information on the Company’s credit exposure related to derivative assets.

Certain of the Company’s derivative contracts contain provisions that adjust the level of collateral the Company is required to post based on the Company’s financial strength rating (or based on the debt rating of the Company’s parent, Ameriprise Financial). Additionally, certain of the Company’s derivative contracts contain provisions that allow the counterparty to terminate the contract if the Company does not ~~currently hedge~~maintain a specific financial strength rating or Ameriprise Financial’s debt does not maintain a specific credit rating (generally an investment grade rating). If these termination provisions were to be triggered, the ~~interest rate~~Company’s counterparty could require immediate settlement of any net liability position. As of September 30, 2023 and December 31, 2022, the aggregate fair value of derivative contracts in a net liability position containing such credit contingent provisions was $192 million and $234 million, respectively. The aggregate fair value of assets posted as collateral for such instruments as of September 30, 2023 and December 31, 2022 was $191 million and $232 million, respectively. If the credit contingent provisions of derivative contracts in a net liability position as of September 30, 2023 and December 31, 2022 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or ~~equity price risk~~needed to settle the instruments immediately would have been $1 million and $2 million as of ~~this exposure.~~September 30, 2023 and December 31, 2022, respectively.

~~Market Risk Benefits~~

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

17. Shareholder’s Equity

The ~~total contract value~~following tables present the amounts related to each component of ~~all variable annuities as of March 31, 2023 was $76.8 billion. See Note 11 for details of~~OCI:



	Three Months Ended September 30,
	2023						2022
	Pretax		Income Tax Benefit (Expense)		Net of Tax		Pretax		Income Tax Benefit (Expense)		Net of Tax
	(in millions)
Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period (1)	$	(595)	$	127	$	(468)	$	(842)	$	178	$	(664)
Reclassification of net (gains) losses on securities included in net income (2)	38		(8)		30		86		(19)		67
Impact of benefit reserves and reinsurance recoverables	14		(3)		11		20		(3)		17
Net unrealized gains (losses) on securities	(543)		116		(427)		(736)		156		(580)
Effect of changes in discount rate assumptions on certain long-duration contracts	221		(47)		174		306		(65)		241
Effect of changes in instrument-specific credit risk on MRBs	23		(5)		18		(4)		1		(3)
Total other comprehensive income (loss)	$	(299)	$	64	$	(235)	$	(434)	$	92	$	(342)


	Nine Months Ended September 30,
	2023						2022
	Pretax		Income Tax Benefit (Expense)		Net of Tax		Pretax		Income Tax Benefit (Expense)		Net of Tax
	(in millions)
Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period (1)	$	(455)	$	102	$	(353)	$	(3,004)	$	639	$	(2,365)
Reclassification of net (gains) losses on securities included in net income (2)	27		(6)		21		84		(18)		66
Impact of benefit reserves and reinsurance recoverables	8		(2)		6		110		(19)		91
Net unrealized gains (losses) on securities	(420)		94		(326)		(2,810)		602		(2,208)
Effect of changes in discount rate assumptions on certain long-duration contracts	213		(45)		168		1,183		(252)		931
Effect of changes in instrument-specific credit risk on MRBs	68		(15)		53		835		(178)		657
Total other comprehensive income (loss)	$	(139)	$	34	$	(105)	$	(792)	$	172	$	(620)

(1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the ~~reserves associated with market risk benefits. The~~period.

(2) Reclassification amounts are recorded in Net realized investment gains (losses).

Other comprehensive income (loss) related to net unrealized gains (losses) on securities includes three components: (i) unrealized gains (losses) that arose from changes in the fair value of ~~variable~~securities that were held during the period; (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit losses to credit losses; and (iii) other adjustments primarily consisting of changes in insurance and annuity ~~market risk benefits are recorded through earnings, with~~asset and liability balances, such as benefit reserves and reinsurance recoverables, to reflect the ~~exception~~expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table presents the changes in the balances of each component of AOCI, net of tax:


	Net Unrealized Gains (Losses) on Securities		Effect of Changes in Discount Rate Assumptions on Certain Long-Duration Contracts		Effect of Changes in Instrument-Specific Credit Risk on MRBs		Other		Total
	(in millions)
Balance at July 1, 2023	$	(890)	$	(78)	$	15	$	(1)	$	(954)
OCI before reclassifications	(457)		174		18		—		(265)
Amounts reclassified from AOCI	30		—		—		—		30
Total OCI	(427)		174		18		—		(235)
Balance at September 30, 2023	$	(1,317)	$	96	$	33	$	(1)	$	(1,189)

Balance at July 1, 2022	$	(584)	$	(243)	$	233	$	(1)	$	(595)
OCI before reclassifications	(647)		241		(3)		—		(409)
Amounts reclassified from AOCI	67		—		—		—		67
Total OCI	(580)		241		(3)		—		(342)
Balance at September 30, 2022	$	(1,164)	$	(2)	$	230	$	(1)	$	(937)

Balance at January 1, 2023	$	(991)	$	(72)	$	(20)	$	(1)	$	(1,084)
OCI before reclassifications	(347)		168		53		—		(126)
Amounts reclassified from AOCI	21		—		—		—		21
Total OCI	(326)		168		53		—		(105)
Balance at September 30, 2023	$	(1,317)	$	96	$	33	$	(1)	$	(1,189)

Balance at January 1, 2022	$	1,044	$	(933)	$	(427)	$	(1)	$	(317)
OCI before reclassifications	(2,274)		931		657		—		(686)
Amounts reclassified from AOCI	66		—		—		—		66
Total OCI	(2,208)		931		657		—		(620)
Balance at September 30, 2022	$	(1,164)	$	(2)	$	230	$	(1)	$	(937)

18. Income Taxes

The Company’s effective tax rate was 9.4% and 19.5% for the three months ended September 30, 2023 and 2022, respectively. The Company’s effective tax rate was 7.9% and 15.9% for the nine months ended September 30, 2023 and 2022, respectively.

The effective tax rate for the three months ended September 30, 2023 was lower than the statutory rate primarily due to tax preferred items including low income housing tax credits and the dividends received deduction. The effective tax rate for the nine months ended September 30, 2023 was lower than the statutory rate as a result of tax preferred items including foreign tax credits, net of addback, the dividends received deduction, and low income housing tax credits, as well as the benefit of an audit closure partially offset by an increase in unrecognized tax benefits.

The decrease in the effective tax rate for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was primarily due to lower pretax income in the current period compared to the prior period. The decrease in the effective tax rate for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily due to lower pretax income in the current period compared to the prior period, as well as the benefit of an audit closure partially offset by an increase in unrecognized tax benefits and a decrease in low income housing tax credits.

Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $28 million, net of federal benefit, which will expire beginning December 31, 2023.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

allowance if required. Factors used in ~~fair value due~~making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination: (i) future taxable income exclusive of reversing temporary differences and carryforward; (ii) future reversals of existing taxable temporary differences; (iii) taxable income in prior carryback years; and (iv) tax planning strategies. Based on analysis of the Company’s tax position, management believes it is more likely than not that the Company will not realize certain state net operating losses of $28 million and state deferred tax assets of $2 million, net of federal benefit; therefore, a valuation allowance of $30 million, net of federal benefit, has been established as of both September 30, 2023 and December 31, 2022.

As of September 30, 2023 and December 31, 2022, the Company had $28 million and $37 million, respectively, of gross unrecognized tax benefits. If recognized, approximately $19 million and $20 million, net of federal tax benefits, of unrecognized tax benefits as of September 30, 2023 and December 31, 2022, respectively, would affect the effective tax rate. During the second quarter of 2023, the Company had additions to its gross unrecognized tax benefits for tax positions of prior years of $64 million and reductions to its gross unrecognized tax benefits of prior years of $71 million.

It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits may decrease by approximately $2 million in the next 12 months primarily due to state statutes of limitations expirations.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized nil and a net increase of $7 million in interest and penalties for the three and nine months ended September 30, 2023, respectively. The Company recognized nil in interest and penalties for both the three and nine months ended September 30, 2022. As of September 30, 2023 and December 31, 2022, the Company had a payable of $10 million and $3 million, respectively, related to accrued interest and penalties.

The Company files income tax returns as part of its inclusion in the consolidated federal income tax return of Ameriprise Financial in the U.S. federal jurisdiction and various state jurisdictions. The federal statute of limitations are closed on years through 2015. A previously open item for 2014 and 2015 was resolved in the second quarter of 2023. Also in the second quarter of 2023, the Internal Revenue Service (“IRS”) audit for tax years 2016 through 2018 was finalized. The IRS is currently auditing Ameriprise Financial’s U.S. income tax returns for 2019 and 2020. Ameriprise Financial’s or its subsidiaries’, including the Company’s, ~~nonperformance risk,~~state income tax returns are currently under examination by various jurisdictions for years ranging from 2017 through 2021.

19. Contingencies

Contingencies

These pending matters are subject to uncertainties and, as such, it is ~~recognized~~inherently difficult to determine whether any loss is probable or even reasonably possible, or to reasonably estimate the amount of any loss that may result from such matters. The Company cannot predict with certainty if, how, or when any such proceedings will be initiated or resolved. Matters frequently need to be more developed before a potential loss or range of loss can be reasonably estimated for any matter. An adverse outcome in any matter could result in an adverse judgment, a settlement, fine, penalty, or other ~~comprehensive income. Fair value~~sanction, and may lead to further claims, examinations, or adverse publicity each of which could have a material adverse effect on the Company’s consolidated financial condition, results of operations, or liquidity.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

In accordance with applicable accounting standards, the Company establishes an accrued liability for contingent litigation and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated. The Company discloses the nature of the contingency when management believes there is ~~calculated~~at least a reasonable possibility that the outcome may be material to the Company’s consolidated financial statements and, where feasible, an estimate of the possible loss. In such cases, there still may be an exposure to loss in excess of any amounts reasonably estimated and accrued. When a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrued liability, but continues to monitor, in conjunction with any outside counsel handling a matter, further developments that would make such loss contingency both probable and reasonably estimable. Once the Company establishes an accrued liability with respect to a loss contingency, the Company continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established, and any appropriate adjustments are made each quarter.

Guaranty Fund Assessments

RiverSource Life Insurance Company and RiverSource Life of NY are required by law to be a member of the guaranty fund association in every state where they are licensed to do business. In the event of insolvency of one or more unaffiliated insurance companies, the Company could be adversely affected by the requirement to pay assessments to the guaranty fund associations. The Company projects its cost of future guaranty fund assessments based on ~~projected, discounted cash flows over~~estimates of insurance company insolvencies provided by the ~~life~~National Organization of Life and Health Insurance Guaranty Associations and the amount of its premiums written relative to the industry-wide premium in each state. The Company accrues the estimated cost of future guaranty fund assessments when it is considered probable that an assessment will be imposed, the event obligating the Company to pay the assessment has occurred and the amount of the ~~contract, including projected, discounted benefits~~assessment can be reasonably estimated.

The Company has a liability for estimated guaranty fund assessments and ~~fees.~~a related premium tax asset. As of September 30, 2023 and December 31, 2022, the estimated liability was $37 million and $12 million, respectively. As of September 30, 2023 and December 31, 2022, the related premium tax asset was $31 million and $10 million, respectively. The expected period over which guaranty fund assessments will be made and the related tax credits recovered is not known.

6564

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RIVERSOURCE LIFE INSURANCE COMPANY

~~Equity Price Risk~~ITEM 2. MANAGEMENT’S NARRATIVE ANALYSIS

Overview

RiverSource Life Insurance Company (“RiverSource Life”) and its subsidiaries are referred to collectively in this Form 10-Q as the “Company”. The following discussion and management’s narrative analysis of the financial condition and results of operations should be read in conjunction with the “Forward-Looking Statements” that follow, the Consolidated Financial Statements and Notes presented in Item 1, its Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on February 23, 2023, as amended by the Amendment No. 1 on Form 10-K/A filed with the SEC on March 10, 2023, (collectively, the “2022 Annual Report”), and its Recast 2022 Annual Report for the year ended December 31, 2022, filed with the SEC on September 27, 2023 (“Recast 2022 Annual Report”), as well as its quarterly reports on Form 10-Q and any current reports on Form 8-K. The Company’s Recast 2022 Annual Report updated certain sections of the Company’s 2022 Annual Report and should be read in conjunction with the 2022 Annual Report in its entirety for a complete description of events, trends, uncertainties, and risks affecting the Company.

The ~~variable annuity guaranteed benefits guarantee payouts~~Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Management’s narrative analysis is presented pursuant to General Instructions H(2)(a) of Form 10-Q in lieu of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

See Note 1 to the ~~annuity holder under certain specific conditions regardless~~Consolidated Financial Statements for additional information.

The Company operates its business in the broader context of the macroeconomic forces around it, including the global and U.S. economies, changes in interest and inflation rates, financial market volatility, fluctuations in foreign exchange rates, geopolitical strain, pandemics, the competitive environment, client and customer activities and preferences, and the various regulatory and legislative developments. Financial markets and macroeconomic conditions have had and will continue to have a significant impact on the Company’s operating and performance results. The Company’s success may be affected by the factors discussed in Item 1A, “Risk Factors” in the Company’s 2022 Annual Report and other factors as discussed herein.

The Company consolidates certain variable interest entities for which it provides investment management services. These entities are defined as consolidated investment entities (“CIEs”). While the consolidation of the ~~investment assets. For this reason, when equity prices decline,~~CIEs impacts the ~~returns from~~Company’s balance sheet and income statement, the ~~separate account assets coupled with guaranteed benefit fees from annuity holders may not be sufficient~~exposure to ~~fund expected payouts. In that case, reserves must be increased with a negative~~these entities is unchanged and there is no impact to the ~~Company’s earnings.~~underlying business results. For further information on CIEs, see Note 5 to the Consolidated Financial Statements. Changes in the fair value of assets and liabilities related to the CIEs, primarily syndicated loans and debt, are reflected in Net investment income.

Critical Accounting Estimates

The ~~core derivative instruments with which~~accounting and reporting policies that the Company ~~hedges~~uses affect its Consolidated Financial Statements. Certain of the ~~equity price risk~~Company’s accounting and reporting policies are critical to an understanding of the Company’s financial condition and results of operations. In some cases, the application of these ~~benefits~~policies can be significantly affected by the estimates, judgments and assumptions made by management during the preparation of the Consolidated Financial Statements. The accounting and reporting policies and estimates the Company has identified as fundamental to a full understanding of its consolidated financial condition and results of operations are ~~longer dated put and call options; these core instruments are supplemented with equity futures and total return swaps.~~described below. See Note 152 to the Consolidated Financial Statements for further information onabout the Company’s ~~derivative instruments.~~accounting policies.

~~Interest Rate Risk~~Valuation of Investments

~~Increases in interest rates reduce~~The most significant component of the Company’s investments is its Available-for-Sale securities, which the Company carries at fair value within its Consolidated Balance Sheets. See Note 14 to the Consolidated Financial Statements for discussion of the fair value of Available-for-Sale securities. Financial markets are subject to significant movements in valuation and liquidity, which can impact the Company’s ability to liquidate and the selling price that can be realized for the Company’s securities and increases the use of judgment in determining the estimated fair value of certain investments. The Company is unable to predict impacts and determine sensitivities in reported amounts reflecting such market movements on its aggregate Available-for-Sale portfolio. Changes to these assumptions do not occur in isolation and it is impracticable to predict such impacts at the individual security unit of measure which are predominately Level 2 fair value and based on observable inputs.

Market Risk Benefits

Market risk benefits are contracts or contract features that both provide protection to the contractholder from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. Market risk benefits include certain contract features on variable annuity products that provide minimum guarantees to policyholders. Guarantees accounted for as market risk benefits include guaranteed minimum death benefit (“GMDB”), guaranteed minimum income benefit (“GMIB”), guaranteed minimum withdrawal benefit (“GMWB”) and guaranteed minimum accumulation benefit (“GMAB”).

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RIVERSOURCE LIFE INSURANCE COMPANY

Variable Annuities

The Company has approximately $75 billion of variable annuity account value that has been issued over a period of more than fifty years. The diversified variable annuity block consists of $34 billion of account value with no living benefit guarantees and $41 billion of account value with living benefit guarantees, primarily GMWB provisions. The business is predominately issued through the Ameriprise Financial® advisor network. The majority of the variable annuity contracts currently offered by the Company contain GMDB provisions. The Company discontinued most new sales of GMWB and GMAB at the end of 2021 and new sales were completely discontinued as of mid-2022. The Company also previously offered contracts containing GMIB provisions. See Note 11 to the Company’s Consolidated Financial Statements for further discussion of its variable annuity contracts.

In determining the assets or liabilities for market risk benefits, the Company projects these benefits and ~~may result~~contract assessments using actuarial models to simulate various equity market scenarios. Significant assumptions made in projecting future benefits and assessments relate to customer asset value growth rates, mortality, persistency, benefit utilization and investment margins. Management reviews, and where appropriate, adjusts its assumptions each quarter. Unless management identifies a material deviation over the course of quarterly monitoring, management reviews and updates these assumptions annually in the third quarter of each year.

Regarding the exposure to variable annuity living benefit guarantees, changes to reserves due to behavioral risk are driven by changes in policyholder surrenders and utilization of guaranteed withdrawal benefits. The Company has extensive experience studies and analysis to monitor changes and trends in policyholder behavior. A significant volume of company-specific policyholder experience data is available and provides management with the ability to regularly analyze policyholder behavior. On a monthly basis, actual surrender and benefit utilization experience is compared to expectations. Experience data includes detailed policy information providing the opportunity to review impacts of multiple variables. The ability to analyze differences in experience, such as presence of a living benefit rider, existence of surrender charges, and tax qualifications provide us an effective approach in detecting changes in policyholder behavior.

At least annually, the Company performs a thorough policyholder behavior analysis to validate the assumptions included in its market risk benefit reserves. The variable annuity assumptions and resulting reserve computations reflect multiple policyholder variables. Differentiation in assumptions by policyholder age, existence of surrender charges, guaranteed withdrawal utilization, and tax qualification are examples of factors recognized in establishing management’s assumptions used in market risk ~~benefits~~benefit calculations. The extensive data derived from the Company’s variable annuity block informs management in confirming previous assumptions and revising the variable annuity behavior assumptions. Changes in assumptions are governed by a review and approval process to ensure an ~~asset position. The interest rate exposure~~appropriate measurement of all impacted financial statement balances. Changes in these assumptions can be offsetting and the Company is ~~hedged with a portfolio of interest rate swaps, futures~~unable to predict their movement, sensitivities in reported amounts, offsetting impacts, or future impacts to the Consolidated Financial Statements over time or in any given future period.

Future Policy Benefits and ~~swaptions.~~ Claims

The Company ~~entered into interest rate swaps according~~establishes reserves to ~~risk exposures along maturities, thus creating both~~cover the benefits associated with non-traditional and traditional long-duration products. Non-traditional long-duration products include variable and structured variable annuity contracts, fixed ~~rate payor~~annuity contracts and universal life (“UL”) and variable ~~rate payor terms. If interest rates were to increase, the Company would have to pay more to the swap counterparty~~universal life (“VUL”) policies. Traditional long-duration products include term life insurance, whole life insurance, disability income (“DI”) and ~~the fair value~~long term care (“LTC”) insurance and life contingent payout annuity products. UL and VUL policies with product features that result in profits followed by losses are accounted for as insurance liabilities. The portion of ~~its equity puts would decrease, resulting in a negative impact to the Company’s pretax income.~~

~~Structured Variable Annuities~~

Structured variable annuities offer the contractholder the ability to allocate account value to either an account that earns fixed interest (fixed account) or an account that is impacted by the performance of various equity indices (indexed account). The Company’s earnings are based upon the spread between investment income earned and the credits made to the fixed account and benefits reflected in an indexed account of the structured variable annuities. As of March 31, 2023, the Company had $7.4 billion in liabilities related to structured variable annuities.

~~Equity Price Risk~~

~~The equity-linked return to contractholders creates equity price risk as the amount paid to contractholders depends on changes in equity prices. The equity price risk for~~ structured variable annuities, indexed annuities and indexed universal life (“IUL”) policies allocated to the indexed account is ~~evaluated together~~accounted for as an embedded derivative.

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RIVERSOURCE LIFE INSURANCE COMPANY

Non-Traditional Long-Duration Products, including Embedded Derivatives

UL and VUL

A portion of the Company’s UL and VUL policies have product features that result in profits followed by losses from the insurance component of the contract. These profits followed by losses can be generated by the cost structure of the product or secondary guarantees in the contract. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges. The liability for these future losses is determined at the reporting date using actuarial models to estimate the death benefits in excess of account value and recognizing the excess over the estimated life based on expected assessments (e.g. cost of insurance charges, contractual administrative charges, similar fees and investment margin). Significant assumptions made in projecting future benefits and assessments relate to client asset value growth rates, mortality, persistency and investment margins. Changes in these assumptions can be offsetting and the Company is unable to predict their movement, sensitivities in reported amounts, offsetting impacts, or future impacts to the Consolidated Financial Statements over time or in any given future period. See Note 11 to the Consolidated Financial Statements for information regarding the liability for contracts with ~~the variable annuity riders as part of a hedge program using the derivative instruments consistent with the hedging on variable annuity riders.~~secondary guarantees.

~~Interest Rate Risk~~Embedded Derivatives

The fair value of ~~the~~ embedded ~~derivative associated with~~derivatives related to structured variable annuities, isindexed annuities and IUL fluctuates based on equity markets and interest rates and is a ~~discounted~~liability. In addition, the valuation of embedded derivatives is impacted by an estimate of the Company’s nonperformance risk adjustment. This estimate includes a spread over the U.S. Treasury curve as of the balance sheet date. As the Company’s estimate of this spread over the U.S. Treasury curve widens or tightens, the liability will decrease or increase.

See Note 14 to the Consolidated Financial Statements for information regarding the fair value measurement of embedded derivatives.

Traditional Long-Duration Products

The liabilities for traditional long-duration products include cash flows related to unpaid amounts on reported claims, estimates of benefits payable on claims incurred but not yet reported and estimates of benefits that will become payable on term life, whole life, DI, LTC, and life contingent payout annuity policies as claims are incurred in the future. Accordingly, the claim liability (also referred to as disabled life reserves) is presented together as one liability for future policy benefits.

The liability for future policy benefits will be updated for actual experience at least on an annual basis and concurrent with changes to cash flow ~~approach.~~assumptions. When net premiums are updated for cash flow changes, the estimated cash flows over the entire life of a group of contracts are updated using historical experience and updated future cash flow assumptions.

Derivative Instruments and Hedging Activities

For further details on the types of derivatives the Company uses and how it accounts for them, see Note 2, Note 14 and Note 16 to the Consolidated Financial Statements. For discussion of the Company’s market risk exposures and hedging program and related sensitivity testing, see Item 2, “Management’s Narrative Analysis - Market Risk.”

Recent Accounting Pronouncements

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RIVERSOURCE LIFE INSURANCE COMPANY

Consolidated Results of Operations for the Nine Months Ended September 30, 2023 and 2022

The following table presents the Company’s consolidated results of operations:


	Nine Months Ended September 30,				Change
	2023		2022
	(in millions)
Revenues
Premiums	$	323	$	223	$	100	45	%
Net investment income	950		568		382		67
Policy and contract charges	1,510		1,567		(57)		(4)
Other revenues	447		492		(45)		(9)
Net realized investment gains (losses)	(58)		(90)		32		36
Total revenues	3,172		2,760		412		15

Benefits and expenses
Benefits, claims, losses and settlement expenses	746		(85)		831		NM
Interest credited to fixed accounts	464		443		21		5
Remeasurement (gains) losses of future policy benefit reserves	(17)		(6)		(11)		NM
Change in fair value of market risk benefits	558		298		260		87
Amortization of deferred acquisition costs	180		181		(1)		(1)
Interest and debt expense	143		71		72		NM
Other insurance and operating expenses	525		518		7		1
Total benefits and expenses	2,599		1,420		1,179		83
Pretax income (loss)	573		1,340		(767)		(57)
Income tax provision (benefit)	46		213		(167)		(78)
Net income (loss)	$	527	$	1,127	$	(600)	(53)	%
NM Not Meaningful.

Overall

Net income decreased $600 million, or 53%, for the nine months ended September 30, 2023 compared to the prior year period. Pretax income decreased $767 million, or 57%, for the nine months ended September 30, 2023 compared to the prior year period.

The following impacts were significant drivers of the period-over-period change in pretax income:

•The unfavorable impact of unlocking was $99 million for the nine months ended September 30, 2023 compared to a favorable impact of unlocking of $133 million for the prior year period.

•The market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the reinsurance accrual was an expense of $137 million for the nine months ended September 30, 2023 compared to a benefit of $566 million for the prior year period.

•The favorable impact of the trend in rising interest rates ~~impact~~on the ~~discounting~~investment portfolio yield, including from investment portfolio repositioning in the fourth quarter of 2022.

Variable annuity account balances increased 5% to $75.1 billion as of September 30, 2023 compared to the prior year period due to market appreciation, partially offset by net outflows of $2.8 billion. Variable annuity sales decreased 6% for the nine months ended September 30, 2023 compared to the prior year period reflecting a decrease in sales of variable annuities with living benefit guarantees. Account values with living benefit riders declined to 55% as of September 30, 2023 compared to 58% a year ago reflecting management’s actions to optimize the Company’s business mix. This trend is expected to continue and meaningfully shift the mix of business away from products with living benefit guarantees over time.

Fixed deferred annuity account balances declined 11% to $6.5 billion as of September 30, 2023 compared to the prior year period as policies continue to lapse and the Company previously discontinued new sales of fixed deferred annuities and fixed index annuities.

In the third quarter of the ~~embedded derivative liability.~~ year, management updated its market-related assumptions and implemented model changes related to the living benefit valuation. In addition, management conducted its annual review of life insurance, annuity and LTC valuation assumptions relative to current experience and management expectations including modeling changes. These aforementioned changes are collectively referred to as unlocking.

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RIVERSOURCE LIFE INSURANCE COMPANY

The ~~spread between~~following table presents the total pretax impacts on the Company’s revenues and expenses attributable to unlocking for the nine months ended September 30:


Pretax Increase (Decrease)	2023		2022
	(in millions)
Policy and contract charges	$	1	$	(1)
Total revenues	1		(1)

Benefits, claims, losses and settlement expenses	(17)		7
Remeasurement (gains) losses of future policy benefit reserves:
LTC unlocking	(5)		(6)
Unlocking impact, excluding LTC	(6)		6
Total remeasurement (gains) losses of future policy benefit reserves	(11)		—
Change in fair value of market risk benefits	128		(139)
Amortization of DAC	—		(2)
Total expenses	100		(134)
Pretax income	$	(99)	$	133

The primary drivers of the year-over-year unlocking impact include the following items:

•The Company lowered its surrender assumptions on variable annuities with living benefits resulting in an expense in the third quarter of 2023.

Revenues

Premiums increased $100 million, or 45%, for the nine months ended September 30, 2023 compared to the prior year period primarily due to higher sales of life contingent payout annuities.

Net investment income increased $382 million, or 67%, for the nine months ended September 30, 2023 compared to the prior year period reflecting the favorable impact of the trend in rising interest rates on the investment ~~income earned and amounts transferred~~portfolio yield, including from investment portfolio repositioning in the fourth quarter of 2022, along with higher average balances due to ~~contractholders is also affected by changes~~the growth in ~~interest rates. These interest rate risks associated with~~ structured variable annuities (“SVA”) and higher net investment income of CIEs.

Policy and contract charges decreased $57 million, or 4%, for the nine months ended September 30, 2023 compared to the prior year period primarily reflecting lower mortality and expense fees due to market depreciation and net outflows.

Other revenues decreased $45 million, or 9%, for the nine months ended September 30, 2023 compared to the prior year period primarily reflecting lower fees from decreased account balances due to market depreciation and net outflows, and a decrease in the yield on deposit receivables arising from reinsurance transactions.

Net realized investment losses were $58 million for the nine months ended September 30, 2023 compared to net realized investment losses of $90 million for the prior year period. The nine months ended September 30, 2023 included net realized losses of $27 million on Available-for-Sale securities, driven by the continued fixed maturity investment portfolio repositioning and net realized losses of $32 million on investments held by CIEs. The net realized investment losses for the nine months ended September 30, 2022 were primarily driven by impairments on securities as the Company repositioned a portion of its fixed maturity bond portfolio in response to market conditions and credit losses on corporate debt securities.

Benefits and Expenses

Benefits, claims, losses and settlement expenses increased $831 million, for the nine months ended September 30, 2023 compared to the prior year period primarily reflecting the following items:

•A $643 million increase in expense from market impacts on SVA embedded derivative, net of hedges in place to offset those risks. This increase was the result of a favorable $746 million change in the market impact on derivatives hedging the SVA embedded derivative and an unfavorable $1.4 billion change in the market impact on SVA embedded derivative. The main market driver contributing to these changes was the equity market impact on the SVA embedded derivative net of the impact on the corresponding hedge assets which resulted in an expense for the nine months ended September 30, 2023 compared to a benefit for the prior year period.

•The impact of higher sales of life contingent payout annuities.

•The impact of increased volume in SVAs.

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RIVERSOURCE LIFE INSURANCE COMPANY

Interest credited to fixed accounts increased $21 million, or 5%, for the nine months ended September 30, 2023 compared to the prior year period primarily reflecting the following items:

•A $48 million increase in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits. The favorable impact of the nonperformance credit spread was $6 million for the nine months ended September 30, 2023 compared to a favorable impact of $54 million for the prior year period.

•A $13 million decrease in expense from other market impacts on IUL benefits, net of hedges, which was an expense of $16 million for the nine months ended September 30, 2023 compared to an expense of $29 million for the prior year period. The decrease in expense was primarily due to an increase in the IUL embedded derivative in the prior period, which reflected higher option costs due to a higher new money rate, offset by more discounting due to higher Treasury rates.

Change in fair value of market risk benefits increased $260 million, or 87%, for the nine months ended September 30, 2023 compared to the prior year period primarily reflecting the following items:

•A $29 million decrease in expense from market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks. This decrease was the result of a favorable $870 million change in the market impact on variable annuity guaranteed benefits reserves and an unfavorable $841 million change in the market impact on derivatives hedging the variable annuity guaranteed benefits. The main market drivers contributing to these changes are ~~not currently hedged.~~summarized below:

~~Fixed Annuities, Fixed Insurance~~•Equity market impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a benefit for the nine months ended September 30, 2023 compared to an expense for the prior year period.

•Interest rate and ~~Fixed Portion~~bond impact on the variable annuity guaranteed benefits liability net of ~~Variable Annuities~~the impact on the corresponding hedge assets resulted in a lower benefit for the nine months ended September 30, 2023 compared to the prior year period.

•Volatility impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a lower expense for the nine months ended September 30, 2023 compared to the prior year period.

•Other unhedged items, including the difference between the assumed and ~~Variable Insurance Contracts~~actual underlying separate account investment performance, transaction costs and various behavioral items, were a lower net expense for the nine months ended September 30, 2023 compared to the prior year period.

Interest and debt expense increased $72 million for the nine months ended September 30, 2023 compared to the prior year period reflecting higher interest expense of CIEs.

Income Taxes

The Company’s ~~earnings from~~effective tax rate was 7.9% for the nine months ended September 30, 2023 compared to 15.9% for the prior year period. The decrease in the effective tax rate for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily due to lower pretax income in the current period compared to the prior year period, as well as the benefit of an audit closure, partially offset by an increase in unrecognized tax benefits and a decrease in low income housing tax credits. See Note 18 to the Consolidated Financial Statements for additional discussion on income taxes.

Market Risk

The Company’s primary market risk exposures are interest rate, equity price and credit risk. Equity price and interest rate fluctuations can have a significant impact on the Company’s results of operations, primarily due to the effects on asset-based fees and expenses, the “spread” income generated on its fixed deferred annuities, fixed insurance, ~~the~~ fixed portion of its variable annuities and variable insurance contracts, the value of market risk benefits and ~~fixed deferred~~other liabilities associated with its variable annuities ~~are based upon the spread between rates earned on assets held~~ and the ~~rates at~~value of derivatives held to hedge related benefits.

Market risk benefits continue to be managed by utilizing a hedging program which ~~interest is credited~~attempts to ~~accounts.~~match the sensitivity of the assets with the sensitivity of the benefits. This approach works with the premise that matched sensitivities will produce a highly effective hedging result. The Company’s comprehensive hedging program focuses mainly on first order sensitivities of assets and liabilities: Equity Market Level (Delta), Interest Rate Level (Rho) and Volatility (Vega). Additionally, various second order sensitivities are managed. The Company ~~primarily invests in fixed rate securities~~uses various options, swaptions, swaps and futures to ~~fund~~manage risk exposures. The exposures are measured and monitored daily and adjustments to the ~~rate credited to clients. The Company guarantees an~~hedge portfolio are made as necessary.

To evaluate interest rate toand equity price risk, the holders of these products. Investment assets and client liabilities generally differ as it relates to basis, repricing or maturity characteristics. Rates credited to clients’ accounts generally reset at shorter intervals thanCompany performs sensitivity testing which measures the yield on the underlying investments. Therefore, in an increasing interest rate environment, higher interest rates may be reflected in crediting rates to clients sooner than in rates earned on invested assets, which could result in a reduced spread between the two rates, reduced earned income and a negative impact on pretax ~~income. While interest rates under the current environment have relieved some pressure~~income from the ~~liability guaranteed minimum interest rates (“GMIRs”), there are still some GMIRs above current levels. Hence, liability credited rates will move more slowly under~~sources listed below for a ~~modest rise~~12-month period following a hypothetical 100 basis point increase in interest rates ~~while projected asset purchases would capture the full increase in interest rates. This dynamic would result in widening spreads under~~or a modestly rising rate scenario given the current relationship between the current level of interest rates and the underlying GMIRs on the business. Of the $34.9 billion in Policyholder account balances, future policy benefits and claims as of March 31, 2023, $17.8 billion is related to liabilities created by these products. The Company does not hedge this exposure.

~~As a result of the current market environment, reinvestment yields are becoming more aligned with the current portfolio yield. The Company would expect the recent~~hypothetical 10% decline in ~~its portfolio income yields to slow and begin to stabilize in future periods under the current environment.~~equity prices. The ~~carrying value and weighted average yield of total non-structured fixed maturity securities and commercial mortgage loans~~interest rate risk test assumes a sudden 100 basis point parallel shift in the ~~Company’s investment portfolio that may generate proceeds to reinvest through March 31, 2025 due to prepayment, maturity or call activity~~yield curve, with rates then staying at those levels for the ~~option~~next 12 months. The equity price risk test assumes a sudden 10% drop in equity prices, with equity prices then staying at those levels for the next 12 months. In estimating the values of the issuer, excluding securities with a make-whole provision, were $0.9 billion and 4.1%, respectively, as of March 31, 2023. In addition, residential mortgage-backed securities, which can be subject to prepayment risk under a low interest rate environment, totaled $3.3 billion and had a weighted average yield of 3.8% as of March 31, 2023. While these amounts represent investments that could be subject to reinvestment risk, it is also possible that these investments will be used to fund liabilities or may not be prepaid and will remain invested at their current yields. In addition to the interest rate environment, thevariable annuities, indexed annuities, IUL

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RIVERSOURCE LIFE INSURANCE COMPANY

~~mix of benefit payments versus product sales as well as the timing and volumes associated with such mix may impact the Company’s investment yield. Furthermore, reinvestment activities~~insurance and the associated ~~investment yield may also be impacted by corporate strategies implemented at management’s discretion. The average yield for investment purchases during~~hedging instruments, the ~~three months ended March 31, 2023 was approximately 5.8%.~~Company assumed no change in implied market volatility despite the 10% drop in equity prices.

The reinvestment of proceeds from maturities, calls and prepayments at rates near the current portfolio yield will have limited impact to future operating results. In a volatile rate environment could have onfollowing tables present the Company’s spread income, it assesses reinvestment risk in its investment portfolio and monitors this risk in accordance with its asset/liability management framework. In addition, the Company may update the crediting rates on its fixed products when warranted, subject to guaranteed minimums.

See Note 9 for more information on the account values of fixed deferred annuities, fixed insurance, and the fixed portion of variable annuities and variable insurance contracts by range of GMIRs and the rangeestimate of the ~~difference between rates credited to policyholders and contractholders~~impact on pretax income from the above defined hypothetical market movements as of ~~March 31,~~September 30, 2023 and December 31, ~~2022~~2022:


September 30, 2023
Equity Price Decline 10%	Equity Price Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based fees and expenses (1)	$	(53)	$	—	$	(53)

Variable annuity and structured variable annuity benefits:



Market risk benefits	(936)		688		(248)
Indexing feature for structured variable annuities	692		(449)		243

Total variable annuity and structured variable annuity benefits	(244)		239		(5)


IUL insurance	56		(53)		3
Total	$	(241)	$	186	$	(55)


Interest Rate Increase 100 Basis Points	Interest Rate Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based fees and expenses (1)	$	(12)	$	—	$	(12)
Variable annuity and structured variable annuity benefits:



Market risk benefits	1,223		(841)		382
Indexing feature for structured variable annuities	12		114		126

Total variable annuity and structured variable annuity benefits	1,235		(727)		508


Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	46		—		46
IUL insurance	13		2		15
Total	$	1,282	$	(725)	$	557


December 31, 2022
Equity Price Decline 10%	Equity Price Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based fees and expenses (1)	$	(54)	$	—	$	(54)

Variable annuity and structured variable annuity benefits:



Market risk benefits	(870)		648		(222)
Indexing feature for structured variable annuities	494		(291)		203

Total variable annuity and structured variable annuity benefits	(376)		357		(19)


IUL insurance	39		(21)		18
Total	$	(391)	$	336	$	(55)

Index

RIVERSOURCE LIFE INSURANCE COMPANY


Interest Rate Increase 100 Basis Points	Interest Rate Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based fees and expenses (1)	$	(12)	$	—	$	(12)
Variable annuity and structured variable annuity benefits:



Market risk benefits	1,484		(1,028)		456
Indexing feature for structured variable annuities	(29)		82		53

Total variable annuity and structured variable annuity benefits	1,455		(946)		509


Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	25		—		25
IUL insurance	12		1		13
Total	$	1,480	$	(945)	$	535

(1) Excludes incentive income which is impacted by market and fund performance during the period and cannot be readily estimated.

Net impacts shown in the above tables from market risk benefits result largely from differences between the liability valuation basis and the ~~respective guaranteed minimums,~~hedging basis. Liabilities are valued using fair value accounting principles, with risk margins incorporated in contractholder behavior assumptions. The Company’s hedging is based on its determination of economic risk, which excludes certain items in the liability valuation.

The selection of a 100 basis point interest rate increase as well as ~~the percentage~~a 10% equity price decline should not be construed as a prediction of ~~account values subject~~future market events. Impacts of larger or smaller changes in interest rates or equity prices will not be proportional to ~~rate reset~~those shown for a 100 basis point increase in ~~the time period indicated.~~

~~Indexed Universal Life~~

~~IUL insurance is similar to UL in many regards, although the rate of credited~~ interest above the minimum guarantee for funds allocated to an indexed account is linked to the performance of the specified index for the indexed account (subject to stated account parameters, which include a cap and floor,rates or a spread and floor). The policyholder may allocate all or a portion of the policy value to a fixed or any available indexed account. As of March 31, 2023, the Company had $2.5 billion in liabilities related to the indexed accounts of IUL.

~~Equity Price Risk~~

~~The equity-linked return to investors creates equity price risk as the amount credited depends on changes~~10% decline in equity prices. Most of the proceeds received from IUL insurance are invested in fixed income securities. To hedge the equity exposure, a portion of the investment earnings received from the fixed income securities is used to purchase call spreads which generate returns to replicate what the Company must credit to client accounts.

~~Interest Rate Risk~~

As mentioned above, most of the proceeds received from IUL insurance are invested in fixed income securities with the return on those investments intended to fund the purchase of call spreads and options. There are two risks relating to interest rates. First, the Company has the risk that investment returns are such that it does not have enough investment income to purchase the needed call spreads. Second, in the event the policy is surrendered, the Company pays out a book value surrender amount and there is a risk that it will incur a loss upon having to sell the fixed income securities backing the liability (if interest rates have risen). This risk is not currently hedged.

Credit Risk

Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting and collateral arrangements whenever practical. See Note 15 for additional information on the Company’s credit exposure related to derivative assets.

Certain of the Company’s derivative contracts contain provisions that adjust the level of collateral the Company is required to post based on the Company’s financial strength rating (or based on the debt rating of the Company’s parent, Ameriprise Financial). Additionally, certain of the Company’s derivative contracts contain provisions that allow the counterparty to terminate the contract if the Company does not maintain a specific financial strength rating or Ameriprise Financial’s debt does not maintain a specific credit rating (generally an investment grade rating). If these termination provisions were to be triggered, the Company’s counterparty could require immediate settlement of any net liability position. As of September 30, 2023 and December 31, 2022, the aggregate fair value of derivative contracts in a net liability position containing such credit contingent provisions was $192 million and $234 million, respectively. The aggregate fair value of assets posted as collateral for such instruments as of September 30, 2023 and December 31, 2022 was $191 million and $232 million, respectively. If the credit contingent provisions of derivative contracts in a net liability position as of September 30, 2023 and December 31, 2022 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been $1 million and $2 million as of September 30, 2023 and December 31, 2022, respectively.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

17. Shareholder’s Equity

The following tables present the amounts related to each component of OCI:



	Three Months Ended September 30,
	2023						2022
	Pretax		Income Tax Benefit (Expense)		Net of Tax		Pretax		Income Tax Benefit (Expense)		Net of Tax
	(in millions)
Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period (1)	$	(595)	$	127	$	(468)	$	(842)	$	178	$	(664)
Reclassification of net (gains) losses on securities included in net income (2)	38		(8)		30		86		(19)		67
Impact of benefit reserves and reinsurance recoverables	14		(3)		11		20		(3)		17
Net unrealized gains (losses) on securities	(543)		116		(427)		(736)		156		(580)
Effect of changes in discount rate assumptions on certain long-duration contracts	221		(47)		174		306		(65)		241
Effect of changes in instrument-specific credit risk on MRBs	23		(5)		18		(4)		1		(3)
Total other comprehensive income (loss)	$	(299)	$	64	$	(235)	$	(434)	$	92	$	(342)


	Nine Months Ended September 30,
	2023						2022
	Pretax		Income Tax Benefit (Expense)		Net of Tax		Pretax		Income Tax Benefit (Expense)		Net of Tax
	(in millions)
Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period (1)	$	(455)	$	102	$	(353)	$	(3,004)	$	639	$	(2,365)
Reclassification of net (gains) losses on securities included in net income (2)	27		(6)		21		84		(18)		66
Impact of benefit reserves and reinsurance recoverables	8		(2)		6		110		(19)		91
Net unrealized gains (losses) on securities	(420)		94		(326)		(2,810)		602		(2,208)
Effect of changes in discount rate assumptions on certain long-duration contracts	213		(45)		168		1,183		(252)		931
Effect of changes in instrument-specific credit risk on MRBs	68		(15)		53		835		(178)		657
Total other comprehensive income (loss)	$	(139)	$	34	$	(105)	$	(792)	$	172	$	(620)

(1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period.

(2) Reclassification amounts are recorded in Net realized investment gains (losses).

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table presents the changes in the balances of each component of AOCI, net of tax:


	Net Unrealized Gains (Losses) on Securities		Effect of Changes in Discount Rate Assumptions on Certain Long-Duration Contracts		Effect of Changes in Instrument-Specific Credit Risk on MRBs		Other		Total
	(in millions)
Balance at July 1, 2023	$	(890)	$	(78)	$	15	$	(1)	$	(954)
OCI before reclassifications	(457)		174		18		—		(265)
Amounts reclassified from AOCI	30		—		—		—		30
Total OCI	(427)		174		18		—		(235)
Balance at September 30, 2023	$	(1,317)	$	96	$	33	$	(1)	$	(1,189)

Balance at July 1, 2022	$	(584)	$	(243)	$	233	$	(1)	$	(595)
OCI before reclassifications	(647)		241		(3)		—		(409)
Amounts reclassified from AOCI	67		—		—		—		67
Total OCI	(580)		241		(3)		—		(342)
Balance at September 30, 2022	$	(1,164)	$	(2)	$	230	$	(1)	$	(937)

Balance at January 1, 2023	$	(991)	$	(72)	$	(20)	$	(1)	$	(1,084)
OCI before reclassifications	(347)		168		53		—		(126)
Amounts reclassified from AOCI	21		—		—		—		21
Total OCI	(326)		168		53		—		(105)
Balance at September 30, 2023	$	(1,317)	$	96	$	33	$	(1)	$	(1,189)

Balance at January 1, 2022	$	1,044	$	(933)	$	(427)	$	(1)	$	(317)
OCI before reclassifications	(2,274)		931		657		—		(686)
Amounts reclassified from AOCI	66		—		—		—		66
Total OCI	(2,208)		931		657		—		(620)
Balance at September 30, 2022	$	(1,164)	$	(2)	$	230	$	(1)	$	(937)

18. Income Taxes

Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $28 million, net of federal benefit, which will expire beginning December 31, 2023.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

allowance if required. Factors used in making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination: (i) future taxable income exclusive of reversing temporary differences and carryforward; (ii) future reversals of existing taxable temporary differences; (iii) taxable income in prior carryback years; and (iv) tax planning strategies. Based on analysis of the Company’s tax position, management believes it is more likely than not that the Company will not realize certain state net operating losses of $28 million and state deferred tax assets of $2 million, net of federal benefit; therefore, a valuation allowance of $30 million, net of federal benefit, has been established as of both September 30, 2023 and December 31, 2022.

It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits may decrease by approximately $2 million in the next 12 months primarily due to state statutes of limitations expirations.

The Company files income tax returns as part of its inclusion in the consolidated federal income tax return of Ameriprise Financial in the U.S. federal jurisdiction and various state jurisdictions. The federal statute of limitations are closed on years through 2015. A previously open item for 2014 and 2015 was resolved in the second quarter of 2023. Also in the second quarter of 2023, the Internal Revenue Service (“IRS”) audit for tax years 2016 through 2018 was finalized. The IRS is currently auditing Ameriprise Financial’s U.S. income tax returns for 2019 and 2020. Ameriprise Financial’s or its subsidiaries’, including the Company’s, state income tax returns are currently under examination by various jurisdictions for years ranging from 2017 through 2021.

19. Contingencies

Contingencies

These pending matters are subject to uncertainties and, as such, it is inherently difficult to determine whether any loss is probable or even reasonably possible, or to reasonably estimate the amount of any loss that may result from such matters. The Company cannot predict with certainty if, how, or when any such proceedings will be initiated or resolved. Matters frequently need to be more developed before a potential loss or range of loss can be reasonably estimated for any matter. An adverse outcome in any matter could result in an adverse judgment, a settlement, fine, penalty, or other sanction, and may lead to further claims, examinations, or adverse publicity each of which could have a material adverse effect on the Company’s consolidated financial condition, results of operations, or liquidity.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Guaranty Fund Assessments

The Company has a liability for estimated guaranty fund assessments and a related premium tax asset. As of September 30, 2023 and December 31, 2022, the estimated liability was $37 million and $12 million, respectively. As of September 30, 2023 and December 31, 2022, the related premium tax asset was $31 million and $10 million, respectively. The expected period over which guaranty fund assessments will be made and the related tax credits recovered is not known.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

ITEM 2. MANAGEMENT’S NARRATIVE ANALYSIS

Overview

RiverSource Life Insurance Company (“RiverSource Life”) and its subsidiaries are referred to collectively in this Form 10-Q as the “Company”. The following discussion and management’s narrative analysis of the financial condition and results of operations should be read in conjunction with the “Forward-Looking Statements” that follow, the Consolidated Financial Statements and Notes presented in Item 1, its Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on February 23, 2023, as amended by the Amendment No. 1 on Form 10-K/A filed with the SEC on March 10, 2023, (collectively, the “2022 Annual Report”), and its Recast 2022 Annual Report for the year ended December 31, 2022, filed with the SEC on September 27, 2023 (“Recast 2022 Annual Report”), as well as its quarterly reports on Form 10-Q and any current reports on Form 8-K. The Company’s Recast 2022 Annual Report updated certain sections of the Company’s 2022 Annual Report and should be read in conjunction with the 2022 Annual Report in its entirety for a complete description of events, trends, uncertainties, and risks affecting the Company.

See Note 1 to the Consolidated Financial Statements for additional information.

The Company consolidates certain variable interest entities for which it provides investment management services. These entities are defined as consolidated investment entities (“CIEs”). While the consolidation of the CIEs impacts the Company’s balance sheet and income statement, the exposure to these entities is unchanged and there is no impact to the underlying business results. For further information on CIEs, see Note 5 to the Consolidated Financial Statements. Changes in the fair value of assets and liabilities related to the CIEs, primarily syndicated loans and debt, are reflected in Net investment income.

Critical Accounting Estimates

Valuation of Investments

The most significant component of the Company’s investments is its Available-for-Sale securities, which the Company carries at fair value within its Consolidated Balance Sheets. See Note 14 to the Consolidated Financial Statements for discussion of the fair value of Available-for-Sale securities. Financial markets are subject to significant movements in valuation and liquidity, which can impact the Company’s ability to liquidate and the selling price that can be realized for the Company’s securities and increases the use of judgment in determining the estimated fair value of certain investments. The Company is unable to predict impacts and determine sensitivities in reported amounts reflecting such market movements on its aggregate Available-for-Sale portfolio. Changes to these assumptions do not occur in isolation and it is impracticable to predict such impacts at the individual security unit of measure which are predominately Level 2 fair value and based on observable inputs.

Market Risk Benefits

Market risk benefits are contracts or contract features that both provide protection to the contractholder from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. Market risk benefits include certain contract features on variable annuity products that provide minimum guarantees to policyholders. Guarantees accounted for as market risk benefits include guaranteed minimum death benefit (“GMDB”), guaranteed minimum income benefit (“GMIB”), guaranteed minimum withdrawal benefit (“GMWB”) and guaranteed minimum accumulation benefit (“GMAB”).

Index

RIVERSOURCE LIFE INSURANCE COMPANY

Variable Annuities

At least annually, the Company performs a thorough policyholder behavior analysis to validate the assumptions included in its market risk benefit reserves. The variable annuity assumptions and resulting reserve computations reflect multiple policyholder variables. Differentiation in assumptions by policyholder age, existence of surrender charges, guaranteed withdrawal utilization, and tax qualification are examples of factors recognized in establishing management’s assumptions used in market risk benefit calculations. The extensive data derived from the Company’s variable annuity block informs management in confirming previous assumptions and revising the variable annuity behavior assumptions. Changes in assumptions are governed by a review and approval process to ensure an appropriate measurement of all impacted financial statement balances. Changes in these assumptions can be offsetting and the Company is unable to predict their movement, sensitivities in reported amounts, offsetting impacts, or future impacts to the Consolidated Financial Statements over time or in any given future period.

Future Policy Benefits and Claims

The Company establishes reserves to cover the benefits associated with non-traditional and traditional long-duration products. Non-traditional long-duration products include variable and structured variable annuity contracts, fixed annuity contracts and universal life (“UL”) and variable universal life (“VUL”) policies. Traditional long-duration products include term life insurance, whole life insurance, disability income (“DI”) and long term care (“LTC”) insurance and life contingent payout annuity products. UL and VUL policies with product features that result in profits followed by losses are accounted for as insurance liabilities. The portion of structured variable annuities, indexed annuities and indexed universal life (“IUL”) policies allocated to the indexed account is accounted for as an embedded derivative.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

Non-Traditional Long-Duration Products, including Embedded Derivatives

UL and VUL

A portion of the Company’s UL and VUL policies have product features that result in profits followed by losses from the insurance component of the contract. These profits followed by losses can be generated by the cost structure of the product or secondary guarantees in the contract. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges. The liability for these future losses is determined at the reporting date using actuarial models to estimate the death benefits in excess of account value and recognizing the excess over the estimated life based on expected assessments (e.g. cost of insurance charges, contractual administrative charges, similar fees and investment margin). Significant assumptions made in projecting future benefits and assessments relate to client asset value growth rates, mortality, persistency and investment margins. Changes in these assumptions can be offsetting and the Company is unable to predict their movement, sensitivities in reported amounts, offsetting impacts, or future impacts to the Consolidated Financial Statements over time or in any given future period. See Note 11 to the Consolidated Financial Statements for information regarding the liability for contracts with secondary guarantees.

Embedded Derivatives

See Note 14 to the Consolidated Financial Statements for information regarding the fair value measurement of embedded derivatives.

Traditional Long-Duration Products

The liabilities for traditional long-duration products include cash flows related to unpaid amounts on reported claims, estimates of benefits payable on claims incurred but not yet reported and estimates of benefits that will become payable on term life, whole life, DI, LTC, and life contingent payout annuity policies as claims are incurred in the future. Accordingly, the claim liability (also referred to as disabled life reserves) is presented together as one liability for future policy benefits.

Derivative Instruments and Hedging Activities

Recent Accounting Pronouncements

Index

RIVERSOURCE LIFE INSURANCE COMPANY

Consolidated Results of Operations for the Nine Months Ended September 30, 2023 and 2022

The following table presents the Company’s consolidated results of operations:


	Nine Months Ended September 30,				Change
	2023		2022
	(in millions)
Revenues
Premiums	$	323	$	223	$	100	45	%
Net investment income	950		568		382		67
Policy and contract charges	1,510		1,567		(57)		(4)
Other revenues	447		492		(45)		(9)
Net realized investment gains (losses)	(58)		(90)		32		36
Total revenues	3,172		2,760		412		15

Benefits and expenses
Benefits, claims, losses and settlement expenses	746		(85)		831		NM
Interest credited to fixed accounts	464		443		21		5
Remeasurement (gains) losses of future policy benefit reserves	(17)		(6)		(11)		NM
Change in fair value of market risk benefits	558		298		260		87
Amortization of deferred acquisition costs	180		181		(1)		(1)
Interest and debt expense	143		71		72		NM
Other insurance and operating expenses	525		518		7		1
Total benefits and expenses	2,599		1,420		1,179		83
Pretax income (loss)	573		1,340		(767)		(57)
Income tax provision (benefit)	46		213		(167)		(78)
Net income (loss)	$	527	$	1,127	$	(600)	(53)	%
NM Not Meaningful.

Overall

The following impacts were significant drivers of the period-over-period change in pretax income:

•The unfavorable impact of unlocking was $99 million for the nine months ended September 30, 2023 compared to a favorable impact of unlocking of $133 million for the prior year period.

•The favorable impact of the trend in rising interest rates on the investment portfolio yield, including from investment portfolio repositioning in the fourth quarter of 2022.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

The following table presents the total pretax impacts on the Company’s revenues and expenses attributable to unlocking for the nine months ended September 30:


Pretax Increase (Decrease)	2023		2022
	(in millions)
Policy and contract charges	$	1	$	(1)
Total revenues	1		(1)

Benefits, claims, losses and settlement expenses	(17)		7
Remeasurement (gains) losses of future policy benefit reserves:
LTC unlocking	(5)		(6)
Unlocking impact, excluding LTC	(6)		6
Total remeasurement (gains) losses of future policy benefit reserves	(11)		—
Change in fair value of market risk benefits	128		(139)
Amortization of DAC	—		(2)
Total expenses	100		(134)
Pretax income	$	(99)	$	133

The primary drivers of the year-over-year unlocking impact include the following items:

•The Company lowered its surrender assumptions on variable annuities with living benefits resulting in an expense in the third quarter of 2023.

Revenues

Premiums increased $100 million, or 45%, for the nine months ended September 30, 2023 compared to the prior year period primarily due to higher sales of life contingent payout annuities.

Net investment income increased $382 million, or 67%, for the nine months ended September 30, 2023 compared to the prior year period reflecting the favorable impact of the trend in rising interest rates on the investment portfolio yield, including from investment portfolio repositioning in the fourth quarter of 2022, along with higher average balances due to the growth in structured variable annuities (“SVA”) and higher net investment income of CIEs.

Benefits and Expenses

Benefits, claims, losses and settlement expenses increased $831 million, for the nine months ended September 30, 2023 compared to the prior year period primarily reflecting the following items:

•The impact of higher sales of life contingent payout annuities.

•The impact of increased volume in SVAs.

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RIVERSOURCE LIFE INSURANCE COMPANY

Interest credited to fixed accounts increased $21 million, or 5%, for the nine months ended September 30, 2023 compared to the prior year period primarily reflecting the following items:

Change in fair value of market risk benefits increased $260 million, or 87%, for the nine months ended September 30, 2023 compared to the prior year period primarily reflecting the following items:

•Equity market impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a benefit for the nine months ended September 30, 2023 compared to an expense for the prior year period.

•Interest rate and bond impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a lower benefit for the nine months ended September 30, 2023 compared to the prior year period.

•Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, transaction costs and various behavioral items, were a lower net expense for the nine months ended September 30, 2023 compared to the prior year period.

Interest and debt expense increased $72 million for the nine months ended September 30, 2023 compared to the prior year period reflecting higher interest expense of CIEs.

Income Taxes

The Company’s effective tax rate was 7.9% for the nine months ended September 30, 2023 compared to 15.9% for the prior year period. The decrease in the effective tax rate for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily due to lower pretax income in the current period compared to the prior year period, as well as the benefit of an audit closure, partially offset by an increase in unrecognized tax benefits and a decrease in low income housing tax credits. See Note 18 to the Consolidated Financial Statements for additional discussion on income taxes.

Market Risk

Market risk benefits continue to be managed by utilizing a hedging program which attempts to match the sensitivity of the assets with the sensitivity of the benefits. This approach works with the premise that matched sensitivities will produce a highly effective hedging result. The Company’s comprehensive hedging program focuses mainly on first order sensitivities of assets and liabilities: Equity Market Level (Delta), Interest Rate Level (Rho) and Volatility (Vega). Additionally, various second order sensitivities are managed. The Company uses various options, swaptions, swaps and futures to manage risk exposures. The exposures are measured and monitored daily and adjustments to the hedge portfolio are made as necessary.

Index

RIVERSOURCE LIFE INSURANCE COMPANY

insurance and the associated hedging instruments, the Company assumed no change in implied market volatility despite the 10% drop in equity prices.

The following tables present the Company’s estimate of the impact on pretax income from the above defined hypothetical market movements as of September 30, 2023 and December 31, 2022:


September 30, 2023
Equity Price Decline 10%	Equity Price Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based fees and expenses (1)	$	(53)	$	—	$	(53)

Variable annuity and structured variable annuity benefits:



Market risk benefits	(936)		688		(248)
Indexing feature for structured variable annuities	692		(449)		243

Total variable annuity and structured variable annuity benefits	(244)		239		(5)


IUL insurance	56		(53)		3
Total	$	(241)	$	186	$	(55)


Interest Rate Increase 100 Basis Points	Interest Rate Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based fees and expenses (1)	$	(12)	$	—	$	(12)
Variable annuity and structured variable annuity benefits:



Market risk benefits	1,223		(841)		382
Indexing feature for structured variable annuities	12		114		126

Total variable annuity and structured variable annuity benefits	1,235		(727)		508


Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	46		—		46
IUL insurance	13		2		15
Total	$	1,282	$	(725)	$	557


December 31, 2022
Equity Price Decline 10%	Equity Price Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based fees and expenses (1)	$	(54)	$	—	$	(54)

Variable annuity and structured variable annuity benefits:



Market risk benefits	(870)		648		(222)
Indexing feature for structured variable annuities	494		(291)		203

Total variable annuity and structured variable annuity benefits	(376)		357		(19)


IUL insurance	39		(21)		18
Total	$	(391)	$	336	$	(55)

Index

RIVERSOURCE LIFE INSURANCE COMPANY


Interest Rate Increase 100 Basis Points	Interest Rate Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based fees and expenses (1)	$	(12)	$	—	$	(12)
Variable annuity and structured variable annuity benefits:



Market risk benefits	1,484		(1,028)		456
Indexing feature for structured variable annuities	(29)		82		53

Total variable annuity and structured variable annuity benefits	1,455		(946)		509


Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	25		—		25
IUL insurance	12		1		13
Total	$	1,480	$	(945)	$	535

(1) Excludes incentive income which is impacted by market and fund performance during the period and cannot be readily estimated.

Asset-Based Fees and Expenses

The Company earns asset-based management fees on its owned separate account assets partially offset by certain expenses. As of September 30, 2023, the value of these assets was $69.6 billion. This source of revenue is subject to both interest rate and equity price risk since the value of these assets and the fees they earn fluctuate inversely with interest rates and directly with equity prices. The Company does not currently hedge the interest rate or equity price risk of this exposure.

Market Risk Benefits

The total contract value of all variable annuities as of September 30, 2023 was $75.1 billion. See Note 11 for details of the reserves associated with market risk benefits. The changes in the fair value of variable annuity market risk benefits are recorded through earnings, with the exception of the portion of the change in fair value due to a change in the Company’s nonperformance risk, which is recognized in other comprehensive income(loss). Fair value is calculated based on projected, discounted cash flows over the life of the contract, including projected, discounted benefits and fees.

Equity Price Risk

The variable annuity guaranteed benefits guarantee payouts to the annuity holder under certain specific conditions regardless of the performance of the investment assets. For this reason, when equity prices decline, the returns from the separate account assets coupled with guaranteed benefit fees from annuity holders may not be sufficient to fund expected payouts. In that case, reserves must be increased with a negative impact to the Company’s earnings.

The core derivative instruments with which the Company hedges the equity price risk of these benefits are longer dated put and call options; these core instruments are supplemented with equity futures and total return swaps. See Note 16 to the Consolidated Financial Statements for further information on the Company’s derivative instruments.

Interest Rate Risk

Increases in interest rates reduce the fair value of the liabilities and may result in market risk benefits in an asset position. The interest rate exposure is hedged with a portfolio of interest rate swaps, futures and swaptions. The Company entered into interest rate swaps according to risk exposures along maturities, thus creating both fixed rate payor and variable rate payor terms. If interest rates were to increase, the Company would have to pay more to the swap counterparty and the fair value of its equity puts would decrease, resulting in a negative impact to the Company’s pretax income.

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Structured Variable Annuities

Structured variable annuities offer the contractholder the ability to allocate account value to either an account that earns fixed interest (fixed account) or an account that is impacted by the performance of various equity indices (indexed account) subject to a cap, floor or buffer. The Company’s earnings are based upon the spread between investment income earned and the credits made to the fixed account and benefits reflected in an indexed account of the structured variable annuities. As of September 30, 2023, the Company had $9.2 billion in liabilities related to structured variable annuities.

Equity Price Risk

The equity-linked return to contractholders creates equity price risk as the amount paid to contractholders depends on changes in equity prices. The equity price risk for structured variable annuities is evaluated together with the variable annuity riders as part of a hedge program using the derivative instruments consistent with the hedging on variable annuity riders.

Interest Rate Risk

The fair value of the embedded derivative associated with structured variable annuities is based on a discounted cash flow approach. Changes in interest rates impact the discounting of the embedded derivative liability. The spread between the investment income earned and amounts transferred to contractholders is also affected by changes in interest rates. These interest rate risks associated with structured variable annuities are not currently hedged.

Fixed Annuities, Fixed Insurance and Fixed Portion of Variable Annuities and Variable Insurance Contracts

The Company’s earnings from fixed insurance, the fixed portion of variable annuities and variable insurance contracts, and fixed deferred annuities are based upon the spread between rates earned on assets held and the rates at which interest is credited to accounts. The Company primarily invests in fixed rate securities to fund the rate credited to clients. The Company guarantees an interest rate to the holders of these products. Investment assets and client liabilities generally differ as it relates to basis, repricing or maturity characteristics. Rates credited to clients’ accounts generally reset at shorter intervals than the yield on the underlying investments. Therefore, in an increasing interest rate environment, higher interest rates may be reflected in crediting rates to clients sooner than in rates earned on invested assets, which could result in a reduced spread between the two rates, reduced earned income and a negative impact on pretax income. While interest rates under the current environment have relieved some pressure from the liability guaranteed minimum interest rates (“GMIRs”), there are still some GMIRs above current levels. Hence, liability credited rates will move more slowly under a modest rise in interest rates while projected asset purchases would capture the full increase in interest rates. This dynamic would result in widening spreads under a modestly rising rate scenario given the current relationship between the current level of interest rates and the underlying GMIRs on the business. Of the $35.5 billion in Policyholder account balances, future policy benefits and claims as of September 30, 2023, $17.2 billion is related to liabilities created by these products. The Company does not hedge this exposure.

As a result of the current market environment, reinvestment yields are becoming more aligned with the current portfolio yield. The Company would expect the recent decline in its portfolio income yields to slow and begin to stabilize in future periods under the current environment. The carrying value and weighted average yield of total non-structured fixed maturity securities and commercial mortgage loans in the Company’s investment portfolio that may generate proceeds to reinvest through September 30, 2025 due to prepayment, maturity or call activity at the option of the issuer, excluding securities with a make-whole provision, were $948 million and 4.1%, respectively, as of September 30, 2023. In addition, residential mortgage backed securities, which can be subject to prepayment risk under a low interest rate environment, totaled $3.4 billion and had a weighted average yield of 4.1% as of September 30, 2023. While these amounts represent investments that could be subject to reinvestment risk, it is also possible that these investments will be used to fund liabilities or may not be prepaid and will remain invested at their current yields. In addition to the interest rate environment, the mix of benefit payments versus product sales as well as the timing and volumes associated with such mix may impact the Company’s investment yield. Furthermore, reinvestment activities and the associated investment yield may also be impacted by corporate strategies implemented at management’s discretion. The average yield for investment purchases during the nine months ended September 30, 2023 was approximately 5.8%.

The reinvestment of proceeds from maturities, calls and prepayments at rates near the current portfolio yield will have limited impact to future operating results. In this volatile rate environment, the Company assesses reinvestment risk in its investment portfolio and monitors this risk in accordance with its asset/liability management framework. In addition, the Company may update the crediting rates on its fixed products when warranted, subject to guaranteed minimums.

See Note 9 for more information on the account values of fixed deferred annuities, fixed insurance, and the fixed portion of variable annuities and variable insurance contracts by range of GMIRs and the range of the difference between rates credited to policyholders and contractholders as of September 30, 2023 and December 31, 2022 and the respective guaranteed minimums, as well as the percentage of account values subject to rate reset in the time period indicated.

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Indexed Universal Life

IUL insurance is similar to UL in many regards, although the rate of credited interest above the minimum guarantee for funds allocated to an indexed account is linked to the performance of the specified index for the indexed account (subject to stated account parameters, which include a cap and floor, or a spread and floor). The policyholder may allocate all or a portion of the policy value to a fixed or any available indexed account. As of September 30, 2023, the Company had $2.6 billion in liabilities related to the indexed accounts of IUL.

Equity Price Risk

The equity-linked return to investors creates equity price risk as the amount credited depends on changes in equity prices. Most of the proceeds received from IUL insurance are invested in fixed income securities. To hedge the equity exposure, a portion of the investment earnings received from the fixed income securities is used to purchase call spreads which generate returns to replicate what the Company must credit to client accounts.

Interest Rate Risk

Credit Risk

The Company is exposed to credit risk within its investment portfolio, including its loan portfolio, and through its derivative and reinsurance activities. Credit risk relates to the uncertainty of an obligor’s continued ability to make timely payments in accordance with the contractual terms of the financial instrument or contract. The Company considers its total potential credit exposure to each counterparty and its affiliates to ensure compliance with pre-established credit guidelines at the time it enters into a transaction which would potentially increase the Company’s credit risk. These guidelines and oversight of credit risk are managed through a comprehensive enterprise risk management program that includes members of senior management.

The Company manages the risk of credit-related losses in the event of nonperformance by counterparties by applying disciplined fundamental credit analysis and underwriting standards, prudently limiting exposures to lower-quality, higher-yielding investments, and diversifying exposures by issuer, industry, region and underlying investment type. The Company remains exposed to occasional adverse cyclical economic downturns during which default rates may be significantly higher than the long-term historical average used in pricing.

The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master netting arrangements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. Generally, the Company’s current credit exposure on over-the-counter derivative contracts is limited to a derivative counterparty’s net positive fair value of derivative contracts after taking into consideration the existence of netting arrangements and any collateral received. This exposure is monitored and managed to an acceptable threshold level.

The counterparty risk for centrally cleared over-the-counter derivatives is transferred to a central clearing party through contract novation. The central clearing party requires both daily settlement of mark-to-market and initial margin. Because the central clearing party monitors open positions and adjusts collateral requirements daily, the Company has minimal credit exposure from such derivative instruments.

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

Exchange-traded derivatives are effected through regulated exchanges that require contract standardization and initial margin to transact through the exchange. Because exchange-traded futures are marked to market and generally cash settled on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivative instruments. Other exchange-traded derivatives would be exposed to nonperformance by counterparties for amounts in excess of initial margin requirements only if the exchange is unable to fulfill the contract.

The Company manages its credit risk related to reinsurance treaties by evaluating the financial condition of reinsurance counterparties prior to entering into new reinsurance treaties. In addition, the Company regularly evaluates their financial strength during the terms of the treaties. As of ~~March 31,~~September 30, 2023, the Company’s largest reinsurance credit risks are related to coinsurance treaties with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company and with life insurance subsidiaries of Genworth Financial, Inc.

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Fair Value Measurements

The Company reports certain assets and liabilities at fair value; specifically, separate account assets, derivatives, market risk benefits, embedded derivatives, and most investments and cash equivalents. Fair value assumes the exchange of assets or liabilities occurs in orderly transactions and is not the result of a forced liquidation or distressed sale. The Company includes actual market prices, or observable inputs, in its fair value measurements to the extent available. Broker quotes are obtained when quotes from pricing services are not available. The Company validates prices obtained from third parties through a variety of means such as: price variance analysis, subsequent sales testing, stale price review, price comparison across pricing vendors and due diligence reviews of vendors. See Note 1314 to the Consolidated Financial Statements for additional information on the Company’s fair value measurements.

Fair Value of Liabilities and Nonperformance Risk

Companies are required to measure the fair value of liabilities at the price that would be received to transfer the liability to a market participant (an exit price). Since there is not a market for the Company’s obligations of its ~~variable annuity riders,~~market risk benefits, fixed deferred indexed annuities, structured variable annuities, and IUL insurance, the Company considers the assumptions participants in a hypothetical market would make to reflect an exit price. As a result, the Company adjusts the valuation of ~~variable annuity riders,~~market risk benefits, fixed deferred indexed annuities, structured variable annuities, and IUL insurance by updating certain contractholder assumptions, adding explicit margins to provide for risk, and adjusting the rates used to discount expected cash flows to reflect a current market estimate of the Company’s nonperformance risk. The nonperformance risk adjustment is based on observable market data adjusted to estimate the risk of the Company not fulfilling these liabilities. Consistent with general market conditions, this estimate resulted in a spread over the U.S. Treasury curve as of ~~March 31,~~September 30, 2023. As the Company’s estimate of this spread widens or tightens, the liability will decrease or ~~increase.~~increase, respectively. If this nonperformance credit spread moves to a zero spread over the U.S. Treasury curve, the reduction to ~~future~~ total equity would be approximately ~~$1.2 billion,~~$812 million, net of the reinsurance accrual and income taxes (calculated at the statutory tax rate of 21%), based on ~~March 31,~~September 30, 2023 credit spreads.

Liquidity and Capital Resources

Liquidity Strategy

The liquidity requirements of the Company are generally met by funds provided by investment income, maturities and periodic repayments of investments, premiums and proceeds from sales of investments, fixed annuity and fixed insurance deposits as well as capital contributions from its parent, Ameriprise Financial Inc. (“Ameriprise Financial”). Other liquidity sources the Company has established are short-term borrowings and available lines of credit with Ameriprise Financial aggregating $852 million. See Note 13 to the Consolidated Financial Statements for additional information on the lines of credit.

The Company enters into short-term borrowings, which may include repurchase agreements and Federal Home Loan Bank (“FHLB”) advances to reduce reinvestment risk. Short-term borrowings allow the Company to receive cash to reinvest in longer-duration assets, while maintaining the flexibility to pay back the short-term debt with cash flows generated by the fixed income portfolio. RiverSource Life Insurance Company is a member of the FHLB of Des Moines, which provides RiverSource Life Insurance Company access to collateralized borrowings. As of ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had estimated maximum borrowing capacity of ~~$4.0~~$3.8 billion and $3.9 billion under the FHLB facility, respectively, of which $201 million was outstanding as of both ~~March 31,~~September 30, 2023 and December 31, 2022, respectively, and is collateralized with commercial mortgage backed securities.

There have been no material changes to the Company’s contractual obligations disclosed in the Company’s Recast 2022 ~~10-K.~~Annual Report.

See Note 12 to the Consolidated Financial Statements for further information about the Company’s long-term debt.

The primary uses of funds are policy benefits, commissions, other product-related acquisition and sales inducement costs, operating expenses, policy loans, dividends to Ameriprise Financial and investment purchases. The Company routinely reviews its sources and uses of funds in order to meet its ongoing obligations. The Company believes these cash flows will be sufficient to fund its short-term and long-term operating liquidity needs and dividends to Ameriprise Financial.

In 2009, the Company established an agreement to protect its exposure to Genworth Life Insurance Company (“GLIC”) for its reinsured ~~long term care (“LTC”).~~LTC. In 2016, substantial enhancements to this reinsurance protection agreement were finalized. The terms of these confidential provisions within the agreement have been shared, in the normal course of regular reviews, with the

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

Company’s domiciliary regulator and rating agencies. GLIC is domiciled in Delaware, so in the event GLIC were subjected to rehabilitation or insolvency proceedings, such proceedings would be located in (and governed by) Delaware laws. Delaware courts have a long tradition of respecting commercial and reinsurance affairs as well as contracts among sophisticated parties. Similar credit protections to what the Company has with GLIC have been tested and respected in Delaware and elsewhere in the United States, and as a result the Company believes its credit protections would be respected even in the unlikely event that GLIC becomes subject to rehabilitation or insolvency proceedings in Delaware. Accordingly, while no credit protections are perfect, the Company believes the correct way to think about the risks represented by its counterparty credit exposure to GLIC is not the full amount of the gross liability that GLIC reinsures, but a much smaller net exposure to GLIC (if any that might exist after taking into account the Company’s credit

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protections). Thus, management believes that this agreement and offsetting non LTC legacy arrangements with Genworth Financial, Inc. will enable the Company to recover on all net exposure in all material respects in the event of a rehabilitation or insolvency of GLIC.

Capital Activity

Cash dividends or distributions paid and received by RiverSource Life Insurance Company were as follows:


	Three Months Ended March 31,					Nine Months Ended September 30,
	2023		2022			2023		2022
	(in millions)					(in millions)
Paid to Ameriprise Financial	$	200	$	300
Dividends paid to Ameriprise Financial					Dividends paid to Ameriprise Financial	$	500	$	600
Dividend received from RiverSource Life Insurance Co. of New York (“RiverSource Life of NY”)					Dividend received from RiverSource Life Insurance Co. of New York (“RiverSource Life of NY”)	50		63

For dividends or distributions from the life insurance companies, notifications to state insurance regulators were made in advance of payments in excess of statutorily defined thresholds.

Regulatory Capital

RiverSource Life Insurance Company and RiverSource Life of NY are subject to regulatory capital requirements. Actual capital, determined on a statutory basis, and regulatory capital requirements for each of the life insurance entities were as follows:


		Actual Capital (1)				Regulatory Capital Requirements (2)			Actual Capital (1)							Regulatory Capital Requirements (2)
		March 31, 2023		December 31, 2022		September 30, 2023					December 31, 2022
		(in millions)							(in millions)
RiverSource Life Insurance Company	RiverSource Life Insurance Company	$	3,108	$	3,103		$	571		RiverSource Life Insurance Company	$	2,842		$	3,103		$	571
RiverSource Life of NY	RiverSource Life of NY	324		320		40	RiverSource Life of NY		222				320			40

(1) Actual capital, as defined by the National Association of Insurance Commissioners for purposes of meeting regulatory capital requirements, includes statutory capital and surplus, plus certain statutory valuation reserves.

(2) Regulatory capital requirement is the company action level and is based on the statutory risk-based capital filing. The regulatory capital requirement is only required to be calculated annually.

In October 2023, the Federal Reserve Board issued its final rule establishing a consolidated capital framework termed the “Building Block Approach” for savings and loan holding companies like Ameriprise Financial that are significantly engaged in insurance activities. The rule is effective January 1, 2024, with reporting beginning in 2025. This rule does not impact the Company’s statutory risk-based capital requirements.

Forward-Looking Statements

This report contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those described in these forward-looking statements. Examples of such forward-looking statements include:

•statements of the Company’s plans, intentions, expectations, objectives, or goals, including those related to the introduction, cessation, terms or pricing of new or existing products and services and the consolidated tax rate;

•statements about the expected trend in the shift to lower-risk products, including the exit from variable annuities with living benefit riders and the discontinuance of new sales of universal life insurance with secondary guarantees;

•other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets; and

•statements of assumptions underlying such statements.

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on track,” “project,” “continue,” “able to remain,” “resume,” “deliver,” “develop,” “evolve,” “drive,” “enable,” “flexibility,” “scenario,” “case”, “appear”, “expand” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements.

Such factors include, but are not limited to:

•market fluctuations and general economic and political factors, including volatility in the U.S. and global market conditions, client behavior and volatility in the markets for the Company’s products;

•changes in interest rates;

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•adverse capital and credit market conditions or any downgrade in the Company’s credit ratings;

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

•effects of competition and the Company’s larger competitors’ economies of scale;

•declines in the Company’s investment management performance;

•the Company’s and its affiliates’ ability to compete in attracting and retaining talent, including AFS attracting and retaining financial advisors;

•impairment, negative performance or default by financial institutions or other counterparties;

•poor performance of the Company’s variable products;

•changes in valuation of securities and investments included in the Company’s assets;

•effects of the elimination of LIBOR on, and value of, securities and other assets and liabilities tied to LIBOR;

•the determination of the amount of allowances taken on loans and investments;

•the illiquidity of the Company’s investments;

•failures by other insurers that lead to higher assessments the Company owes to state insurance guaranty funds;

•failures or defaults by counterparties to the Company’s reinsurance arrangements;

•inadequate reserves for future policy benefits and claims or for future redemptions and maturities;

•deviations from the Company’s assumptions regarding morbidity, mortality and persistency affecting the Company’s profitability;

•changes to the Company’s or its affiliates’ reputation arising from employee or agent misconduct or otherwise;

•direct or indirect effects of or responses to climate change;

•interruptions or other failures in the Company’s operating systems and networks, including errors or failures caused by third-party service providers, interference or third-party attacks;

•interruptions or other errors in the Company’s telecommunications or data processing systems;

•identification and mitigation of risk exposure in market environments, new products, vendors and other types of risk;

•occurrence of natural or man-made disasters and catastrophes;

•legal and regulatory actions brought against the Company;

•changes to laws and regulations that govern operation of the Company’s business;

•changes in corporate tax laws and regulations and interpretations and determinations of tax laws impacting the Company’s products;

•protection of the Company’s intellectual property and claims the Company infringes the intellectual property of others; and

•changes in and the adoption of new accounting standards.

The Company cautions the reader that the foregoing list of factors is not exhaustive. There may also be other risks that the Company is unable to predict at this time that may cause actual results to differ materially from those in forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update publicly or revise any forward-looking statements. The foregoing list of factors should be read in conjunction with the “Risk Factors” discussion included in Part I, Item 1A of the Company’s 2022 ~~10-K.~~Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to provide reasonable assurance that the information required to be reported in the Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in and pursuant to Securities and Exchange Commission regulations, including controls and procedures designed to ensure that this information is accumulated and communicated to the Company’s management, including its principal executive officer and chief financial officer, as appropriate, to allow timely decisions regarding the required disclosure. It should be noted that, because of inherent limitations, the Company’s disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the disclosure controls and procedures are met.

The Company’s management, under the supervision and with the participation of the Company’s principal executive officer and chief financial officer, evaluated the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Company’s principal executive officer and chief financial officer have concluded that the Company’s disclosure controls and procedures were effective at a reasonable level of assurance as of ~~March 31,~~September 30, 2023.

Changes in Internal Control over Financial Reporting

~~Commensurate with the implementation of Targeted Improvements~~There have not been any changes to the Accounting for Long-Duration Contracts accounting standard (“ASU 2018-12”) which was effective on January 1,2023 (including the restatement periods), the Company converted to a new actuarial valuation system for impacted insurance and annuity products. The new valuation system is designed to provide for an efficient and well-controlled valuation process under the new standard and leverages a single actuarial modeling platform for the Company’s valuation, risk modeling and insurance product pricing needs. In connection with the adoption of ASU 2018-12 and the conversion to the new valuation system, certain internal controls over financial reporting related to long duration accounting have been modified, automated, or implemented and utilize enhanced software capabilities ensuring an effective control environment. The

~~RIVERSOURCE LIFE INSURANCE COMPANY~~

~~Company will continue to monitor and ensure effectiveness of the financial reporting controls over long duration accounting. There were no other changes in the~~RiverSource Life Insurance Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, ~~the~~RiverSource Life Insurance Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

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ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 1819 to the Consolidated Financial Statements in Part I, Item 1 is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors provided in Part I, Item 1A of RiverSource Life Insurance Company’s 2022 ~~10-K.~~Annual Report.

ITEM 6. EXHIBITS

The following exhibits are filed as part of this Quarterly Report:


Exhibit			Description

3.1			Copy of Certificate of Incorporation of IDS Life Insurance Company, filed as Exhibit 3.1 to Post-Effective Amendment No. 5 to Registration Statement No. 33-28976, is incorporated by reference.
3.1.1			Copy of Certificate of Amendment of Certificate of Incorporation of IDS Life Insurance Company dated June 22, 2006, filed as Exhibit 3.1 to Form 8-K filed on January 5, 2007, is incorporated by reference.
3.2			Copy of Amended and Restated By-Laws of RiverSource Life Insurance Company dated June 22, 2006, filed as Exhibit 27(f)(2) to Post-Effective Amendment No. 28 to Registration Statement No. 333-69777, is incorporated by reference.
31.1*			Certification of Gumer C. Alvero, Chairman and President, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2*			Certification of Brian E. Hartert, Chief Financial Officer, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
32*			Certification of Gumer C. Alvero, Chairman and President and Brian E. Hartert, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101			The following materials from Riversource Life Insurance Company’s Quarterly Report on Form 10-Q for the period ended ~~March 31,~~September 30, 2023 are formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at ~~March 31,~~September 30, 2023 and December 31, 2022; (ii) Consolidated Statements of Income for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022; (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022; (iv) Consolidated Statements of Shareholder's Equity for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022; (v) Consolidated Statements of Cash Flows for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022; and (vi) Notes to the Consolidated Financial Statements.
104			The cover page from Riversource Life Insurance Company’s Quarterly Report on Form 10-Q for the period ended ~~March 31,~~September 30, 2023 is formatted in iXBRL and contained in Exhibit 101.
* Filed electronically herewithin.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


									RIVERSOURCE LIFE INSURANCE COMPANY
									(Registrant)


Date:	~~May~~November 2, 2023	By:	/s/ Gumer C. Alvero
			Gumer C. Alvero Director, Chairman and President (Principal Executive Officer)


Date:	~~May~~November 2, 2023	By:	/s/ Brian E. Hartert
			Brian E. Hartert Chief Financial Officer (Principal Financial Officer)

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