Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 09, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity File Number | 000-55705 | |
Entity Central Index Key | 0001167609 | |
Entity Registrant Name | BRIGHTHOUSE LIFE INSURANCE Co OF NY | |
Entity Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 13-3690700 | |
Entity Address, Address Line One | 285 Madison Avenue, 14th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10017 | |
City Area Code | 980 | |
Local Phone Number | 365-7100 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 200,000 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Investments: | ||
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $4,361 and $3,460, respectively; allowance for credit losses of $0 and $0, respectively) | $ 4,622 | $ 3,843 |
Mortgage loans (net of allowance for credit losses of $2 and $2, respectively) | 670 | 643 |
Short-term investments, principally at estimated fair value | 3 | 71 |
Other invested assets, principally at estimated fair value | 244 | 266 |
Total investments | 5,539 | 4,823 |
Cash and cash equivalents | 482 | 275 |
Accrued investment income | 35 | 29 |
Premiums, reinsurance and other receivables | 1,165 | 1,223 |
Deferred policy acquisition costs | 202 | 160 |
Current income tax recoverable | 2 | 0 |
Other assets | 25 | 27 |
Separate account assets | 5,037 | 4,965 |
Total assets | 12,487 | 11,502 |
Liabilities | ||
Future policy benefits | 820 | 825 |
Policyholder account balances | 4,002 | 3,151 |
Other policy-related balances | 10 | 12 |
Payables for collateral under derivative transactions | 213 | 137 |
Current income tax payable | 0 | 2 |
Deferred income tax liability | 152 | 178 |
Other liabilities | 1,054 | 940 |
Separate account liabilities | 5,037 | 4,965 |
Total liabilities | 11,288 | 10,210 |
Contingencies, Commitments and Guarantees (Note 9) | ||
Stockholder’s Equity | ||
Common stock, par value $10 per share; 200,000 shares authorized, issued and outstanding | 2 | 2 |
Additional paid-in capital | 491 | 491 |
Retained earnings (deficit) | 529 | 541 |
Accumulated other comprehensive income (loss) | 177 | 258 |
Total stockholder’s equity | 1,199 | 1,292 |
Total liabilities and stockholder’s equity | $ 12,487 | $ 11,502 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Fixed maturity securities, amortized cost | $ 4,361 | $ 3,460 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Mortgage loans valuation allowances | $ 2 | $ 2 |
Stockholder’s Equity | ||
Common stock, par value | $ 10 | $ 10 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares, issued | 200,000 | 200,000 |
Common stock, shares outstanding | 200,000 | 200,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues | ||||
Premiums | $ 4 | $ (3) | $ 10 | $ 16 |
Universal life and investment-type product policy fees | 26 | 24 | 78 | 70 |
Net investment income | 40 | 34 | 116 | 100 |
Other revenues | (23) | (22) | (72) | (62) |
Net investment gains (losses) | 0 | 8 | 0 | 13 |
Net derivative gains (losses) | 10 | 23 | (46) | 178 |
Total revenues | 57 | 64 | 86 | 315 |
Expenses | ||||
Policyholder benefits and claims | 6 | 6 | (8) | 20 |
Interest credited to policyholder account balances | 24 | 10 | 48 | 29 |
Amortization of deferred policy acquisition costs | 8 | 25 | 6 | 58 |
Other expenses | 17 | 17 | 57 | 57 |
Total expenses | 55 | 58 | 103 | 164 |
Income (loss) before provision for income tax | 2 | 6 | (17) | 151 |
Provision for income tax expense (benefit) | 1 | 1 | (5) | 30 |
Net income (loss) | 1 | 5 | (12) | 121 |
Comprehensive income (loss) | $ (17) | $ 23 | $ (93) | $ 231 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | AOCI Attributable to Parent |
Beginning Balance at Dec. 31, 2019 | $ 1,049 | $ 2 | $ 491 | $ 434 | $ 122 |
Net income (loss) | 116 | 116 | |||
Other comprehensive income (loss), net of income tax | 92 | 92 | |||
Ending Balance at Jun. 30, 2020 | 1,257 | 2 | 491 | 550 | 214 |
Beginning Balance at Dec. 31, 2019 | 1,049 | 2 | 491 | 434 | 122 |
Net income (loss) | 121 | ||||
Ending Balance at Sep. 30, 2020 | 1,280 | 2 | 491 | 555 | 232 |
Beginning Balance at Jun. 30, 2020 | 1,257 | 2 | 491 | 550 | 214 |
Net income (loss) | 5 | 5 | |||
Other comprehensive income (loss), net of income tax | 18 | 18 | |||
Ending Balance at Sep. 30, 2020 | 1,280 | 2 | 491 | 555 | 232 |
Beginning Balance at Dec. 31, 2020 | 1,292 | 2 | 491 | 541 | 258 |
Net income (loss) | (13) | (13) | |||
Other comprehensive income (loss), net of income tax | (63) | (63) | |||
Ending Balance at Jun. 30, 2021 | 1,216 | 2 | 491 | 528 | 195 |
Beginning Balance at Dec. 31, 2020 | 1,292 | 2 | 491 | 541 | 258 |
Net income (loss) | (12) | ||||
Ending Balance at Sep. 30, 2021 | 1,199 | 2 | 491 | 529 | 177 |
Beginning Balance at Jun. 30, 2021 | 1,216 | 2 | 491 | 528 | 195 |
Net income (loss) | 1 | 1 | |||
Other comprehensive income (loss), net of income tax | (18) | (18) | |||
Ending Balance at Sep. 30, 2021 | $ 1,199 | $ 2 | $ 491 | $ 529 | $ 177 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Cash Flows [Abstract] | ||
Net cash provided by (used in) operating activities | $ (1) | $ 62 |
Cash flows from investing activities | ||
Sales, maturities and repayments of fixed maturity securities | 305 | 436 |
Sales, maturities and repayments of mortgage loans | 61 | 48 |
Purchases of fixed maturity securities | (1,175) | (780) |
Purchases of mortgage loans | (90) | (62) |
Cash received in connection with freestanding derivatives | 361 | 222 |
Cash paid in connection with freestanding derivatives | (65) | (187) |
Net change in short-term investments | 69 | 41 |
Net change in other invested assets | 0 | 1 |
Net cash provided by (used in) investing activities | (534) | (281) |
Cash flows from financing activities | ||
Policyholder account balances: Deposits | 744 | 460 |
Policyholder account balances: Withdrawals | (78) | (75) |
Net change in payables for collateral under derivative transactions | 76 | (11) |
Short-term debt issued | 0 | 100 |
Short-term debt repaid | 0 | (100) |
Net cash provided by (used in) financing activities | 742 | 374 |
Change in cash, cash equivalents and restricted cash | 207 | 155 |
Cash, cash equivalents and restricted cash, beginning of period | 275 | 148 |
Cash, cash equivalents and restricted cash, end of period | 482 | 303 |
Supplemental disclosure of cash flow information | ||
Net cash paid (received) for interest | $ 0 | $ 1 |
Business, Basis of Presentation
Business, Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business, Basis of Presentation and Summary of Significant Accounting Policies | 1. Business, Basis of Presentation and Summary of Significant Accounting Policies Business “BHNY” and the “Company” refer to Brighthouse Life Insurance Company of NY, a New York domiciled life insurance company. Brighthouse Life Insurance Company of NY is a wholly-owned subsidiary of Brighthouse Life Insurance Company, which is an indirect wholly-owned subsidiary of Brighthouse Financial, Inc. (“BHF” together with its subsidiaries and affiliates, “Brighthouse Financial”). The Company is licensed to transact business in the state of New York. The Company markets or administers a range of annuity and life insurance products to individuals. The Company is organized into two segments: Annuities and Life. In addition, the Company reports certain of its results of operations in Corporate & Other. Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates. Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a standalone entity. The accompanying interim condensed financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2020 balance sheet data was derived from audited financial statements included in Brighthouse Life Insurance Company of NY’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed financial statements should be read in conjunction with the financial statements of the Company included in the 2020 Annual Report. Adoption of New Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASU”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. There were no ASUs adopted as of September 30, 2021. Future Adoption of New Accounting Pronouncements In August 2018, the FASB issued new guidance on long-duration contracts (ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts) . This new guidance is effective for fiscal years beginning after January 1, 2023. The amendments to Topic 944 will result in significant changes to the accounting for long-duration insurance contracts. These changes (i) require all guarantees that qualify as market risk benefits to be measured at fair value, (ii) require more frequent updating of assumptions and modify existing discount rate requirements for certain insurance liabilities, (iii) modify the methods of amortization for deferred policy acquisition costs (“DAC”), and (iv) require new qualitative and quantitative disclosures around insurance contract asset and liability balances and the judgments, assumptions and methods used to measure those balances. The market risk benefit guidance is required to be applied on a retrospective basis, while the changes to guidance for insurance liabilities and DAC will be applied to existing carrying amounts on the effective date. The Company continues to evaluate the new guidance and therefore is unable to estimate the impact on its financial statements. The most significant impact from the ASU is the requirement that all variable annuity guarantees will be considered market risk benefits and measured at fair value, whereas currently a significant amount of variable annuity guarantees are classified as insurance liabilities. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 2. Segment Information The Company is organized into two segments: Annuities and Life. In addition, the Company reports certain of its results of operations in Corporate & Other. Annuities The Annuities segment consists of a variety of variable, fixed, index-linked and income annuities designed to address contract holders’ needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security. Life The Life segment consists of insurance products and services, mainly term life insurance, designed to address policyholders’ needs for financial security and protected wealth transfer, which may be provided on a tax-advantaged basis. Corporate & Other Corporate & Other contains the excess capital not allocated to the segments and expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes direct-to-consumer life insurance that is no longer actively sold. Financial Measures and Segment Accounting Policies Adjusted earnings is a financial measure used by management to evaluate performance, allocate resources and facilitate comparisons to industry results. Consistent with GAAP guidance for segment reporting, adjusted earnings is also used to measure segment performance. The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by contract holders by highlighting the results of operations and the underlying profitability drivers of the business. Adjusted earnings, which may be positive or negative, focuses on the Company’s primary businesses principally by excluding the impact of market volatility, which could distort trends. The following are significant items excluded from total revenues in calculating adjusted earnings: • Net investment gains (losses); • Net derivative gains (losses) except earned income and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment; and • Certain variable annuity guaranteed minimum income benefits (“GMIB”) fees (“GMIB Fees”). The following are significant items excluded from total expenses in calculating adjusted earnings: • Amounts associated with benefits related to GMIBs (“GMIB Costs”); • Amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”); and • Amortization of DAC related to: (i) net investment gains (losses), (ii) net derivative gains (losses), (iii) GMIB Fees and GMIB Costs and (iv) Market Value Adjustments. The tax impact of the adjustments discussed above is calculated net of the statutory tax rate, which could differ from the Company’s effective tax rate. The segment accounting policies are the same as those used to prepare the Company’s interim condensed financial statements, except for the adjustments to calculate adjusted earnings described above. In addition, segment accounting policies include the methods of capital allocation described below. Segment investment and capitalization targets are based on statutory oriented risk principles and metrics. Segment invested assets backing liabilities are based on net statutory liabilities plus excess capital. For the variable annuity business, the excess capital held is based on the target statutory total asset requirement consistent with the Company’s variable annuity risk management strategy. For insurance businesses other than variable annuities, excess capital held is based on a percentage of required statutory risk-based capital. Assets in excess of those allocated to the segments, if any, are held in Corporate & Other. Segment net investment income reflects the performance of each segment’s respective invested assets. Operating results by segment, as well as Corporate & Other, were as follows: Three Months Ended September 30, 2021 Annuities Life Corporate Total (In millions) Pre-tax adjusted earnings $ (8) $ 2 $ 2 $ (4) Provision for income tax expense (benefit) (1) — 1 — Adjusted earnings $ (7) $ 2 $ 1 (4) Adjustments for: Net investment gains (losses) — Net derivative gains (losses) 10 Other adjustments to net income (loss) (4) Provision for income tax (expense) benefit (1) Net income (loss) $ 1 Interest revenue $ 30 $ 10 $ — Three Months Ended September 30, 2020 Annuities Life Corporate Total (In millions) Pre-tax adjusted earnings $ (7) $ 19 $ — $ 12 Provision for income tax expense (benefit) (2) 4 — 2 Adjusted earnings $ (5) $ 15 $ — 10 Adjustments for: Net investment gains (losses) 8 Net derivative gains (losses) 23 Other adjustments to net income (loss) (37) Provision for income tax (expense) benefit 1 Net income (loss) $ 5 Interest revenue $ 24 $ 9 $ 1 Nine Months Ended September 30, 2021 Annuities Life Corporate Total (In millions) Pre-tax adjusted earnings $ (25) $ 10 $ 4 $ (11) Provision for income tax expense (benefit) (6) 2 1 (3) Adjusted earnings $ (19) $ 8 $ 3 (8) Adjustments for: Net investment gains (losses) — Net derivative gains (losses) (46) Other adjustments to net income (loss) 40 Provision for income tax (expense) benefit 2 Net income (loss) $ (12) Interest revenue $ 88 $ 27 $ 1 Nine Months Ended September 30, 2020 Annuities Life Corporate Total (In millions) Pre-tax adjusted earnings $ (7) $ 39 $ (3) $ 29 Provision for income tax expense (benefit) (3) 8 (1) 4 Adjusted earnings $ (4) $ 31 $ (2) 25 Adjustments for: Net investment gains (losses) 13 Net derivative gains (losses) 178 Other adjustments to net income (loss) (69) Provision for income tax (expense) benefit (26) Net income (loss) $ 121 Interest revenue $ 71 $ 27 $ 2 Total revenues by segment, as well as Corporate & Other, were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Annuities $ 33 $ 26 $ 90 $ 76 Life 12 3 32 36 Corporate & Other — 1 1 2 Adjustments 12 34 (37) 201 Total $ 57 $ 64 $ 86 $ 315 Total assets by segment, as well as Corporate & Other, were as follows at: September 30, 2021 December 31, 2020 (In millions) Annuities $ 10,386 $ 9,467 Life 1,856 1,859 Corporate & Other 245 176 Total $ 12,487 $ 11,502 |
Insurance
Insurance | 9 Months Ended |
Sep. 30, 2021 | |
Insurance [Abstract] | |
Insurance | 3. Insurance Guarantees As discussed in Notes 1 and 3 of the Notes to the Financial Statements included in the 2020 Annual Report, the Company issues variable annuity contracts with guaranteed minimum benefits. Guaranteed minimum death benefits, the life contingent portion of guaranteed minimum withdrawal benefits (“GMWB”) and certain portions of GMIBs are accounted for as insurance liabilities in future policyholder benefits, while other guarantees are accounted for in whole or in part as embedded derivatives in policyholder account balances and are further discussed in Note 5. Information regarding the Company’s guarantee exposure was as follows at: September 30, 2021 December 31, 2020 In the At In the At (Dollars in millions) Annuity Contracts (1), (2) Variable Annuity Guarantees Total account value (3) $ 5,042 $ 3,756 $ 4,971 $ 3,816 Separate account value $ 5,034 $ 3,753 $ 4,962 $ 3,816 Net amount at risk $ 17 (4) $ 373 (5) $ 3 (4) $ 429 (5) Average attained age of contract holders 69 years 69 years 69 years 69 years _______________ (1) The Company’s annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive. (2) Includes direct business, but excludes offsets from hedging or reinsurance, if any. Therefore, the net amount at risk presented reflects the economic exposures of living and death benefit guarantees associated with variable annuities, but not necessarily their impact on the Company. See Note 5 of the Notes to the Financial Statements included in the 2020 Annual Report for a discussion of guaranteed minimum benefits which have been reinsured. (3) Includes the contract holder’s investments in the general account and separate account, if applicable. (4) Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death. (5) Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company’s potential economic exposure to such guarantees in the event all contract holders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contract holders have achieved. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 4. Investments See Notes 1 and 8 of the Notes to the Financial Statements included in the 2020 Annual Report for a description of the Company’s accounting policies for investments and the fair value hierarchy for investments and the related valuation methodologies. Fixed Maturity Securities Available-for-sale Fixed Maturity Securities by Sector Fixed maturity securities by sector were as follows at: September 30, 2021 December 31, 2020 Amortized Allowance for Credit Losses Gross Unrealized Estimated Amortized Allowance for Credit Losses Gross Unrealized Estimated Gains Losses Gains Losses (In millions) U.S. corporate $ 2,223 $ — $ 154 $ 13 $ 2,364 $ 1,697 $ — $ 201 $ 1 $ 1,897 Foreign corporate 650 — 36 4 682 503 — 58 2 559 ABS 358 — 3 — 361 350 — 6 1 355 CMBS 318 — 22 2 338 299 — 31 1 329 U.S. government and agency 252 — 38 — 290 254 — 58 — 312 RMBS 259 — 13 1 271 219 — 17 — 236 State and political subdivision 280 — 16 2 294 122 — 15 — 137 Foreign government 21 — 1 — 22 16 — 2 — 18 Total fixed maturity securities $ 4,361 $ — $ 283 $ 22 $ 4,622 $ 3,460 $ — $ 388 $ 5 $ 3,843 The Company held non-income producing fixed maturity securities with an estimated fair value of $3 million and $2 million at September 30, 2021 and December 31, 2020, respectively. Maturities of Fixed Maturity Securities The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at September 30, 2021: Due in One Due After One Due After Five Years Through Due After Ten Structured Total Fixed (In millions) Amortized cost $ 45 $ 659 $ 1,505 $ 1,217 $ 935 $ 4,361 Estimated fair value $ 45 $ 694 $ 1,569 $ 1,344 $ 970 $ 4,622 _______________ (1) Structured securities include residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”) (collectively, “Structured Securities”). Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. Structured Securities are shown separately, as they are not due at a single maturity. Continuous Gross Unrealized Losses for Fixed Maturity Securities by Sector The estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position, by sector and by length of time that the securities have been in a continuous unrealized loss position, were as follows at: September 30, 2021 December 31, 2020 Less than 12 Months 12 Months or Greater Less than 12 Months 12 Months or Greater Estimated Gross Estimated Gross Estimated Gross Estimated Gross (Dollars in millions) U.S. corporate $ 452 $ 11 $ 31 $ 2 $ 54 $ 1 $ 2 $ — Foreign corporate 169 3 9 1 4 — 10 2 ABS 86 — 3 — 98 1 17 — CMBS 49 1 10 1 19 1 — — RMBS 87 1 — — 4 — — — State and political subdivision 104 2 — — 9 — — — Foreign government 4 — — — 2 — — — Total fixed maturity securities $ 951 $ 18 $ 53 $ 4 $ 190 $ 3 $ 29 $ 2 Total number of securities in an unrealized loss position 441 18 82 15 Allowance for Credit Losses for Fixed Maturity Securities Evaluation and Measurement Methodologies For fixed maturity securities in an unrealized loss position, management first assesses whether the Company intends to sell, or whether it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to estimated fair value through net investment gains (losses). For fixed maturity securities that do not meet the aforementioned criteria, management evaluates whether the decline in estimated fair value has resulted from credit losses or other factors. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the allowance for credit loss evaluation process include, but are not limited to: (i) the extent to which estimated fair value is less than amortized cost; (ii) any changes to the rating of the security by a rating agency; (iii) adverse conditions specifically related to the security, industry or geographic area; and (iv) payment structure of the fixed maturity security and the likelihood of the issuer being able to make payments in the future or the issuer’s failure to make scheduled interest and principal payments. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss is deemed to exist and an allowance for credit losses is recorded, limited by the amount that the estimated fair value is less than the amortized cost basis, with a corresponding charge to net investment gains (losses). Any unrealized losses that have not been recorded through an allowance for credit losses are recognized in other comprehensive income (loss) (“OCI”). Once a security specific allowance for credit losses is established, the present value of cash flows expected to be collected from the security continues to be reassessed. Any changes in the security specific allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense in net investment gains (losses). Fixed maturity securities are also evaluated to determine whether any amounts have become uncollectible. When all, or a portion, of a security is deemed uncollectible, the uncollectible portion is written-off with an adjustment to amortized cost and a corresponding reduction to the allowance for credit losses. Accrued interest receivables are presented separate from the amortized cost basis of fixed maturity securities. An allowance for credit losses is not estimated on an accrued interest receivable, rather receivable balances 90-days past due are deemed uncollectible and are written off with a corresponding reduction to net investment income. The accrued interest receivable on fixed maturity securities totaled $30 million and $24 million at September 30, 2021 and December 31, 2020, respectively, and is included in accrued investment income. Fixed maturity securities are also evaluated to determine if they qualify as purchased financial assets with credit deterioration (“PCD”). To determine if the credit deterioration experienced since origination is more than insignificant, both (i) the extent of the credit deterioration and (ii) any rating agency downgrades are evaluated. For securities categorized as PCD assets, the present value of cash flows expected to be collected from the security are compared to the par value of the security. If the present value of cash flows expected to be collected is less than the par value, credit losses are embedded in the purchase price of the PCD asset. In this situation, both an allowance for credit losses and amortized cost gross-up is recorded, limited by the amount that the estimated fair value is less than the grossed-up amortized cost basis. Any difference between the purchase price and the present value of cash flows is amortized or accreted into net investment income over the life of the PCD asset. Any subsequent PCD asset allowance for credit losses is evaluated in a manner similar to the process described above for fixed maturity securities. Current Period Evaluation Based on the Company’s current evaluation of its fixed maturity securities in an unrealized loss position and the current intent or requirement to sell, the Company recorded no allowance for credit losses on fixed maturity securities at September 30, 2021. Management concluded that for fixed maturity securities in an unrealized loss position, the unrealized loss was not due to issuer specific credit-related factors and as a result was recognized in OCI. Where unrealized losses have not been recognized into income, it is primarily because the securities’ bond issuer(s) are of high credit quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in estimated fair value is largely due to changes in interest rates and non-issuer-specific credit spreads. These issuers continued to make timely principal and interest payments and the estimated fair value is expected to recover as the securities approach maturity. Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at: September 30, 2021 December 31, 2020 Carrying % of Carrying % of (Dollars in millions) Commercial $ 479 71.5 % $ 458 71.2 % Agricultural 193 28.8 187 29.1 Total mortgage loans 672 100.3 645 100.3 Allowance for credit losses (2) (0.3) (2) (0.3) Total mortgage loans, net $ 670 100.0 % $ 643 100.0 % Allowance for Credit Losses for Mortgage Loans Evaluation and Measurement Methodologies The allowance for credit losses is a valuation account that is deducted from the mortgage loan’s amortized cost basis to present the net amount expected to be collected on the mortgage loan. The loan balance, or a portion of the loan balance, is written-off against the allowance when management believes this amount is uncollectible. Accrued interest receivables are presented separate from the amortized cost basis of mortgage loans. An allowance for credit losses is generally not estimated on an accrued interest receivable, rather when a loan is placed in nonaccrual status the associated accrued interest receivable balance is written off with a corresponding reduction to net investment income. For mortgage loans that are granted payment deferrals due to the impact of the ongoing worldwide pandemic sparked by the novel coronavirus (“COVID-19 pandemic”), interest continues to be accrued during the deferral period if the loan was less than 30 days past due at December 31, 2019 and performing at the onset of the pandemic. Accrued interest on COVID-19 pandemic impacted loans was not significant at both September 30, 2021 and December 31, 2020. The accrued interest receivable on mortgage loans is included in accrued investment income and totaled $4 million at both September 30, 2021 and December 31, 2020. The allowance for credit losses is estimated using relevant available information, from internal and external sources, relating to past events, current conditions, and a reasonable and supportable forecast. Historical credit loss experience provides the basis for estimating expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics and environmental conditions. A reasonable and supportable forecast period of two-years is used with an input reversion period of one-year. Mortgage loans are evaluated in both portfolio segments to determine the allowance for credit losses. The loan-level loss rates are determined using individual loan terms and characteristics, risk pools/internal ratings, national economic forecasts, prepayment speeds, and estimated default and loss severity. The resulting loss rates are applied to the mortgage loan’s amortized cost to generate an allowance for credit losses. In certain situations, the allowance for credit losses is measured as the difference between the loan’s amortized cost and liquidation value of the collateral. These situations include collateral dependent loans, expected troubled debt restructurings (“TDR”), foreclosure probable loans, and loans with dissimilar risk characteristics. Rollforward of the Allowance for Credit Losses for Mortgage Loans by Portfolio Segment The changes in the allowance for credit losses by portfolio segment were as follows: Commercial Agricultural Total (In millions) Nine Months Ended September 30, 2021 Balance, beginning of period $ 1 $ 1 $ 2 Current period provision — — — Balance, end of period $ 1 $ 1 $ 2 Nine Months Ended September 30, 2020 Balance, beginning of period $ 1 $ 1 $ 2 Current period provision — — — Balance, end of period $ 1 $ 1 $ 2 Credit Quality of Mortgage Loans by Portfolio Segment The amortized cost of mortgage loans by year of origination and credit quality indicator was as follows at: 2021 2020 2019 2018 2017 Prior Total (In millions) September 30, 2021 Commercial mortgage loans Loan-to-value ratios: Less than 65% $ 17 $ 31 $ 87 $ 10 $ 13 $ 157 $ 315 65% to 75% 39 — 65 19 7 15 145 76% to 80% — — — — — 4 4 Greater than 80% — — — 5 — 10 15 Total commercial mortgage loans 56 31 152 34 20 186 479 Agricultural mortgage loans Loan-to-value ratios: Less than 65% 32 45 40 20 6 46 189 65% to 75% 1 — 2 1 — — 4 Total agricultural mortgage loans 33 45 42 21 6 46 193 Total $ 89 $ 76 $ 194 $ 55 $ 26 $ 232 $ 672 2020 2019 2018 2017 2016 Prior Total (In millions) December 31, 2020 Commercial mortgage loans Loan-to-value ratios: Less than 65% $ 32 $ 102 $ 23 $ 13 $ 16 $ 187 $ 373 65% to 75% — 50 6 7 — 3 66 76% to 80% — — — — 1 3 4 Greater than 80% — — 5 — — 10 15 Total commercial mortgage loans 32 152 34 20 17 203 458 Agricultural mortgage loans Loan-to-value ratios: Less than 65% 46 43 21 6 15 52 183 65% to 75% — 3 1 — — — 4 Total agricultural mortgage loans 46 46 22 6 15 52 187 Total $ 78 $ 198 $ 56 $ 26 $ 32 $ 255 $ 645 The loan-to-value ratio is a measure commonly used to assess the quality of commercial and agricultural mortgage loans. The loan-to-value ratio compares the amount of the loan to the estimated fair value of the underlying property collateralizing the loan and is commonly expressed as a percentage. A loan-to-value ratio less than 100% indicates an excess of collateral value over the loan amount. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds the collateral value. The amortized cost of commercial mortgage loans by debt-service coverage ratio was as follows at: September 30, 2021 December 31, 2020 Amortized Cost % of Amortized Cost % of (Dollars in millions) Debt-service coverage ratios: Greater than 1.20x $ 450 93.9 % $ 450 98.3 % 1.00x - 1.20x 17 3.6 8 1.7 Less than 1.00x 12 2.5 — — Total $ 479 100.0 % $ 458 100.0 % The debt-service coverage ratio compares a property’s net operating income to its debt-service payments. Debt-service coverage ratios less than 1.00 times indicate that property operations do not generate enough income to cover the loan’s current debt payments. A debt-service coverage ratio greater than 1.00 times indicates an excess of net operating income over the debt-service payments. Past Due Mortgage Loans by Portfolio Segment The Company has a high-quality, well performing mortgage loan portfolio, with over 99% of all mortgage loans classified as performing at both September 30, 2021 and December 31, 2020. Delinquency is defined consistent with industry practice, when mortgage loans are past due as follows: commercial mortgage loans — 60 days; and agricultural mortgage loans — 90 days. To the extent a payment deferral is agreed to with a borrower, in response to the COVID-19 pandemic, the past due status of the impacted loans during the forbearance period is locked-in as of March 1, 2020, which reflects the date on which the COVID-19 pandemic began to affect the borrower’s ability to make payments. At both September 30, 2021 and December 31, 2020, the Company did not have any COVID-19 pandemic modified loans in delinquent status. At both September 30, 2021 and December 31, 2020 the Company did not have any mortgage loans past due. Mortgage Loans in Nonaccrual Status by Portfolio Segment Mortgage loans are placed in a nonaccrual status if there are concerns regarding collectability of future payments or the loan is past due, unless the past due loan is well collateralized. To the extent a payment deferral is agreed to with a borrower, in response to the COVID-19 pandemic, the impacted loans generally will not be reported as in a nonaccrual status during the period of deferral. A COVID-19 pandemic modified loan is only reported as a nonaccrual asset in the event a borrower declares bankruptcy, the borrower experiences significant credit deterioration such that the Company does not expect to collect all principal and interest due, or the loan was 90 days past due at the onset of the pandemic. At both September 30, 2021 and December 31, 2020, the Company did not have any COVID-19 pandemic modified loans in nonaccrual status. The Company did not have any mortgage loans in a nonaccrual status at either September 30, 2021 or December 31, 2020. Modified Mortgage Loans by Portfolio Segment Under certain circumstances, modifications are granted to nonperforming mortgage loans. Each modification is evaluated to determine if a TDR has occurred. A modification is a TDR when the borrower is in financial difficulty and the creditor makes concessions. Generally, the types of concessions may include reducing the amount of debt owed, reducing the contractual interest rate, extending the maturity date at an interest rate lower than current market interest rates and/or reducing accrued interest. The Company did not have any mortgage loans modified in a TDR during both the nine months ended September 30, 2021 and 2020. Short-term modifications made on a good faith basis to borrowers who were not more than 30 days past due at December 31, 2019 and in response to the COVID-19 pandemic are not considered TDRs. Net Unrealized Investment Gains (Losses) Unrealized investment gains (losses) on fixed maturity securities and the effect on DAC, deferred sales inducements (“DSI”) and future policy benefits, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in accumulated other comprehensive income (loss) (“AOCI”). The components of net unrealized investment gains (losses), included in AOCI, were as follows at: September 30, 2021 December 31, 2020 (In millions) Fixed maturity securities $ 261 $ 383 Derivatives 6 1 Subtotal 267 384 Amounts allocated from: Future policy benefits (9) (20) DAC and DSI (34) (38) Subtotal (43) (58) Deferred income tax benefit (expense) (47) (68) Net unrealized investment gains (losses) $ 177 $ 258 The changes in net unrealized investment gains (losses) were as follows: Nine Months Ended September 30, 2021 (In millions) Balance at December 31, 2020 $ 258 Unrealized investment gains (losses) during the period (117) Unrealized investment gains (losses) relating to: Future policy benefits 11 DAC and DSI 4 Deferred income tax benefit (expense) 21 Balance at September 30, 2021 $ 177 Change in net unrealized investment gains (losses) $ (81) Concentrations of Credit Risk There were no investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, at both September 30, 2021 and December 31, 2020. Invested Assets on Deposit and Pledged as Collateral Invested assets on deposit and pledged as collateral at estimated fair value were as follows at: September 30, 2021 December 31, 2020 (In millions) Invested assets on deposit (regulatory deposits) $ 2 $ 2 Invested assets pledged as collateral (1) 127 5 Total invested assets on deposit and pledged as collateral (2) $ 129 $ 7 _______________ (1) The Company has pledged invested assets in connection with derivative transactions (see Note 5). (2) The Company did not hold any restricted cash and cash equivalents at either September 30, 2021 or December 31, 2020. Variable Interest Entities A variable interest entity (“VIE”) is a legal entity that does not have sufficient equity at risk to finance its activities or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. The Company has invested in legal entities that are VIEs. VIEs are consolidated when the investor is the primary beneficiary. A primary beneficiary is the variable interest holder in a VIE with both (i) the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. There were no material VIEs for which the Company has concluded that it is the primary beneficiary at either September 30, 2021 or December 31, 2020. The carrying amount and maximum exposure to loss related to the VIEs for which the Company has concluded that it holds a variable interest, but is not the primary beneficiary, were as follows at: September 30, 2021 December 31, 2020 Carrying Maximum Carrying Maximum (In millions) Fixed maturity securities $ 315 $ 294 $ 301 $ 274 The Company’s investments in unconsolidated VIEs are described below. Fixed Maturity Securities The Company invests in U.S. corporate bonds, foreign corporate bonds, and Structured Securities issued by VIEs. The Company is not obligated to provide any financial or other support to these VIEs, other than the original investment. The Company’s involvement with these entities is limited to that of a passive investor. The Company has no unilateral right to appoint or remove the servicer, special servicer, or investment manager, which are generally viewed as having the power to direct the activities that most significantly impact the economic performance of the VIE, nor does the Company function in any of these roles. The Company does not have the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity; as a result, the Company has determined it is not the primary beneficiary, or consolidator, of the VIE. The Company’s maximum exposure to loss on these fixed maturity securities is limited to the amortized cost of these investments. See “— Fixed Maturity Securities Available-for-sale” for information on these securities. Net Investment Income The components of net investment income were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Investment income: Fixed maturity securities $ 35 $ 28 $ 100 $ 83 Mortgage loans 6 7 19 19 Cash, cash equivalents and short-term investments — — — 1 Other — — 1 1 Total investment income 41 35 120 104 Less: Investment expenses 1 1 4 4 Net investment income $ 40 $ 34 $ 116 $ 100 Net Investment Gains (Losses) Components of Net Investment Gains (Losses) The components of net investment gains (losses) were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Fixed maturity securities $ (1) $ 6 $ — $ 12 Mortgage loans 1 1 — — Other — 1 — 1 Total net investment gains (losses) $ — $ 8 $ — $ 13 Sales or Disposals of Fixed Maturity Securities Investment gains and losses on sales of securities are determined on a specific identification basis. Proceeds from sales or disposals of fixed maturity securities and the components of fixed maturity securities net investment gains (losses) were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Proceeds $ 33 $ 137 $ 72 $ 316 Gross investment gains $ — $ 7 $ 1 $ 13 Gross investment losses (1) (1) (1) (1) Net investment gains (losses) $ (1) $ 6 $ — $ 12 |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 5. Derivatives Accounting for Derivatives See Notes 1 and 8 of the Notes to the Financial Statements included in the 2020 Annual Report for a description of the Company’s accounting policies for derivatives and the fair value hierarchy for derivatives. Derivative Strategies Types of Derivative Instruments and Derivative Strategies The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to minimize its exposure to various market risks. Commonly used derivative instruments include, but are not necessarily limited to: • Interest rate caps; • Foreign currency swaps; and • Equity derivatives: options and total return swaps. For detailed information on these contracts and the related strategies, see Note 7 of the Notes to the Financial Statements included in the 2020 Annual Report. Primary Risks Managed by Derivatives The primary underlying risk exposure, gross notional amount and estimated fair value of derivatives held were as follows at: September 30, 2021 December 31, 2020 Primary Underlying Risk Exposure Gross Estimated Fair Value Gross Estimated Fair Value Assets Liabilities Assets Liabilities (In millions) Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency swaps Foreign currency exchange rate $ 116 $ 7 $ 1 $ 115 $ 4 $ 3 Total qualifying hedges 116 7 1 115 4 3 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate caps Interest rate 800 3 — 800 1 — Foreign currency swaps Foreign currency exchange rate 16 4 — 16 4 — Equity index options Equity market 2,752 222 130 5,908 250 94 Equity total return swaps Equity market 2,084 9 30 249 7 — Total non-designated or non-qualifying derivatives 5,652 238 160 6,973 262 94 Embedded derivatives: Ceded guaranteed minimum income benefits Other N/A 387 — N/A 477 — Direct guaranteed minimum benefits Other N/A — (22) N/A — 14 Direct index-linked annuities Other N/A — 629 N/A — 393 Total embedded derivatives Other N/A 387 607 N/A 477 407 Total $ 5,768 $ 632 $ 768 $ 7,088 $ 743 $ 504 The amount and location of gains (losses), including earned income, recognized for derivatives and gains (losses) pertaining to hedged items presented in net derivative gains (losses) were as follows: Net Derivative Net Derivative Net Investment Income Amount of (In millions) Three Months Ended September 30, 2021 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ — $ 3 Total cash flow hedges — — — 3 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives — — — — Foreign currency exchange rate derivatives — — — — Equity derivatives (8) — — — Embedded derivatives 18 — — — Total non-qualifying hedges 10 — — — Total $ 10 $ — $ — $ 3 Three Months Ended September 30, 2020 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ — $ (6) Total cash flow hedges — — — (6) Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives — — — — Foreign currency exchange rate derivatives (1) — — — Equity derivatives 86 — — — Embedded derivatives (62) — — — Total non-qualifying hedges 23 — — — Total $ 23 $ — $ — $ (6) Net Derivative Net Derivative Net Investment Income Amount of (In millions) Nine Months Ended September 30, 2021 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ 1 $ 5 Total cash flow hedges — — 1 5 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives 1 — — — Foreign currency exchange rate derivatives — — — — Equity derivatives 202 — — — Embedded derivatives (249) — — — Total non-qualifying hedges (46) — — — Total $ (46) $ — $ 1 $ 5 Nine Months Ended September 30, 2020 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ 1 $ 5 Total cash flow hedges — — 1 5 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives (1) — — — Foreign currency exchange rate derivatives 2 — — — Equity derivatives 12 — — — Embedded derivatives 165 — — — Total non-qualifying hedges 178 — — — Total $ 178 $ — $ 1 $ 5 At September 30, 2021 and December 31, 2020, the balance in AOCI associated with cash flow hedges was $6 million and $1 million, respectively. Counterparty Credit Risk The Company may be exposed to credit-related losses in the event of counterparty nonperformance on derivative instruments. Generally, the credit exposure is the fair value at the reporting date less any collateral received from the counterparty. The Company manages its credit risk by: (i) entering into derivative transactions with creditworthy counterparties governed by master netting agreements; (ii) trading through regulated exchanges and central clearing counterparties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single party credit exposures which are subject to periodic management review. See Note 6 for a description of the impact of credit risk on the valuation of derivatives. The estimated fair values of net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at: Gross Amounts Not Offset on the Balance Sheets Gross Amount Recognized Financial Instruments (1) Collateral Received/Pledged (2) Net Amount Securities Collateral Received/Pledged (3) Net Amount After Securities Collateral (In millions) September 30, 2021 Derivative assets $ 245 $ (44) $ (198) $ 3 $ (3) $ — Derivative liabilities $ 161 $ (44) $ — $ 117 $ (112) $ 5 December 31, 2020 Derivative assets $ 266 $ (91) $ (136) $ 39 $ (34) $ 5 Derivative liabilities $ 97 $ (91) $ — $ 6 $ (6) $ — _______________ (1) Represents amounts subject to an enforceable master netting agreement or similar agreement. (2) The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreement. (3) Securities collateral received from counterparties is not reported on the balance sheets and may not be sold or re-pledged unless the counterparty is in default. Amounts do not include excess of collateral pledged or received. The Company’s collateral arrangements generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the amount owed by that counterparty reaches a minimum transfer amount. Certain of these arrangements also include credit-contingent provisions which permit the party with positive fair value to terminate the derivative at the current fair value or demand immediate full collateralization from the party in a net liability position, in the event that the financial strength or credit rating of the party in a net liability position falls below a certain level. The aggregate estimated fair values of derivatives in a net liability position containing such credit-contingent provisions and the aggregate estimated fair value of assets posted as collateral for such instruments were as follows at: September 30, 2021 December 31, 2020 (In millions) Estimated fair value of derivatives in a net liability position (1) $ 117 $ 6 Estimated Fair Value of Collateral Provided: (2) Fixed maturity securities $ 127 $ 6 _______________ (1) After taking into consideration the existence of netting agreements. (2) Substantially all of the Company’s collateral arrangements provide for daily posting of collateral for the full value of the derivative contract. As a result, if the credit-contingent provisions of derivative contracts in a net liability position were triggered, minimal additional assets would be required to be posted as collateral or needed to settle the instruments immediately. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 6. Fair Value Considerable judgment is often required in interpreting market data to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. Recurring Fair Value Measurements The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are presented in the tables below. Investments that do not have a readily determinable fair value and are measured at net asset value (or equivalent) as a practical expedient to estimated fair value are excluded from the fair value hierarchy. September 30, 2021 Fair Value Hierarchy Total Estimated Level 1 Level 2 Level 3 (In millions) Assets Fixed maturity securities: U.S. corporate $ — $ 2,323 $ 41 $ 2,364 Foreign corporate — 670 12 682 ABS — 348 13 361 CMBS — 338 — 338 U.S. government and agency 148 142 — 290 RMBS — 271 — 271 State and political subdivision — 294 — 294 Foreign government — 22 — 22 Total fixed maturity securities 148 4,408 66 4,622 Short-term investments 2 1 — 3 Derivative assets: (1) Interest rate — 3 — 3 Foreign currency exchange rate — 11 — 11 Equity market — 231 — 231 Total derivative assets — 245 — 245 Embedded derivatives within asset host contracts (2) — — 387 387 Separate account assets — 5,037 — 5,037 Total assets $ 150 $ 9,691 $ 453 $ 10,294 Liabilities Derivative liabilities: (1) Foreign currency exchange rate $ — $ 1 $ — $ 1 Equity market — 160 — 160 Total derivative liabilities — 161 — 161 Embedded derivatives within liability host contracts (2) — — 607 607 Total liabilities $ — $ 161 $ 607 $ 768 December 31, 2020 Fair Value Hierarchy Total Estimated Level 1 Level 2 Level 3 (In millions) Assets Fixed maturity securities: U.S. corporate $ — $ 1,873 $ 24 $ 1,897 Foreign corporate — 557 2 559 ABS — 349 6 355 CMBS — 329 — 329 U.S. government and agency 158 154 — 312 RMBS — 236 — 236 State and political subdivision — 137 — 137 Foreign government — 18 — 18 Total fixed maturity securities 158 3,653 32 3,843 Short-term investments 63 8 — 71 Derivative assets: (1) Interest rate — 1 — 1 Foreign currency exchange rate — 8 — 8 Equity market — 257 — 257 Total derivative assets — 266 — 266 Embedded derivatives within asset host contracts (2) — — 477 477 Separate account assets — 4,965 — 4,965 Total assets $ 221 $ 8,892 $ 509 $ 9,622 Liabilities Derivative liabilities: (1) Foreign currency exchange rate $ — $ 3 $ — $ 3 Equity market — 94 — 94 Total derivative liabilities — 97 — 97 Embedded derivatives within liability host contracts (2) — — 407 407 Total liabilities $ — $ 97 $ 407 $ 504 _______________ (1) Derivative assets are presented within other invested assets on the balance sheets and derivative liabilities are presented within other liabilities on the balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the balance sheets. (2) Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables on the balance sheets. Embedded derivatives within liability host contracts are presented within policyholder account balances on the balance sheets. Valuation Controls and Procedures The Company monitors and provides oversight of valuation controls and policies for securities, mortgage loans and derivatives, which are primarily executed by its valuation service providers. The valuation methodologies used to determine fair values prioritize the use of observable market prices and market-based parameters and determines that judgmental valuation adjustments, when applied, are based upon established policies and are applied consistently over time. The valuation methodologies for securities, mortgage loans and derivatives are reviewed on an ongoing basis and revised when necessary. In addition, the Chief Accounting Officer periodically reports to the Audit Committee of Brighthouse Financial’s Board of Directors regarding compliance with fair value accounting standards. The fair value of financial assets and financial liabilities is based on quoted market prices, where available. Prices received are assessed to determine if they represent a reasonable estimate of fair value. Several controls are performed, including certain monthly controls, which include, but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed prices of securities sold to the fair value estimates, reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing due diligence to confirm that independent pricing services use market-based parameters. The process includes a determination of the observability of inputs used in estimated fair values received from independent pricing services or brokers by assessing whether these inputs can be corroborated by observable market data. Independent non-binding broker quotes, also referred to herein as “consensus pricing,” are used for a non-significant portion of the portfolio. Prices received from independent brokers are assessed to determine if they represent a reasonable estimate of fair value by considering such pricing relative to the current market dynamics and current pricing for similar financial instruments. A formal process is also applied to challenge any prices received from independent pricing services that are not considered representative of estimated fair value. If prices received from independent pricing services are not considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations are obtained. If obtaining an independent non-binding broker quotation is unsuccessful, the last available price will be used. Additional controls are performed, such as, balance sheet analytics to assess reasonableness of period-to-period pricing changes, including any price adjustments. Price adjustments are applied if prices or quotes received from independent pricing services or brokers are not considered reflective of market activity or representative of estimated fair value. The Company did not have significant price adjustments during the nine months ended September 30, 2021. Determination of Fair Value Fixed Maturity Securities The fair values for actively traded marketable bonds, primarily U.S. government and agency securities, are determined using the quoted market prices and are classified as Level 1 assets. For fixed maturity securities classified as Level 2 assets, fair values are determined using either a market or income approach and are valued based on a variety of observable inputs as described below. U.S. corporate and foreign corporate securities: Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, benchmark yields, spreads off benchmark yields, new issuances, issuer rating, trades of identical or comparable securities, or duration. Privately-placed securities are valued using the additional key inputs: market yield curve, call provisions, observable prices and spreads for similar public or private securities that incorporate the credit quality and industry sector of the issuer, and delta spread adjustments to reflect specific credit-related issues. U.S. government and agency, state and political subdivision and foreign government securities: Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, benchmark U.S. Treasury yield or other yields, spread off the U.S. Treasury yield curve for the identical security, issuer ratings and issuer spreads, broker-dealer quotes, and comparable securities that are actively traded. Structured Securities: Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, spreads for actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity, ratings, geographic region, weighted average coupon and weighted average maturity, average delinquency rates and debt-service coverage ratios. Other issuance-specific information is also used, including, but not limited to; collateral type, structure of the security, vintage of the loans, payment terms of the underlying asset, payment priority within tranche, and deal performance. Short-term Investments The fair value for actively traded short-term investments are determined using quoted market prices and are classified as Level 1 assets. For financial instruments classified as Level 2 assets, fair values are determined using a market approach and are valued based on a variety of observable inputs as described below. Fair value is determined using third-party commercial pricing services, with the primary input being quoted prices in markets that are not active. Derivatives Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates and/or financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. The Company’s OTC derivatives are settled bilateral contracts between two counterparties (“OTC-bilateral”). The fair values for OTC-bilateral derivatives classified as Level 2 assets or liabilities are determined using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models which are based on market standard valuation methodologies and a variety of observable inputs. The significant inputs to the pricing models for most OTC-bilateral derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-bilateral derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and management believes they are consistent with what other market participants would use when pricing such instruments. Most inputs for OTC-bilateral derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s derivatives and could materially affect net income. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC-bilateral derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period. Embedded Derivatives Embedded derivatives principally include certain direct variable annuity guarantees and certain affiliated ceded reinsurance agreements related to such variable annuity guarantees, and equity crediting rates within index-linked annuity contracts. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income. The Company issues variable annuity products with guaranteed minimum benefits. Guaranteed minimum accumulation benefits (“GMAB”), the non-life contingent portion of GMWBs and certain portions of GMIBs are accounted for as embedded derivatives and measured at estimated fair value separately from the host variable annuity contract. These embedded derivatives are classified within policyholder account balances on the balance sheets with changes in estimated fair value reported in net derivative gains (losses). The Company determines the fair value of these embedded derivatives by estimating the present value of projected future benefits minus the present value of projected future fees using actuarial and capital markets assumptions including expectations of policyholder behavior. The calculation is based on in-force business and is performed using standard actuarial valuation software which projects future cash flows from the embedded derivative over multiple risk neutral stochastic scenarios using observable risk-free rates. The percentage of fees included in the initial fair value measurement is not updated in subsequent periods. Capital markets assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly-traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience. The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk margin related to non-capital markets inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for BHF’s debt. These observable spreads are then adjusted to reflect the priority of these liabilities and claims-paying ability of the issuing insurance subsidiaries as compared to BHF’s overall financial strength. Risk margins are established to capture the non-capital markets risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. Transfers Into or Out of Level 3: Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) Certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were as follows at: September 30, 2021 December 31, 2020 Impact of Valuation Techniques Significant Range Range Embedded derivatives Direct, assumed and ceded guaranteed minimum benefits Option pricing • Mortality rates 0.03% - 12.62% 0.03% - 12.13% Decrease (1) • Lapse rates 0.30% - 14.50% 0.25% - 15.00% Decrease (2) • Utilization rates 0.00% - 25.00% 0.00% - 25.00% Increase (3) • Withdrawal rates 0.25% - 10.00% 0.25% - 10.00% (4) • Long-term equity volatilities 16.44% - 22.16% 16.66% - 22.21% Increase (5) • Nonperformance risk spread (0.50)% - 1.28% 0.47% - 1.97% Decrease (6) _______________ (1) Mortality rates vary by age and by demographic characteristics such as gender. The range shown reflects the mortality rate for policyholders between 35 and 90 years old, which represents the majority of the business with living benefits. Mortality rate assumptions are set based on company experience and include an assumption for mortality improvement. (2) The range shown reflects base lapse rates for major product categories for duration 1-20, which represents majority of business with living benefit riders. Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. (3) The utilization rate assumption estimates the percentage of contract holders with a GMIB or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible in a given year. The range shown represents the floor and cap of the GMIB dynamic election rates across varying levels of in-the-money. For lifetime withdrawal guarantee riders, the assumption is that everyone will begin withdrawals once account value reaches zero which is equivalent to a 100% utilization rate. Utilization rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the policyholder. (4) The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value. (5) Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (6) Nonperformance risk spread varies by duration. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the embedded derivative. The Company does not develop unobservable inputs used in measuring fair value for all other assets and liabilities classified within Level 3; therefore, these are not included in the table above. The other Level 3 assets and liabilities primarily included fixed maturity securities and derivatives. For fixed maturity securities valued based on non-binding broker quotes, an increase (decrease) in credit spreads would result in a higher (lower) fair value. For derivatives valued based on third-party pricing models, an increase (decrease) in credit spreads would generally result in a higher (lower) fair value. The changes in assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3) were summarized as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Fixed Maturity Securities Corporate (1) Structured Securities Foreign Government Net Embedded (In millions) Three Months Ended September 30, 2021 Balance, beginning of period $ 18 $ 20 $ 3 $ (234) Total realized/unrealized gains (losses) included in net income (loss) (3) (4) — — — 18 Total realized/unrealized gains (losses) included in AOCI — — — — Purchases (5) 13 3 — — Sales (5) — — — — Issuances (5) — — — — Settlements (5) — — — (4) Transfers into Level 3 (6) 24 — — — Transfers out of Level 3 (6) (2) (10) (3) — Balance, end of period $ 53 $ 13 $ — $ (220) Three Months Ended September 30, 2020 Balance, beginning of period $ 55 $ 20 $ — $ 389 Total realized/unrealized gains (losses) included in net income (loss) (3) (4) — — — (62) Total realized/unrealized gains (losses) included in AOCI 3 — — — Purchases (5) 16 1 — — Sales (5) (2) — — — Issuances (5) — — — — Settlements (5) — — — (13) Transfers into Level 3 (6) 4 — — — Transfers out of Level 3 (6) (4) (17) — — Balance, end of period $ 72 $ 4 $ — $ 314 Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2021 (7) $ — $ — $ — $ 123 Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at September 30, 2021 (7) $ — $ — $ — $ — Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2020 (7) $ — $ — $ — $ (74) Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at September 30, 2020 (7) $ 2 $ — $ — $ — Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Fixed Maturity Securities Corporate (1) Structured Securities Foreign Government Net Embedded (In millions) Nine Months Ended September 30, 2021 Balance, beginning of period $ 26 $ 6 $ — $ 70 Total realized/unrealized gains (losses) included in net income (loss) (3) (4) — — — (249) Total realized/unrealized gains (losses) included in AOCI — — — — Purchases (5) 37 13 — — Sales (5) (3) (3) — — Issuances (5) — — — — Settlements (5) — — — (41) Transfers into Level 3 (6) 5 — — — Transfers out of Level 3 (6) (12) (3) — — Balance, end of period $ 53 $ 13 $ — $ (220) Nine Months Ended September 30, 2020 Balance, beginning of period $ 35 $ 9 $ — $ 186 Total realized/unrealized gains (losses) included in net income (loss) (3) (4) — — — 165 Total realized/unrealized gains (losses) included in AOCI 4 — — — Purchases (5) 39 1 — — Sales (5) (6) — — — Issuances (5) — — — — Settlements (5) — — — (37) Transfers into Level 3 (6) 4 — — — Transfers out of Level 3 (6) (4) (6) — — Balance, end of period $ 72 $ 4 $ — $ 314 Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2021 (7) $ — $ — $ — $ (287) Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at September 30, 2021 (7) $ — $ — $ — $ — Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2020 (7) $ — $ — $ — $ 132 Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at September 30, 2020 (7) $ 4 $ — $ — $ — _______________ (1) Comprised of U.S. and foreign corporate securities. (2) Embedded derivative assets and liabilities are presented net for purposes of the rollforward. (3) Amortization of premium/accretion of discount is included within net investment income. Changes in the allowance for credit losses and direct write-offs are charged to net income (loss) on securities are included in net investment gains (losses). Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net embedded derivatives are reported in net derivative gains (losses). (4) Interest accruals, as well as cash interest coupons received, are excluded from the rollforward. (5) Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements. (6) Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and then out of Level 3 in the same period are excluded from the rollforward. (7) Changes in unrealized gains (losses) included in net income (loss) for fixed maturities are reported in either net investment income or net investment gains (losses). Substantially all changes in unrealized gains (losses) included in net income (loss) for net embedded derivatives are reported in net derivative gains (losses). Fair Value of Financial Instruments Carried at Other Than Fair Value The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income and payables for collateral under derivative transactions. The estimated fair value of the excluded financial instruments, which are primarily classified in Level 2, approximates carrying value as they are short-term in nature such that the Company believes there is minimal risk of material changes in interest rates or credit quality. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure. The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at: September 30, 2021 Fair Value Hierarchy Carrying Level 1 Level 2 Level 3 Total (In millions) Assets Mortgage loans $ 670 $ — $ — $ 698 $ 698 Premiums, reinsurance and other receivables $ 452 $ — $ 6 $ 447 $ 453 Liabilities Policyholder account balances $ 869 $ — $ — $ 938 $ 938 Other liabilities $ 475 $ — $ 39 $ 436 $ 475 December 31, 2020 Fair Value Hierarchy Carrying Level 1 Level 2 Level 3 Total (In millions) Assets Mortgage loans $ 643 $ — $ — $ 681 $ 681 Premiums, reinsurance and other receivables $ 436 $ — $ 1 $ 435 $ 436 Liabilities Policyholder account balances $ 915 $ — $ — $ 979 $ 979 Other liabilities $ 430 $ — $ 7 $ 423 $ 430 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Equity | 7. Equity Accumulated Other Comprehensive Income (Loss) Information regarding changes in the balances of each component of AOCI was as follows: Three Months Ended September 30, 2021 Unrealized Unrealized Total (In millions) Balance at June 30, 2021 $ 191 $ 4 $ 195 OCI before reclassifications (26) 3 (23) Deferred income tax benefit (expense) 6 (1) 5 AOCI before reclassifications, net of income tax 171 6 177 Amounts reclassified from AOCI — — — Deferred income tax benefit (expense) — — — Amounts reclassified from AOCI, net of income tax — — — Balance at September 30, 2021 $ 171 $ 6 $ 177 Three Months Ended September 30, 2020 Unrealized Unrealized Total (In millions) Balance at June 30, 2020 $ 199 $ 15 $ 214 OCI before reclassifications 35 (6) 29 Deferred income tax benefit (expense) (8) 1 (7) AOCI before reclassifications, net of income tax 226 10 236 Amounts reclassified from AOCI (6) — (6) Deferred income tax benefit (expense) 2 — 2 Amounts reclassified from AOCI, net of income tax (4) — (4) Balance at September 30, 2020 $ 222 $ 10 $ 232 Nine Months Ended September 30, 2021 Unrealized Unrealized Total (In millions) Balance at December 31, 2020 $ 256 $ 2 $ 258 OCI before reclassifications (106) 5 (101) Deferred income tax benefit (expense) 22 (1) 21 AOCI before reclassifications, net of income tax 172 6 178 Amounts reclassified from AOCI (1) — (1) Deferred income tax benefit (expense) — — — Amounts reclassified from AOCI, net of income tax (1) — (1) Balance at September 30, 2021 $ 171 $ 6 $ 177 Nine Months Ended September 30, 2020 Unrealized Unrealized Total (In millions) Balance at December 31, 2019 $ 116 $ 6 $ 122 OCI before reclassifications 146 5 151 Deferred income tax benefit (expense) (31) (1) (32) AOCI before reclassifications, net of income tax 231 10 241 Amounts reclassified from AOCI (12) — (12) Deferred income tax benefit (expense) 3 — 3 Amounts reclassified from AOCI, net of income tax (9) — (9) Balance at September 30, 2020 $ 222 $ 10 $ 232 _______________ (1) See Note 4 for information on offsets to investments related to future policy benefits, DAC and DSI. Information regarding amounts reclassified out of each component of AOCI was as follows: AOCI Components Amounts Reclassified from AOCI Statements of Operations and Comprehensive Income (Loss) Location Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Net unrealized investment gains (losses): Net unrealized investment gains (losses) $ — $ 6 $ 1 $ 12 Net investment income Net unrealized investment gains (losses), before income tax — 6 1 12 Income tax (expense) benefit — (2) — (3) Net unrealized investment gains (losses), net of income tax — 4 1 9 Total reclassifications, net of income tax $ — $ 4 $ 1 $ 9 |
Other Revenues and Other Expens
Other Revenues and Other Expenses | 9 Months Ended |
Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | |
Other Revenues and Other Expenses | 8. Other Revenues and Other Expenses Other Revenues The Company has entered into contracts with mutual funds, fund managers, and their affiliates (collectively, the “Funds”) whereby the Company is paid monthly or quarterly fees (“12b-1 fees”) for providing certain services to customers and distributors of the Funds. The 12b-1 fees are generally equal to a fixed percentage of the average daily balance of the customer’s investment in a fund. The percentage is specified in the contract between the Company and the Funds. Payments are generally collected when due and are neither refundable nor able to offset future fees. To earn these fees, the Company performs services such as responding to phone inquiries, maintaining records, providing information to distributors and shareholders about fund performance and providing training to account managers and sales agents. The passage of time reflects the satisfaction of the Company’s performance obligations to the Funds and is used to recognize revenue associated with 12b-1 fees. Direct other revenues consisted primarily of 12b-1 fees of $4 million and $11 million for the three months and nine months ended September 30, 2021, respectively, and $3 million and $9 million for the three months and nine months ended September 30, 2020, respectively, of which all were reported in the Annuities segment. Other Expenses Information on other expenses was as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Compensation $ 6 $ 5 $ 18 $ 15 Contracted services and other labor costs 4 3 11 11 Transition services agreements 2 2 5 4 Establishment costs 1 1 3 5 Premium and other taxes, licenses and fees 1 1 2 2 Volume related costs, excluding compensation, net of DAC capitalization 6 5 18 15 Other (3) — — 5 Total other expenses $ 17 $ 17 $ 57 $ 57 Related Party Expenses See Note 10 for a discussion of related party expenses included in the table above. |
Contingencies, Commitments and
Contingencies, Commitments and Guarantees | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies, Commitments and Guarantees | 9. Contingencies, Commitments and Guarantees Contingencies Litigation Sales Practices Claims Over the past several years, the Company has faced claims and regulatory inquiries and investigations, alleging improper marketing or sales of individual life insurance policies, annuities or other products. The Company continues to defend vigorously against the claims in these matters. The Company believes adequate provision has been made in its financial statements for all probable and reasonably estimable losses for sales practices matters. Summary Various litigations, claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company’s financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, investor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to previously, large or indeterminate amounts, including punitive and treble damages, are sought. Although, in light of these considerations, it is possible that an adverse outcome in certain cases could have a material effect upon the Company’s financial position, based on information currently known by the Company’s management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s net income or cash flows in particular quarterly or annual periods. Other Contingencies As with litigation and regulatory loss contingencies, the Company considers establishing liabilities for certain non-litigation loss contingencies when assertions are made involving disputes or other matters with counterparties to contractual arrangements entered into by the Company, including with third-party vendors. The Company establishes liabilities for such non-litigation loss contingencies when it is probable that a loss will be incurred and the amount of the loss can be reasonably estimated. In matters where it is not probable, but is reasonably possible that a loss will be incurred and the amount of loss can be reasonably estimated, such losses or range of losses are disclosed, and no accrual is made. In the absence of sufficient information to support an assessment of the reasonably possible loss or range of loss, no accrual is made and no loss or range of loss is disclosed. On a quarterly and annual basis, the Company reviews relevant information with respect to non-litigation contingencies and, when applicable, updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. Commitments Mortgage Loan Commitments The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $44 million and $7 million at September 30, 2021 and December 31, 2020, respectively. Commitments to Fund Private Corporate Bond Investments The Company commits to lend funds under private corporate bond investments. The amounts of these unfunded commitments were $15 million at both September 30, 2021 and December 31, 2020. Guarantees In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments. In addition, the Company indemnifies its directors and officers as provided in its charters and bylaws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future. The Company did not have a liability for indemnities, guarantees and commitments at either September 30, 2021 or December 31, 2020. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party TransactionsThe Company has various existing arrangements with its Brighthouse Financial affiliates and had previous arrangements with MetLife, Inc. (together with its subsidiaries and affiliates, “MetLife”) for services necessary to conduct its activities. Certain of the MetLife services have continued, however, MetLife ceased to be a related party in June 2018. See Note 8 for amounts related to continuing transition services. Other material arrangements between the Company and its related parties not disclosed elsewhere are as follows: Reinsurance Agreements The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products. The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth. Information regarding the significant effects of ceded related party reinsurance included on the interim condensed statements of operations and comprehensive income (loss) was as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Premiums $ (11) $ (11) $ (34) $ (31) Universal life and investment-type product policy fees $ (1) $ (1) $ (3) $ (3) Other revenues $ (28) $ (25) $ (83) $ (71) Policyholder benefits and claims $ (18) $ (53) $ (60) $ (111) Other expenses $ (2) $ (2) $ (6) $ (5) Information regarding the significant effects of ceded related party reinsurance included on the interim condensed balance sheets was as follows at: September 30, 2021 December 31, 2020 (In millions) Assets Premiums, reinsurance and other receivables $ 682 $ 749 Liabilities Other liabilities $ 363 $ 362 The Company cedes risks to Brighthouse Life Insurance Company related to guaranteed minimum benefit guarantees written directly by the Company. These ceded reinsurance agreements contain embedded derivatives and changes in the estimated fair value are included within net derivative gains (losses). The embedded derivatives associated with the cessions are included within premiums, reinsurance and other receivables and were $387 million and $477 million at September 30, 2021 and December 31, 2020, respectively. Net derivative gains (losses) associated with the embedded derivatives were $10 million and ($92) million for the three months and nine months ended September 30, 2021, respectively, and $16 million and $217 million for the three months and nine months ended September 30, 2020, respectively. Shared Services and Overhead Allocations Brighthouse Services, LLC, an affiliate, currently provides the Company certain services, which include, but are not limited to, treasury, financial planning and analysis, legal, human resources, tax planning, internal audit, financial reporting and information technology. Revenues received from an affiliate related to these agreements, recorded in universal life and investment-type product policy fees, were $4 million and $10 million for the three months and nine months ended September 30, 2021, respectively, and $2 million and $8 million for the three months and nine months ended September 30, 2020, respectively. Costs incurred under these arrangements were $14 million and $39 million for the three months and nine months ended September 30, 2021, respectively, and $12 million and $38 million for the three months and nine months ended September 30, 2020, respectively, and were recorded in other expenses. Included in these costs were those incurred related to the establishment of services and infrastructure to replace those previously provided by MetLife. The Company did not incur any costs for the three months and nine months ended September 30, 2021 and incurred costs of $1 million and $3 million for the three months and nine months ended September 30, 2020, respectively. The Company has been charged a fee to reflect the value of the available infrastructure and services provided by these costs. While management believes the method used to allocate expenses under this arrangement has been reasonable, the allocated expenses may not have been indicative of those of a standalone entity. These establishment costs were fully allocated as of December 31, 2020. The Company had net receivables from/(payables to) affiliates, related to the items discussed above, of ($19) million and ($6) million at September 30, 2021 and December 31, 2020, respectively. Broker-Dealer Transactions The related party expense for the Company was commissions paid on the sale of variable products and passed through to the broker-dealer affiliate. The related party revenue for the Company was fee income passed through the broker-dealer affiliate from trusts and mutual funds whose shares serve as investment options of policyholders of the Company. Fee income received related to these transactions and recorded in other revenues was $3 million and $10 million for the three months and nine months ended September 30, 2021, respectively, and $3 million and $9 million for the three months and nine months ended September 30, 2020, respectively. Commission expenses incurred related to these transactions and recorded in other expenses was $23 million and $69 million for the three months and nine months ended September 30, 2021, respectively, and $15 million and $49 million for the three months and nine months ended September 30, 2020, respectively. The Company also had related party fee income receivables of $1 million at both September 30, 2021 and December 31, 2020. |
Business, Basis of Presentati_2
Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates. |
Consolidation of Subsidiaries, Policy [Policy Text Block] | Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a standalone entity. The accompanying interim condensed financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2020 balance sheet data was derived from audited financial statements included in Brighthouse Life Insurance Company of NY’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed financial statements should be read in conjunction with the financial statements of the Company included in the 2020 Annual Report. |
New Accounting Pronouncements, Policy [Policy Text Block] | Adoption of New Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASU”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. There were no ASUs adopted as of September 30, 2021. Future Adoption of New Accounting Pronouncements In August 2018, the FASB issued new guidance on long-duration contracts (ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts) . This new guidance is effective for fiscal years beginning after January 1, 2023. The amendments to Topic 944 will result in significant changes to the accounting for long-duration insurance contracts. These changes (i) require all guarantees that qualify as market risk benefits to be measured at fair value, (ii) require more frequent updating of assumptions and modify existing discount rate requirements for certain insurance liabilities, (iii) modify the methods of amortization for deferred policy acquisition costs (“DAC”), and (iv) require new qualitative and quantitative disclosures around insurance contract asset and liability balances and the judgments, assumptions and methods used to measure those balances. The market risk benefit guidance is required to be applied on a retrospective basis, while the changes to guidance for insurance liabilities and DAC will be applied to existing carrying amounts on the effective date. The Company continues to evaluate the new guidance and therefore is unable to estimate the impact on its financial statements. The most significant impact from the ASU is the requirement that all variable annuity guarantees will be considered market risk benefits and measured at fair value, whereas currently a significant amount of variable annuity guarantees are classified as insurance liabilities. |
Investments, Policy [Policy Text Block] | For fixed maturity securities in an unrealized loss position, management first assesses whether the Company intends to sell, or whether it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to estimated fair value through net investment gains (losses). For fixed maturity securities that do not meet the aforementioned criteria, management evaluates whether the decline in estimated fair value has resulted from credit losses or other factors. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the allowance for credit loss evaluation process include, but are not limited to: (i) the extent to which estimated fair value is less than amortized cost; (ii) any changes to the rating of the security by a rating agency; (iii) adverse conditions specifically related to the security, industry or geographic area; and (iv) payment structure of the fixed maturity security and the likelihood of the issuer being able to make payments in the future or the issuer’s failure to make scheduled interest and principal payments. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss is deemed to exist and an allowance for credit losses is recorded, limited by the amount that the estimated fair value is less than the amortized cost basis, with a corresponding charge to net investment gains (losses). Any unrealized losses that have not been recorded through an allowance for credit losses are recognized in other comprehensive income (loss) (“OCI”). Once a security specific allowance for credit losses is established, the present value of cash flows expected to be collected from the security continues to be reassessed. Any changes in the security specific allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense in net investment gains (losses). Fixed maturity securities are also evaluated to determine whether any amounts have become uncollectible. When all, or a portion, of a security is deemed uncollectible, the uncollectible portion is written-off with an adjustment to amortized cost and a corresponding reduction to the allowance for credit losses. Accrued interest receivables are presented separate from the amortized cost basis of fixed maturity securities. An allowance for credit losses is not estimated on an accrued interest receivable, rather receivable balances 90-days past due are deemed uncollectible and are written off with a corresponding reduction to net investment income. The accrued interest receivable on fixed maturity securities totaled $30 million and $24 million at September 30, 2021 and December 31, 2020, respectively, and is included in accrued investment income. Fixed maturity securities are also evaluated to determine if they qualify as purchased financial assets with credit deterioration (“PCD”). To determine if the credit deterioration experienced since origination is more than insignificant, both (i) the extent of the credit deterioration and (ii) any rating agency downgrades are evaluated. For securities categorized as PCD assets, the present value of cash flows expected to be collected from the security are compared to the par value of the security. If the present value of cash flows expected to be collected is less than the par value, credit losses are embedded in the purchase price of the PCD asset. In this situation, both an allowance for credit losses and amortized cost gross-up is recorded, limited by the amount that the estimated fair value is less than the grossed-up amortized cost basis. Any difference between the purchase price and the present value of cash flows is amortized or accreted into net investment income over the life of the PCD asset. Any subsequent PCD asset allowance for credit losses is evaluated in a manner similar to the process described above for fixed maturity securities. |
Derivatives, Policy [Policy Text Block] | Derivative Strategies Types of Derivative Instruments and Derivative Strategies The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to minimize its exposure to various market risks. Commonly used derivative instruments include, but are not necessarily limited to: • Interest rate caps; • Foreign currency swaps; and • Equity derivatives: options and total return swaps. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting Information, by Segment | Operating results by segment, as well as Corporate & Other, were as follows: Three Months Ended September 30, 2021 Annuities Life Corporate Total (In millions) Pre-tax adjusted earnings $ (8) $ 2 $ 2 $ (4) Provision for income tax expense (benefit) (1) — 1 — Adjusted earnings $ (7) $ 2 $ 1 (4) Adjustments for: Net investment gains (losses) — Net derivative gains (losses) 10 Other adjustments to net income (loss) (4) Provision for income tax (expense) benefit (1) Net income (loss) $ 1 Interest revenue $ 30 $ 10 $ — Three Months Ended September 30, 2020 Annuities Life Corporate Total (In millions) Pre-tax adjusted earnings $ (7) $ 19 $ — $ 12 Provision for income tax expense (benefit) (2) 4 — 2 Adjusted earnings $ (5) $ 15 $ — 10 Adjustments for: Net investment gains (losses) 8 Net derivative gains (losses) 23 Other adjustments to net income (loss) (37) Provision for income tax (expense) benefit 1 Net income (loss) $ 5 Interest revenue $ 24 $ 9 $ 1 Nine Months Ended September 30, 2021 Annuities Life Corporate Total (In millions) Pre-tax adjusted earnings $ (25) $ 10 $ 4 $ (11) Provision for income tax expense (benefit) (6) 2 1 (3) Adjusted earnings $ (19) $ 8 $ 3 (8) Adjustments for: Net investment gains (losses) — Net derivative gains (losses) (46) Other adjustments to net income (loss) 40 Provision for income tax (expense) benefit 2 Net income (loss) $ (12) Interest revenue $ 88 $ 27 $ 1 Nine Months Ended September 30, 2020 Annuities Life Corporate Total (In millions) Pre-tax adjusted earnings $ (7) $ 39 $ (3) $ 29 Provision for income tax expense (benefit) (3) 8 (1) 4 Adjusted earnings $ (4) $ 31 $ (2) 25 Adjustments for: Net investment gains (losses) 13 Net derivative gains (losses) 178 Other adjustments to net income (loss) (69) Provision for income tax (expense) benefit (26) Net income (loss) $ 121 Interest revenue $ 71 $ 27 $ 2 Total assets by segment, as well as Corporate & Other, were as follows at: September 30, 2021 December 31, 2020 (In millions) Annuities $ 10,386 $ 9,467 Life 1,856 1,859 Corporate & Other 245 176 Total $ 12,487 $ 11,502 |
Reconciliation of Revenue from Segments to Consolidated | Total revenues by segment, as well as Corporate & Other, were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Annuities $ 33 $ 26 $ 90 $ 76 Life 12 3 32 36 Corporate & Other — 1 1 2 Adjustments 12 34 (37) 201 Total $ 57 $ 64 $ 86 $ 315 |
Insurance (Tables)
Insurance (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Insurance [Abstract] | |
Guarantees related to Annuity, Universal and Variable Life Contracts | Information regarding the Company’s guarantee exposure was as follows at: September 30, 2021 December 31, 2020 In the At In the At (Dollars in millions) Annuity Contracts (1), (2) Variable Annuity Guarantees Total account value (3) $ 5,042 $ 3,756 $ 4,971 $ 3,816 Separate account value $ 5,034 $ 3,753 $ 4,962 $ 3,816 Net amount at risk $ 17 (4) $ 373 (5) $ 3 (4) $ 429 (5) Average attained age of contract holders 69 years 69 years 69 years 69 years _______________ (1) The Company’s annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive. (2) Includes direct business, but excludes offsets from hedging or reinsurance, if any. Therefore, the net amount at risk presented reflects the economic exposures of living and death benefit guarantees associated with variable annuities, but not necessarily their impact on the Company. See Note 5 of the Notes to the Financial Statements included in the 2020 Annual Report for a discussion of guaranteed minimum benefits which have been reinsured. (3) Includes the contract holder’s investments in the general account and separate account, if applicable. (4) Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death. (5) Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company’s potential economic exposure to such guarantees in the event all contract holders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contract holders have achieved. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Fixed Maturity Securities by Sector | Fixed maturity securities by sector were as follows at: September 30, 2021 December 31, 2020 Amortized Allowance for Credit Losses Gross Unrealized Estimated Amortized Allowance for Credit Losses Gross Unrealized Estimated Gains Losses Gains Losses (In millions) U.S. corporate $ 2,223 $ — $ 154 $ 13 $ 2,364 $ 1,697 $ — $ 201 $ 1 $ 1,897 Foreign corporate 650 — 36 4 682 503 — 58 2 559 ABS 358 — 3 — 361 350 — 6 1 355 CMBS 318 — 22 2 338 299 — 31 1 329 U.S. government and agency 252 — 38 — 290 254 — 58 — 312 RMBS 259 — 13 1 271 219 — 17 — 236 State and political subdivision 280 — 16 2 294 122 — 15 — 137 Foreign government 21 — 1 — 22 16 — 2 — 18 Total fixed maturity securities $ 4,361 $ — $ 283 $ 22 $ 4,622 $ 3,460 $ — $ 388 $ 5 $ 3,843 |
Maturities of Fixed Maturity Securities | The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at September 30, 2021: Due in One Due After One Due After Five Years Through Due After Ten Structured Total Fixed (In millions) Amortized cost $ 45 $ 659 $ 1,505 $ 1,217 $ 935 $ 4,361 Estimated fair value $ 45 $ 694 $ 1,569 $ 1,344 $ 970 $ 4,622 _______________ (1) Structured securities include residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”) (collectively, “Structured Securities”). |
Continuous Gross Unrealized Losses for Fixed Maturity Securities by Sector | The estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position, by sector and by length of time that the securities have been in a continuous unrealized loss position, were as follows at: September 30, 2021 December 31, 2020 Less than 12 Months 12 Months or Greater Less than 12 Months 12 Months or Greater Estimated Gross Estimated Gross Estimated Gross Estimated Gross (Dollars in millions) U.S. corporate $ 452 $ 11 $ 31 $ 2 $ 54 $ 1 $ 2 $ — Foreign corporate 169 3 9 1 4 — 10 2 ABS 86 — 3 — 98 1 17 — CMBS 49 1 10 1 19 1 — — RMBS 87 1 — — 4 — — — State and political subdivision 104 2 — — 9 — — — Foreign government 4 — — — 2 — — — Total fixed maturity securities $ 951 $ 18 $ 53 $ 4 $ 190 $ 3 $ 29 $ 2 Total number of securities in an unrealized loss position 441 18 82 15 |
Mortgage Loans by Portfolio Segment | Mortgage loans are summarized as follows at: September 30, 2021 December 31, 2020 Carrying % of Carrying % of (Dollars in millions) Commercial $ 479 71.5 % $ 458 71.2 % Agricultural 193 28.8 187 29.1 Total mortgage loans 672 100.3 645 100.3 Allowance for credit losses (2) (0.3) (2) (0.3) Total mortgage loans, net $ 670 100.0 % $ 643 100.0 % |
Rollforward of the Allowance for Credit Losses for Mortgage Loans by Portfolio Segment | The changes in the allowance for credit losses by portfolio segment were as follows: Commercial Agricultural Total (In millions) Nine Months Ended September 30, 2021 Balance, beginning of period $ 1 $ 1 $ 2 Current period provision — — — Balance, end of period $ 1 $ 1 $ 2 Nine Months Ended September 30, 2020 Balance, beginning of period $ 1 $ 1 $ 2 Current period provision — — — Balance, end of period $ 1 $ 1 $ 2 |
Credit Quality of Mortgage Loans by Portfolio Segment | The amortized cost of mortgage loans by year of origination and credit quality indicator was as follows at: 2021 2020 2019 2018 2017 Prior Total (In millions) September 30, 2021 Commercial mortgage loans Loan-to-value ratios: Less than 65% $ 17 $ 31 $ 87 $ 10 $ 13 $ 157 $ 315 65% to 75% 39 — 65 19 7 15 145 76% to 80% — — — — — 4 4 Greater than 80% — — — 5 — 10 15 Total commercial mortgage loans 56 31 152 34 20 186 479 Agricultural mortgage loans Loan-to-value ratios: Less than 65% 32 45 40 20 6 46 189 65% to 75% 1 — 2 1 — — 4 Total agricultural mortgage loans 33 45 42 21 6 46 193 Total $ 89 $ 76 $ 194 $ 55 $ 26 $ 232 $ 672 2020 2019 2018 2017 2016 Prior Total (In millions) December 31, 2020 Commercial mortgage loans Loan-to-value ratios: Less than 65% $ 32 $ 102 $ 23 $ 13 $ 16 $ 187 $ 373 65% to 75% — 50 6 7 — 3 66 76% to 80% — — — — 1 3 4 Greater than 80% — — 5 — — 10 15 Total commercial mortgage loans 32 152 34 20 17 203 458 Agricultural mortgage loans Loan-to-value ratios: Less than 65% 46 43 21 6 15 52 183 65% to 75% — 3 1 — — — 4 Total agricultural mortgage loans 46 46 22 6 15 52 187 Total $ 78 $ 198 $ 56 $ 26 $ 32 $ 255 $ 645 The amortized cost of commercial mortgage loans by debt-service coverage ratio was as follows at: September 30, 2021 December 31, 2020 Amortized Cost % of Amortized Cost % of (Dollars in millions) Debt-service coverage ratios: Greater than 1.20x $ 450 93.9 % $ 450 98.3 % 1.00x - 1.20x 17 3.6 8 1.7 Less than 1.00x 12 2.5 — — Total $ 479 100.0 % $ 458 100.0 % |
Net Unrealized Investment Gains (Losses) | The components of net unrealized investment gains (losses), included in AOCI, were as follows at: September 30, 2021 December 31, 2020 (In millions) Fixed maturity securities $ 261 $ 383 Derivatives 6 1 Subtotal 267 384 Amounts allocated from: Future policy benefits (9) (20) DAC and DSI (34) (38) Subtotal (43) (58) Deferred income tax benefit (expense) (47) (68) Net unrealized investment gains (losses) $ 177 $ 258 The changes in net unrealized investment gains (losses) were as follows: Nine Months Ended September 30, 2021 (In millions) Balance at December 31, 2020 $ 258 Unrealized investment gains (losses) during the period (117) Unrealized investment gains (losses) relating to: Future policy benefits 11 DAC and DSI 4 Deferred income tax benefit (expense) 21 Balance at September 30, 2021 $ 177 Change in net unrealized investment gains (losses) $ (81) |
Invested Assets on Deposit and Pledged as Collateral | Invested assets on deposit and pledged as collateral at estimated fair value were as follows at: September 30, 2021 December 31, 2020 (In millions) Invested assets on deposit (regulatory deposits) $ 2 $ 2 Invested assets pledged as collateral (1) 127 5 Total invested assets on deposit and pledged as collateral (2) $ 129 $ 7 _______________ (1) The Company has pledged invested assets in connection with derivative transactions (see Note 5). (2) The Company did not hold any restricted cash and cash equivalents at either September 30, 2021 or December 31, 2020. |
Variable Interest Entities | The carrying amount and maximum exposure to loss related to the VIEs for which the Company has concluded that it holds a variable interest, but is not the primary beneficiary, were as follows at: September 30, 2021 December 31, 2020 Carrying Maximum Carrying Maximum (In millions) Fixed maturity securities $ 315 $ 294 $ 301 $ 274 |
Components of Net Investment Income | The components of net investment income were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Investment income: Fixed maturity securities $ 35 $ 28 $ 100 $ 83 Mortgage loans 6 7 19 19 Cash, cash equivalents and short-term investments — — — 1 Other — — 1 1 Total investment income 41 35 120 104 Less: Investment expenses 1 1 4 4 Net investment income $ 40 $ 34 $ 116 $ 100 |
Components of Net Investment Gains (Losses) | The components of net investment gains (losses) were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Fixed maturity securities $ (1) $ 6 $ — $ 12 Mortgage loans 1 1 — — Other — 1 — 1 Total net investment gains (losses) $ — $ 8 $ — $ 13 |
Sales or Disposals of Fixed Maturity Securities | Proceeds from sales or disposals of fixed maturity securities and the components of fixed maturity securities net investment gains (losses) were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Proceeds $ 33 $ 137 $ 72 $ 316 Gross investment gains $ — $ 7 $ 1 $ 13 Gross investment losses (1) (1) (1) (1) Net investment gains (losses) $ (1) $ 6 $ — $ 12 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position | The primary underlying risk exposure, gross notional amount and estimated fair value of derivatives held were as follows at: September 30, 2021 December 31, 2020 Primary Underlying Risk Exposure Gross Estimated Fair Value Gross Estimated Fair Value Assets Liabilities Assets Liabilities (In millions) Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency swaps Foreign currency exchange rate $ 116 $ 7 $ 1 $ 115 $ 4 $ 3 Total qualifying hedges 116 7 1 115 4 3 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate caps Interest rate 800 3 — 800 1 — Foreign currency swaps Foreign currency exchange rate 16 4 — 16 4 — Equity index options Equity market 2,752 222 130 5,908 250 94 Equity total return swaps Equity market 2,084 9 30 249 7 — Total non-designated or non-qualifying derivatives 5,652 238 160 6,973 262 94 Embedded derivatives: Ceded guaranteed minimum income benefits Other N/A 387 — N/A 477 — Direct guaranteed minimum benefits Other N/A — (22) N/A — 14 Direct index-linked annuities Other N/A — 629 N/A — 393 Total embedded derivatives Other N/A 387 607 N/A 477 407 Total $ 5,768 $ 632 $ 768 $ 7,088 $ 743 $ 504 |
Derivative Instruments, Gain (Loss) | The amount and location of gains (losses), including earned income, recognized for derivatives and gains (losses) pertaining to hedged items presented in net derivative gains (losses) were as follows: Net Derivative Net Derivative Net Investment Income Amount of (In millions) Three Months Ended September 30, 2021 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ — $ 3 Total cash flow hedges — — — 3 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives — — — — Foreign currency exchange rate derivatives — — — — Equity derivatives (8) — — — Embedded derivatives 18 — — — Total non-qualifying hedges 10 — — — Total $ 10 $ — $ — $ 3 Three Months Ended September 30, 2020 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ — $ (6) Total cash flow hedges — — — (6) Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives — — — — Foreign currency exchange rate derivatives (1) — — — Equity derivatives 86 — — — Embedded derivatives (62) — — — Total non-qualifying hedges 23 — — — Total $ 23 $ — $ — $ (6) Net Derivative Net Derivative Net Investment Income Amount of (In millions) Nine Months Ended September 30, 2021 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ 1 $ 5 Total cash flow hedges — — 1 5 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives 1 — — — Foreign currency exchange rate derivatives — — — — Equity derivatives 202 — — — Embedded derivatives (249) — — — Total non-qualifying hedges (46) — — — Total $ (46) $ — $ 1 $ 5 Nine Months Ended September 30, 2020 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ 1 $ 5 Total cash flow hedges — — 1 5 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives (1) — — — Foreign currency exchange rate derivatives 2 — — — Equity derivatives 12 — — — Embedded derivatives 165 — — — Total non-qualifying hedges 178 — — — Total $ 178 $ — $ 1 $ 5 At September 30, 2021 and December 31, 2020, the balance in AOCI associated with cash flow hedges was $6 million and $1 million, respectively. |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The amount and location of gains (losses), including earned income, recognized for derivatives and gains (losses) pertaining to hedged items presented in net derivative gains (losses) were as follows: Net Derivative Net Derivative Net Investment Income Amount of (In millions) Three Months Ended September 30, 2021 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ — $ 3 Total cash flow hedges — — — 3 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives — — — — Foreign currency exchange rate derivatives — — — — Equity derivatives (8) — — — Embedded derivatives 18 — — — Total non-qualifying hedges 10 — — — Total $ 10 $ — $ — $ 3 Three Months Ended September 30, 2020 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ — $ (6) Total cash flow hedges — — — (6) Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives — — — — Foreign currency exchange rate derivatives (1) — — — Equity derivatives 86 — — — Embedded derivatives (62) — — — Total non-qualifying hedges 23 — — — Total $ 23 $ — $ — $ (6) Net Derivative Net Derivative Net Investment Income Amount of (In millions) Nine Months Ended September 30, 2021 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ 1 $ 5 Total cash flow hedges — — 1 5 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives 1 — — — Foreign currency exchange rate derivatives — — — — Equity derivatives 202 — — — Embedded derivatives (249) — — — Total non-qualifying hedges (46) — — — Total $ (46) $ — $ 1 $ 5 Nine Months Ended September 30, 2020 Derivatives Designated as Hedging Instruments: Cash flow hedges: Foreign currency exchange rate derivatives $ — $ — $ 1 $ 5 Total cash flow hedges — — 1 5 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate derivatives (1) — — — Foreign currency exchange rate derivatives 2 — — — Equity derivatives 12 — — — Embedded derivatives 165 — — — Total non-qualifying hedges 178 — — — Total $ 178 $ — $ 1 $ 5 At September 30, 2021 and December 31, 2020, the balance in AOCI associated with cash flow hedges was $6 million and $1 million, respectively. |
Estimated Fair Value of Derivative Assets after Master Netting Agreements and Cash Collateral | The estimated fair values of net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at: Gross Amounts Not Offset on the Balance Sheets Gross Amount Recognized Financial Instruments (1) Collateral Received/Pledged (2) Net Amount Securities Collateral Received/Pledged (3) Net Amount After Securities Collateral (In millions) September 30, 2021 Derivative assets $ 245 $ (44) $ (198) $ 3 $ (3) $ — Derivative liabilities $ 161 $ (44) $ — $ 117 $ (112) $ 5 December 31, 2020 Derivative assets $ 266 $ (91) $ (136) $ 39 $ (34) $ 5 Derivative liabilities $ 97 $ (91) $ — $ 6 $ (6) $ — _______________ (1) Represents amounts subject to an enforceable master netting agreement or similar agreement. (2) The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreement. (3) Securities collateral received from counterparties is not reported on the balance sheets and may not be sold or re-pledged unless the counterparty is in default. Amounts do not include excess of collateral pledged or received. |
Estimated Fair Value of Derivative Liabilities after Master Netting Agreements and Cash Collateral | The estimated fair values of net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at: Gross Amounts Not Offset on the Balance Sheets Gross Amount Recognized Financial Instruments (1) Collateral Received/Pledged (2) Net Amount Securities Collateral Received/Pledged (3) Net Amount After Securities Collateral (In millions) September 30, 2021 Derivative assets $ 245 $ (44) $ (198) $ 3 $ (3) $ — Derivative liabilities $ 161 $ (44) $ — $ 117 $ (112) $ 5 December 31, 2020 Derivative assets $ 266 $ (91) $ (136) $ 39 $ (34) $ 5 Derivative liabilities $ 97 $ (91) $ — $ 6 $ (6) $ — _______________ (1) Represents amounts subject to an enforceable master netting agreement or similar agreement. (2) The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreement. (3) Securities collateral received from counterparties is not reported on the balance sheets and may not be sold or re-pledged unless the counterparty is in default. Amounts do not include excess of collateral pledged or received. |
Schedule of Derivative Instruments | The aggregate estimated fair values of derivatives in a net liability position containing such credit-contingent provisions and the aggregate estimated fair value of assets posted as collateral for such instruments were as follows at: September 30, 2021 December 31, 2020 (In millions) Estimated fair value of derivatives in a net liability position (1) $ 117 $ 6 Estimated Fair Value of Collateral Provided: (2) Fixed maturity securities $ 127 $ 6 _______________ (1) After taking into consideration the existence of netting agreements. (2) Substantially all of the Company’s collateral arrangements provide for daily posting of collateral for the full value of the derivative contract. As a result, if the credit-contingent provisions of derivative contracts in a net liability position were triggered, minimal additional assets would be required to be posted as collateral or needed to settle the instruments immediately. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Recurring Fair Value Measurements | The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are presented in the tables below. Investments that do not have a readily determinable fair value and are measured at net asset value (or equivalent) as a practical expedient to estimated fair value are excluded from the fair value hierarchy. September 30, 2021 Fair Value Hierarchy Total Estimated Level 1 Level 2 Level 3 (In millions) Assets Fixed maturity securities: U.S. corporate $ — $ 2,323 $ 41 $ 2,364 Foreign corporate — 670 12 682 ABS — 348 13 361 CMBS — 338 — 338 U.S. government and agency 148 142 — 290 RMBS — 271 — 271 State and political subdivision — 294 — 294 Foreign government — 22 — 22 Total fixed maturity securities 148 4,408 66 4,622 Short-term investments 2 1 — 3 Derivative assets: (1) Interest rate — 3 — 3 Foreign currency exchange rate — 11 — 11 Equity market — 231 — 231 Total derivative assets — 245 — 245 Embedded derivatives within asset host contracts (2) — — 387 387 Separate account assets — 5,037 — 5,037 Total assets $ 150 $ 9,691 $ 453 $ 10,294 Liabilities Derivative liabilities: (1) Foreign currency exchange rate $ — $ 1 $ — $ 1 Equity market — 160 — 160 Total derivative liabilities — 161 — 161 Embedded derivatives within liability host contracts (2) — — 607 607 Total liabilities $ — $ 161 $ 607 $ 768 December 31, 2020 Fair Value Hierarchy Total Estimated Level 1 Level 2 Level 3 (In millions) Assets Fixed maturity securities: U.S. corporate $ — $ 1,873 $ 24 $ 1,897 Foreign corporate — 557 2 559 ABS — 349 6 355 CMBS — 329 — 329 U.S. government and agency 158 154 — 312 RMBS — 236 — 236 State and political subdivision — 137 — 137 Foreign government — 18 — 18 Total fixed maturity securities 158 3,653 32 3,843 Short-term investments 63 8 — 71 Derivative assets: (1) Interest rate — 1 — 1 Foreign currency exchange rate — 8 — 8 Equity market — 257 — 257 Total derivative assets — 266 — 266 Embedded derivatives within asset host contracts (2) — — 477 477 Separate account assets — 4,965 — 4,965 Total assets $ 221 $ 8,892 $ 509 $ 9,622 Liabilities Derivative liabilities: (1) Foreign currency exchange rate $ — $ 3 $ — $ 3 Equity market — 94 — 94 Total derivative liabilities — 97 — 97 Embedded derivatives within liability host contracts (2) — — 407 407 Total liabilities $ — $ 97 $ 407 $ 504 _______________ (1) Derivative assets are presented within other invested assets on the balance sheets and derivative liabilities are presented within other liabilities on the balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the balance sheets. (2) Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables on the balance sheets. Embedded derivatives within liability host contracts are presented within policyholder account balances on the balance sheets. |
Fair Value Inputs, Quantitative Information | Certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were as follows at: September 30, 2021 December 31, 2020 Impact of Valuation Techniques Significant Range Range Embedded derivatives Direct, assumed and ceded guaranteed minimum benefits Option pricing • Mortality rates 0.03% - 12.62% 0.03% - 12.13% Decrease (1) • Lapse rates 0.30% - 14.50% 0.25% - 15.00% Decrease (2) • Utilization rates 0.00% - 25.00% 0.00% - 25.00% Increase (3) • Withdrawal rates 0.25% - 10.00% 0.25% - 10.00% (4) • Long-term equity volatilities 16.44% - 22.16% 16.66% - 22.21% Increase (5) • Nonperformance risk spread (0.50)% - 1.28% 0.47% - 1.97% Decrease (6) _______________ (1) Mortality rates vary by age and by demographic characteristics such as gender. The range shown reflects the mortality rate for policyholders between 35 and 90 years old, which represents the majority of the business with living benefits. Mortality rate assumptions are set based on company experience and include an assumption for mortality improvement. (2) The range shown reflects base lapse rates for major product categories for duration 1-20, which represents majority of business with living benefit riders. Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. (3) The utilization rate assumption estimates the percentage of contract holders with a GMIB or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible in a given year. The range shown represents the floor and cap of the GMIB dynamic election rates across varying levels of in-the-money. For lifetime withdrawal guarantee riders, the assumption is that everyone will begin withdrawals once account value reaches zero which is equivalent to a 100% utilization rate. Utilization rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the policyholder. (4) The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value. (5) Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (6) Nonperformance risk spread varies by duration. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the embedded derivative. |
Fair Value, Measured on Recurring Basis, Unobservable Input Reconciliation | The changes in assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3) were summarized as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Fixed Maturity Securities Corporate (1) Structured Securities Foreign Government Net Embedded (In millions) Three Months Ended September 30, 2021 Balance, beginning of period $ 18 $ 20 $ 3 $ (234) Total realized/unrealized gains (losses) included in net income (loss) (3) (4) — — — 18 Total realized/unrealized gains (losses) included in AOCI — — — — Purchases (5) 13 3 — — Sales (5) — — — — Issuances (5) — — — — Settlements (5) — — — (4) Transfers into Level 3 (6) 24 — — — Transfers out of Level 3 (6) (2) (10) (3) — Balance, end of period $ 53 $ 13 $ — $ (220) Three Months Ended September 30, 2020 Balance, beginning of period $ 55 $ 20 $ — $ 389 Total realized/unrealized gains (losses) included in net income (loss) (3) (4) — — — (62) Total realized/unrealized gains (losses) included in AOCI 3 — — — Purchases (5) 16 1 — — Sales (5) (2) — — — Issuances (5) — — — — Settlements (5) — — — (13) Transfers into Level 3 (6) 4 — — — Transfers out of Level 3 (6) (4) (17) — — Balance, end of period $ 72 $ 4 $ — $ 314 Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2021 (7) $ — $ — $ — $ 123 Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at September 30, 2021 (7) $ — $ — $ — $ — Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2020 (7) $ — $ — $ — $ (74) Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at September 30, 2020 (7) $ 2 $ — $ — $ — Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Fixed Maturity Securities Corporate (1) Structured Securities Foreign Government Net Embedded (In millions) Nine Months Ended September 30, 2021 Balance, beginning of period $ 26 $ 6 $ — $ 70 Total realized/unrealized gains (losses) included in net income (loss) (3) (4) — — — (249) Total realized/unrealized gains (losses) included in AOCI — — — — Purchases (5) 37 13 — — Sales (5) (3) (3) — — Issuances (5) — — — — Settlements (5) — — — (41) Transfers into Level 3 (6) 5 — — — Transfers out of Level 3 (6) (12) (3) — — Balance, end of period $ 53 $ 13 $ — $ (220) Nine Months Ended September 30, 2020 Balance, beginning of period $ 35 $ 9 $ — $ 186 Total realized/unrealized gains (losses) included in net income (loss) (3) (4) — — — 165 Total realized/unrealized gains (losses) included in AOCI 4 — — — Purchases (5) 39 1 — — Sales (5) (6) — — — Issuances (5) — — — — Settlements (5) — — — (37) Transfers into Level 3 (6) 4 — — — Transfers out of Level 3 (6) (4) (6) — — Balance, end of period $ 72 $ 4 $ — $ 314 Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2021 (7) $ — $ — $ — $ (287) Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at September 30, 2021 (7) $ — $ — $ — $ — Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2020 (7) $ — $ — $ — $ 132 Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at September 30, 2020 (7) $ 4 $ — $ — $ — _______________ (1) Comprised of U.S. and foreign corporate securities. (2) Embedded derivative assets and liabilities are presented net for purposes of the rollforward. (3) Amortization of premium/accretion of discount is included within net investment income. Changes in the allowance for credit losses and direct write-offs are charged to net income (loss) on securities are included in net investment gains (losses). Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net embedded derivatives are reported in net derivative gains (losses). (4) Interest accruals, as well as cash interest coupons received, are excluded from the rollforward. (5) Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements. (6) Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and then out of Level 3 in the same period are excluded from the rollforward. (7) Changes in unrealized gains (losses) included in net income (loss) for fixed maturities are reported in either net investment income or net investment gains (losses). Substantially all changes in unrealized gains (losses) included in net income (loss) for net embedded derivatives are reported in net derivative gains (losses). |
Fair Value of Financial Instruments Carried at Other Than Fair Value | The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at: September 30, 2021 Fair Value Hierarchy Carrying Level 1 Level 2 Level 3 Total (In millions) Assets Mortgage loans $ 670 $ — $ — $ 698 $ 698 Premiums, reinsurance and other receivables $ 452 $ — $ 6 $ 447 $ 453 Liabilities Policyholder account balances $ 869 $ — $ — $ 938 $ 938 Other liabilities $ 475 $ — $ 39 $ 436 $ 475 December 31, 2020 Fair Value Hierarchy Carrying Level 1 Level 2 Level 3 Total (In millions) Assets Mortgage loans $ 643 $ — $ — $ 681 $ 681 Premiums, reinsurance and other receivables $ 436 $ — $ 1 $ 435 $ 436 Liabilities Policyholder account balances $ 915 $ — $ — $ 979 $ 979 Other liabilities $ 430 $ — $ 7 $ 423 $ 430 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | Information regarding changes in the balances of each component of AOCI was as follows: Three Months Ended September 30, 2021 Unrealized Unrealized Total (In millions) Balance at June 30, 2021 $ 191 $ 4 $ 195 OCI before reclassifications (26) 3 (23) Deferred income tax benefit (expense) 6 (1) 5 AOCI before reclassifications, net of income tax 171 6 177 Amounts reclassified from AOCI — — — Deferred income tax benefit (expense) — — — Amounts reclassified from AOCI, net of income tax — — — Balance at September 30, 2021 $ 171 $ 6 $ 177 Three Months Ended September 30, 2020 Unrealized Unrealized Total (In millions) Balance at June 30, 2020 $ 199 $ 15 $ 214 OCI before reclassifications 35 (6) 29 Deferred income tax benefit (expense) (8) 1 (7) AOCI before reclassifications, net of income tax 226 10 236 Amounts reclassified from AOCI (6) — (6) Deferred income tax benefit (expense) 2 — 2 Amounts reclassified from AOCI, net of income tax (4) — (4) Balance at September 30, 2020 $ 222 $ 10 $ 232 Nine Months Ended September 30, 2021 Unrealized Unrealized Total (In millions) Balance at December 31, 2020 $ 256 $ 2 $ 258 OCI before reclassifications (106) 5 (101) Deferred income tax benefit (expense) 22 (1) 21 AOCI before reclassifications, net of income tax 172 6 178 Amounts reclassified from AOCI (1) — (1) Deferred income tax benefit (expense) — — — Amounts reclassified from AOCI, net of income tax (1) — (1) Balance at September 30, 2021 $ 171 $ 6 $ 177 Nine Months Ended September 30, 2020 Unrealized Unrealized Total (In millions) Balance at December 31, 2019 $ 116 $ 6 $ 122 OCI before reclassifications 146 5 151 Deferred income tax benefit (expense) (31) (1) (32) AOCI before reclassifications, net of income tax 231 10 241 Amounts reclassified from AOCI (12) — (12) Deferred income tax benefit (expense) 3 — 3 Amounts reclassified from AOCI, net of income tax (9) — (9) Balance at September 30, 2020 $ 222 $ 10 $ 232 _______________ (1) See Note 4 for information on offsets to investments related to future policy benefits, DAC and DSI. |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Information regarding amounts reclassified out of each component of AOCI was as follows: AOCI Components Amounts Reclassified from AOCI Statements of Operations and Comprehensive Income (Loss) Location Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Net unrealized investment gains (losses): Net unrealized investment gains (losses) $ — $ 6 $ 1 $ 12 Net investment income Net unrealized investment gains (losses), before income tax — 6 1 12 Income tax (expense) benefit — (2) — (3) Net unrealized investment gains (losses), net of income tax — 4 1 9 Total reclassifications, net of income tax $ — $ 4 $ 1 $ 9 |
Other Revenues and Other Expe_2
Other Revenues and Other Expenses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | |
Other Expenses | Information on other expenses was as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Compensation $ 6 $ 5 $ 18 $ 15 Contracted services and other labor costs 4 3 11 11 Transition services agreements 2 2 5 4 Establishment costs 1 1 3 5 Premium and other taxes, licenses and fees 1 1 2 2 Volume related costs, excluding compensation, net of DAC capitalization 6 5 18 15 Other (3) — — 5 Total other expenses $ 17 $ 17 $ 57 $ 57 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Effects of reinsurance | Information regarding the significant effects of ceded related party reinsurance included on the interim condensed statements of operations and comprehensive income (loss) was as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (In millions) Premiums $ (11) $ (11) $ (34) $ (31) Universal life and investment-type product policy fees $ (1) $ (1) $ (3) $ (3) Other revenues $ (28) $ (25) $ (83) $ (71) Policyholder benefits and claims $ (18) $ (53) $ (60) $ (111) Other expenses $ (2) $ (2) $ (6) $ (5) Information regarding the significant effects of ceded related party reinsurance included on the interim condensed balance sheets was as follows at: September 30, 2021 December 31, 2020 (In millions) Assets Premiums, reinsurance and other receivables $ 682 $ 749 Liabilities Other liabilities $ 363 $ 362 |
Business, Basis of Presentati_3
Business, Basis of Presentation and Summary of Significant Accounting Policies (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of Reportable Segments | 2 |
Segment Information (Operating
Segment Information (Operating Results) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||||
Pre-tax adjusted earnings | $ 2 | $ 6 | $ (17) | $ 151 | ||
Provision for income tax expense (benefit) | 1 | 1 | (5) | 30 | ||
Net investment gains (losses) | 0 | 8 | 0 | 13 | ||
Net derivative gains (losses) | 10 | 23 | (46) | 178 | ||
Other adjustments to net income (loss) | (23) | (22) | (72) | (62) | ||
Net income (loss) | 1 | 5 | $ (13) | $ 116 | (12) | 121 |
Annuities | ||||||
Segment Reporting Information [Line Items] | ||||||
Interest revenue | 30 | 24 | 88 | 71 | ||
Life | ||||||
Segment Reporting Information [Line Items] | ||||||
Interest revenue | 10 | 9 | 27 | 27 | ||
Corporate & Other | ||||||
Segment Reporting Information [Line Items] | ||||||
Interest revenue | 0 | 1 | 1 | 2 | ||
Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Pre-tax adjusted earnings | (4) | 12 | (11) | 29 | ||
Provision for income tax expense (benefit) | 0 | 2 | (3) | 4 | ||
Adjusted earnings | (4) | 10 | (8) | 25 | ||
Operating Segments | Annuities | ||||||
Segment Reporting Information [Line Items] | ||||||
Pre-tax adjusted earnings | (8) | (7) | (25) | (7) | ||
Provision for income tax expense (benefit) | (1) | (2) | (6) | (3) | ||
Adjusted earnings | (7) | (5) | (19) | (4) | ||
Operating Segments | Life | ||||||
Segment Reporting Information [Line Items] | ||||||
Pre-tax adjusted earnings | 2 | 19 | 10 | 39 | ||
Provision for income tax expense (benefit) | 0 | 4 | 2 | 8 | ||
Adjusted earnings | 2 | 15 | 8 | 31 | ||
Operating Segments | Corporate & Other | ||||||
Segment Reporting Information [Line Items] | ||||||
Pre-tax adjusted earnings | 2 | 0 | 4 | (3) | ||
Provision for income tax expense (benefit) | 1 | 0 | 1 | (1) | ||
Adjusted earnings | 1 | 0 | 3 | (2) | ||
Segment Reconciling Items | ||||||
Segment Reporting Information [Line Items] | ||||||
Provision for income tax expense (benefit) | (1) | 1 | 2 | (26) | ||
Net investment gains (losses) | 0 | 8 | 0 | 13 | ||
Net derivative gains (losses) | 10 | 23 | (46) | 178 | ||
Other adjustments to net income (loss) | $ (4) | $ (37) | $ 40 | $ (69) |
Segment Information (Reconcilia
Segment Information (Reconciliation of Operating Revenues to Total Revenues) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 57 | $ 64 | $ 86 | $ 315 |
Annuities | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 33 | 26 | 90 | 76 |
Life | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 12 | 3 | 32 | 36 |
Corporate & Other | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 0 | 1 | 1 | 2 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 12 | $ 34 | $ (37) | $ 201 |
Segment Information (Assets) (D
Segment Information (Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 12,487 | $ 11,502 |
Annuities | ||
Segment Reporting Information [Line Items] | ||
Total assets | 10,386 | 9,467 |
Life | ||
Segment Reporting Information [Line Items] | ||
Total assets | 1,856 | 1,859 |
Corporate & Other | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 245 | $ 176 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of segments | 2 |
Insurance (Guarantees Related t
Insurance (Guarantees Related to Annuity Contracts) (Details) - Variable Annuity Guarantees - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Guaranteed Death Benefits | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Total account value (3) | $ 5,042 | $ 4,971 |
Separate account value | 5,034 | 4,962 |
Net amount at risk | $ 17 | $ 3 |
Average attained age of contract holders | 69 years | 69 years |
Guaranteed Annuitization Benefits | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Total account value (3) | $ 3,756 | $ 3,816 |
Separate account value | 3,753 | 3,816 |
Net amount at risk | $ 373 | $ 429 |
Average attained age of contract holders | 69 years | 69 years |
Investments (Fixed Maturity Sec
Investments (Fixed Maturity Securities by Sector) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, amortized cost | $ 4,361 | $ 3,460 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Fixed maturity securities, gross unrealized gains | 283 | 388 |
Fixed maturity securities, gross unrealized losses | 22 | 5 |
Fixed maturity securities, estimated fair value | 4,622 | 3,843 |
U.S. corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, amortized cost | 2,223 | 1,697 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Fixed maturity securities, gross unrealized gains | 154 | 201 |
Fixed maturity securities, gross unrealized losses | 13 | 1 |
Fixed maturity securities, estimated fair value | 2,364 | 1,897 |
Foreign corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, amortized cost | 650 | 503 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Fixed maturity securities, gross unrealized gains | 36 | 58 |
Fixed maturity securities, gross unrealized losses | 4 | 2 |
Fixed maturity securities, estimated fair value | 682 | 559 |
ABS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, amortized cost | 358 | 350 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Fixed maturity securities, gross unrealized gains | 3 | 6 |
Fixed maturity securities, gross unrealized losses | 0 | 1 |
Fixed maturity securities, estimated fair value | 361 | 355 |
CMBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, amortized cost | 318 | 299 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Fixed maturity securities, gross unrealized gains | 22 | 31 |
Fixed maturity securities, gross unrealized losses | 2 | 1 |
Fixed maturity securities, estimated fair value | 338 | 329 |
U.S. government and agency | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, amortized cost | 252 | 254 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Fixed maturity securities, gross unrealized gains | 38 | 58 |
Fixed maturity securities, gross unrealized losses | 0 | 0 |
Fixed maturity securities, estimated fair value | 290 | 312 |
RMBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, amortized cost | 259 | 219 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Fixed maturity securities, gross unrealized gains | 13 | 17 |
Fixed maturity securities, gross unrealized losses | 1 | 0 |
Fixed maturity securities, estimated fair value | 271 | 236 |
State and political subdivision | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, amortized cost | 280 | 122 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Fixed maturity securities, gross unrealized gains | 16 | 15 |
Fixed maturity securities, gross unrealized losses | 2 | 0 |
Fixed maturity securities, estimated fair value | 294 | 137 |
Foreign government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, amortized cost | 21 | 16 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Fixed maturity securities, gross unrealized gains | 1 | 2 |
Fixed maturity securities, gross unrealized losses | 0 | 0 |
Fixed maturity securities, estimated fair value | $ 22 | $ 18 |
Investments (Maturities of Fixe
Investments (Maturities of Fixed Maturity Securities) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||
Amortized cost, due in one year or less | $ 45 | |
Amortized cost, due after one year through five years | 659 | |
Amortized cost, due after five years through ten years | 1,505 | |
Amortized cost, due after ten years | 1,217 | |
Amortized cost, Structured Securities | 935 | |
Fixed maturity securities, amortized cost | 4,361 | $ 3,460 |
Estimated fair value, due in one year or less | 45 | |
Estimated fair value, due after one year through five years | 694 | |
Estimated fair value, due after five years through ten years | 1,569 | |
Estimated fair value, due after ten years | 1,344 | |
Estimated fair value, Structured Securities | 970 | |
Fixed maturity securities, estimated fair value | $ 4,622 | $ 3,843 |
Investments (Continuous Gross U
Investments (Continuous Gross Unrealized Losses for Fixed Maturity Securities by Sector) (Details) number in Millions, $ in Millions | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities in continuous unrealized loss position, less than 12 months, estimated fair value | $ 951 | $ 190 |
Fixed maturity securities in continuous unrealized loss position, less than 12 months, gross unrealized losses | $ 18 | $ 3 |
Fixed maturity securities in continuous unrealized loss position, less than 12 months, number of securities | 441 | 82 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, estimated fair value | $ 53 | $ 29 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, gross unrealized losses | $ 4 | $ 2 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, number of securities | 18 | 15 |
U.S. corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities in continuous unrealized loss position, less than 12 months, estimated fair value | $ 452 | $ 54 |
Fixed maturity securities in continuous unrealized loss position, less than 12 months, gross unrealized losses | 11 | 1 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, estimated fair value | 31 | 2 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, gross unrealized losses | 2 | 0 |
Foreign corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities in continuous unrealized loss position, less than 12 months, estimated fair value | 169 | 4 |
Fixed maturity securities in continuous unrealized loss position, less than 12 months, gross unrealized losses | 3 | 0 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, estimated fair value | 9 | 10 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, gross unrealized losses | 1 | 2 |
ABS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities in continuous unrealized loss position, less than 12 months, estimated fair value | 86 | 98 |
Fixed maturity securities in continuous unrealized loss position, less than 12 months, gross unrealized losses | 0 | 1 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, estimated fair value | 3 | 17 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, gross unrealized losses | 0 | 0 |
CMBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities in continuous unrealized loss position, less than 12 months, estimated fair value | 49 | 19 |
Fixed maturity securities in continuous unrealized loss position, less than 12 months, gross unrealized losses | 1 | 1 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, estimated fair value | 10 | 0 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, gross unrealized losses | 1 | 0 |
RMBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities in continuous unrealized loss position, less than 12 months, estimated fair value | 87 | 4 |
Fixed maturity securities in continuous unrealized loss position, less than 12 months, gross unrealized losses | 1 | 0 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, estimated fair value | 0 | 0 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, gross unrealized losses | 0 | 0 |
State and political subdivision | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities in continuous unrealized loss position, less than 12 months, estimated fair value | 104 | 9 |
Fixed maturity securities in continuous unrealized loss position, less than 12 months, gross unrealized losses | 2 | 0 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, estimated fair value | 0 | 0 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, gross unrealized losses | 0 | 0 |
Foreign government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities in continuous unrealized loss position, less than 12 months, estimated fair value | 4 | 2 |
Fixed maturity securities in continuous unrealized loss position, less than 12 months, gross unrealized losses | 0 | 0 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, estimated fair value | 0 | 0 |
Fixed maturity securities in continuous unrealized loss position, 12 months or greater, gross unrealized losses | $ 0 | $ 0 |
Investments (Mortgage Loans by
Investments (Mortgage Loans by Portfolio Segment) (Details) - Mortgage Loans - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing receivable, before allowance for credit losses | $ 672 | $ 645 | ||
Financing receivable, before allowance for credit losses as a percentage of financing receivable, net of allowance for credit losses | 100.30% | 100.30% | ||
Financing receivable, allowance for credit losses | $ (2) | $ (2) | $ (2) | $ (2) |
Financing receivable, allowance for credit losses as a percentage of financing receivable, net of allowance for credit losses | (0.30%) | (0.30%) | ||
Financing receivable, net of allowance for credit losses | $ 670 | $ 643 | ||
Financing receivable, after allowance for credit losses as a percentage of financing receivable, net of allowance for credit losses | 100.00% | 100.00% | ||
Commercial | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing receivable, before allowance for credit losses | $ 479 | $ 458 | ||
Financing receivable, before allowance for credit losses as a percentage of financing receivable, net of allowance for credit losses | 71.50% | 71.20% | ||
Financing receivable, allowance for credit losses | $ (1) | $ (1) | (1) | (1) |
Agricultural | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing receivable, before allowance for credit losses | $ 193 | $ 187 | ||
Financing receivable, before allowance for credit losses as a percentage of financing receivable, net of allowance for credit losses | 28.80% | 29.10% | ||
Financing receivable, allowance for credit losses | $ (1) | $ (1) | $ (1) | $ (1) |
Investments (Rollforward of the
Investments (Rollforward of the Allowance for Credit Losses for Mortgage Loans by Portfolio Segment) (Details) - Mortgage Loans - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Financing receivable, allowance for credit losses, beginning of period | $ 2 | $ 2 |
Current period provision | 0 | 0 |
Financing receivable, allowance for credit losses, end of period | 2 | 2 |
Commercial | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Financing receivable, allowance for credit losses, beginning of period | 1 | 1 |
Current period provision | 0 | 0 |
Financing receivable, allowance for credit losses, end of period | 1 | 1 |
Agricultural | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Financing receivable, allowance for credit losses, beginning of period | 1 | 1 |
Current period provision | 0 | 0 |
Financing receivable, allowance for credit losses, end of period | $ 1 | $ 1 |
Investments (Credit Quality of
Investments (Credit Quality of Mortgage Loans by Portfolio Segment) (Details) - Mortgage Loans - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, originated in current FY | $ 89 | $ 78 |
Financing receivable, originated in FY before latest FY | 76 | 198 |
Financing receivable, originated two years before latest FY | 194 | 56 |
Financing receivable, originated three years before latest FY | 55 | 26 |
Financing receivable, originated four years before latest FY | 26 | 32 |
Financing receivable, originated five or more years before latest FY | 232 | 255 |
Financing receivable, before allowance for credit losses | 672 | 645 |
Commercial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, originated in current FY | 56 | 32 |
Financing receivable, originated in FY before latest FY | 31 | 152 |
Financing receivable, originated two years before latest FY | 152 | 34 |
Financing receivable, originated three years before latest FY | 34 | 20 |
Financing receivable, originated four years before latest FY | 20 | 17 |
Financing receivable, originated five or more years before latest FY | 186 | 203 |
Financing receivable, before allowance for credit losses | $ 479 | $ 458 |
Financing receivable, before allowance for credit losses by debt service coverage ratio as a percentage of financing receivable, before allowance for credit losses | 100.00% | 100.00% |
Commercial | Debt Service Coverage Ratio, Greater than 1.20x | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, before allowance for credit losses | $ 450 | $ 450 |
Financing receivable, before allowance for credit losses by debt service coverage ratio as a percentage of financing receivable, before allowance for credit losses | 93.90% | 98.30% |
Commercial | Debt Service Coverage Ratio, 1.00x to 1.20x | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, before allowance for credit losses | $ 17 | $ 8 |
Financing receivable, before allowance for credit losses by debt service coverage ratio as a percentage of financing receivable, before allowance for credit losses | 3.60% | 1.70% |
Commercial | Debt Service Coverage Ratio, Less than 1.00x | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, before allowance for credit losses | $ 12 | $ 0 |
Financing receivable, before allowance for credit losses by debt service coverage ratio as a percentage of financing receivable, before allowance for credit losses | 2.50% | 0.00% |
Commercial | Loan-to-Value Ratio, Less than 65% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, originated in current FY | $ 17 | $ 32 |
Financing receivable, originated in FY before latest FY | 31 | 102 |
Financing receivable, originated two years before latest FY | 87 | 23 |
Financing receivable, originated three years before latest FY | 10 | 13 |
Financing receivable, originated four years before latest FY | 13 | 16 |
Financing receivable, originated five or more years before latest FY | 157 | 187 |
Financing receivable, before allowance for credit losses | 315 | 373 |
Commercial | Loan-to-Value Ratio, 65% to 75% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, originated in current FY | 39 | 0 |
Financing receivable, originated in FY before latest FY | 0 | 50 |
Financing receivable, originated two years before latest FY | 65 | 6 |
Financing receivable, originated three years before latest FY | 19 | 7 |
Financing receivable, originated four years before latest FY | 7 | 0 |
Financing receivable, originated five or more years before latest FY | 15 | 3 |
Financing receivable, before allowance for credit losses | 145 | 66 |
Commercial | Loan-to-Value Ratio, 76% to 80% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, originated in current FY | 0 | 0 |
Financing receivable, originated in FY before latest FY | 0 | 0 |
Financing receivable, originated two years before latest FY | 0 | 0 |
Financing receivable, originated three years before latest FY | 0 | 0 |
Financing receivable, originated four years before latest FY | 0 | 1 |
Financing receivable, originated five or more years before latest FY | 4 | 3 |
Financing receivable, before allowance for credit losses | 4 | 4 |
Commercial | Loan-to-Value Ratio, Greater than 80% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, originated in current FY | 0 | 0 |
Financing receivable, originated in FY before latest FY | 0 | 0 |
Financing receivable, originated two years before latest FY | 0 | 5 |
Financing receivable, originated three years before latest FY | 5 | 0 |
Financing receivable, originated four years before latest FY | 0 | 0 |
Financing receivable, originated five or more years before latest FY | 10 | 10 |
Financing receivable, before allowance for credit losses | 15 | 15 |
Agricultural | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, originated in current FY | 33 | 46 |
Financing receivable, originated in FY before latest FY | 45 | 46 |
Financing receivable, originated two years before latest FY | 42 | 22 |
Financing receivable, originated three years before latest FY | 21 | 6 |
Financing receivable, originated four years before latest FY | 6 | 15 |
Financing receivable, originated five or more years before latest FY | 46 | 52 |
Financing receivable, before allowance for credit losses | 193 | 187 |
Agricultural | Loan-to-Value Ratio, Less than 65% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, originated in current FY | 32 | 46 |
Financing receivable, originated in FY before latest FY | 45 | 43 |
Financing receivable, originated two years before latest FY | 40 | 21 |
Financing receivable, originated three years before latest FY | 20 | 6 |
Financing receivable, originated four years before latest FY | 6 | 15 |
Financing receivable, originated five or more years before latest FY | 46 | 52 |
Financing receivable, before allowance for credit losses | 189 | 183 |
Agricultural | Loan-to-Value Ratio, 65% to 75% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, originated in current FY | 1 | 0 |
Financing receivable, originated in FY before latest FY | 0 | 3 |
Financing receivable, originated two years before latest FY | 2 | 1 |
Financing receivable, originated three years before latest FY | 1 | 0 |
Financing receivable, originated four years before latest FY | 0 | 0 |
Financing receivable, originated five or more years before latest FY | 0 | 0 |
Financing receivable, before allowance for credit losses | $ 4 | $ 4 |
Investments (Net Unrealized Inv
Investments (Net Unrealized Investment Gains (Losses)) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Components of net unrealized investment gains (losses) included in accumulated other comprehensive loss | ||
Fixed maturity securities | $ 261 | $ 383 |
Derivatives | 6 | 1 |
Subtotal | 267 | 384 |
Amounts allocated from: Future policy benefits | (9) | (20) |
Amounts allocated from: DAC and DSI | (34) | (38) |
Subtotal | (43) | (58) |
Deferred income tax benefit (expense) | (47) | (68) |
Net unrealized investment gains (losses) | $ 177 | $ 258 |
Investments (Changes in Net Unr
Investments (Changes in Net Unrealized Investment Gains (Losses)) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Unrealized investment gains (losses), beginning of period | $ 258 |
Unrealized investment gains (losses) during the period | (117) |
Unrealized investment gains (losses) relating to: Future policy benefits | 11 |
Unrealized investment gains (losses) relating to: DAC and DSI | 4 |
Unrealized investment gains (losses) relating to: Deferred income tax benefit (expense) | 21 |
Unrealized investment gains (losses), end of period | 177 |
Change in net unrealized investment gains (losses) | $ (81) |
Investments (Invested Assets on
Investments (Invested Assets on Deposit and Pledged as Collateral) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||
Invested assets on deposit (regulatory deposits) | $ 2 | $ 2 |
Invested assets pledged as collateral | 127 | 5 |
Total invested assets on deposit and pledged as collateral | $ 129 | $ 7 |
Investments (Variable Interest
Investments (Variable Interest Entities) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Variable Interest Entity [Line Items] | ||
Carrying amount | $ 12,487 | $ 11,502 |
VIE, Not Primary Beneficiary | Fixed maturity securities | ||
Variable Interest Entity [Line Items] | ||
Carrying amount | 315 | 301 |
Maximum exposure to loss | $ 294 | $ 274 |
Investments (Net Investment Inc
Investments (Net Investment Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Investment Income [Line Items] | ||||
Gross investment income | $ 41 | $ 35 | $ 120 | $ 104 |
Less: Investment expenses | 1 | 1 | 4 | 4 |
Net investment income | 40 | 34 | 116 | 100 |
Fixed maturity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 35 | 28 | 100 | 83 |
Mortgage loans | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 6 | 7 | 19 | 19 |
Cash, cash equivalents and short-term investments | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 0 | 0 | 0 | 1 |
Other | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | $ 0 | $ 0 | $ 1 | $ 1 |
Investments (Components of Net
Investments (Components of Net Investment Gains (Losses)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Investment Gains (Losses) [Line Items] | ||||
Net investment gains (losses) | $ 0 | $ 8 | $ 0 | $ 13 |
Fixed maturity securities | ||||
Net Investment Gains (Losses) [Line Items] | ||||
Net investment gains (losses) | (1) | 6 | 0 | 12 |
Mortgage loans | ||||
Net Investment Gains (Losses) [Line Items] | ||||
Net investment gains (losses) | 1 | 1 | 0 | 0 |
Other | ||||
Net Investment Gains (Losses) [Line Items] | ||||
Net investment gains (losses) | $ 0 | $ 1 | $ 0 | $ 1 |
Investments (Sales or Disposals
Investments (Sales or Disposals of Fixed Maturity Securities) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sales or disposals of fixed maturity securities | $ 33 | $ 137 | $ 72 | $ 316 |
Fixed maturity securities, gross investment gains | 0 | 7 | 1 | 13 |
Fixed maturity securities, gross investment losses | (1) | (1) | (1) | (1) |
Fixed maturity securities, net investment gains (losses) | $ (1) | $ 6 | $ 0 | $ 12 |
Investments (Fixed Maturity S_2
Investments (Fixed Maturity Securities - Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, estimated fair value | $ 4,622 | $ 3,843 |
Fixed maturity securities, allowance for credit losses | 0 | 0 |
Non-Income Producing | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, estimated fair value | 3 | 2 |
Fixed maturity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Accrued interest receivable | $ 30 | $ 24 |
Investments (Mortgage Loans - N
Investments (Mortgage Loans - Narrative) (Details) - Mortgage Loans - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accrued interest receivable | $ 4 | $ 4 | |
Financing receivable, before allowance for credit losses | 672 | 645 | |
Financing receivables in nonaccrual status, COVID-19 pandemic modified loans | 0 | 0 | |
Financing receivables in nonaccrual status | 0 | 0 | |
Financing receivables modified in a troubled debt restructuring | 0 | $ 0 | |
Past Due | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, before allowance for credit losses | 0 | $ 0 | |
COVID-19 Pandemic Financial Asset Past Due | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, before allowance for credit losses | $ 0 | $ 0 | |
Performing | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, before allowance for credit losses by performance status as a percentage of financing receivables, before allowance for credit losses | 100.00% | 100.00% | |
Minimum | Performing | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, before allowance for credit losses by performance status as a percentage of financing receivables, before allowance for credit losses | 99.00% | 99.00% |
Investments (Invested Assets _2
Investments (Invested Assets on Deposit and Pledged as Collateral - Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||
Restricted cash and cash equivalents | $ 0 | $ 0 |
Derivatives (Primary Risks Mana
Derivatives (Primary Risks Managed by Derivatives) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | $ 5,768 | $ 7,088 |
Derivative assets | 632 | 743 |
Derivative liabilities | 768 | 504 |
Embedded Derivative, Fair Value of Embedded Derivative Asset | 387 | 477 |
Embedded Derivative, Fair Value of Embedded Derivative Liability | 607 | 407 |
Derivatives Designated as Hedging Instruments: | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 116 | 115 |
Derivative assets | 7 | 4 |
Derivative liabilities | 1 | 3 |
Derivatives Designated as Hedging Instruments: | Cash flow hedges: | Foreign currency swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 116 | 115 |
Derivative assets | 7 | 4 |
Derivative liabilities | 1 | 3 |
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 5,652 | 6,973 |
Derivative assets | 238 | 262 |
Derivative liabilities | 160 | 94 |
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Interest rate caps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 800 | 800 |
Derivative assets | 3 | 1 |
Derivative liabilities | 0 | 0 |
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Foreign currency swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 16 | 16 |
Derivative assets | 4 | 4 |
Derivative liabilities | 0 | 0 |
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Equity index options | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 2,752 | 5,908 |
Derivative assets | 222 | 250 |
Derivative liabilities | 130 | 94 |
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Equity total return swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 2,084 | 249 |
Derivative assets | 9 | 7 |
Derivative liabilities | 30 | 0 |
Ceded guaranteed minimum income benefits | ||
Derivatives, Fair Value [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative Asset | 387 | 477 |
Embedded Derivative, Fair Value of Embedded Derivative Liability | 0 | 0 |
Direct guaranteed minimum benefits | ||
Derivatives, Fair Value [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative Asset | 0 | 0 |
Embedded Derivative, Fair Value of Embedded Derivative Liability | (22) | 14 |
Direct index-linked annuities | ||
Derivatives, Fair Value [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative Asset | 0 | 0 |
Embedded Derivative, Fair Value of Embedded Derivative Liability | $ 629 | $ 393 |
Derivatives (Derivatives Pertai
Derivatives (Derivatives Pertaining to Hedged Items) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net Derivative Gains (Losses) Recognized for Hedged Items | $ 0 | $ 0 | $ 0 | $ 0 |
Amount of Gains (Losses) Deferred in AOCI | 3 | (6) | 5 | 5 |
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net Derivative Gains (Losses) Recognized for Hedged Items | 0 | 0 | 0 | 0 |
Amount of Gains (Losses) Deferred in AOCI | 0 | 0 | 0 | 0 |
Cash flow hedges: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net Derivative Gains (Losses) Recognized for Hedged Items | 0 | 0 | 0 | 0 |
Amount of Gains (Losses) Deferred in AOCI | 3 | (6) | 5 | 5 |
Net Derivative Gains (Losses) Recognized for Derivatives | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 10 | 23 | (46) | 178 |
Net Derivative Gains (Losses) Recognized for Derivatives | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 10 | 23 | (46) | 178 |
Net Derivative Gains (Losses) Recognized for Derivatives | Cash flow hedges: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 0 | 0 | 0 |
Net Investment Income | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 0 | 1 | 1 |
Net Investment Income | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 0 | 0 | 0 |
Net Investment Income | Cash flow hedges: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 0 | 1 | 1 |
Interest rate derivatives | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net Derivative Gains (Losses) Recognized for Hedged Items | 0 | 0 | 0 | 0 |
Amount of Gains (Losses) Deferred in AOCI | 0 | 0 | 0 | 0 |
Interest rate derivatives | Net Derivative Gains (Losses) Recognized for Derivatives | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 0 | 1 | (1) |
Interest rate derivatives | Net Investment Income | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 0 | 0 | 0 |
Foreign currency exchange rate derivatives | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net Derivative Gains (Losses) Recognized for Hedged Items | 0 | 0 | 0 | 0 |
Amount of Gains (Losses) Deferred in AOCI | 0 | 0 | 0 | 0 |
Foreign currency exchange rate derivatives | Cash flow hedges: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net Derivative Gains (Losses) Recognized for Hedged Items | 0 | 0 | 0 | 0 |
Amount of Gains (Losses) Deferred in AOCI | 3 | (6) | 5 | 5 |
Foreign currency exchange rate derivatives | Net Derivative Gains (Losses) Recognized for Derivatives | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | (1) | 0 | 2 |
Foreign currency exchange rate derivatives | Net Derivative Gains (Losses) Recognized for Derivatives | Cash flow hedges: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 0 | 0 | 0 |
Foreign currency exchange rate derivatives | Net Investment Income | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 0 | 0 | 0 |
Foreign currency exchange rate derivatives | Net Investment Income | Cash flow hedges: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 0 | 1 | 1 |
Equity derivatives | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net Derivative Gains (Losses) Recognized for Hedged Items | 0 | 0 | 0 | 0 |
Amount of Gains (Losses) Deferred in AOCI | 0 | 0 | 0 | 0 |
Equity derivatives | Net Derivative Gains (Losses) Recognized for Derivatives | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | (8) | 86 | 202 | 12 |
Equity derivatives | Net Investment Income | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 0 | 0 | 0 |
Embedded derivatives | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net Derivative Gains (Losses) Recognized for Hedged Items | 0 | 0 | 0 | 0 |
Amount of Gains (Losses) Deferred in AOCI | 0 | 0 | 0 | 0 |
Embedded derivatives | Net Derivative Gains (Losses) Recognized for Derivatives | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 18 | (62) | (249) | 165 |
Embedded derivatives | Net Investment Income | Derivatives Not Designated or Not Qualifying as Hedging Instruments: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ 0 | $ 0 | $ 0 | $ 0 |
Derivatives (Asset and Liabilit
Derivatives (Asset and Liability after Master Netting Arrangement or a Similar Arrangement) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Offsetting Derivative Assets [Abstract] | ||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | $ 245 | $ 266 |
Derivative Asset, Not Offset, Policy Election Deduction | (44) | (91) |
Derivative Asset, Collateral, Obligation to Return Cash, Offset | (198) | (136) |
Derivative Asset, Fair Value, Amount Offset Against Collateral | 3 | 39 |
Derivative Asset, Collateral, Obligation to Return Securities, Offset | (3) | (34) |
Derivative Asset, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election | 0 | 5 |
Offsetting Derivative Liabilities [Abstract] | ||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 161 | 97 |
Derivative Liability, Not Offset, Policy Election Deduction | (44) | (91) |
Derivative Liability, Collateral, Right to Reclaim Cash, Offset | 0 | 0 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 117 | 6 |
Derivative Liability, Collateral, Right to Reclaim Securities, Offset | (112) | (6) |
Derivative Liability, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election | $ 5 | $ 0 |
Derivatives (Estimated Fair Val
Derivatives (Estimated Fair Value of OTC-Bilateral Derivatives (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Estimated Fair Value of Derivatives in Net Liability Position | $ 117 | $ 6 |
Fixed Maturity Securities | ||
Derivative [Line Items] | ||
Estimated Fair Value of Collateral Provided | $ 127 | $ 6 |
Derivatives (Derivatives Pert_2
Derivatives (Derivatives Pertaining to Hedged Items - Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
AOCI before Tax, Attributable to Parent | $ 6 | $ 1 |
Fair Value (Recurring Fair Valu
Fair Value (Recurring Fair Value Measurements) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | $ 4,622 | $ 3,843 |
Short-term investments, principally at estimated fair value | 3 | 71 |
Derivative assets | 632 | 743 |
Embedded derivatives within asset host contracts | 387 | 477 |
Separate account assets | 5,037 | 4,965 |
Liabilities [Abstract] | ||
Derivative liabilities | 768 | 504 |
Embedded derivatives within liability host contracts | 607 | 407 |
Recurring | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 4,622 | 3,843 |
Short-term investments, principally at estimated fair value | 3 | 71 |
Derivative assets | 245 | 266 |
Embedded derivatives within asset host contracts | 387 | 477 |
Separate account assets | 5,037 | 4,965 |
Total assets | 10,294 | 9,622 |
Liabilities [Abstract] | ||
Derivative liabilities | 161 | 97 |
Embedded derivatives within liability host contracts | 607 | 407 |
Total liabilities | 768 | 504 |
Recurring | Interest rate | ||
Assets [Abstract] | ||
Derivative assets | 3 | 1 |
Recurring | Foreign Exchange Contract [Member] | ||
Assets [Abstract] | ||
Derivative assets | 11 | 8 |
Liabilities [Abstract] | ||
Derivative liabilities | 1 | 3 |
Recurring | Equity market | ||
Assets [Abstract] | ||
Derivative assets | 231 | 257 |
Liabilities [Abstract] | ||
Derivative liabilities | 160 | 94 |
Recurring | U.S. corporate | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 2,364 | 1,897 |
Recurring | Foreign corporate | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 682 | 559 |
Recurring | CMBS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 338 | 329 |
Recurring | U.S. government and agency | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 290 | 312 |
Recurring | RMBS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 271 | 236 |
Recurring | ABS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 361 | 355 |
Recurring | State and political subdivision | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 294 | 137 |
Recurring | Foreign government | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 22 | 18 |
Recurring | Level 1 | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 148 | 158 |
Short-term investments, principally at estimated fair value | 2 | 63 |
Derivative assets | 0 | 0 |
Embedded derivatives within asset host contracts | 0 | 0 |
Separate account assets | 0 | 0 |
Total assets | 150 | 221 |
Liabilities [Abstract] | ||
Derivative liabilities | 0 | 0 |
Embedded derivatives within liability host contracts | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring | Level 1 | Interest rate | ||
Assets [Abstract] | ||
Derivative assets | 0 | 0 |
Recurring | Level 1 | Foreign Exchange Contract [Member] | ||
Assets [Abstract] | ||
Derivative assets | 0 | 0 |
Liabilities [Abstract] | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Equity market | ||
Assets [Abstract] | ||
Derivative assets | 0 | 0 |
Liabilities [Abstract] | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | U.S. corporate | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 1 | Foreign corporate | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 1 | CMBS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 1 | U.S. government and agency | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 148 | 158 |
Recurring | Level 1 | RMBS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 1 | ABS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 1 | State and political subdivision | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 1 | Foreign government | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 2 | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 4,408 | 3,653 |
Short-term investments, principally at estimated fair value | 1 | 8 |
Derivative assets | 245 | 266 |
Embedded derivatives within asset host contracts | 0 | 0 |
Separate account assets | 5,037 | 4,965 |
Total assets | 9,691 | 8,892 |
Liabilities [Abstract] | ||
Derivative liabilities | 161 | 97 |
Embedded derivatives within liability host contracts | 0 | 0 |
Total liabilities | 161 | 97 |
Recurring | Level 2 | Interest rate | ||
Assets [Abstract] | ||
Derivative assets | 3 | 1 |
Recurring | Level 2 | Foreign Exchange Contract [Member] | ||
Assets [Abstract] | ||
Derivative assets | 11 | 8 |
Liabilities [Abstract] | ||
Derivative liabilities | 1 | 3 |
Recurring | Level 2 | Equity market | ||
Assets [Abstract] | ||
Derivative assets | 231 | 257 |
Liabilities [Abstract] | ||
Derivative liabilities | 160 | 94 |
Recurring | Level 2 | U.S. corporate | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 2,323 | 1,873 |
Recurring | Level 2 | Foreign corporate | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 670 | 557 |
Recurring | Level 2 | CMBS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 338 | 329 |
Recurring | Level 2 | U.S. government and agency | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 142 | 154 |
Recurring | Level 2 | RMBS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 271 | 236 |
Recurring | Level 2 | ABS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 348 | 349 |
Recurring | Level 2 | State and political subdivision | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 294 | 137 |
Recurring | Level 2 | Foreign government | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 22 | 18 |
Recurring | Level 3 | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 66 | 32 |
Short-term investments, principally at estimated fair value | 0 | 0 |
Derivative assets | 0 | 0 |
Embedded derivatives within asset host contracts | 387 | 477 |
Separate account assets | 0 | 0 |
Total assets | 453 | 509 |
Liabilities [Abstract] | ||
Derivative liabilities | 0 | 0 |
Embedded derivatives within liability host contracts | 607 | 407 |
Total liabilities | 607 | 407 |
Recurring | Level 3 | Interest rate | ||
Assets [Abstract] | ||
Derivative assets | 0 | 0 |
Recurring | Level 3 | Foreign Exchange Contract [Member] | ||
Assets [Abstract] | ||
Derivative assets | 0 | 0 |
Liabilities [Abstract] | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Equity market | ||
Assets [Abstract] | ||
Derivative assets | 0 | 0 |
Liabilities [Abstract] | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | U.S. corporate | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 41 | 24 |
Recurring | Level 3 | Foreign corporate | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 12 | 2 |
Recurring | Level 3 | CMBS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 3 | U.S. government and agency | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 3 | RMBS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 3 | ABS | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 13 | 6 |
Recurring | Level 3 | State and political subdivision | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | 0 | 0 |
Recurring | Level 3 | Foreign government | ||
Assets [Abstract] | ||
Fixed maturity securities, estimated fair value | $ 0 | $ 0 |
Fair Value (Assets and Liabilit
Fair Value (Assets and Liabilities Measured - Quantitative Information) (Details) - Level 3 | Sep. 30, 2021 | Dec. 31, 2020 |
Measurement Input, Mortality Rate | Minimum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0.0003 | 0.0003 |
Measurement Input, Mortality Rate | Maximum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0.1262 | 0.1213 |
Measurement Input, Lapse Rate | Minimum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0.0030 | 0.0025 |
Measurement Input, Lapse Rate | Maximum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0.1450 | 0.1500 |
Measurement Input, Utilization Rate | Minimum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0 | 0 |
Measurement Input, Utilization Rate | Maximum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0.2500 | 0.2500 |
Measurement Input, Withdrawal Rate | Minimum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0.0025 | 0.0025 |
Measurement Input, Withdrawal Rate | Maximum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0.1000 | 0.1000 |
Measurement Input, Long Term Equity Volatilities | Minimum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0.1644 | 0.1666 |
Measurement Input, Long Term Equity Volatilities | Maximum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0.2216 | 0.2221 |
Measurement Input, Entity Credit Risk | Minimum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | (0.0050) | 0.0047 |
Measurement Input, Entity Credit Risk | Maximum | ||
Fair Value, Option, Quantitative Disclosures | ||
Embedded Derivative Liability, Measurement Input | 0.0128 | 0.0197 |
Fair Value (Unobservable Input
Fair Value (Unobservable Input Reconciliation) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Embedded derivatives | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance, beginning of period | $ (234) | $ 389 | $ 70 | $ 186 |
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) | 18 | (62) | (249) | 165 |
Total realized/unrealized gains (losses) included in AOCI | 0 | 0 | 0 | 0 |
Purchases (5) | 0 | 0 | 0 | 0 |
Sales (5) | 0 | 0 | 0 | 0 |
Issuances (5) | 0 | 0 | 0 | 0 |
Settlements (5) | (4) | (13) | (41) | (37) |
Transfers into Level 3 (6) | 0 | 0 | 0 | 0 |
Transfers out of Level 3 (6) | 0 | 0 | 0 | 0 |
Balance, end of period | (220) | 314 | (220) | 314 |
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period | 123 | (74) | (287) | 132 |
Changes in unrealized gains (losses) included in OCI for the instruments still held at end of period | 0 | 0 | 0 | 0 |
Corporate (1) | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 18 | 55 | 26 | 35 |
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) | 0 | 0 | 0 | 0 |
Total realized/unrealized gains (losses) included in AOCI | 0 | 3 | 0 | 4 |
Purchases (5) | 13 | 16 | 37 | 39 |
Sales (5) | 0 | (2) | (3) | (6) |
Issuances (5) | 0 | 0 | 0 | 0 |
Settlements (5) | 0 | 0 | 0 | 0 |
Transfers into Level 3 (6) | 24 | 4 | 5 | 4 |
Transfers out of Level 3 (6) | (2) | (4) | (12) | (4) |
Balance, end of period | 53 | 72 | 53 | 72 |
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period | 0 | 0 | 0 | 0 |
Changes in unrealized gains (losses) included in OCI for the instruments still held at end of period | 0 | 2 | 0 | 4 |
Structured Securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 20 | 20 | 6 | 9 |
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) | 0 | 0 | 0 | 0 |
Total realized/unrealized gains (losses) included in AOCI | 0 | 0 | 0 | 0 |
Purchases (5) | 3 | 1 | 13 | 1 |
Sales (5) | 0 | 0 | (3) | 0 |
Issuances (5) | 0 | 0 | 0 | 0 |
Settlements (5) | 0 | 0 | 0 | 0 |
Transfers into Level 3 (6) | 0 | 0 | 0 | 0 |
Transfers out of Level 3 (6) | (10) | (17) | (3) | (6) |
Balance, end of period | 13 | 4 | 13 | 4 |
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period | 0 | 0 | 0 | 0 |
Changes in unrealized gains (losses) included in OCI for the instruments still held at end of period | 0 | 0 | 0 | 0 |
Foreign Government | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 3 | 0 | 0 | 0 |
Total realized/unrealized gains (losses) included in net income (loss) (3) (4) | 0 | 0 | 0 | 0 |
Total realized/unrealized gains (losses) included in AOCI | 0 | 0 | 0 | 0 |
Purchases (5) | 0 | 0 | 0 | 0 |
Sales (5) | 0 | 0 | 0 | 0 |
Issuances (5) | 0 | 0 | 0 | 0 |
Settlements (5) | 0 | 0 | 0 | 0 |
Transfers into Level 3 (6) | 0 | 0 | 0 | 0 |
Transfers out of Level 3 (6) | (3) | 0 | 0 | 0 |
Balance, end of period | 0 | 0 | 0 | 0 |
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period | 0 | 0 | 0 | 0 |
Changes in unrealized gains (losses) included in OCI for the instruments still held at end of period | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value (Financial Instrumen
Fair Value (Financial Instruments Carried at Other Than Fair Value) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Carrying Value | ||
Assets | ||
Mortgage loans | $ 670 | $ 643 |
Premiums, reinsurance and other receivables | 452 | 436 |
Liabilities | ||
Policyholder account balances | 869 | 915 |
Other liabilities | 475 | 430 |
Estimated Fair Value | ||
Assets | ||
Mortgage loans | 698 | 681 |
Premiums, reinsurance and other receivables | 453 | 436 |
Liabilities | ||
Policyholder account balances | 938 | 979 |
Other liabilities | 475 | 430 |
Estimated Fair Value | Level 1 | ||
Assets | ||
Mortgage loans | 0 | 0 |
Premiums, reinsurance and other receivables | 0 | 0 |
Liabilities | ||
Policyholder account balances | 0 | 0 |
Other liabilities | 0 | 0 |
Estimated Fair Value | Level 2 | ||
Assets | ||
Mortgage loans | 0 | 0 |
Premiums, reinsurance and other receivables | 6 | 1 |
Liabilities | ||
Policyholder account balances | 0 | 0 |
Other liabilities | 39 | 7 |
Estimated Fair Value | Level 3 | ||
Assets | ||
Mortgage loans | 698 | 681 |
Premiums, reinsurance and other receivables | 447 | 435 |
Liabilities | ||
Policyholder account balances | 938 | 979 |
Other liabilities | $ 436 | $ 423 |
Equity (Components of Accumulat
Equity (Components of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | $ 195 | $ 214 | $ 258 | $ 122 |
OCI before reclassifications | (23) | 29 | (101) | 151 |
Deferred income tax benefit (expense) | 5 | (7) | 21 | (32) |
AOCI before reclassifications, net of income tax | 177 | 236 | 178 | 241 |
Amounts reclassified from AOCI | 0 | (6) | (1) | (12) |
Deferred income tax benefit (expense) | 0 | 2 | 0 | 3 |
Amounts reclassified from AOCI, net of income tax | 0 | (4) | (1) | (9) |
Balance, end of period | 177 | 232 | 177 | 232 |
Net unrealized investment gains (losses): | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | 191 | 199 | 256 | 116 |
OCI before reclassifications | (26) | 35 | (106) | 146 |
Deferred income tax benefit (expense) | 6 | (8) | 22 | (31) |
AOCI before reclassifications, net of income tax | 171 | 226 | 172 | 231 |
Amounts reclassified from AOCI | 0 | (6) | (1) | (12) |
Deferred income tax benefit (expense) | 0 | 2 | 0 | 3 |
Amounts reclassified from AOCI, net of income tax | 0 | (4) | (1) | (9) |
Balance, end of period | 171 | 222 | 171 | 222 |
Unrealized Gains (Losses) on Derivatives | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | 4 | 15 | 2 | 6 |
OCI before reclassifications | 3 | (6) | 5 | 5 |
Deferred income tax benefit (expense) | (1) | 1 | (1) | (1) |
AOCI before reclassifications, net of income tax | 6 | 10 | 6 | 10 |
Amounts reclassified from AOCI | 0 | 0 | 0 | 0 |
Deferred income tax benefit (expense) | 0 | 0 | 0 | 0 |
Amounts reclassified from AOCI, net of income tax | 0 | 0 | 0 | 0 |
Balance, end of period | $ 6 | $ 10 | $ 6 | $ 10 |
Equity (Reclassifications Out o
Equity (Reclassifications Out of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Net investment income | $ 40 | $ 34 | $ 116 | $ 100 | ||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 2 | 6 | (17) | 151 | ||
Income tax (expense) benefit | (1) | (1) | 5 | (30) | ||
Net income (loss) | 1 | 5 | $ (13) | $ 116 | (12) | 121 |
Reclassification out of Accumulated Other Comprehensive Income | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Net income (loss) | 0 | 4 | 1 | 9 | ||
Reclassification out of Accumulated Other Comprehensive Income | Net unrealized investment gains (losses): | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Net investment income | 0 | 6 | 1 | 12 | ||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 0 | 6 | 1 | 12 | ||
Income tax (expense) benefit | 0 | (2) | 0 | (3) | ||
Net income (loss) | $ 0 | $ 4 | $ 1 | $ 9 |
Other Expenses (Other Expenses)
Other Expenses (Other Expenses) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | ||||
Compensation | $ 6 | $ 5 | $ 18 | $ 15 |
Contracted services and other labor costs | 4 | 3 | 11 | 11 |
Transition services agreements | 2 | 2 | 5 | 4 |
Establishment costs | 1 | 1 | 3 | 5 |
Premium and other taxes, licenses and fees | 1 | 1 | 2 | 2 |
Volume related costs, excluding compensation, net of DAC capitalization | 6 | 5 | 18 | 15 |
Other | (3) | 0 | 0 | 5 |
Total other expenses | $ 17 | $ 17 | $ 57 | $ 57 |
Other Revenues (Narrative) (Det
Other Revenues (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Distribution Service [Member] | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 4 | $ 3 | $ 11 | $ 9 |
Contingencies, Commitments an_2
Contingencies, Commitments and Guarantees (Commitments and Guarantees - Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Liabilities for indemnities, guarantees and commitments | $ 0 | $ 0 |
Mortgage Loan Commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability | 44 | 7 |
Commitments to Fund Private Corporate Bond Investments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability | $ 15 | $ 15 |
Related Party Transactions (Eff
Related Party Transactions (Effects of Affiliated Reinsurance on Statements of Operations) (Details) - Affiliated Entity - Ceded - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Effects of Reinsurance [Line Items] | ||||
Premiums | $ (11) | $ (11) | $ (34) | $ (31) |
Universal life and investment-type product policy fees | (1) | (1) | (3) | (3) |
Other revenues | (28) | (25) | (83) | (71) |
Policyholder benefits and claims | (18) | (53) | (60) | (111) |
Other expenses | $ (2) | $ (2) | $ (6) | $ (5) |
Related Party Transactions (E_2
Related Party Transactions (Effects of Affiliated Reinsurance on Balance Sheets) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Premiums, reinsurance and other receivables | $ 1,165 | $ 1,223 |
Liabilities: | ||
Other liabilities | 1,054 | 940 |
Ceded | Affiliated Entity | ||
Assets: | ||
Premiums, reinsurance and other receivables | 682 | 749 |
Liabilities: | ||
Other liabilities | $ 363 | $ 362 |
Related Party Transactions (Rei
Related Party Transactions (Reinsurance Transactions - Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Embedded Derivative, Fair Value of Embedded Derivative Asset | $ 387 | $ 387 | $ 477 | ||
Affiliated Entity | Ceded guaranteed minimum income benefits | |||||
Embedded Derivative, Fair Value of Embedded Derivative Asset | 387 | 387 | $ 477 | ||
Net derivatives gains (losses) | $ 10 | $ 16 | $ (92) | $ 217 |
Related Party Transactions (Sha
Related Party Transactions (Shared Services and Overhead Allocations - Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Insurance Commissions and Fees | $ 26 | $ 24 | $ 78 | $ 70 | |
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | 14 | 12 | 39 | 38 | |
Related Party Transaction, Amounts of Transaction | 0 | 1 | 0 | 3 | |
Affiliated Entity | |||||
Insurance Commissions and Fees | 4 | $ 2 | 10 | $ 8 | |
All Services and Transactions Except Broker Dealer Activities [Member] | |||||
Related Party Transaction, Due from (to) Related Party | $ (19) | $ (19) | $ (6) |
Related Party Transactions (Bro
Related Party Transactions (Broker Dealer Transactions - Narrative) (Details) - Broker Dealer Activities [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Revenue from Related Parties | $ 3 | $ 3 | $ 10 | $ 9 | |
Related Party Transaction, Expenses from Transactions with Related Party | 23 | $ 15 | 69 | $ 49 | |
Due from Related Parties | $ 1 | $ 1 | $ 1 |