Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 09, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 033-28976 | |
Entity Registrant Name | RIVERSOURCE LIFE INSURANCE COMPANY | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-0823832 | |
Entity Address, Address Line One | 1099 Ameriprise Financial Center | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55474 | |
City Area Code | (612) | |
Local Phone Number | 671-3131 | |
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 | 100,000 | |
Entity Central Index Key | 0000727892 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Investments: | |||
Deferred acquisition costs | $ 2,710 | $ 2,508 | |
Total assets | 136,578 | 134,424 | |
Liabilities: | |||
Policyholder account balances, future policy benefits and claims | 34,857 | 33,986 | |
Separate account liabilities | 90,026 | 87,556 | |
Total liabilities | 134,619 | 131,111 | |
Shareholder's equity: | |||
Common stock, $30 par value; 100,000 shares authorized, issued and outstanding | 3 | 3 | |
Additional paid-in capital | 2,466 | 2,466 | |
Accumulated deficit | (911) | (76) | |
Accumulated other comprehensive income, net of tax | 401 | 920 | |
Total shareholder's equity | 1,959 | 3,313 | |
Total liabilities and shareholder's equity | 136,578 | 134,424 | |
RiverSource Life | |||
Investments: | |||
Available-for-Sale: Fixed maturities, at fair value | 15,789 | 22,855 | |
Mortgage loans, at amortized cost | 1,776 | 2,574 | |
Policy loans | 836 | 846 | |
Other investments | 239 | 701 | |
Total investments | 18,640 | 26,976 | |
Cash and cash equivalents | 2,664 | 3,191 | |
Reinsurance recoverables | 4,536 | 3,409 | |
Other receivables | 8,242 | 1,613 | |
Accrued investment income | 131 | 172 | |
Deferred acquisition costs | 2,710 | 2,508 | |
Other assets | 7,371 | 6,969 | |
Separate account assets | 90,026 | 87,556 | |
Liabilities: | |||
Policyholder account balances, future policy benefits and claims | 34,857 | 33,986 | |
Short-term borrowings | 200 | 200 | |
Long-term debt | 500 | 500 | |
Other liabilities | 6,802 | 6,887 | |
Separate account liabilities | 90,026 | 87,556 | |
Consolidated investment entities | |||
Investments: | |||
Total investments | 2,170 | 1,918 | |
Cash and cash equivalents | 68 | 94 | |
Other receivables | 18 | 16 | |
Other assets | 2 | 2 | |
Liabilities: | |||
Debt | [1] | 2,163 | 1,913 |
Other liabilities | $ 71 | $ 69 | |
[1] | The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Shareholder's equity: | ||
Common stock, par value (in dollars per share) | $ 30 | $ 30 |
Common stock, shares authorized (in shares) | 100,000 | 100,000 |
Common stock, shares issued (in shares) | 100,000 | 100,000 |
Common stock, shares outstanding (in shares) | 100,000 | 100,000 |
RiverSource Life | ||
Assets | ||
Available-for-sale: Fixed maturities, amortized cost | $ 14,129,000,000 | $ 20,260,000,000 |
Available-for-sale: Fixed maturities, allowance for credit losses | 1,000,000 | 10,000,000 |
Reinsurance recoverables, allowance for credit loss | 11,000,000 | 8,000,000 |
RiverSource Life | Fixed maturities | ||
Assets | ||
Available-for-sale: Fixed maturities, amortized cost | 14,129,000,000 | 20,260,000,000 |
Available-for-sale: Fixed maturities, allowance for credit losses | 1,000,000 | 10,000,000 |
RiverSource Life | Mortgages | ||
Assets | ||
Allowance for credit losses | 14,000,000 | 28,000,000 |
RiverSource Life | Other investments | ||
Assets | ||
Allowance for credit losses | $ 0 | $ 7,000,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues | ||||
Premiums | $ (1,098) | $ 82 | $ (945) | $ 256 |
Net investment income | 193 | 212 | 664 | 647 |
Policy and contract charges | 590 | 535 | 1,715 | 1,529 |
Other revenues | 177 | 122 | 436 | 357 |
Net realized investment gains (losses) | 533 | 1 | 589 | (16) |
Total revenues | 395 | 952 | 2,459 | 2,773 |
Benefits and expenses | ||||
Benefits, claims, losses and settlement expenses | (719) | 1,101 | 337 | 820 |
Interest credited to fixed accounts | 172 | 170 | 455 | 523 |
Amortization of deferred acquisition costs | 6 | 83 | 69 | 338 |
Interest and debt expense | 43 | 84 | ||
Other insurance and operating expenses | 179 | 163 | 553 | 490 |
Total benefits and expenses | (319) | 1,517 | 1,498 | 2,171 |
Pretax income | 714 | (565) | 961 | 602 |
Income tax provision | 111 | (131) | 121 | 35 |
Net Income | $ 603 | $ (434) | $ 840 | $ 567 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 603 | $ (434) | $ 840 | $ 567 |
Other comprehensive income (loss), net of tax: | ||||
Net unrealized gains (losses) on securities | (321) | 88 | (519) | 219 |
Total other comprehensive income (loss), net of tax | (321) | 88 | (519) | 219 |
Total comprehensive income | $ 282 | $ (346) | $ 321 | $ 786 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY - USD ($) $ in Millions | Total | Common shares | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, AdjustmentRetained earnings |
Beginning balance at Dec. 31, 2019 | $ 3,336 | $ 3 | $ 2,466 | $ 293 | $ 574 | ||
Beginning balance (Current expected credit losses guidance) at Dec. 31, 2019 | $ (7) | $ (7) | |||||
Comprehensive income: | |||||||
Net Income | 567 | 567 | |||||
Other comprehensive income (loss), net of tax | 219 | 219 | |||||
Total comprehensive income | 786 | ||||||
Cash dividends to Ameriprise Financial, Inc. | (650) | (650) | |||||
Ending balance at Sep. 30, 2020 | 3,465 | 3 | 2,466 | 203 | 793 | ||
Beginning balance at Jun. 30, 2020 | 3,961 | 3 | 2,466 | 787 | 705 | ||
Comprehensive income: | |||||||
Net Income | (434) | (434) | |||||
Other comprehensive income (loss), net of tax | 88 | 88 | |||||
Total comprehensive income | (346) | ||||||
Cash dividends to Ameriprise Financial, Inc. | (150) | (150) | |||||
Ending balance at Sep. 30, 2020 | 3,465 | 3 | 2,466 | 203 | 793 | ||
Beginning balance at Dec. 31, 2020 | 3,313 | 3 | 2,466 | (76) | 920 | ||
Comprehensive income: | |||||||
Net Income | 840 | 840 | |||||
Other comprehensive income (loss), net of tax | (519) | (519) | |||||
Total comprehensive income | 321 | ||||||
Cash dividends to Ameriprise Financial, Inc. | (1,675) | (1,675) | |||||
Ending balance at Sep. 30, 2021 | 1,959 | 3 | 2,466 | (911) | 401 | ||
Beginning balance at Jun. 30, 2021 | 2,602 | 3 | 2,466 | (589) | 722 | ||
Comprehensive income: | |||||||
Net Income | 603 | 603 | |||||
Other comprehensive income (loss), net of tax | (321) | (321) | |||||
Total comprehensive income | 282 | ||||||
Cash dividends to Ameriprise Financial, Inc. | (925) | (925) | |||||
Ending balance at Sep. 30, 2021 | $ 1,959 | $ 3 | $ 2,466 | $ (911) | $ 401 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities | ||
Net Income | $ 840 | $ 567 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation, amortization and accretion, net | (50) | (19) |
Deferred income tax (benefit) expense | (43) | 186 |
Contractholder and policyholder charges, non-cash | (292) | (288) |
Loss from equity method investments | 56 | 58 |
Net realized investment (gains) losses | (602) | (9) |
Impairments and provision for loan losses | 1 | 25 |
Net losses (gains) of consolidated investment entities | (17) | |
Changes in operating assets and liabilities: | ||
Deferred acquisition costs | (127) | 183 |
Policyholder account balances, future policy benefits and claims, net | 1,465 | 3,540 |
Derivatives, net of collateral | (316) | 268 |
Reinsurance recoverables | 20 | (156) |
Other receivables | 6 | 53 |
Accrued investment income | 16 | (9) |
Current income tax expense (benefit) | (401) | (82) |
Payable for investment securities purchase | 20 | |
Other operating assets and liabilities of consolidated investment entities, net | 15 | |
Other, net | 77 | 93 |
Net cash provided by (used in) operating activities | 668 | 4,410 |
Available-for-Sale securities: | ||
Proceeds from sales | 555 | 84 |
Maturities, sinking fund payments and calls | 2,396 | 1,788 |
Purchases | (2,680) | (3,079) |
Proceeds from sales, maturities and repayments of mortgage loans | 218 | 138 |
Funding of mortgage loans | (152) | (120) |
Proceeds from sales and collections of other investments | 88 | 92 |
Purchase of other investments | (31) | (147) |
Purchase of investments by consolidated investment entities | (1,461) | |
Proceeds from sales, maturities and repayments of investments by consolidated investment entities | 850 | |
Purchase of equipment and software | (9) | (7) |
Change in policy loans, net | 10 | 18 |
Cash paid for deposit receivable | (216) | (3) |
Cash received for deposit receivable | 132 | 74 |
Advance on line of credit to Ameriprise Financial, Inc. | (1) | (702) |
Repayment from Ameriprise Financial, Inc. on line of credit | 1 | 702 |
Cash received from written options with deferred premiums | 60 | 129 |
Cash paid for written options with deferred premiums | (314) | (292) |
Other, net | (19) | (67) |
Net cash provided by (used in) investing activities | (573) | (1,392) |
Policyholder account balances: | ||
Deposits and other additions | 1,131 | 1,202 |
Net transfers from (to) separate accounts | (206) | (63) |
Surrenders and other benefits | (1,002) | (1,035) |
Proceeds from line of credit with Ameriprise Financial, Inc. | 5 | 6 |
Payments on line of credit with Ameriprise Financial, Inc. | (5) | (56) |
Cash received for purchased options with deferred premiums | 580 | 40 |
Cash paid for purchased options with deferred premiums | (94) | (177) |
Borrowings by consolidated investment entities | 1,375 | |
Repayments of debt by consolidated investment entities | (757) | |
Cash dividends to Ameriprise Financial, Inc. | (1,675) | (650) |
Net cash provided by (used in) financing activities | (648) | (733) |
Net increase (decrease) in cash and cash equivalents | (553) | 2,285 |
Cash and cash equivalents at beginning of period | 3,285 | 1,275 |
Cash and cash equivalents at end of period | 2,732 | 3,560 |
Supplemental Disclosures: | ||
Income taxes paid (received), net | 567 | (122) |
Non-cash investing activity: | ||
Partnership commitments not yet remitted | 4 | |
Exchange of an investment that resulted in a realized gain and an increase to amortized cost | 17 | |
Investments transferred in connection with reinsurance transaction | 7,527 | |
RiverSource Life | ||
Supplemental Disclosures: | ||
Interest paid on borrowings | $ 2 | |
Consolidated investment entities | ||
Supplemental Disclosures: | ||
Interest paid on borrowings | $ 73 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | RiverSource Life Insurance Company is a stock life insurance company with one wholly owned stock life insurance company subsidiary, RiverSource Life Insurance Co. of New York (“RiverSource Life of NY”). RiverSource Life Insurance Company is a wholly owned subsidiary of Ameriprise Financial, Inc. (“Ameriprise Financial”). • RiverSource Life Insurance Company is domiciled in Minnesota and holds Certificates of Authority in American Samoa, the District of Columbia and all states except New York. RiverSource Life Insurance Company issues insurance and annuity products. • RiverSource Life of NY is domiciled and holds a Certificate of Authority in New York. RiverSource Life of NY issues insurance and annuity products. RiverSource Life Insurance Company also wholly owns RiverSource Tax Advantaged Investments, Inc. (“RTA”). RTA is a stock company domiciled in Delaware and is a limited partner in affordable housing partnership investments. The accompanying Consolidated Financial Statements include the accounts of RiverSource Life Insurance Company and companies in which it directly or indirectly has a controlling financial interest and variable interest entities (“VIEs”) in which it is the primary beneficiary (collectively, the “Company”). All intercompany transactions and balances have been eliminated in consolidation. The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for fair statement of the consolidated financial position and results of operations for the interim periods have been made. All adjustments made were of a normal recurring nature. The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on February 24, 2021 (“2020 10-K”). During the third quarter of 2021, RiverSource Life Insurance Company closed on a transaction with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company, effective July 1, 2021, to reinsure approximately $7.0 billion of fixed deferred and immediate annuity policies. As part of the transaction, RiverSource Life Insurance Company transferred $7.8 billion in consideration primarily consisting of Available-for-Sale securities, commercial mortgage loans, syndicated loans and cash. The transaction resulted in a net realized gain of approximately $532 million on investments sold. A similar previously announced transaction with RiverSource Life of New York did not receive regulatory approval in time to close by September 30, 2021 and the transaction was terminated by the parties. The Company evaluated events or transactions that may have occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued. No subsequent events or transactions requiring recognition or disclosure were identified. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Adoption of New Accounting Standards Income Taxes – Simplifying the Accounting for Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) updated the accounting standards to simplify the accounting for income taxes. The update eliminates certain exceptions to: (1) accounting principles related to intra-period tax allocation to be applied on a prospective basis, (2) deferred tax liabilities related to outside basis differences to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption, and (3) year-to-date losses in interim periods to be applied on a prospective basis. The update also amends existing guidance related to situations when an entity receives: (1) a step-up in the tax basis of goodwill to be applied on a prospective basis, (2) an allocation of income tax expense when members of a consolidated tax filing group issue separate financial statements to be applied on a retrospective basis for all periods presented, (3) interim recognition of enactment of tax laws or rate changes to be applied on a prospective basis, and (4) franchise taxes and other taxes partially based on income to be applied on a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The standard is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted the standard on January 1, 2021. The adoption of this standard had no impact on the Company’s consolidated financial condition or results of operations. Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments In June 2016, the FASB updated the accounting standards related to accounting for credit losses on certain types of financial instruments. The update replaces the current incurred loss model for estimating credit losses with a new model that requires an entity to estimate the credit losses expected over the life of the asset. At adoption, the initial estimate of the expected credit losses will be recorded through retained earnings and subsequent changes in the estimate will be reported in current period earnings and recorded through an allowance for credit losses on the balance sheet. The credit loss model for Available-for-Sale debt securities did not change; however, the credit loss calculation and subsequent recoveries are required to be recorded through an allowance. The standard is effective for interim and annual periods beginning after December 15, 2019. A modified retrospective cumulative adjustment to retained earnings should be recorded as of the first reporting period in which the guidance is effective for loans, receivables, and other financial instruments subject to the new expected credit loss model. Prospective adoption is required for establishing an allowance related to Available-for-Sale debt securities, certain beneficial interests, and financial assets purchased with a more-than-insignificant amount of credit deterioration since origination. The Company adopted the standard on January 1, 2020. The adoption of this update did not have a material impact on the Company’s consolidated financial condition or results of operations. Intangibles – Goodwill and Other – Internal-Use Software – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB updated the accounting standards related to customer’s accounting for implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract. The update requires implementation costs for a CCA to be evaluated for capitalization using the same approach as implementation costs associated with internal-use software. The update also addresses presentation, measurement and impairment of capitalized implementation costs in a CCA that is a service contract. The update requires new disclosures on the nature of hosting arrangements that are service contracts, significant judgements made when applying the guidance and quantitative disclosures, including amounts capitalized, amortized and impaired. The update is effective for interim and annual periods beginning after December 15, 2019, and can be applied either prospectively or retrospectively. The Company adopted the standard using a prospective approach on January 1, 2020. The adoption did not have an impact on the Company’s consolidated financial condition or results of operations. Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB updated the accounting standards related to disclosures for fair value measurements. The update eliminates the following disclosures: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (2) the policy of timing of transfers between levels of the fair value hierarchy, and (3) the valuation processes for Level 3 fair value measurements. The new disclosures include changes in unrealized gains and losses for the period included in other comprehensive income (“OCI”) for recurring Level 3 fair value measurements of instruments held at the end of the reporting period and the range and weighted average used to develop significant unobservable inputs and how the weighted average was calculated. The new disclosures are required on a prospective basis; all other provisions should be applied retrospectively. The update is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for the entire standard or only the provisions to eliminate or modify disclosure requirements. The Company early adopted the provisions of the standard to eliminate or modify disclosure requirements in the fourth quarter of 2018. The Company adopted the provisions of the standard to include new disclosures on January 1, 2020. The update did not have an impact on the Company’s consolidated financial condition or results of operations. Future Adoption of New Accounting Standards Reference Rate Reform – Expedients for Contract Modifications In March 2020, the FASB updated the accounting standards to provide optional expedients and exceptions for applying GAAP to contracts, hedging or other transactions that are affected by reference rate reform (i.e., the elimination of LIBOR). The following expedients are provided for modified contracts whose reference rate is changed: (1) receivables and debt contracts are accounted for prospectively by adjusting the effective interest rate, (2) leases are accounted for as a continuation of the existing contracts with no reassessments of the lease classification and discount rate or remeasurements of lease payments that otherwise would be required, and (3) an entity is not required to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract. The amendments in this update were effective upon issuance and must be elected prior to December 31, 2022. When elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions. In January 2021, FASB updated the standard to allow an entity to elect to apply the treatment under the original guidance to derivative instruments that use an interest rate for margining, discounting or contract price alignment that will be modified due to reference rate reform but did not qualify under the original guidance. The Company has not yet applied any of the optional expedients. The adoption of the standard is not expected to have an impact on the Company’s consolidated results of operations and financial condition. Financial Services – Insurance – Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB updated the accounting standard related to long-duration insurance contracts. The guidance revises key elements of the measurement models and disclosure requirements for long-duration insurance contracts issued by insurers and reinsurers. The guidance establishes a significant new category of benefit features called market risk benefits that protect the contractholder from other-than-nominal capital market risk and expose the insurer to that risk. Insurers will have to measure market risk benefits at fair value. Market risk benefits include variable annuity guaranteed benefits (i.e. guaranteed minimum death, withdrawal, withdrawal for life, accumulation and income benefits). The portion of the change in fair value attributable to a change in the instrument-specific credit risk of market risk benefits in a liability position will be recorded in OCI. Significant changes also relate to the measurement of the liability for future policy benefits for nonparticipating traditional long-duration insurance contracts and immediate annuities with a life contingent feature including the following: • Insurers will be required to review and update the cash flow assumptions used to measure the liability for future policy benefits rather than using assumptions locked in at contract inception. The review of assumptions to measure the liability for all future policy benefits will be required annually at the same time each year, or more frequently if suggested by experience. The effect of updating assumptions will be measured on a retrospective catch-up basis and presented separate from the ongoing policyholder benefit expense in the statement of operations in the period the update is made. This new unlocking process will be required for the Company’s term and whole life insurance, disability income, long term care insurance and immediate annuities with a life contingent feature. • The discount rate used to measure the liability for future policy benefits will be standardized. The current requirement to use a discount rate reflecting expected investment yields will change to an upper-medium grade (low credit risk) fixed income corporate instrument yield (generally interpreted as an “A” rating) reflecting the duration characteristics of the liability. Entities will be required to update the discount rate at each reporting date with the effect of discount rate changes reflected in OCI. • The current premium deficiency test is being replaced with a net premium ratio cap of 100%. If the net premium ratio (i.e. the ratio of the present value of total expected benefits and related expenses to the present value of total expected premiums) exceeds 100%, insurers are required to recognize a loss in the statement of operations in the period. Contracts from different issue years will no longer be permitted to be grouped to determine contracts in a loss position. In addition, the update requires deferred acquisition costs (“DAC”) and deferred sales inducement costs (“DSIC”) relating to all long-duration contracts and most investment contracts to be amortized on a straight-line basis over the expected life of the contract independent of profit emergence. Under the new guidance, interest will not accrue to the deferred balance and DAC and DSIC will not be subject to an impairment test. The update requires significant additional disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account balances, market risk benefits, DAC and DSIC, as well as qualitative and quantitative information about expected cash flows, estimates and assumptions. The standard is effective for interim and annual periods beginning after December 15, 2022, and interim periods within those years. The standard should be applied to the liability for future policy benefits and DAC and DSIC on a modified retrospective basis and applied to market risk benefits on a retrospective basis with the option to apply full retrospective transition if certain criteria are met. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated financial condition, results of operations and disclosures. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | The following table presents disaggregated revenue from contracts with customers and a reconciliation to total revenues reported on the Consolidated Statements of Income. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Policy and contract charges Affiliated $ 50 $ 44 $ 144 $ 127 Unaffiliated 4 3 12 10 Total 54 47 156 137 Other revenues Administrative fees Affiliated 13 12 37 33 Unaffiliated 5 3 15 13 18 15 52 46 Other fees Affiliated 99 89 291 259 Unaffiliated 1 1 4 3 100 90 295 262 Total 118 105 347 308 Total revenue from contracts with customers 172 152 503 445 Revenue from other sources (1) 223 800 1,956 2,328 Total revenues $ 395 $ 952 $ 2,459 $ 2,773 (1) Amounts primarily consist of revenue associated with insurance and annuity products or financial instruments. The following discussion describes the nature, timing, and uncertainty of revenues and cash flows arising from the Company’s contracts with customers. Policy and contract charges The Company earns revenue for providing distribution-related services to affiliated and unaffiliated mutual funds that are available as underlying investments in its variable annuity and variable life insurance products. The performance obligation is satisfied at the time the mutual fund is distributed. Revenue is recognized over the time the mutual fund is held in the variable product and is generally earned based on a fixed rate applied, as a percentage, to the net asset value of the fund. The revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control, including market volatility and how long the fund(s) remain in the insurance policy or annuity contract. The revenue will not be recognized until it is probable that a significant reversal will not occur. These fees are accrued and collected on a monthly basis. Other revenues Administrative fees The Company earns revenue for providing customer support, contract servicing and administrative services for affiliated and unaffiliated mutual funds that are available as underlying instruments in its variable annuity and variable life insurance products. The transfer agent and administration revenue is earned daily based on a fixed rate applied, as a percentage, to assets under management. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are accrued and collected on a monthly basis. Other fees The Company earns revenue for providing affiliated and unaffiliated partners an opportunity to educate the financial advisors of its affiliate, Ameriprise Financial Services, LLC (“AFS”), that sell the Company's products as well as product and marketing personnel to support the offer, sale and servicing of funds within the Company's variable annuity and variable life insurance products. These payments allow the parties to train and support the advisors, explain the features of their products, and distribute marketing and educational materials. The affiliated revenue is earned based on a rate, updated at least annually, which is applied, as a percentage, to the market value of assets invested. The unaffiliated revenue is earned based on a fixed rate applied, as a percentage, to the market value of assets invested. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are accrued and collected on a monthly basis. Receivables Receivables for revenue from contracts with customers are recognized when the performance obligation is satisfied and the Company has an unconditional right to the revenue. Receivables related to revenues from contracts with customers were $62 million and $57 million as of September 30, 2021 and December 31, 2020, respectively. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2021 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | The Company provides asset management services to collateralized loan obligations (“CLOs”) which are considered to be VIEs that are sponsored by the Company. In addition, the Company invests in structured investments other than CLOs and certain affordable housing partnerships which are considered VIEs. The Company consolidates the CLOs if the Company is deemed to be the primary beneficiary. The Company has no obligation to provide financial or other support to the non-consolidated VIEs beyond its initial investment and existing future funding commitments, and the Company has not provided any support to these entities. The Company has unfunded commitments related to consolidated CLOs of $27 million and $13 million as of September 30, 2021 and December 31, 2020, respectively. CLOs CLOs are asset backed financing entities collateralized by a pool of assets, primarily syndicated loans and, to a lesser extent, high-yield bonds. Multiple tranches of debt securities are issued by a CLO, offering investors various maturity and credit risk characteristics. The debt securities issued by the CLOs are non-recourse to the Company. The CLO’s debt holders have recourse only to the assets of the CLO. The assets of the CLOs cannot be used by the Company. Scheduled debt payments are based on the performance of the CLO’s collateral pool. The Company earns management fees from the CLOs based on the value of the CLO’s collateral pool and, in certain instances, may also receive incentive fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company has invested in a portion of the unrated, junior subordinated notes and highly rated senior notes of certain CLOs. The Company consolidates certain CLOs where it is the primary beneficiary and has the power to direct the activities that most significantly impact the economic performance of the CLO. Affordable Housing Partnerships and Other Real Estate Partnerships The Company is a limited partner in affordable housing partnerships that qualify for government-sponsored low income housing tax credit programs and partnerships that invest in multi-family residential properties that were originally developed with an affordable housing component. The Company has determined it is not the primary beneficiary and therefore does not consolidate these partnerships. A majority of the limited partnerships are VIEs. The Company’s maximum exposure to loss as a result of its investment in the VIEs is limited to the carrying value. The carrying value is reflected in other investments and was $151 million and $200 million as of September 30, 2021 and December 31, 2020, respectively. The Company had a $9 million liability recorded as of both September 30, 2021 and December 31, 2020 related to original purchase commitments not yet remitted to the VIEs. The Company has not provided any additional support and is not contractually obligated to provide additional support to the VIEs beyond the funding commitments. Structured Investments The Company invests in structured investments which are considered VIEs for which it is not the sponsor. These structured investments typically invest in fixed income instruments and are managed by third parties and include asset backed securities, and commercial and residential mortgage backed securities. The Company classifies these investments as Available-for-Sale securities. The Company has determined that it is not the primary beneficiary of these structures due to the size of the Company’s investment in the entities and position in the capital structure of these entities. The Company’s maximum exposure to loss as a result of its investment in these structured investments is limited to its amortized cost. See Note 5 for additional information on these structured investments. Fair Value of Assets and Liabilities The Company categorizes its fair value measurements according to a three-level hierarchy. See Note 12 for the definition of the three levels of the fair value hierarchy. The following tables present the balances of assets and liabilities held by consolidated investment entities measured at fair value on a recurring basis: September 30, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets Investments: Common stocks $ — $ 2 $ — $ 2 Syndicated loans — 2,123 45 2,168 Total investments — 2,125 45 2,170 Receivables — 18 — 18 Other assets — 2 — 2 Total assets at fair value $ — $ 2,145 $ 45 $ 2,190 Liabilities Debt (1) $ — $ 2,163 $ — $ 2,163 Other liabilities — 71 — 71 Total liabilities at fair value $ — $ 2,234 $ — $ 2,234 December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets Investments: Corporate debt securities $ — $ 8 $ — $ 8 Common stocks — 1 — 1 Syndicated loans — 1,817 92 1,909 Total investments — 1,826 92 1,918 Receivables — 16 — 16 Other assets — — 2 2 Total assets at fair value $ — $ 1,842 $ 94 $ 1,936 Liabilities Debt (1) $ — $ 1,913 $ — $ 1,913 Other liabilities — 69 — 69 Total liabilities at fair value $ — $ 1,982 $ — $ 1,982 (1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. The following tables provide a summary of changes in Level 3 assets and liabilities held by consolidated investment entities measured at fair value on a recurring basis: Syndicated Loans (in millions) Balance, July 1, 2021 $ 112 Purchases 7 Sales (4) Settlements (10) Transfers into Level 3 5 Transfers out of Level 3 (47) Deconsolidation of consolidated investment entities (18) Balance, September 30, 2021 $ 45 Syndicated Loans Other Assets (in millions) Balance, January 1, 2021 $ 92 $ 2 Total gains (losses) included in: Net income 2 (1) — Purchases 88 — Sales (38) — Settlements (49) — Transfers into Level 3 90 — Transfers out of Level 3 (122) (2) Deconsolidation of consolidated investment entities (18) — Balance, September 30, 2021 $ 45 $ — (1) Included in net investment income in the Consolidated Statements of Operations. Securities and loans transferred from Level 3 primarily represent assets with fair values that are now obtained from a third-party pricing service with observable inputs or priced in active markets. Securities and loans transferred to Level 3 represent assets with fair values that are now based on a single non-binding broker quote. All Level 3 measurements as of September 30, 2021 and December 31, 2020 were obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company. Determination of Fair Value Assets Investments The fair value of syndicated loans obtained from third-party pricing services using a market approach with observable inputs is classified as Level 2. The fair value of syndicated loans obtained from third-party pricing services with a single non-binding broker quote as the underlying valuation source is classified as Level 3. The underlying inputs used in non-binding broker quotes are not readily available to the Company. See Note 12 for a description of the Company’s determination of the fair value of corporate debt securities, common stocks and other investments. Receivables For receivables of the consolidated CLOs, the carrying value approximates fair value as the nature of these assets has historically been short term and the receivables have been collectible. The fair value of these receivables is classified as Level 2. Liabilities Debt The fair value of the CLOs’ assets, typically syndicated bank loans, is more observable than the fair value of the CLOs’ debt tranches for which market activity is limited and less transparent. As a result, the fair value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets and is classified as Level 2. Other Liabilities Other liabilities consist primarily of securities purchased but not yet settled held by consolidated CLOs. The carrying value approximates fair value as the nature of these liabilities has historically been short term. The fair value of these liabilities is classified as Level 2. Other liabilities also include accrued interest on the CLO debt. Fair Value Option The Company has elected the fair value option for the financial assets and liabilities of the consolidated CLOs. Management believes that the use of the fair value option better matches the changes in fair value of assets and liabilities related to the CLOs. The following table presents the fair value and unpaid principal balance of loans and debt for which the fair value option has been elected: September 30, 2021 December 31, 2020 (in millions) Syndicated loans Unpaid principal balance $ 2,223 $ 1,990 Excess unpaid principal over fair value (55) (81) Fair value $ 2,168 $ 1,909 Fair value of loans more than 90 days past due $ 2 $ 5 Fair value of loans in nonaccrual status 5 19 Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both 5 24 Debt Unpaid principal balance $ 2,298 $ 2,069 Excess unpaid principal over fair value (135) (156) Carrying value (1) $ 2,163 $ 1,913 (1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. During the first quarter of 2021, the Company launched two new CLOs and issued debt of $817 million. Interest income from syndicated loans, bonds and structured investments is recorded based on contractual rates in net investment income. Gains and losses related to changes in the fair value of investments are recorded in net investment income and gains and losses on sales of investments are recorded in net realized investment gains (losses). Interest expense on debt is recorded in interest and debt expense with gains and losses related to changes in the fair value of debt recorded in net investment income. Total net gains (losses) recognized in net investment income related to the changes in fair value of investments the Company owns in the consolidated CLOs where it has elected the fair value option and collateralized financing entity accounting were immaterial for both the three months and nine months ended September 30, 2021. Debt of the consolidated investment entities and the stated interest rates were as follows: Carrying Value Weighted Average Interest Rate September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) Debt of consolidated CLOs due 2025-2034 $ 2,163 $ 1,913 1.7 % 2.1 % |
Investments
Investments | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Available-for-Sale securities distributed by type were as follows: Description of Securities September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Fixed maturities: Corporate debt securities $ 8,135 $ 1,293 $ (31) $ — $ 9,397 Residential mortgage backed securities 2,107 46 (7) — 2,146 Commercial mortgage backed securities 2,448 86 (6) — 2,528 State and municipal obligations 835 249 (1) (1) 1,082 Asset backed securities 523 27 — — 550 Foreign government bonds and obligations 80 6 (1) — 85 U.S. government and agency obligations 1 — — — 1 Total $ 14,129 $ 1,707 $ (46) $ (1) $ 15,789 Description of Securities December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Fixed maturities: Corporate debt securities $ 10,982 $ 1,903 $ (2) $ (10) $ 12,873 Residential mortgage backed securities 2,888 115 (1) — 3,002 Commercial mortgage backed securities 3,935 235 (4) — 4,166 State and municipal obligations 1,050 295 (1) — 1,344 Asset backed securities 1,168 45 (1) — 1,212 Foreign government bonds and obligations 236 22 (1) — 257 U.S. government and agency obligations 1 — — — 1 Total $ 20,260 $ 2,615 $ (10) $ (10) $ 22,855 In March 2020, the Company purchased $368 million of investments at fair value, primarily agency residential mortgage back securities, from Ameriprise Financial. As of September 30, 2021 and December 31, 2020, accrued interest of $125 million and $158 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in accrued investment income on the Consolidated Balance Sheets. As of September 30, 2021 and December 31, 2020, investment securities with a fair value of $2.5 billion and $2.9 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which $403 million and $454 million, respectively, may be sold, pledged or rehypothecated by the counterparty. As of both September 30, 2021 and December 31, 2020, fixed maturity securities comprised approximately 85% of the Company’s total investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings Ltd. (“Fitch”). The Company uses the median of available ratings from Moody’s, S&P and Fitch, or if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. As of September 30, 2021 and December 31, 2020, approximately $352 million and $553 million, respectively, of securities were internally rated by Columbia Management Investment Advisers, LLC, an affiliate of the Company, using criteria similar to those used by NRSROs. A summary of fixed maturity securities by rating was as follows: Ratings September 30, 2021 December 31, 2020 Amortized Cost Fair Value Percent of Total Fair Value Amortized Cost Fair Value Percent of Total Fair Value (in millions, except percentages) AAA $ 4,723 $ 4,858 31 % $ 7,323 $ 7,698 34 % AA 785 967 6 1,036 1,266 6 A 1,589 1,950 12 2,663 3,235 14 BBB 6,074 6,905 44 7,770 9,026 39 Below investment grade 958 1,109 7 1,468 1,630 7 Total fixed maturities $ 14,129 $ 15,789 100 % $ 20,260 $ 22,855 100 % As of September 30, 2021 and December 31, 2020, approximately 42% and 37%, respectively, of securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. The Company had holdings of $317 million in Ameriprise Advisor Financing, LLC (“AAF”), $246 million in Kraft Heinz Co., $227 million in Duke Energy Corp., $213 million in Suncor Energy Inc., and $212 million in AT&T Inc. which were greater than 10% of the Company’s total equity as of September 30, 2021. The Company had holdings of $372 million in AAF which was greater than 10% of total equity as of December 31, 2020. There were no other holdings of any other issuer greater than 10% of total equity as of both September 30, 2021 and December 31, 2020. The following tables summarize the fair value and gross unrealized losses on Available-for-Sale securities, aggregated by major investment type and the length of time that individual securities have been in a continuous unrealized loss position for which no allowance for credit losses has been recorded: Description of Securities September 30, 2021 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 79 $ 1,454 $ (29) 5 $ 23 $ (2) 84 $ 1,477 $ (31) Residential mortgage backed securities 24 688 (7) 2 2 — 26 690 (7) Commercial mortgage backed securities 38 550 (5) 3 22 (1) 41 572 (6) State and municipal obligations 18 49 (1) — — — 18 49 (1) Foreign government bonds and obligations 5 6 — 6 4 (1) 11 10 (1) Total 164 $ 2,747 $ (42) 16 $ 51 $ (4) 180 $ 2,798 $ (46) Description of Securities December 31, 2020 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 26 $ 228 $ (1) 1 $ 12 $ (1) 27 $ 240 $ (2) Residential mortgage backed securities 11 47 (1) 7 14 — 18 61 (1) Commercial mortgage backed securities 12 179 (3) 7 60 (1) 19 239 (4) State and municipal obligations 2 4 — 1 4 (1) 3 8 (1) Asset backed securities 4 65 — 2 36 (1) 6 101 (1) Foreign government bonds and obligations 1 3 — 7 8 (1) 8 11 (1) Total 56 $ 526 $ (5) 25 $ 134 $ (5) 81 $ 660 $ (10) As part of the Company’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities for which an allowance for credit losses has not been recognized during the nine months ended September 30, 2021 is primarily attributable to higher interest rates, partially offset by tighter credit spreads. The Company did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors. The Company does not intend to sell these securities and does not believe that it is more likely than not that the Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost basis. As of September 30, 2021 and December 31, 2020, 88% and 83% respectively, of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade. The following tables present a rollforward of the allowance for credit losses on Available-for-Sale securities: Corporate Debt Securities State and Municipal Obligations Total (in millions) Balance, July 1, 2021 $ — $ — $ — Additions for which credit losses were not previously recorded — 1 1 Charge-offs — — — Balance, September 30, 2021 $ — $ 1 $ 1 Balance, July 1, 2020 $ 13 $ — $ 13 Additions for which credit losses were not previously recorded — — — Balance, September 30, 2020 $ 13 $ — $ 13 Balance, January 1, 2021 $ 10 $ — $ 10 Additions for which credit losses were not previously recorded — 1 1 Charge-offs (10) — (10) Balance, September 30, 2021 $ — $ 1 $ 1 Balance at January 1, 2020 (1) $ — $ — $ — Additions for which credit losses were not previously recorded 13 — 13 Balance at September 30, 2020 $ 13 $ — $ 13 (1) Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired. Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in net realized investment gains (losses) were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Gross realized investment gains $ 505 $ 2 $ 568 $ 12 Gross realized investment losses (6) — (6) (2) Credit losses (1) — (1) (13) Other impairments — — (13) — Total $ 498 $ 2 $ 548 $ (3) Credit losses for the three months and nine months ended September 30, 2021 primarily related to recording an allowance for credit losses on a state and municipal security. For the nine months ended September 30, 2020, credit losses primarily related to recording an allowance for credit losses on certain corporate debt securities, primarily in the oil and gas industry. Other impairments for the nine months ended September 30, 2021 relate to Available-for-Sale securities that were impaired prior to being sold in the reinsurance transaction. See Note 1 for more information on the reinsurance transaction. See Note 15 for a rollforward of net unrealized investment gains (losses) included in AOCI. Available-for-Sale securities by contractual maturity as of September 30, 2021 were as follows: Amortized Cost Fair Value (in millions) Due within one year $ 411 $ 417 Due after one year through five years 1,955 2,090 Due after five years through 10 years 3,049 3,166 Due after 10 years 3,636 4,892 9,051 10,565 Residential mortgage backed securities 2,107 2,146 Commercial mortgage backed securities 2,448 2,528 Asset backed securities 523 550 Total $ 14,129 $ 15,789 Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities were not included in the maturities distribution. The following is a summary of net investment income: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Fixed maturities $ 137 $ 191 $ 511 $ 585 Mortgage loans 21 29 82 86 Other investments 40 (3) 86 (9) 198 217 679 662 Less: investment expenses 5 5 15 15 Total $ 193 $ 212 $ 664 $ 647 |
Financing Receivables
Financing Receivables | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Financing Receivables | Financing receivables are comprised of commercial loans, consumer loans, and the deposit receivable. Allowance for Credit Losses The following tables present a rollforward of the allowance for credit losses for the nine months ended September 30: Commercial Loans (in millions) Balance, January 1, 2021 $ 35 Provisions (21) Balance, September 30, 2021 $ 14 Commercial Loans (in millions) Balance, December 31, 2019 (1) $ 20 Cumulative effect of adoption of current expected credit losses guidance 3 Balance, January 1, 2020 23 Provisions 13 Balance, September 30, 2020 $ 36 (1) Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. The decrease in the allowance for credit losses provision for commercial loans reflects the sale of certain commercial mortgage loans and syndicated loans in conjunction with the fixed deferred and immediate annuity reinsurance transaction discussed in Note 1. As of September 30, 2021 and December 31, 2020, accrued interest on commercial loans was $10 million and $14 million, respectively, and is recorded in accrued investment income on the Consolidated Balance Sheets and excluded from the amortized cost basis of commercial loans. Purchases and Sales During the three months and nine months ended September 30, 2021, the Company sold $746 million of commercial mortgage loans. During the three months ended September 30, 2021 and 2020, the Company purchased nil and $84 million, respectively, of syndicated loans, and sold $350 million and $2 million, respectively, of syndicated loans. During the nine months ended September 30, 2021 and 2020, the Company purchased $26 million and $134 million, respectively, of syndicated loans and sold $354 million and $9 million, respectively, of syndicated loans. The Company has not acquired any loans with deteriorated credit quality as of the acquisition date. Credit Quality Information Nonperforming loans were nil and $7 million as of September 30, 2021 and December 31, 2020, respectively. All other loans were considered to be performing. Commercial Loans Commercial Mortgage Loans The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review. Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates when credit risk changes. Commercial mortgage loans which management has assigned its highest risk rating were less than 1% of total commercial mortgage loans as of both September 30, 2021 and December 31, 2020. Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. Total commercial mortgage loan modifications through December 31, 2020 due to the COVID-19 pandemic consisted of 88 loans with a total unpaid balance of $360 million. Modifications primarily consisted of short-term forbearance and interest only payment s. There were no additional modifications through September 30, 2021. As of September 30, 2021 , there were no loans remaining that were modified due to COVID-19. All loans returned to their normal payment schedules. Total commercial mortgage loans past due were nil as of both September 30, 2021 and December 31, 2020. The tables below present the amortized cost basis of commercial mortgage loans by year of origination and loan-to-value ratio: September 30, 2021 Loan-to-Value Ratio 2021 2020 2019 2018 2017 Prior Total (in millions) > 100% $ — $ — $ 19 $ 11 $ — $ 30 $ 60 80% - 100% 9 14 10 2 — 37 72 60% - 80% 93 64 66 25 59 128 435 40% - 60% 23 31 84 66 52 412 668 < 40% 6 7 39 — 45 458 555 Total $ 131 $ 116 $ 218 $ 104 $ 156 $ 1,065 $ 1,790 December 31, 2020 Loan-to-Value Ratio 2020 2019 2018 2017 2016 Prior Total (in millions) > 100% $ — $ — $ 2 $ — $ — $ 10 $ 12 80% - 100% 15 16 9 3 7 15 65 60% - 80% 85 152 27 29 46 141 480 40% - 60% 20 50 74 147 111 543 945 < 40% 7 22 69 88 58 856 1,100 Total $ 127 $ 240 $ 181 $ 267 $ 222 $ 1,565 $ 2,602 Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capitalization rate assumptions based on property type. In addition, the Company reviews the concentrations of credit risk by region and property type. Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows: Loans Percentage September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) East North Central $ 179 $ 250 10 % 10 % East South Central 65 111 4 4 Middle Atlantic 109 165 6 6 Mountain 119 234 7 10 New England 23 47 1 2 Pacific 571 784 32 30 South Atlantic 476 663 27 25 West North Central 134 192 7 7 West South Central 114 156 6 6 1,790 2,602 100 % 100 % Less: allowance for credit losses 14 28 Total $ 1,776 $ 2,574 Concentrations of credit risk of commercial mortgage loans by property type were as follows: Loans Percentage September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) Apartments $ 468 $ 680 26 % 26 % Hotel 15 49 1 2 Industrial 280 401 16 16 Mixed use 57 76 3 3 Office 258 358 15 14 Retail 597 843 33 32 Other 115 195 6 7 1,790 2,602 100 % 100 % Less: allowance for credit losses 14 28 Total $ 1,776 $ 2,574 Syndicated Loans The recorded investment in syndicated loans as of September 30, 2021 and December 31, 2020 were $35 million and $446 million, respectively. The Company’s syndicated loan portfolio is diversified across industries and issuers. Total syndicated loans past due were nil and $2 million as of September 30, 2021 and December 31, 2020, respectively. The Company assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality. The tables below present the amortized cost basis of syndicated loans by origination year and internal risk rating: September 30, 2021 Internal Risk Rating 2021 2020 2019 2018 2017 Prior Total (in millions) Risk 5 $ — $ — $ — $ — $ — $ — $ — Risk 4 — — — — — — — Risk 3 — — — — — 1 1 Risk 2 12 — 2 1 4 1 20 Risk 1 4 — 2 — 4 4 14 Total $ 16 $ — $ 4 $ 1 $ 8 $ 6 $ 35 December 31, 2020 Internal Risk Rating 2020 2019 2018 2017 2016 Prior Total (in millions) Risk 5 $ — $ — $ — $ — $ — $ 2 $ 2 Risk 4 — — 3 7 — 7 17 Risk 3 — 7 6 19 10 18 60 Risk 2 23 42 45 51 10 32 203 Risk 1 14 25 35 43 17 30 164 Total $ 37 $ 74 $ 89 $ 120 $ 37 $ 89 $ 446 Policy Loans Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, there is no allowance for credit losses. Deposit Receivable The deposit receivable was $8.0 billion and $1.4 billion as of September 30, 2021 and December 31, 2020, respectively. The deposit receivable is fully collateralized by the fair value of the assets held in trusts. Based on management’s evaluation of the nature of the underlying assets and the potential for changes in the collateral value, there was no allowance for credit losses for the deposit receivable as of both September 30, 2021 and December 31, 2020. The increase in the deposit receivable is primarily driven by the reinsurance transaction, effective July 1, 2021, to reinsure fixed deferred and non-life contingent immediate annuity policies. See Note 1 for more information on the fixed deferred and immediate annuity reinsurance transaction. Troubled Debt Restructurings |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2021 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | During the third quarter of 2021, RiverSource Life Insurance Company reinsured 100% of its insurance risk associated with its life contingent immediate annuity policies in force as of July 1, 2021 through a reinsurance agreement with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company. Policies issued after July 1, 2021 are not subject to this reinsurance agreement. See Note 1 for more information on the fixed deferred and immediate annuity reinsurance transaction. The ceded premiums associated with life contingent immediate annuity policies were $1.2 billion for the three months and nine months ended September 30, 2021. Reinsurance recoverables included $1.1 billion related to life contingent immediate annuity policies as of September 30, 2021. |
Deferred Acquisition Costs and
Deferred Acquisition Costs and Deferred Sales Inducement Costs | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Charges, Insurers [Abstract] | |
Deferred Acquisition Costs and Deferred Sales Inducement Costs | During the third quarter of the year, management updated market-related inputs and implemented model changes related to the living benefit valuation. In addition, management conducted its annual review of life insurance and annuity valuation assumptions relative to current experience and management expectations including modeling changes. These aforementioned changes are collectively referred to as unlocking. The impact of unlocking to DAC in the third quarter of 2021 primarily reflected a favorable impact from lower surrenders on variable annuities with living benefits and UL and VUL insurance products. The impact of unlocking to DAC in the third quarter of 2020 primarily reflected an unfavorable impact from updates to interest rate assumptions, partially offset by a favorable impact from lower surrenders on variable annuities with living benefit guarantees. The balances of and changes in DAC were as follows: 2021 2020 (in millions) Balance at January 1 $ 2,508 $ 2,673 Capitalization of acquisition costs 196 155 Amortization (129) (238) Amortization, impact of valuation assumptions review 60 (100) Impact of change in net unrealized (gains) losses on securities 75 (61) Balance at September 30 $ 2,710 $ 2,429 The balances of and changes in DSIC, which is included in other assets, were as follows: 2021 2020 (in millions) Balance at January 1 $ 187 $ 216 Capitalization of sales inducement costs 1 1 Amortization (15) (19) Amortization, impact of valuation assumptions review 2 (16) Impact of change in net unrealized (gains) losses on securities 11 (1) Balance at September 30 $ 186 $ 181 |
Policyholder Account Balances,
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Policyholder Account Balances, Future Policy Benefits and Claims & Separate Account Liabilities | |
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities | Policyholder account balances, future policy benefits and claims consisted of the following: September 30, 2021 December 31, 2020 (in millions) Policyholder account balances Fixed annuities (1) $ 8,229 $ 8,531 Variable annuity fixed sub-accounts 5,020 5,104 Universal life (“UL”)/variable universal life (“VUL”) insurance 3,098 3,122 Indexed universal life (“IUL”) insurance 2,461 2,269 Structured variable annuities 3,552 1,371 Other life insurance 580 605 Total policyholder account balances 22,940 21,002 Future policy benefits Variable annuity guaranteed minimum withdrawal benefits (“GMWB”) 2,256 3,049 Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2) (14) 1 Other annuity liabilities 73 211 Fixed annuity life contingent liabilities 1,303 1,370 Life and disability income insurance 1,152 1,187 Long term care insurance 5,664 5,722 UL/VUL and other life insurance additional liabilities 1,278 1,259 Total future policy benefits 11,712 12,799 Policy claims and other policyholders’ funds 205 185 Total policyholder account balances, future policy benefits and claims $ 34,857 $ 33,986 (1) Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts. (2) Includes the fair value of GMAB embedded derivatives that was a net asset as of September 30, 2021 reported as a contra liability. Separate account liabilities consisted of the following: September 30, 2021 December 31, 2020 (in millions) Variable annuity $ 81,063 $ 79,299 VUL insurance 8,931 8,226 Other insurance 32 31 Total $ 90,026 $ 87,556 |
Variable Annuity and Insurance
Variable Annuity and Insurance Guarantees | 9 Months Ended |
Sep. 30, 2021 | |
Insurance [Abstract] | |
Variable Annuity and Insurance Guarantees | The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (“GMDB”) provisions. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. The Company previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions. Certain UL policies offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges. The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities: Variable Annuity Guarantees by Benefit Type (1) September 30, 2021 December 31, 2020 Total Contract Value Contract Value in Separate Accounts Net Amount at Risk Weighted Average Attained Age Total Contract Value Contract Value in Separate Accounts Net Amount at Risk Weighted Average Attained Age (in millions, except age) GMDB: Return of premium $ 68,486 $ 66,600 $ 18 69 $ 66,874 $ 64,932 $ 5 68 Five/six-year reset 8,181 5,467 13 68 8,116 5,386 6 68 One-year ratchet 6,105 5,786 40 71 6,094 5,763 8 71 Five-year ratchet 1,425 1,371 2 67 1,436 1,381 — 67 Other 1,281 1,264 46 74 1,261 1,243 45 73 Total — GMDB $ 85,478 $ 80,488 $ 119 69 $ 83,781 $ 78,705 $ 64 68 GGU death benefit $ 1,221 $ 1,166 $ 176 72 $ 1,183 $ 1,126 $ 162 71 GMIB $ 186 $ 172 $ 5 71 $ 187 $ 173 $ 6 71 GMWB: GMWB $ 1,903 $ 1,897 $ 1 75 $ 1,972 $ 1,967 $ 1 74 GMWB for life 51,275 51,226 215 69 50,142 50,057 185 69 Total — GMWB $ 53,178 $ 53,123 $ 216 69 $ 52,114 $ 52,024 $ 186 69 GMAB $ 2,037 $ 2,037 $ — 62 $ 2,291 $ 2,291 $ — 61 (1) Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table. The net amount at risk for GMDB, GGU and GMAB is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB is defined as the greater of the present value of the minimum guaranteed annuity payments less the current contract value or zero. The net amount at risk for GMWB is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero. The following table provides information related to insurance guarantees for which the Company has established additional liabilities: September 30, 2021 December 31, 2020 Net Amount at Risk Weighted Average Attained Age Net Amount at Risk Weighted Average Attained Age (in millions, except age) UL secondary guarantees $ 6,563 68 $ 6,587 67 The net amount at risk for UL secondary guarantees is defined as the current guaranteed death benefit amount in excess of the current policyholder account balance. Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees were as follows: GMDB & GGU GMIB GMWB (1) GMAB (1) UL (in millions) Balance at January 1, 2020 $ 16 $ 7 $ 1,462 $ (39) $ 758 Incurred claims 10 1 2,219 63 172 Paid claims (6) (1) — — (34) Balance at September 30, 2020 $ 20 $ 7 $ 3,681 $ 24 $ 896 Balance at January 1, 2021 $ 24 $ 6 $ 3,049 $ 1 $ 916 Incurred claims 12 1 (793) (15) 106 Paid claims (3) (1) — — (27) Balance at September 30, 2021 $ 33 $ 6 $ 2,256 $ (14) $ 995 (1) The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims. The liabilities for guaranteed benefits are supported by general account assets. The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts providing guaranteed benefits: September 30, 2021 December 31, 2020 (in millions) Mutual funds: Equity $ 47,854 $ 45,947 Bond 24,779 26,073 Other 8,067 6,911 Total mutual funds $ 80,700 $ 78,931 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Long-Term Debt The Company has a $500 million unsecured 3.5% surplus note due December 31, 2050 to Ameriprise Financial. The outstanding balance was $500 million as of both September 30, 2021 and December 31, 2020 and is recorded in Long-term debt on the Consolidated Balance Sheets. Short-term Borrowings RiverSource Life Insurance Company is a member of the Federal Home Loan Bank (“FHLB”) of Des Moines which provides access to collateralized borrowings. The Company has pledged Available-for-Sale securities consisting of commercial mortgage backed securities to collateralize its obligation under these borrowings. The fair value of the securities pledged is recorded in investments and was $1.0 billion and $1.2 billion as of September 30, 2021 and December 31, 2020, respectively. The amount of the Company’s liability including accrued interest was $200 million as of both September 30, 2021 and December 31, 2020. The remaining maturity of outstanding FHLB advances was less than three months as of September 30, 2021 and less than three months as of December 31, 2020. The weighted average annualized interest rate on the FHLB advances held as of September 30, 2021 and December 31, 2020 was 0.3% and 0.4%, respectively. |
Fair Values of Assets and Liabi
Fair Values of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale. Valuation Hierarchy The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows: Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date. Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The following tables present the balances of assets and liabilities measured at fair value on a recurring basis: September 30, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets Available-for-Sale securities: Corporate debt securities $ — $ 8,883 $ 514 $ 9,397 Residential mortgage backed securities — 2,146 — 2,146 Commercial mortgage backed securities — 2,528 — 2,528 State and municipal obligations — 1,082 — 1,082 Asset backed securities — 232 318 550 Foreign government bonds and obligations — 85 — 85 U.S. government and agency obligations 1 — — 1 Total Available-for-Sale securities 1 14,956 832 15,789 Cash equivalents 1,637 1,013 — 2,650 Receivables : Fixed deferred indexed annuity ceded embedded derivatives — — 56 56 Other assets: Interest rate derivative contracts 1 1,184 — 1,185 Equity derivative contracts 486 3,937 — 4,423 Foreign exchange derivative contracts — 17 — 17 Credit derivative contracts — 18 — 18 Total other assets 487 5,156 — 5,643 Separate account assets at net asset value (“NAV”) 90,026 (1) Total assets at fair value $ 2,125 $ 21,125 $ 888 $ 114,164 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 4 $ 54 $ 58 IUL embedded derivatives — — 917 917 GMWB and GMAB embedded derivatives — — 1,436 1,436 (2) Structured variable annuity embedded derivatives — — 217 217 Total policyholder account balances, future policy benefits and claims — 4 2,624 2,628 (3) Other liabilities: Interest rate derivative contracts — 476 — 476 Equity derivative contracts 167 3,396 — 3,563 Foreign exchange derivative contracts 2 — — 2 Total other liabilities 169 3,872 — 4,041 Total liabilities at fair value $ 169 $ 3,876 $ 2,624 $ 6,669 December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets Available-for-Sale securities: Corporate debt securities $ — $ 12,107 $ 766 $ 12,873 Residential mortgage backed securities — 2,993 9 3,002 Commercial mortgage backed securities — 4,166 — 4,166 State and municipal obligations — 1,344 — 1,344 Asset backed securities — 817 395 1,212 Foreign government bonds and obligations — 257 — 257 U.S. government and agency obligations 1 — — 1 Total Available-for-Sale securities 1 21,684 1,170 22,855 Cash equivalents 2,419 713 — 3,132 Other assets: Interest rate derivative contracts 1 1,754 — 1,755 Equity derivative contracts 406 3,578 — 3,984 Foreign exchange derivative contracts 1 17 — 18 Credit derivative contracts — 1 — 1 Total other assets 408 5,350 — 5,758 Separate account assets at NAV 87,556 (1) Total assets at fair value $ 2,828 $ 27,747 $ 1,170 $ 119,301 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 3 $ 49 $ 52 IUL embedded derivatives — — 935 935 GMWB and GMAB embedded derivatives — — 2,316 2,316 (4) Structured variable annuity embedded derivatives — — 70 70 Total policyholder account balances, future policy benefits and claims — 3 3,370 3,373 (5) Other liabilities: Interest rate derivative contracts — 734 — 734 Equity derivative contracts 182 3,329 — 3,511 Foreign exchange derivative contracts 2 — — 2 Credit derivative contracts — 1 — 1 Total other liabilities 184 4,064 — 4,248 Total liabilities at fair value $ 184 $ 4,067 $ 3,370 $ 7,621 (1) Amounts are comprised of certain financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy. (2) The fair value of the GMWB and GMAB embedded derivatives included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position (recorded as a contra liability) as of September 30, 2021. (3) The Company’s adjustment for nonperformance risk resulted in a $550 million cumulative decrease to the embedded derivatives as of September 30, 2021. (4) The fair value of the GMWB and GMAB embedded derivatives included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, 2020. (5) The Company’s adjustment for nonperformance risk resulted in a $727 million cumulative decrease to the embedded derivatives as of December 31, 2020. The following tables provide a summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis: Available-for-Sale Securities Receivables Corporate Debt Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, July 1, 2021 $ 385 $ 336 $ 721 $ — Total gains (losses) included in: Net income (1) — (1) (1) — Other comprehensive income (loss) (3) — (3) — Purchases 9 — 9 — Issues — — — 57 (4) Settlements (44) (20) (64) (1) Transfers into Level 3 168 2 170 — Balance, September 30, 2021 $ 514 $ 318 $ 832 $ 56 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ (4) $ — Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2021 $ 54 $ 928 $ 1,373 $ 214 $ 2,569 Total (gains) losses included in: Net income 1 (2) 14 (2) (69) (3) 17 (3) (37) Issues — — 95 (7) 88 Settlements (1) (25) 37 (7) 4 Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 14 (2) $ (60) (3) $ — $ (46) Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, July 1, 2020 $ 731 $ 56 $ 352 $ 1,139 Total gains (losses) included in: Other comprehensive income (loss) 5 — 32 37 Purchases 7 1 — 8 Settlements (7) — — (7) Transfers into Level 3 — — 14 14 Transfers out of Level 3 — (39) — (39) Balance, September 30, 2020 $ 736 $ 18 $ 398 $ 1,152 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 5 $ — $ 32 $ 37 Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2020 $ 41 $ 882 $ 3,129 $ 9 $ 4,061 Total (gains) losses included in: Net income 3 (2) 50 (2) (296) (3) 3 (3) (240) Issues — 15 93 (3) 105 Settlements — (21) 17 — (4) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 50 (2) $ (283) (3) $ — $ (233) Available-for-Sale Securities Receivables Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, January 1, 2021 $ 766 $ 9 $ 395 $ 1,170 $ — Total gains (losses) included in: Net income (1) — — (1) (1) — Other comprehensive income (loss) (6) — 3 (3) — Purchases 76 — — 76 — Issues — — — — 57 (4) Settlements (73) — (58) (131) (1) Transfers into Level 3 168 — 2 170 — Transfers out of Level 3 (416) (9) (24) (449) — Balance, September 30, 2021 $ 514 $ — $ 318 $ 832 $ 56 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ 3 $ (1) $ — Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2021 $ 49 $ 935 $ 2,316 $ 70 $ 3,370 Total (gains) losses included in: Net income 7 (2) 51 (2) (1,273) (3) 192 (3) (1,023) Issues — 4 274 (22) 256 Settlements (2) (73) 119 (23) 21 Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 51 (2) $ (1,236) (3) $ — $ (1,185) Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, January 1, 2020 $ 735 $ 17 $ 389 $ 1,141 Total gains (losses) included in: Net income (1) — — (1) (1) Other comprehensive income (loss) 13 1 (5) 9 Purchases 13 39 — 52 Settlements (24) — — (24) Transfers into Level 3 — — 14 14 Transfers out of Level 3 — (39) — (39) Balance, September 30, 2020 $ 736 $ 18 $ 398 $ 1,152 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020 $ (1) $ — $ — $ (1) (1) Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 13 $ 1 $ (5) $ 9 Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2020 $ 43 $ 881 $ 763 $ — $ 1,687 Total (gains) losses included in: Net income (2) (2) 53 (2) 1,900 (3) 16 (3) 1,967 Issues 3 53 267 (7) 316 Settlements — (61) 13 — (48) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 53 (2) $ 1,936 (3) $ — $ 1,989 (1) Included in net investment income in the Consolidated Statements of Income. (2) Included in interest credited to fixed accounts in the Consolidated Statements of Income. (3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income. (4) Represents the amount of ceded embedded derivatives associated with fixed deferred annuity products reinsured in the third quarter of 2021. See Note 1 for additional information on the reinsurance transaction. The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $1 million and $(123) million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual for the three months ended September 30, 2021 and 2020, respectively. The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $(138) million and $446 million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual for the nine months ended September 30, 2021 and 2020, respectively. Securities transferred from Level 3 primarily represent securities with fair values that are obtained from a third-party pricing service with observable inputs or fair values that were included in an observable transaction with a market participant. The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities: September 30, 2021 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 514 Discounted cash flow Yield/spread to U.S. Treasuries (1) 0.8% – 2.4% 1.2% Asset backed securities $ 318 Discounted cash flow Annual default rate 5.6% 5.6% Loss severity 25.0% 25.0% Yield/spread to swap rates (2) 140 bps – 225 bps 146 bps Fixed deferred indexed annuity ceded embedded derivatives $ 56 Discounted cash flow Surrender rate (4) 0.0% – 66.8% 1.4% IUL embedded derivatives $ 917 Discounted cash flow Nonperformance risk (3) 60 bps 60 bps Fixed deferred indexed annuity embedded derivatives $ 54 Discounted cash flow Surrender rate (4) 0.0% – 66.8% 1.4% Nonperformance risk (3) 60 bps 60 bps GMWB and GMAB embedded derivatives $ 1,436 Discounted cash flow Utilization of guaranteed withdrawals (5) (6) 0.0% – 48.0% 10.6% Surrender rate (4) 0.1% – 63.4% 3.6% Market volatility (7) (8) 4.4% – 17.6% 11.3% Nonperformance risk (3) 60 bps 60 bps Structured variable annuity embedded derivatives $ 217 Discounted cash flow Surrender rate (4) 0.8% – 40.0% 0.9% Nonperformance risk (3) 60 bps 60 bps December 31, 2020 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 766 Discounted cash flow Yield/spread to U.S. Treasuries (1) 1.0% – 3.3% 1.5% Asset backed securities $ 395 Discounted cash flow Annual default rate 5.3% 5.3% Loss severity 25.0% 25.0% Yield/spread to swap rates (2) 250 bps – 400 bps 259 bps IUL embedded derivatives $ 935 Discounted cash flow Nonperformance risk (3) 65 bps 65 bps Fixed deferred indexed annuity embedded derivatives $ 49 Discounted cash flow Surrender rate (4) 0.0% – 50.0% 1.2% Nonperformance risk (3) 65 bps 65 bps GMWB and GMAB embedded derivatives $ 2,316 Discounted cash flow Utilization of guaranteed withdrawals (5) (6) 0.0% – 48.0% 10.6% Surrender rate (4) 0.1% – 73.5% 3.8% Market volatility (7) (8) 4.3% – 17.1% 11.0% Nonperformance risk (3) 65 bps 65 bps Structured variable annuity embedded derivatives $ 70 Discounted cash flow Surrender rate (4) 0.8% – 40.0% 0.9% Nonperformance risk (3) 65 bps 65 bps (1) The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. (2) The weighted average for the spread to swap rates for asset backed securities is calculated as the sum of each tranche’s balance multiplied by its spread to swap divided by the aggregate balances of the tranches. (3) The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives. (4) The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula. (5) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. (6) The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals. (7) Market volatility is implied volatility of fund of funds and managed volatility funds. (8) The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit. Level 3 measurements not included in the table above are obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company. Uncertainty of Fair Value Measurements Significant increases (decreases) in the yield/spread to U.S. Treasuries used in the fair value measurement of Level 3 corporate debt securities in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the annual default rate used in the fair value measurement of Level 3 asset backed securities in isolation, generally, would have resulted in a significantly lower (higher) fair value measurement and significant increases (decreases) in loss severity in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the yield/spread to swap rates in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the surrender rate used in the fair value measurement of the fixed deferred indexed annuity ceded embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in nonperformance risk used in the fair value measurement of the IUL embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in nonperformance risk and surrender rate used in the fair value measurements of the fixed deferred indexed annuity embedded derivatives and structured variable annuity embedded derivatives in isolation would have resulted in a significantly lower (higher) liability value. Significant increases (decreases) in utilization and volatility used in the fair value measurement of the GMWB and GMAB embedded derivatives in isolation would have resulted in a significantly higher (lower) liability value. Significant increases (decreases) in nonperformance risk and surrender rate used in the fair value measurement of the GMWB and GMAB embedded derivatives in isolation would have resulted in a significantly lower (higher) liability value. Utilization of guaranteed withdrawals and surrender rates vary with the type of rider, the duration of the policy, the age of the contractholder, the distribution channel and whether the value of the guaranteed benefit exceeds the contract accumulation value. Determination of Fair Value The Company uses valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The Company’s market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company’s income approach uses valuation techniques to convert future projected cash flows to a single discounted present value amount. When applying either approach, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy. Assets Cash Equivalents Cash equivalents include time deposits and other highly liquid investments with original or remaining maturities at the time of purchase of 90 days or less. Actively traded money market funds are measured at their NAV and classified as Level 1. U.S. Treasuries are also classified as Level 1. The Company’s remaining cash equivalents are classified as Level 2 and measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization. Available-for-Sale Securities When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from third-party pricing services, non-binding broker quotes, or other model-based valuation techniques. Level 1 securities primarily include U.S. Treasuries. Level 2 securities primarily include corporate bonds, residential mortgage backed securities, commercial mortgage backed securities, state and municipal obligations, asset backed securities and foreign government securities. The fair value of these Level 2 securities is based on a market approach with prices obtained from third-party pricing services. Observable inputs used to value these securities can include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes. The fair value of securities included in an observable transaction with a market participant are also considered Level 2 when the market is not active. Level 3 securities primarily include certain corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and asset backed securities. The fair value of corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and certain asset backed securities classified as Level 3 is typically based on a single non-binding broker quote. The underlying inputs used for some of the non-binding broker quotes are not readily available to the Company. The Company’s privately placed corporate bonds are typically based on a single non-binding broker quote. The fair value of affiliated asset backed securities is determined using a discounted cash flow model. Inputs used to determine the expected cash flows include assumptions about discount rates and default, prepayment and recovery rates of the underlying assets. Given the significance of the unobservable inputs to this fair value measurement, the fair value of the investment in the affiliated asset backed securities is classified as Level 3. In consideration of the above, management is responsible for the fair values recorded on the financial statements. Prices received from third-party pricing services are subjected to exception reporting that identifies investments with significant daily price movements as well as no movements. The Company reviews the exception reporting and resolves the exceptions through reaffirmation of the price or recording an appropriate fair value estimate. The Company also performs subsequent transaction testing. The Company performs annual due diligence of third-party pricing services. The Company’s due diligence procedures include assessing the vendor’s valuation qualifications, control environment, analysis of asset-class specific valuation methodologies, and understanding of sources of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. The Company also considers the results of its exception reporting controls and any resulting price challenges that arise. Receivables During the third quarter of 2021, the Company reinsured its fixed deferred indexed annuity products which have an indexed account that is accounted for as an embedded derivative. The Company uses discounted cash flow models including Black-Scholes calculations to determine the fair value of these ceded embedded derivatives. The fair value of fixed deferred indexed annuity ceded embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates. Given the significance of the unobservable surrender rates, these embedded derivatives are classified as Level 3. See Note 1 for more information on the reinsurance transaction. Separate Account Assets The fair value of assets held by separate accounts is determined by the NAV of the funds in which those separate accounts are invested. The NAV is used as a practical expedient for fair value and represents the exit price for the separate account. Separate account assets are excluded from classification in the fair value hierarchy. Other Assets Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active over-the-counter (“OTC”) markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps and the majority of options. The counterparties’ nonperformance risk associated with uncollateralized derivative assets was immaterial as of both September 30, 2021 and December 31, 2020. See Note 13 and Note 14 for further information on the credit risk of derivative instruments and related collateral. Liabilities Policyholder Account Balances, Future Policy Benefits and Claims There is no active market for the transfer of the Company’s embedded derivatives attributable to the provisions of certain variable annuity riders, fixed deferred indexed annuity, structured variable annuity and IUL products. The Company values the embedded derivatives attributable to the provisions of certain variable annuity riders using internal valuation models. These models calculate fair value as the present value of future expected benefit payments less the present value of future expected rider fees attributable to the embedded derivative feature. The projected cash flows used by these models include observable capital market assumptions and incorporate significant unobservable inputs related to implied volatility as well as contractholder behavior assumptions that include margins for risk, all of which the Company believes a market participant would expect. The fair value also reflects a current estimate of the Company’s nonperformance risk specific to these embedded derivatives. Given the significant unobservable inputs to this valuation, these measurements are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims. The Company uses a discounted cash flow model to determine the fair value of the embedded derivatives associated with the provisions of its equity index annuity product. The projected cash flows generated by this model are based on significant observable inputs related to interest rates, volatilities and equity index levels and, therefore, are classified as Level 2. The Company uses discounted cash flow models including Black-Scholes calculations to determine the fair value of the embedded derivatives associated with the provisions of its fixed deferred indexed annuity, structured variable annuity and IUL products. The structured variable annuity product is a limited flexible purchase payment annuity that offers 45 different indexed account options providing equity market exposure and a fixed account. Each indexed account includes a protection option (a buffer or a floor). If the index has a negative return, contractholder losses will be reduced by buffer or limited to a floor. The portion allocated to an indexed account is accounted for as an embedded derivative. The fair value of fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates and the estimate of the Company’s nonperformance risk. Given the significance of the unobservable surrender rates and the nonperformance risk assumption to the fair value, the fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims. Other Liabilities Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active OTC markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps and the majority of options. The Company’s nonperformance risk associated with uncollateralized derivative liabilities was immaterial as of both September 30, 2021 and December 31, 2020. See Note 13 and Note 14 for further information on the credit risk of derivative instruments and related collateral. Fair Value on a Nonrecurring Basis The Company assesses its investment in affordable housing partnerships for impairment. The investments that are determined to be impaired are written down to their fair value. The Company uses a discounted cash flow model to measure the fair value of these investments. Inputs to the discounted cash flow model are estimates of future net operating losses and tax credits available to the Company and discount rates based on market condition and the financial strength of the syndicator (general partner). The balance of affordable housing partnerships measured at fair value on a nonrecurring basis was $99 million and $101 million as of September 30, 2021 and December 31, 2020, respectively, and is classified as Level 3 in the fair value hierarchy. Asset and Liabilities Not Reported at Fair Value The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair value: September 30, 2021 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 1,776 $ — $ — $ 1,873 $ 1,873 Policy loans 836 — 836 — 836 Other investments 53 — 35 18 53 Receivables 7,952 — — 8,799 8,799 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 11,767 $ — $ — $ 12,845 $ 12,845 Short-term borrowings 200 — 200 — 200 Long-term debt 500 — 496 — 496 Other liabilities 10 — — 10 10 Separate account liabilities — investment contracts 378 — 378 — 378 December 31, 2020 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 2,574 $ — $ — $ 2,724 $ 2,724 Policy loans 846 — 846 — 846 Other investments 457 — 417 40 457 Receivables 1,430 — — 1,732 1,732 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 9,990 $ — $ — $ 11,686 $ 11,686 Short-term borrowings 200 — 200 — 200 Long-term debt 500 — 509 — 509 Other liabilities 12 — — 11 11 Separate account liabilities — investment contracts 351 — 351 — 351 Other investments include syndicated loans and the Company’s membership in the FHLB. Receivables include the deposit receivable. See Note 6 for additional information on mortgage loans, policy loans, syndicated loans and the deposit receivable. Policyholder account balances, future policy benefits and claims includes fixed annuities in deferral status, non-life contingent fixed annuities in payout status, indexed and structured variable annuity host contracts, and the fixed portion of a small number of variable annuity contracts classified as investment contracts. See Note 9 for additional information on these liabilities. Short-term borrowings include FHLB borrowings. Long-term debt includes the surplus note with Ameriprise Financial. See Note 11 for further information on short-term borrowings and long-term debt. Other liabilities include future funding commitments to affordable housing partnerships and other real estate partnerships. Separate account liabilities are related to certain annuity products that are classified as investment contracts. |
Offsetting Assets and Liabiliti
Offsetting Assets and Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Offsetting [Abstract] | |
Offsetting Assets and Liabilities | Certain financial instruments and derivative instruments are eligible for offset in the Consolidated Balance Sheets. The Company’s derivative instruments are subject to master netting and collateral arrangements and qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. The Company’s policy is to recognize amounts subject to master netting arrangements on a gross basis in the Consolidated Balance Sheets. The following tables present the gross and net information about the Company’s assets subject to master netting arrangements: September 30, 2021 Gross Amounts of Recognized Assets Gross Amounts Offset in the Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,266 $ — $ 5,266 $ (3,441) $ (1,364) $ (404) $ 57 OTC cleared 25 — 25 (15) — — 10 Exchange-traded 352 — 352 (110) (213) — 29 Total derivatives $ 5,643 $ — $ 5,643 $ (3,566) $ (1,577) $ (404) $ 96 December 31, 2020 Gross Amounts of Recognized Assets Gross Amounts Offset in the Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,391 $ — $ 5,391 $ (3,801) $ (1,243) $ (315) $ 32 OTC cleared 58 — 58 (25) — — 33 Exchange-traded 309 — 309 (90) (165) — 54 Total derivatives $ 5,758 $ — $ 5,758 $ (3,916) $ (1,408) $ (315) $ 119 (1) Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. The following tables present the gross and net information about the Company’s liabilities subject to master netting arrangements: September 30, 2021 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 3,916 $ — $ 3,916 $ (3,441) $ (182) $ (293) $ — OTC cleared 15 — 15 (15) — Exchange-traded 110 — 110 (110) — Total derivatives $ 4,041 $ — $ 4,041 $ (3,566) $ (182) $ (293) $ — December 31, 2020 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 4,129 $ — $ 4,129 $ (3,801) $ (1) $ (327) $ — OTC cleared 25 — 25 (25) — — — Exchange-traded 94 — 94 (90) — — 4 Total derivatives $ 4,248 $ — $ 4,248 $ (3,916) $ (1) $ (327) $ 4 (1) Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. In the tables above, the amount of assets or liabilities presented are offset first by financial instruments that have the right of offset under master netting or similar arrangements, then any remaining amount is reduced by the amount of cash and securities collateral. The actual collateral may be greater than amounts presented in the tables. When the fair value of collateral accepted by the Company is less than the amount due to the Company, there is a risk of loss if the counterparty fails to perform or provide additional collateral. To mitigate this risk, the Company monitors collateral values regularly and requires additional collateral when necessary. When the value of collateral pledged by the Company declines, it may be required to post additional collateral. Freestanding derivative instruments are reflected in other assets and other liabilities. Cash collateral pledged by the Company is reflected in other assets and cash collateral accepted by the Company is reflected in other liabilities. See Note 14 for additional disclosures related to the Company’s derivative instruments. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivative instruments enable the Company to manage its exposure to various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including equity and interest rate indices or prices. The Company primarily enters into derivative agreements for risk management purposes related to the Company’s products and operations. Certain of the Company’s freestanding derivative instruments are subject to master netting arrangements. The Company’s policy on the recognition of derivatives on the Consolidated Balance Sheets is to not offset fair value amounts recognized for derivatives and collateral arrangements executed with the same counterparty under the same master netting arrangement. See Note 13 for additional information regarding the estimated fair value of the Company’s freestanding derivatives after considering the effect of master netting arrangements and collateral. Generally, the Company uses derivatives as economic hedges and accounting hedges. The following table presents the notional value and gross fair value of derivative instruments, including embedded derivatives: September 30, 2021 December 31, 2020 Notional Gross Fair Value Notional Gross Fair Value Assets (1) Liabilities (2)(3) Assets (1) Liabilities (2)(3) (in millions) Derivatives not designated as hedging instruments Interest rate contracts $ 79,344 $ 1,185 $ 476 $ 77,925 $ 1,755 $ 734 Equity contracts 58,509 4,423 3,563 55,993 3,984 3,511 Credit contracts 1,727 18 — 2,269 1 1 Foreign exchange contracts 2,255 17 2 3,124 18 2 Total non-designated hedges 141,835 5,643 4,041 139,311 5,758 4,248 Embedded derivatives GMWB and GMAB (4) N/A — 1,436 N/A — 2,316 IUL N/A — 917 N/A — 935 Fixed deferred indexed annuities and deposit receivables N/A 56 58 N/A — 52 Structured variable annuities N/A — 217 N/A — 70 Total embedded derivatives N/A 56 2,628 N/A — 3,373 Total derivatives $ 141,835 $ 5,699 $ 6,669 $ 139,311 $ 5,758 $ 7,621 N/A Not applicable. (1) The fair value of freestanding derivative assets is included in Other assets and the fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables on the Consolidated Balance Sheets. (2) The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. (3) The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $2.9 billion and $3.7 billion as of September 30, 2021 and December 31, 2020, respectively. See Note 13 for additional information related to master netting arrangements and cash collateral. (4) The fair value of the GMWB and GMAB embedded derivatives as of September 30, 2021 included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2020 included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position. See Note 12 for additional information regarding the Company’s fair value measurement of derivative instruments. As of September 30, 2021 and December 31, 2020, investment securities with a fair value of $448 million and $325 million, respectively, were received as collateral to meet contractual obligations under derivative contracts, of which $448 million and $325 million, respectively, may be sold, pledged or rehypothecated by the Company. As of both September 30, 2021 and December 31, 2020, the Company had sold, pledged, or rehypothecated none of these securities. In addition, as of both September 30, 2021 and December 31, 2020, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets. The following tables present a summary of the impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income: Net Investment Income Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses (in millions) Three Months Ended September 30, 2021 Interest rate contracts $ — $ — $ (171) Equity contracts — — 1 Credit contracts — — 2 Foreign exchange contracts — — — GMWB and GMAB embedded derivatives — — (64) IUL embedded derivatives — 11 — Fixed deferred indexed annuity and deposit receivables embedded derivatives — 1 — Structured variable annuity embedded derivatives — — (17) Total gain (loss) $ — $ 12 $ (249) Nine Months Ended September 30, 2021 Interest rate contracts $ — $ — $ (1,125) Equity contracts 1 55 (613) Credit contracts — — 41 Foreign exchange contracts — — 6 GMWB and GMAB embedded derivatives — — 879 IUL embedded derivatives — 22 — Fixed deferred indexed annuity and deposit receivables embedded derivatives — (7) — Structured variable annuity embedded derivatives — — (192) Total gain (loss) $ 1 $ 70 $ (1,004) Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses (in millions) Three Months Ended September 30, 2020 Interest rate contracts $ — $ (371) Equity contracts 42 (468) Credit contracts — (12) Foreign exchange contracts — (23) GMWB and GMAB embedded derivatives — 186 IUL embedded derivatives (29) — Fixed deferred indexed annuity embedded derivatives (3) — Structured variable annuity embedded derivatives — (3) Total gain (loss) $ 10 $ (691) Nine Months Ended September 30, 2020 Interest rate contracts $ — $ 2,204 Equity contracts (7) 58 Credit contracts — (91) Foreign exchange contracts — 26 GMWB and GMAB embedded derivatives — (2,180) IUL embedded derivatives 8 — Fixed deferred indexed annuity embedded derivatives 2 — Structured variable annuity embedded derivatives — (16) Total gain (loss) $ 3 $ 1 The Company holds derivative instruments that either do not qualify or are not designated for hedge accounting treatment. These derivative instruments are used as economic hedges of equity, interest rate, credit and foreign currency exchange rate risk related to various products and transactions of the Company. Certain annuity contracts contain GMWB or GMAB provisions, which guarantee the right to make limited partial withdrawals each contract year regardless of the volatility inherent in the underlying investments or guarantee a minimum accumulation value of consideration received at the beginning of the contract period, after a specified holding period, respectively. The indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. The Company economically hedges the aggregate exposure related to the indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions using options, swaptions, swaps and futures. The deferred premium associated with certain of the above options and swaptions is paid or received semi-annually over the life of the contract or at maturity. The following is a summary of the payments the Company is scheduled to make and receive for these options and swaptions as of September 30, 2021: Premiums Payable Premiums Receivable (in millions) 2021 (1) $ 60 $ 45 2022 204 205 2023 51 43 2024 138 25 2025 125 22 2026 - 2028 262 88 Total $ 840 $ 428 (1) 2021 amounts represent the amounts payable and receivable for the period from October 1, 2021 to December 31, 2021. Actual timing and payment amounts may differ due to future settlements, modifications or exercises of the contracts prior to the full premium being paid or received. The Company has a macro hedge program to provide protection against the statutory tail scenario risk arising from variable annuity reserves on its statutory surplus and to cover some of the residual risks not covered by other hedging activities. As a means of economically hedging these risks, the Company may use a combination of futures, options, swaps and swaptions. Certain of the macro hedge derivatives may contain settlement provisions linked to both equity returns and interest rates. The Company’s macro hedge derivatives that contain settlement provisions linked to both equity returns and interest rates, if any, are shown in other contracts in the tables above. Structured variable annuity and IUL products have returns tied to the performance of equity markets. As a result of fluctuations in equity markets, the obligation incurred by the Company related to structured variable annuity and IUL products will positively or negatively impact earnings over the life of these products. The equity component of structured variable annuity and IUL product obligations are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. As a means of economically hedging its obligations under the provisions of these products, the Company enters into index options and futures contracts. Cash Flow Hedges During both the nine months ended September 30, 2021 and 2020, the Company held no derivatives that were designated as cash flow hedges. During both the nine months ended September 30, 2021 and 2020, no hedge relationships were discontinued due to forecasted transactions no longer being expected to occur according to the original hedge strategy. Credit Risk Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting and collateral arrangements whenever practical. See Note 13 for additional information on the Company’s credit exposure related to derivative assets. Certain of the Company’s derivative contracts contain provisions that adjust the level of collateral the Company is required to post based on the Company’s financial strength rating (or based on the debt rating of the Company’s parent, Ameriprise Financial). Additionally, certain of the Company’s derivative contracts contain provisions that allow the counterparty to terminate the contract if the Company does not maintain a specific financial strength rating or Ameriprise Financial’s debt does not maintain a specific credit rating (generally an investment grade rating). If these termination provisions were to be triggered, the Company’s counterparty could require immediate settlement of any net liability position. As of September 30, 2021 and December 31, 2020, the aggregate fair value of derivative contracts in a net liability position containing such credit contingent provisions was $378 million and $324 million, respectively. The aggregate fair value of assets posted as collateral for such instruments as of September 30, 2021 and December 31, 2020 was $378 million and $324 million, respectively. If the credit contingent provisions of derivative contracts in a net liability position as of September 30, 2021 and December 31, 2020 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been nil on September 30, 2021 and December 31, 2020, respectively. |
Shareholder's Equity
Shareholder's Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholder's Equity | The following tables provide the amounts related to each component of OCI: Three Months Ended September 30, 2021 2020 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ (57) $ 14 $ (43) $ 208 $ (44) $ 164 Reclassification of net (gains) losses on securities included in net income (2) (498) 104 (394) (2) — (2) Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables 147 (31) 116 (94) 20 (74) Net unrealized gains (losses) on securities (408) 87 (321) 112 (24) 88 Total other comprehensive income (loss) $ (408) $ 87 $ (321) $ 112 $ (24) $ 88 Nine Months Ended September 30, 2021 2020 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ (396) $ 86 $ (310) $ 500 $ (107) $ 393 Reclassification of net (gains) losses on securities included in net income (2) (548) 115 (433) 3 (1) 2 Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables 284 (60) 224 (223) 47 (176) Net unrealized gains (losses) on securities (660) 141 (519) 280 (61) 219 Total other comprehensive income (loss) $ (660) $ 141 $ (519) $ 280 $ (61) $ 219 (1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period. (2) Reclassification amounts are recorded in net realized investment gains (losses). Other comprehensive income (loss) related to net unrealized gains (losses) on securities includes three components: (i) unrealized gains (losses) that arose from changes in the fair value of securities that were held during the period; (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit impairments to credit losses; and (iii) other adjustments primarily consisting of changes in insurance and annuity asset and liability balances, such as DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates. The following table presents the changes in the balances of each component of AOCI, net of tax: Net Unrealized Gains (Losses) on Securities Other Total (in millions) Balance, July 1, 2021 $ 723 $ (1) $ 722 OCI before reclassifications 73 — 73 Amounts reclassified from AOCI (394) — (394) Total OCI (321) — (321) Balance, September 30, 2021 $ 402 $ (1) $ 401 Balance, January 1, 2021 $ 921 $ (1) $ 920 OCI before reclassifications (86) — (86) Amounts reclassified from AOCI (433) — (433) Total OCI (519) — (519) Balance, September 30, 2021 $ 402 $ (1) $ 401 Net Unrealized Gains (Losses) on Securities Other Total (in millions) Balance, July 1, 2020 $ 706 $ (1) $ 705 OCI before reclassifications 90 — 90 Amounts reclassified from AOCI (2) — (2) Total OCI 88 — 88 Balance, September 30, 2020 $ 794 $ (1) $ 793 Balance, January 1, 2020 $ 575 $ (1) $ 574 OCI before reclassifications 217 — 217 Amounts reclassified from AOCI 2 — 2 Total OCI 219 — 219 Balance, September 30, 2020 $ 794 $ (1) $ 793 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The Company’s effective tax rate was 15.6% and 23.2% for the three months ended September 30, 2021 and 2020, respectively. The Company’s effective tax rate was 12.7% and 5.7% for the nine months ended September 30, 2021 and 2020, respectively. The effective tax rate for the three months ended September 30, 2021 is lower than the statutory rate as a result of tax preferred items including low income housing tax credits and the dividends received deduction. The effective tax rate for the nine months ended September 30, 2021 is lower than the statutory rate as a result of tax preferred items including low income housing tax credits, the dividends received deduction and foreign tax credits. The Company recorded a pretax loss for the three months ended September 30, 2020. Tax benefits applied to a pretax loss raise the effective tax rate. The effective tax rate for the three months ended September 30, 2020 is higher than the statutory rate as a result of tax benefits including low income housing tax credits and the dividends received deduction. The effective tax rate for the nine months ended September 30, 2020 is lower than the statutory rate as a result of tax preferred items including low income housing tax credits and the dividends received deduction. The lower effective tax rate for the three months ended September 30, 2021 is the result of current period pretax income compared to the prior period pretax loss and a decrease in tax preferred items including low income housing tax credits and the dividends received deduction. The increase in the effective tax rate for the nine months ended September 30, 2021 compared to the prior period is the result of higher pretax income and a decrease in tax preferred items including low income housing tax credits and the dividends received deduction partially offset by an increase in foreign tax credits. Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $9 million, net of federal benefit, which will expire beginning December 31, 2021. The Company is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. Significant judgment is required in determining if a valuation allowance should be established, and the amount of such allowance if required. Factors used in making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination, (i) future taxable income exclusive of reversing temporary differences and carryforwards, (ii) future reversals of existing taxable temporary differences, (iii) taxable income in prior carryback years, and (iv) tax planning strategies. Based on analysis of the Company’s tax position, management believes it is more likely than not that the results of future operations and implementation of tax planning strategies will not allow the Company to realize certain state deferred tax assets of $2 million and state net operating losses of $9 million; therefore, a valuation allowance of $11 million has been established as of both September 30, 2021 and December 31, 2020. As of September 30, 2021 and December 31, 2020, the Company had $39 million and $38 million, respectively, of gross unrecognized tax benefits. If recognized, approximately $21 million and $20 million, net of federal tax benefits, of unrecognized tax benefits as of September 30, 2021 and December 31, 2020 would affect the effective tax rate. It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits may decrease by approximately $33 million in the next 12 months primarily due to Internal Revenue Service (“IRS”) settlements. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized nil in interest and penalties for both the three months and nine months ended September 30, 2021 and 2020. As of both September 30, 2021 and December 31, 2020, the Company had a payable of $2 million related to accrued interest and penalties. The Company files income tax returns as part of its inclusion in the consolidated federal income tax returns of Ameriprise Financial in the U.S. federal jurisdiction and various state jurisdictions. The federal statute of limitations are closed on years through 2015, except for one issue for 2014 and 2015 which was claimed on amended returns. The IRS is currently auditing Ameriprise Financial’s U.S. income tax returns for 2016, 2017 and 2018. Ameriprise Financial’s or the Company’s state income tax returns are currently under examination by various jurisdictions for years ranging from 2015 through 2019. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | The Company and its affiliates are involved in the normal course of business in legal proceedings which include regulatory inquiries, arbitration and litigation, including class actions, concerning matters arising in connection with the conduct of its activities. These include proceedings specific to the Company as well as proceedings generally applicable to business practices in the industries in which it operates. The Company can also be subject to legal proceedings arising out of its general business activities, such as its investments, contracts, and employment relationships. Uncertain economic conditions, heightened and sustained volatility in the financial markets and significant financial reform legislation may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the Company or the insurance industry generally. The level of regulatory activity and inquiry concerning the Company’s businesses remains elevated. Insurance companies, including the Company, have been the subject of examinations and other inquiries by various state and federal regulatory agencies regarding sales and marketing practices (including sales to older consumers and disclosure practices), claims handling, and unclaimed property and escheatment practices and procedures. From time to time, the Company and its affiliates, including AFS and RiverSource Distributors, Inc. receive requests for information from, and/or are subject to examination or claims by various state, federal and other domestic authorities concerning their business activities and practices and other subjects, including from time to time: sales and distribution of various products, including the Company’s life insurance and variable annuity products; supervision of associated persons, including AFS financial advisors and RiverSource Distributors Inc.’s wholesalers; administration of insurance and annuity claims; security of client information; and transaction monitoring systems and controls. The Company and its affiliates have cooperated and will continue to cooperate with the applicable regulators. The Company believes that it is not a party to, nor are any of its properties the subject of, any pending legal, arbitration or regulatory investigation, examination or proceeding that is likely to have a material adverse effect on its consolidated financial condition, results of operations or liquidity. Notwithstanding the foregoing, it is possible that the outcome of any current or future legal, arbitration or regulatory proceeding could have a material impact on results of operations in any particular reporting period as the proceedings are resolved. RiverSource Life Insurance Company and RiverSource Life of NY are required by law to be a member of the guaranty fund association in every state where they are licensed to do business. In the event of insolvency of one or more unaffiliated insurance companies, the Company could be adversely affected by the requirement to pay assessments to the guaranty fund associations. The Company projects its cost of future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and Health Insurance Guaranty Associations (“NOLHGA”) and the amount of its premiums written relative to the industry-wide premium in each state. The Company accrues the estimated cost of future guaranty fund assessments when it is considered probable that an assessment will be imposed, the event obligating the Company to pay the assessment has occurred and the amount of the assessment can be reasonably estimated. The Company has a liability for estimated guaranty fund assessments and a related premium tax asset. As of both September 30, 2021 and December 31, 2020, the estimated liability was $12 million. As of both September 30, 2021 and December 31, 2020, the related premium tax asset was $10 million. The expected period over which guaranty fund assessments will be made and the related tax credits recovered is not known. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregated revenue from contracts with customers | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Policy and contract charges Affiliated $ 50 $ 44 $ 144 $ 127 Unaffiliated 4 3 12 10 Total 54 47 156 137 Other revenues Administrative fees Affiliated 13 12 37 33 Unaffiliated 5 3 15 13 18 15 52 46 Other fees Affiliated 99 89 291 259 Unaffiliated 1 1 4 3 100 90 295 262 Total 118 105 347 308 Total revenue from contracts with customers 172 152 503 445 Revenue from other sources (1) 223 800 1,956 2,328 Total revenues $ 395 $ 952 $ 2,459 $ 2,773 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) - Consolidated investment entities | 9 Months Ended |
Sep. 30, 2021 | |
Assets and liabilities measured at fair value | |
Schedule of balances of assets and liabilities measured at fair value on a recurring basis | September 30, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets Investments: Common stocks $ — $ 2 $ — $ 2 Syndicated loans — 2,123 45 2,168 Total investments — 2,125 45 2,170 Receivables — 18 — 18 Other assets — 2 — 2 Total assets at fair value $ — $ 2,145 $ 45 $ 2,190 Liabilities Debt (1) $ — $ 2,163 $ — $ 2,163 Other liabilities — 71 — 71 Total liabilities at fair value $ — $ 2,234 $ — $ 2,234 December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets Investments: Corporate debt securities $ — $ 8 $ — $ 8 Common stocks — 1 — 1 Syndicated loans — 1,817 92 1,909 Total investments — 1,826 92 1,918 Receivables — 16 — 16 Other assets — — 2 2 Total assets at fair value $ — $ 1,842 $ 94 $ 1,936 Liabilities Debt (1) $ — $ 1,913 $ — $ 1,913 Other liabilities — 69 — 69 Total liabilities at fair value $ — $ 1,982 $ — $ 1,982 |
Summary of changes in Level 3 assets measured at fair value on a recurring basis | Syndicated Loans (in millions) Balance, July 1, 2021 $ 112 Purchases 7 Sales (4) Settlements (10) Transfers into Level 3 5 Transfers out of Level 3 (47) Deconsolidation of consolidated investment entities (18) Balance, September 30, 2021 $ 45 Syndicated Loans Other Assets (in millions) Balance, January 1, 2021 $ 92 $ 2 Total gains (losses) included in: Net income 2 (1) — Purchases 88 — Sales (38) — Settlements (49) — Transfers into Level 3 90 — Transfers out of Level 3 (122) (2) Deconsolidation of consolidated investment entities (18) — Balance, September 30, 2021 $ 45 $ — (1) Included in net investment income in the Consolidated Statements of Operations. |
Schedule of fair value and unpaid principal balance of loans and debt for which fair value option has been elected | September 30, 2021 December 31, 2020 (in millions) Syndicated loans Unpaid principal balance $ 2,223 $ 1,990 Excess unpaid principal over fair value (55) (81) Fair value $ 2,168 $ 1,909 Fair value of loans more than 90 days past due $ 2 $ 5 Fair value of loans in nonaccrual status 5 19 Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both 5 24 Debt Unpaid principal balance $ 2,298 $ 2,069 Excess unpaid principal over fair value (135) (156) Carrying value (1) $ 2,163 $ 1,913 (1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
Schedule of debt and stated interest rates | Carrying Value Weighted Average Interest Rate September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) Debt of consolidated CLOs due 2025-2034 $ 2,163 $ 1,913 1.7 % 2.1 % |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-Sale securities by type | Description of Securities September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Fixed maturities: Corporate debt securities $ 8,135 $ 1,293 $ (31) $ — $ 9,397 Residential mortgage backed securities 2,107 46 (7) — 2,146 Commercial mortgage backed securities 2,448 86 (6) — 2,528 State and municipal obligations 835 249 (1) (1) 1,082 Asset backed securities 523 27 — — 550 Foreign government bonds and obligations 80 6 (1) — 85 U.S. government and agency obligations 1 — — — 1 Total $ 14,129 $ 1,707 $ (46) $ (1) $ 15,789 Description of Securities December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Fixed maturities: Corporate debt securities $ 10,982 $ 1,903 $ (2) $ (10) $ 12,873 Residential mortgage backed securities 2,888 115 (1) — 3,002 Commercial mortgage backed securities 3,935 235 (4) — 4,166 State and municipal obligations 1,050 295 (1) — 1,344 Asset backed securities 1,168 45 (1) — 1,212 Foreign government bonds and obligations 236 22 (1) — 257 U.S. government and agency obligations 1 — — — 1 Total $ 20,260 $ 2,615 $ (10) $ (10) $ 22,855 |
Summary of fixed maturity securities by rating | Ratings September 30, 2021 December 31, 2020 Amortized Cost Fair Value Percent of Total Fair Value Amortized Cost Fair Value Percent of Total Fair Value (in millions, except percentages) AAA $ 4,723 $ 4,858 31 % $ 7,323 $ 7,698 34 % AA 785 967 6 1,036 1,266 6 A 1,589 1,950 12 2,663 3,235 14 BBB 6,074 6,905 44 7,770 9,026 39 Below investment grade 958 1,109 7 1,468 1,630 7 Total fixed maturities $ 14,129 $ 15,789 100 % $ 20,260 $ 22,855 100 % |
Summary of fair value and gross unrealized losses on Available-for-Sale securities in continuous unrealized loss position | Description of Securities September 30, 2021 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 79 $ 1,454 $ (29) 5 $ 23 $ (2) 84 $ 1,477 $ (31) Residential mortgage backed securities 24 688 (7) 2 2 — 26 690 (7) Commercial mortgage backed securities 38 550 (5) 3 22 (1) 41 572 (6) State and municipal obligations 18 49 (1) — — — 18 49 (1) Foreign government bonds and obligations 5 6 — 6 4 (1) 11 10 (1) Total 164 $ 2,747 $ (42) 16 $ 51 $ (4) 180 $ 2,798 $ (46) Description of Securities December 31, 2020 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 26 $ 228 $ (1) 1 $ 12 $ (1) 27 $ 240 $ (2) Residential mortgage backed securities 11 47 (1) 7 14 — 18 61 (1) Commercial mortgage backed securities 12 179 (3) 7 60 (1) 19 239 (4) State and municipal obligations 2 4 — 1 4 (1) 3 8 (1) Asset backed securities 4 65 — 2 36 (1) 6 101 (1) Foreign government bonds and obligations 1 3 — 7 8 (1) 8 11 (1) Total 56 $ 526 $ (5) 25 $ 134 $ (5) 81 $ 660 $ (10) |
Rollforward of allowance for credit losses on Available-for-Sale securities | Corporate Debt Securities State and Municipal Obligations Total (in millions) Balance, July 1, 2021 $ — $ — $ — Additions for which credit losses were not previously recorded — 1 1 Charge-offs — — — Balance, September 30, 2021 $ — $ 1 $ 1 Balance, July 1, 2020 $ 13 $ — $ 13 Additions for which credit losses were not previously recorded — — — Balance, September 30, 2020 $ 13 $ — $ 13 Balance, January 1, 2021 $ 10 $ — $ 10 Additions for which credit losses were not previously recorded — 1 1 Charge-offs (10) — (10) Balance, September 30, 2021 $ — $ 1 $ 1 Balance at January 1, 2020 (1) $ — $ — $ — Additions for which credit losses were not previously recorded 13 — 13 Balance at September 30, 2020 $ 13 $ — $ 13 |
Schedule of net realized gains and losses on Available-for-Sale securities | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Gross realized investment gains $ 505 $ 2 $ 568 $ 12 Gross realized investment losses (6) — (6) (2) Credit losses (1) — (1) (13) Other impairments — — (13) — Total $ 498 $ 2 $ 548 $ (3) |
Schedule of Available-for-Sale securities by contractual maturity | Amortized Cost Fair Value (in millions) Due within one year $ 411 $ 417 Due after one year through five years 1,955 2,090 Due after five years through 10 years 3,049 3,166 Due after 10 years 3,636 4,892 9,051 10,565 Residential mortgage backed securities 2,107 2,146 Commercial mortgage backed securities 2,448 2,528 Asset backed securities 523 550 Total $ 14,129 $ 15,789 |
Summary of net investment income | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Fixed maturities $ 137 $ 191 $ 511 $ 585 Mortgage loans 21 29 82 86 Other investments 40 (3) 86 (9) 198 217 679 662 Less: investment expenses 5 5 15 15 Total $ 193 $ 212 $ 664 $ 647 |
Financing Receivables (Tables)
Financing Receivables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Financing Receivables | |
Rollforward of allowance for loan losses | Commercial Loans (in millions) Balance, January 1, 2021 $ 35 Provisions (21) Balance, September 30, 2021 $ 14 Commercial Loans (in millions) Balance, December 31, 2019 (1) $ 20 Cumulative effect of adoption of current expected credit losses guidance 3 Balance, January 1, 2020 23 Provisions 13 Balance, September 30, 2020 $ 36 (1) Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Schedule of concentrations of credit risk of loans by region and property type | Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows: Loans Percentage September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) East North Central $ 179 $ 250 10 % 10 % East South Central 65 111 4 4 Middle Atlantic 109 165 6 6 Mountain 119 234 7 10 New England 23 47 1 2 Pacific 571 784 32 30 South Atlantic 476 663 27 25 West North Central 134 192 7 7 West South Central 114 156 6 6 1,790 2,602 100 % 100 % Less: allowance for credit losses 14 28 Total $ 1,776 $ 2,574 Concentrations of credit risk of commercial mortgage loans by property type were as follows: Loans Percentage September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) Apartments $ 468 $ 680 26 % 26 % Hotel 15 49 1 2 Industrial 280 401 16 16 Mixed use 57 76 3 3 Office 258 358 15 14 Retail 597 843 33 32 Other 115 195 6 7 1,790 2,602 100 % 100 % Less: allowance for credit losses 14 28 Total $ 1,776 $ 2,574 |
Commercial Loans | Commercial mortgage loans | |
Financing Receivables | |
Schedule of amortized cost basis of loans and credit quality information | September 30, 2021 Loan-to-Value Ratio 2021 2020 2019 2018 2017 Prior Total (in millions) > 100% $ — $ — $ 19 $ 11 $ — $ 30 $ 60 80% - 100% 9 14 10 2 — 37 72 60% - 80% 93 64 66 25 59 128 435 40% - 60% 23 31 84 66 52 412 668 < 40% 6 7 39 — 45 458 555 Total $ 131 $ 116 $ 218 $ 104 $ 156 $ 1,065 $ 1,790 December 31, 2020 Loan-to-Value Ratio 2020 2019 2018 2017 2016 Prior Total (in millions) > 100% $ — $ — $ 2 $ — $ — $ 10 $ 12 80% - 100% 15 16 9 3 7 15 65 60% - 80% 85 152 27 29 46 141 480 40% - 60% 20 50 74 147 111 543 945 < 40% 7 22 69 88 58 856 1,100 Total $ 127 $ 240 $ 181 $ 267 $ 222 $ 1,565 $ 2,602 |
Commercial Loans | Syndicated loans | |
Financing Receivables | |
Schedule of amortized cost basis of loans and credit quality information | September 30, 2021 Internal Risk Rating 2021 2020 2019 2018 2017 Prior Total (in millions) Risk 5 $ — $ — $ — $ — $ — $ — $ — Risk 4 — — — — — — — Risk 3 — — — — — 1 1 Risk 2 12 — 2 1 4 1 20 Risk 1 4 — 2 — 4 4 14 Total $ 16 $ — $ 4 $ 1 $ 8 $ 6 $ 35 December 31, 2020 Internal Risk Rating 2020 2019 2018 2017 2016 Prior Total (in millions) Risk 5 $ — $ — $ — $ — $ — $ 2 $ 2 Risk 4 — — 3 7 — 7 17 Risk 3 — 7 6 19 10 18 60 Risk 2 23 42 45 51 10 32 203 Risk 1 14 25 35 43 17 30 164 Total $ 37 $ 74 $ 89 $ 120 $ 37 $ 89 $ 446 |
Deferred Acquisition Costs an_2
Deferred Acquisition Costs and Deferred Sales Inducement Costs (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Charges, Insurers [Abstract] | |
Schedule of balances of and changes in DAC | 2021 2020 (in millions) Balance at January 1 $ 2,508 $ 2,673 Capitalization of acquisition costs 196 155 Amortization (129) (238) Amortization, impact of valuation assumptions review 60 (100) Impact of change in net unrealized (gains) losses on securities 75 (61) Balance at September 30 $ 2,710 $ 2,429 |
Schedule of balances of and changes in DSIC | 2021 2020 (in millions) Balance at January 1 $ 187 $ 216 Capitalization of sales inducement costs 1 1 Amortization (15) (19) Amortization, impact of valuation assumptions review 2 (16) Impact of change in net unrealized (gains) losses on securities 11 (1) Balance at September 30 $ 186 $ 181 |
Policyholder Account Balances_2
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Policyholder Account Balances, Future Policy Benefits and Claims & Separate Account Liabilities | |
Schedule of components of policyholder account balances, future policy benefits and claims | September 30, 2021 December 31, 2020 (in millions) Policyholder account balances Fixed annuities (1) $ 8,229 $ 8,531 Variable annuity fixed sub-accounts 5,020 5,104 Universal life (“UL”)/variable universal life (“VUL”) insurance 3,098 3,122 Indexed universal life (“IUL”) insurance 2,461 2,269 Structured variable annuities 3,552 1,371 Other life insurance 580 605 Total policyholder account balances 22,940 21,002 Future policy benefits Variable annuity guaranteed minimum withdrawal benefits (“GMWB”) 2,256 3,049 Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2) (14) 1 Other annuity liabilities 73 211 Fixed annuity life contingent liabilities 1,303 1,370 Life and disability income insurance 1,152 1,187 Long term care insurance 5,664 5,722 UL/VUL and other life insurance additional liabilities 1,278 1,259 Total future policy benefits 11,712 12,799 Policy claims and other policyholders’ funds 205 185 Total policyholder account balances, future policy benefits and claims $ 34,857 $ 33,986 (1) Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts. (2) Includes the fair value of GMAB embedded derivatives that was a net asset as of September 30, 2021 reported as a contra liability. |
Schedule of components of separate account liabilities | September 30, 2021 December 31, 2020 (in millions) Variable annuity $ 81,063 $ 79,299 VUL insurance 8,931 8,226 Other insurance 32 31 Total $ 90,026 $ 87,556 |
Variable Annuity and Insuranc_2
Variable Annuity and Insurance Guarantees (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Insurance [Abstract] | |
Schedule of variable annuity guarantees with additional liabilities | Variable Annuity Guarantees by Benefit Type (1) September 30, 2021 December 31, 2020 Total Contract Value Contract Value in Separate Accounts Net Amount at Risk Weighted Average Attained Age Total Contract Value Contract Value in Separate Accounts Net Amount at Risk Weighted Average Attained Age (in millions, except age) GMDB: Return of premium $ 68,486 $ 66,600 $ 18 69 $ 66,874 $ 64,932 $ 5 68 Five/six-year reset 8,181 5,467 13 68 8,116 5,386 6 68 One-year ratchet 6,105 5,786 40 71 6,094 5,763 8 71 Five-year ratchet 1,425 1,371 2 67 1,436 1,381 — 67 Other 1,281 1,264 46 74 1,261 1,243 45 73 Total — GMDB $ 85,478 $ 80,488 $ 119 69 $ 83,781 $ 78,705 $ 64 68 GGU death benefit $ 1,221 $ 1,166 $ 176 72 $ 1,183 $ 1,126 $ 162 71 GMIB $ 186 $ 172 $ 5 71 $ 187 $ 173 $ 6 71 GMWB: GMWB $ 1,903 $ 1,897 $ 1 75 $ 1,972 $ 1,967 $ 1 74 GMWB for life 51,275 51,226 215 69 50,142 50,057 185 69 Total — GMWB $ 53,178 $ 53,123 $ 216 69 $ 52,114 $ 52,024 $ 186 69 GMAB $ 2,037 $ 2,037 $ — 62 $ 2,291 $ 2,291 $ — 61 (1) Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table. |
Schedule insurance guarantees with additional liabilities | September 30, 2021 December 31, 2020 Net Amount at Risk Weighted Average Attained Age Net Amount at Risk Weighted Average Attained Age (in millions, except age) UL secondary guarantees $ 6,563 68 $ 6,587 67 |
Schedule of changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees | Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees were as follows: GMDB & GGU GMIB GMWB (1) GMAB (1) UL (in millions) Balance at January 1, 2020 $ 16 $ 7 $ 1,462 $ (39) $ 758 Incurred claims 10 1 2,219 63 172 Paid claims (6) (1) — — (34) Balance at September 30, 2020 $ 20 $ 7 $ 3,681 $ 24 $ 896 Balance at January 1, 2021 $ 24 $ 6 $ 3,049 $ 1 $ 916 Incurred claims 12 1 (793) (15) 106 Paid claims (3) (1) — — (27) Balance at September 30, 2021 $ 33 $ 6 $ 2,256 $ (14) $ 995 (1) The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims. |
Summary of distribution of separate account balances by asset type | September 30, 2021 December 31, 2020 (in millions) Mutual funds: Equity $ 47,854 $ 45,947 Bond 24,779 26,073 Other 8,067 6,911 Total mutual funds $ 80,700 $ 78,931 |
Fair Values of Assets and Lia_2
Fair Values of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value of Assets and Liabilities | |
Summary of significant unobservable inputs used in fair value measurements of Level 3 assets and liabilities | September 30, 2021 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 514 Discounted cash flow Yield/spread to U.S. Treasuries (1) 0.8% – 2.4% 1.2% Asset backed securities $ 318 Discounted cash flow Annual default rate 5.6% 5.6% Loss severity 25.0% 25.0% Yield/spread to swap rates (2) 140 bps – 225 bps 146 bps Fixed deferred indexed annuity ceded embedded derivatives $ 56 Discounted cash flow Surrender rate (4) 0.0% – 66.8% 1.4% IUL embedded derivatives $ 917 Discounted cash flow Nonperformance risk (3) 60 bps 60 bps Fixed deferred indexed annuity embedded derivatives $ 54 Discounted cash flow Surrender rate (4) 0.0% – 66.8% 1.4% Nonperformance risk (3) 60 bps 60 bps GMWB and GMAB embedded derivatives $ 1,436 Discounted cash flow Utilization of guaranteed withdrawals (5) (6) 0.0% – 48.0% 10.6% Surrender rate (4) 0.1% – 63.4% 3.6% Market volatility (7) (8) 4.4% – 17.6% 11.3% Nonperformance risk (3) 60 bps 60 bps Structured variable annuity embedded derivatives $ 217 Discounted cash flow Surrender rate (4) 0.8% – 40.0% 0.9% Nonperformance risk (3) 60 bps 60 bps December 31, 2020 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 766 Discounted cash flow Yield/spread to U.S. Treasuries (1) 1.0% – 3.3% 1.5% Asset backed securities $ 395 Discounted cash flow Annual default rate 5.3% 5.3% Loss severity 25.0% 25.0% Yield/spread to swap rates (2) 250 bps – 400 bps 259 bps IUL embedded derivatives $ 935 Discounted cash flow Nonperformance risk (3) 65 bps 65 bps Fixed deferred indexed annuity embedded derivatives $ 49 Discounted cash flow Surrender rate (4) 0.0% – 50.0% 1.2% Nonperformance risk (3) 65 bps 65 bps GMWB and GMAB embedded derivatives $ 2,316 Discounted cash flow Utilization of guaranteed withdrawals (5) (6) 0.0% – 48.0% 10.6% Surrender rate (4) 0.1% – 73.5% 3.8% Market volatility (7) (8) 4.3% – 17.1% 11.0% Nonperformance risk (3) 65 bps 65 bps Structured variable annuity embedded derivatives $ 70 Discounted cash flow Surrender rate (4) 0.8% – 40.0% 0.9% Nonperformance risk (3) 65 bps 65 bps (1) The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. (2) The weighted average for the spread to swap rates for asset backed securities is calculated as the sum of each tranche’s balance multiplied by its spread to swap divided by the aggregate balances of the tranches. (3) The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives. (4) The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula. (5) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. (6) The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals. (7) Market volatility is implied volatility of fund of funds and managed volatility funds. (8) The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit. |
Schedule of carrying value and estimated fair value of financial instruments not reported at fair value | September 30, 2021 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 1,776 $ — $ — $ 1,873 $ 1,873 Policy loans 836 — 836 — 836 Other investments 53 — 35 18 53 Receivables 7,952 — — 8,799 8,799 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 11,767 $ — $ — $ 12,845 $ 12,845 Short-term borrowings 200 — 200 — 200 Long-term debt 500 — 496 — 496 Other liabilities 10 — — 10 10 Separate account liabilities — investment contracts 378 — 378 — 378 December 31, 2020 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 2,574 $ — $ — $ 2,724 $ 2,724 Policy loans 846 — 846 — 846 Other investments 457 — 417 40 457 Receivables 1,430 — — 1,732 1,732 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 9,990 $ — $ — $ 11,686 $ 11,686 Short-term borrowings 200 — 200 — 200 Long-term debt 500 — 509 — 509 Other liabilities 12 — — 11 11 Separate account liabilities — investment contracts 351 — 351 — 351 |
RiverSource Life | |
Fair Value of Assets and Liabilities | |
Schedule of balances of assets and liabilities measured at fair value on a recurring basis | September 30, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets Available-for-Sale securities: Corporate debt securities $ — $ 8,883 $ 514 $ 9,397 Residential mortgage backed securities — 2,146 — 2,146 Commercial mortgage backed securities — 2,528 — 2,528 State and municipal obligations — 1,082 — 1,082 Asset backed securities — 232 318 550 Foreign government bonds and obligations — 85 — 85 U.S. government and agency obligations 1 — — 1 Total Available-for-Sale securities 1 14,956 832 15,789 Cash equivalents 1,637 1,013 — 2,650 Receivables : Fixed deferred indexed annuity ceded embedded derivatives — — 56 56 Other assets: Interest rate derivative contracts 1 1,184 — 1,185 Equity derivative contracts 486 3,937 — 4,423 Foreign exchange derivative contracts — 17 — 17 Credit derivative contracts — 18 — 18 Total other assets 487 5,156 — 5,643 Separate account assets at net asset value (“NAV”) 90,026 (1) Total assets at fair value $ 2,125 $ 21,125 $ 888 $ 114,164 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 4 $ 54 $ 58 IUL embedded derivatives — — 917 917 GMWB and GMAB embedded derivatives — — 1,436 1,436 (2) Structured variable annuity embedded derivatives — — 217 217 Total policyholder account balances, future policy benefits and claims — 4 2,624 2,628 (3) Other liabilities: Interest rate derivative contracts — 476 — 476 Equity derivative contracts 167 3,396 — 3,563 Foreign exchange derivative contracts 2 — — 2 Total other liabilities 169 3,872 — 4,041 Total liabilities at fair value $ 169 $ 3,876 $ 2,624 $ 6,669 December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets Available-for-Sale securities: Corporate debt securities $ — $ 12,107 $ 766 $ 12,873 Residential mortgage backed securities — 2,993 9 3,002 Commercial mortgage backed securities — 4,166 — 4,166 State and municipal obligations — 1,344 — 1,344 Asset backed securities — 817 395 1,212 Foreign government bonds and obligations — 257 — 257 U.S. government and agency obligations 1 — — 1 Total Available-for-Sale securities 1 21,684 1,170 22,855 Cash equivalents 2,419 713 — 3,132 Other assets: Interest rate derivative contracts 1 1,754 — 1,755 Equity derivative contracts 406 3,578 — 3,984 Foreign exchange derivative contracts 1 17 — 18 Credit derivative contracts — 1 — 1 Total other assets 408 5,350 — 5,758 Separate account assets at NAV 87,556 (1) Total assets at fair value $ 2,828 $ 27,747 $ 1,170 $ 119,301 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 3 $ 49 $ 52 IUL embedded derivatives — — 935 935 GMWB and GMAB embedded derivatives — — 2,316 2,316 (4) Structured variable annuity embedded derivatives — — 70 70 Total policyholder account balances, future policy benefits and claims — 3 3,370 3,373 (5) Other liabilities: Interest rate derivative contracts — 734 — 734 Equity derivative contracts 182 3,329 — 3,511 Foreign exchange derivative contracts 2 — — 2 Credit derivative contracts — 1 — 1 Total other liabilities 184 4,064 — 4,248 Total liabilities at fair value $ 184 $ 4,067 $ 3,370 $ 7,621 (1) Amounts are comprised of certain financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy. (2) The fair value of the GMWB and GMAB embedded derivatives included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position (recorded as a contra liability) as of September 30, 2021. (3) The Company’s adjustment for nonperformance risk resulted in a $550 million cumulative decrease to the embedded derivatives as of September 30, 2021. (4) The fair value of the GMWB and GMAB embedded derivatives included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, 2020. (5) The Company’s adjustment for nonperformance risk resulted in a $727 million cumulative decrease to the embedded derivatives as of December 31, 2020. |
Summary of changes in Level 3 assets measured at fair value on a recurring basis | Available-for-Sale Securities Receivables Corporate Debt Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, July 1, 2021 $ 385 $ 336 $ 721 $ — Total gains (losses) included in: Net income (1) — (1) (1) — Other comprehensive income (loss) (3) — (3) — Purchases 9 — 9 — Issues — — — 57 (4) Settlements (44) (20) (64) (1) Transfers into Level 3 168 2 170 — Balance, September 30, 2021 $ 514 $ 318 $ 832 $ 56 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ (4) $ — Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2021 $ 54 $ 928 $ 1,373 $ 214 $ 2,569 Total (gains) losses included in: Net income 1 (2) 14 (2) (69) (3) 17 (3) (37) Issues — — 95 (7) 88 Settlements (1) (25) 37 (7) 4 Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 14 (2) $ (60) (3) $ — $ (46) Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, July 1, 2020 $ 731 $ 56 $ 352 $ 1,139 Total gains (losses) included in: Other comprehensive income (loss) 5 — 32 37 Purchases 7 1 — 8 Settlements (7) — — (7) Transfers into Level 3 — — 14 14 Transfers out of Level 3 — (39) — (39) Balance, September 30, 2020 $ 736 $ 18 $ 398 $ 1,152 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 5 $ — $ 32 $ 37 Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2020 $ 41 $ 882 $ 3,129 $ 9 $ 4,061 Total (gains) losses included in: Net income 3 (2) 50 (2) (296) (3) 3 (3) (240) Issues — 15 93 (3) 105 Settlements — (21) 17 — (4) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 50 (2) $ (283) (3) $ — $ (233) Available-for-Sale Securities Receivables Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, January 1, 2021 $ 766 $ 9 $ 395 $ 1,170 $ — Total gains (losses) included in: Net income (1) — — (1) (1) — Other comprehensive income (loss) (6) — 3 (3) — Purchases 76 — — 76 — Issues — — — — 57 (4) Settlements (73) — (58) (131) (1) Transfers into Level 3 168 — 2 170 — Transfers out of Level 3 (416) (9) (24) (449) — Balance, September 30, 2021 $ 514 $ — $ 318 $ 832 $ 56 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ 3 $ (1) $ — Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2021 $ 49 $ 935 $ 2,316 $ 70 $ 3,370 Total (gains) losses included in: Net income 7 (2) 51 (2) (1,273) (3) 192 (3) (1,023) Issues — 4 274 (22) 256 Settlements (2) (73) 119 (23) 21 Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 51 (2) $ (1,236) (3) $ — $ (1,185) Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, January 1, 2020 $ 735 $ 17 $ 389 $ 1,141 Total gains (losses) included in: Net income (1) — — (1) (1) Other comprehensive income (loss) 13 1 (5) 9 Purchases 13 39 — 52 Settlements (24) — — (24) Transfers into Level 3 — — 14 14 Transfers out of Level 3 — (39) — (39) Balance, September 30, 2020 $ 736 $ 18 $ 398 $ 1,152 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020 $ (1) $ — $ — $ (1) (1) Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 13 $ 1 $ (5) $ 9 Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2020 $ 43 $ 881 $ 763 $ — $ 1,687 Total (gains) losses included in: Net income (2) (2) 53 (2) 1,900 (3) 16 (3) 1,967 Issues 3 53 267 (7) 316 Settlements — (61) 13 — (48) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 53 (2) $ 1,936 (3) $ — $ 1,989 (1) Included in net investment income in the Consolidated Statements of Income. (2) Included in interest credited to fixed accounts in the Consolidated Statements of Income. (3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income. (4) Represents the amount of ceded embedded derivatives associated with fixed deferred annuity products reinsured in the third quarter of 2021. See Note 1 for additional information on the reinsurance transaction. |
Summary of changes in Level 3 liabilities measured at fair value on a recurring basis | Available-for-Sale Securities Receivables Corporate Debt Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, July 1, 2021 $ 385 $ 336 $ 721 $ — Total gains (losses) included in: Net income (1) — (1) (1) — Other comprehensive income (loss) (3) — (3) — Purchases 9 — 9 — Issues — — — 57 (4) Settlements (44) (20) (64) (1) Transfers into Level 3 168 2 170 — Balance, September 30, 2021 $ 514 $ 318 $ 832 $ 56 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ (4) $ — Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2021 $ 54 $ 928 $ 1,373 $ 214 $ 2,569 Total (gains) losses included in: Net income 1 (2) 14 (2) (69) (3) 17 (3) (37) Issues — — 95 (7) 88 Settlements (1) (25) 37 (7) 4 Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 14 (2) $ (60) (3) $ — $ (46) Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, July 1, 2020 $ 731 $ 56 $ 352 $ 1,139 Total gains (losses) included in: Other comprehensive income (loss) 5 — 32 37 Purchases 7 1 — 8 Settlements (7) — — (7) Transfers into Level 3 — — 14 14 Transfers out of Level 3 — (39) — (39) Balance, September 30, 2020 $ 736 $ 18 $ 398 $ 1,152 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 5 $ — $ 32 $ 37 Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2020 $ 41 $ 882 $ 3,129 $ 9 $ 4,061 Total (gains) losses included in: Net income 3 (2) 50 (2) (296) (3) 3 (3) (240) Issues — 15 93 (3) 105 Settlements — (21) 17 — (4) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 50 (2) $ (283) (3) $ — $ (233) Available-for-Sale Securities Receivables Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, January 1, 2021 $ 766 $ 9 $ 395 $ 1,170 $ — Total gains (losses) included in: Net income (1) — — (1) (1) — Other comprehensive income (loss) (6) — 3 (3) — Purchases 76 — — 76 — Issues — — — — 57 (4) Settlements (73) — (58) (131) (1) Transfers into Level 3 168 — 2 170 — Transfers out of Level 3 (416) (9) (24) (449) — Balance, September 30, 2021 $ 514 $ — $ 318 $ 832 $ 56 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ 3 $ (1) $ — Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2021 $ 49 $ 935 $ 2,316 $ 70 $ 3,370 Total (gains) losses included in: Net income 7 (2) 51 (2) (1,273) (3) 192 (3) (1,023) Issues — 4 274 (22) 256 Settlements (2) (73) 119 (23) 21 Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 51 (2) $ (1,236) (3) $ — $ (1,185) Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, January 1, 2020 $ 735 $ 17 $ 389 $ 1,141 Total gains (losses) included in: Net income (1) — — (1) (1) Other comprehensive income (loss) 13 1 (5) 9 Purchases 13 39 — 52 Settlements (24) — — (24) Transfers into Level 3 — — 14 14 Transfers out of Level 3 — (39) — (39) Balance, September 30, 2020 $ 736 $ 18 $ 398 $ 1,152 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020 $ (1) $ — $ — $ (1) (1) Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 13 $ 1 $ (5) $ 9 Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2020 $ 43 $ 881 $ 763 $ — $ 1,687 Total (gains) losses included in: Net income (2) (2) 53 (2) 1,900 (3) 16 (3) 1,967 Issues 3 53 267 (7) 316 Settlements — (61) 13 — (48) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 53 (2) $ 1,936 (3) $ — $ 1,989 (1) Included in net investment income in the Consolidated Statements of Income. (2) Included in interest credited to fixed accounts in the Consolidated Statements of Income. (3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income. (4) Represents the amount of ceded embedded derivatives associated with fixed deferred annuity products reinsured in the third quarter of 2021. See Note 1 for additional information on the reinsurance transaction. |
Offsetting Assets and Liabili_2
Offsetting Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Offsetting [Abstract] | |
Schedule of gross and net information about assets subject to master netting arrangements | September 30, 2021 Gross Amounts of Recognized Assets Gross Amounts Offset in the Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,266 $ — $ 5,266 $ (3,441) $ (1,364) $ (404) $ 57 OTC cleared 25 — 25 (15) — — 10 Exchange-traded 352 — 352 (110) (213) — 29 Total derivatives $ 5,643 $ — $ 5,643 $ (3,566) $ (1,577) $ (404) $ 96 December 31, 2020 Gross Amounts of Recognized Assets Gross Amounts Offset in the Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,391 $ — $ 5,391 $ (3,801) $ (1,243) $ (315) $ 32 OTC cleared 58 — 58 (25) — — 33 Exchange-traded 309 — 309 (90) (165) — 54 Total derivatives $ 5,758 $ — $ 5,758 $ (3,916) $ (1,408) $ (315) $ 119 (1) Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Schedule of gross and net information about liabilities subject to master netting arrangements | September 30, 2021 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 3,916 $ — $ 3,916 $ (3,441) $ (182) $ (293) $ — OTC cleared 15 — 15 (15) — Exchange-traded 110 — 110 (110) — Total derivatives $ 4,041 $ — $ 4,041 $ (3,566) $ (182) $ (293) $ — December 31, 2020 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 4,129 $ — $ 4,129 $ (3,801) $ (1) $ (327) $ — OTC cleared 25 — 25 (25) — — — Exchange-traded 94 — 94 (90) — — 4 Total derivatives $ 4,248 $ — $ 4,248 $ (3,916) $ (1) $ (327) $ 4 (1) Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional value and gross fair value of derivative instruments, including embedded derivatives | September 30, 2021 December 31, 2020 Notional Gross Fair Value Notional Gross Fair Value Assets (1) Liabilities (2)(3) Assets (1) Liabilities (2)(3) (in millions) Derivatives not designated as hedging instruments Interest rate contracts $ 79,344 $ 1,185 $ 476 $ 77,925 $ 1,755 $ 734 Equity contracts 58,509 4,423 3,563 55,993 3,984 3,511 Credit contracts 1,727 18 — 2,269 1 1 Foreign exchange contracts 2,255 17 2 3,124 18 2 Total non-designated hedges 141,835 5,643 4,041 139,311 5,758 4,248 Embedded derivatives GMWB and GMAB (4) N/A — 1,436 N/A — 2,316 IUL N/A — 917 N/A — 935 Fixed deferred indexed annuities and deposit receivables N/A 56 58 N/A — 52 Structured variable annuities N/A — 217 N/A — 70 Total embedded derivatives N/A 56 2,628 N/A — 3,373 Total derivatives $ 141,835 $ 5,699 $ 6,669 $ 139,311 $ 5,758 $ 7,621 N/A Not applicable. (1) The fair value of freestanding derivative assets is included in Other assets and the fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables on the Consolidated Balance Sheets. (2) The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. (3) The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $2.9 billion and $3.7 billion as of September 30, 2021 and December 31, 2020, respectively. See Note 13 for additional information related to master netting arrangements and cash collateral. (4) The fair value of the GMWB and GMAB embedded derivatives as of September 30, 2021 included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2020 included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position. |
Summary of impact of derivatives not designated as hedging instruments, including embedded derivatives | Net Investment Income Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses (in millions) Three Months Ended September 30, 2021 Interest rate contracts $ — $ — $ (171) Equity contracts — — 1 Credit contracts — — 2 Foreign exchange contracts — — — GMWB and GMAB embedded derivatives — — (64) IUL embedded derivatives — 11 — Fixed deferred indexed annuity and deposit receivables embedded derivatives — 1 — Structured variable annuity embedded derivatives — — (17) Total gain (loss) $ — $ 12 $ (249) Nine Months Ended September 30, 2021 Interest rate contracts $ — $ — $ (1,125) Equity contracts 1 55 (613) Credit contracts — — 41 Foreign exchange contracts — — 6 GMWB and GMAB embedded derivatives — — 879 IUL embedded derivatives — 22 — Fixed deferred indexed annuity and deposit receivables embedded derivatives — (7) — Structured variable annuity embedded derivatives — — (192) Total gain (loss) $ 1 $ 70 $ (1,004) Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses (in millions) Three Months Ended September 30, 2020 Interest rate contracts $ — $ (371) Equity contracts 42 (468) Credit contracts — (12) Foreign exchange contracts — (23) GMWB and GMAB embedded derivatives — 186 IUL embedded derivatives (29) — Fixed deferred indexed annuity embedded derivatives (3) — Structured variable annuity embedded derivatives — (3) Total gain (loss) $ 10 $ (691) Nine Months Ended September 30, 2020 Interest rate contracts $ — $ 2,204 Equity contracts (7) 58 Credit contracts — (91) Foreign exchange contracts — 26 GMWB and GMAB embedded derivatives — (2,180) IUL embedded derivatives 8 — Fixed deferred indexed annuity embedded derivatives 2 — Structured variable annuity embedded derivatives — (16) Total gain (loss) $ 3 $ 1 |
Summary of payments to make and receive for options and swaptions | Premiums Payable Premiums Receivable (in millions) 2021 (1) $ 60 $ 45 2022 204 205 2023 51 43 2024 138 25 2025 125 22 2026 - 2028 262 88 Total $ 840 $ 428 (1) 2021 amounts represent the amounts payable and receivable for the period from October 1, 2021 to December 31, 2021. |
Shareholder's Equity (Tables)
Shareholder's Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of amounts related to each component of OCI | Three Months Ended September 30, 2021 2020 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ (57) $ 14 $ (43) $ 208 $ (44) $ 164 Reclassification of net (gains) losses on securities included in net income (2) (498) 104 (394) (2) — (2) Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables 147 (31) 116 (94) 20 (74) Net unrealized gains (losses) on securities (408) 87 (321) 112 (24) 88 Total other comprehensive income (loss) $ (408) $ 87 $ (321) $ 112 $ (24) $ 88 Nine Months Ended September 30, 2021 2020 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ (396) $ 86 $ (310) $ 500 $ (107) $ 393 Reclassification of net (gains) losses on securities included in net income (2) (548) 115 (433) 3 (1) 2 Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables 284 (60) 224 (223) 47 (176) Net unrealized gains (losses) on securities (660) 141 (519) 280 (61) 219 Total other comprehensive income (loss) $ (660) $ 141 $ (519) $ 280 $ (61) $ 219 (1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period. (2) Reclassification amounts are recorded in net realized investment gains (losses). |
Schedule of changes in the balances of each component of AOCI | Net Unrealized Gains (Losses) on Securities Other Total (in millions) Balance, July 1, 2021 $ 723 $ (1) $ 722 OCI before reclassifications 73 — 73 Amounts reclassified from AOCI (394) — (394) Total OCI (321) — (321) Balance, September 30, 2021 $ 402 $ (1) $ 401 Balance, January 1, 2021 $ 921 $ (1) $ 920 OCI before reclassifications (86) — (86) Amounts reclassified from AOCI (433) — (433) Total OCI (519) — (519) Balance, September 30, 2021 $ 402 $ (1) $ 401 Net Unrealized Gains (Losses) on Securities Other Total (in millions) Balance, July 1, 2020 $ 706 $ (1) $ 705 OCI before reclassifications 90 — 90 Amounts reclassified from AOCI (2) — (2) Total OCI 88 — 88 Balance, September 30, 2020 $ 794 $ (1) $ 793 Balance, January 1, 2020 $ 575 $ (1) $ 574 OCI before reclassifications 217 — 217 Amounts reclassified from AOCI 2 — 2 Total OCI 219 — 219 Balance, September 30, 2020 $ 794 $ (1) $ 793 |
Basis of Presentation - Subsidi
Basis of Presentation - Subsidiaries (Details) | Sep. 30, 2021item |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of wholly owned subsidiaries | 1 |
Basis of Presentation - Reinsur
Basis of Presentation - Reinsurance Transaction (Details) - USD ($) $ in Millions | Jul. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Reinsurance transaction | |||||
Net realized gain | $ 533 | $ 1 | $ 589 | $ (16) | |
RiverSource Life Insurance Company | |||||
Reinsurance transaction | |||||
Consideration transferred in reinsurance transaction | 7,800 | ||||
Net realized gain | $ 532 | ||||
RiverSource Life Insurance Company | Fixed deferred and immediate annuity policies | |||||
Reinsurance transaction | |||||
Policies reinsured | $ 7,000 |
Revenue from Contract with Cust
Revenue from Contract with Customers - Disaggregated Revenue and Receivables (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 | ||
Revenues | ||||||
Revenue from contracts with customers | $ 172 | $ 152 | $ 503 | $ 445 | ||
Revenue from other sources | [1] | 223 | 800 | 1,956 | 2,328 | |
Total revenues | 395 | 952 | 2,459 | 2,773 | ||
Receivables related to revenues from contracts with customers | 62 | 62 | $ 57 | |||
Policy and contract charges | ||||||
Revenues | ||||||
Revenue from contracts with customers | 54 | 47 | 156 | 137 | ||
Policy and contract charges | Affiliated | ||||||
Revenues | ||||||
Revenue from contracts with customers | 50 | 44 | 144 | 127 | ||
Policy and contract charges | Unaffiliated | ||||||
Revenues | ||||||
Revenue from contracts with customers | 4 | 3 | 12 | 10 | ||
Total Other revenues | ||||||
Revenues | ||||||
Revenue from contracts with customers | 118 | 105 | 347 | 308 | ||
Other revenues: Administrative fees | ||||||
Revenues | ||||||
Revenue from contracts with customers | 18 | 15 | 52 | 46 | ||
Other revenues: Administrative fees | Affiliated | ||||||
Revenues | ||||||
Revenue from contracts with customers | 13 | 12 | 37 | 33 | ||
Other revenues: Administrative fees | Unaffiliated | ||||||
Revenues | ||||||
Revenue from contracts with customers | 5 | 3 | 15 | 13 | ||
Other revenues: Other fees | ||||||
Revenues | ||||||
Revenue from contracts with customers | 100 | 90 | 295 | 262 | ||
Other revenues: Other fees | Affiliated | ||||||
Revenues | ||||||
Revenue from contracts with customers | 99 | 89 | 291 | 259 | ||
Other revenues: Other fees | Unaffiliated | ||||||
Revenues | ||||||
Revenue from contracts with customers | $ 1 | $ 1 | $ 4 | $ 3 | ||
[1] | Amounts primarily consist of revenue associated with insurance and annuity products or financial instruments. |
Variable Interest Entities - In
Variable Interest Entities - Investment Entities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
VIEs, not primary beneficiary | ||
Variable interest entities | ||
Obligation to provide financial or other support to VIEs | $ 0 | |
VIEs, not primary beneficiary | Affordable Housing Partnerships and Other Real Estate Partnerships | ||
Variable interest entities | ||
Maximum loss exposure | 151 | $ 200 |
Other investments | 151 | 200 |
Liability related to original purchase commitments not yet remitted | 9 | 9 |
Consolidated investment entities | Unfunded commitments | ||
Variable interest entities | ||
Loans | $ 27 | $ 13 |
Variable Interest Entities - Fa
Variable Interest Entities - Fair Value of Assets and Liabilities (Details) - Consolidated investment entities - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Liabilities | |||
Debt | [1] | $ 2,163 | $ 1,913 |
Recurring basis | |||
Assets | |||
Investments | 2,170 | 1,918 | |
Receivables | 18 | 16 | |
Other assets | 2 | 2 | |
Total assets at fair value | 2,190 | 1,936 | |
Liabilities | |||
Debt | [1] | 2,163 | 1,913 |
Other liabilities | 71 | 69 | |
Total liabilities at fair value | 2,234 | 1,982 | |
Recurring basis | Corporate debt securities | |||
Assets | |||
Investments | 8 | ||
Recurring basis | Common stocks | |||
Assets | |||
Investments | 2 | 1 | |
Recurring basis | Syndicated loans | |||
Assets | |||
Investments | 2,168 | 1,909 | |
Recurring basis | Level 2 | |||
Assets | |||
Investments | 2,125 | 1,826 | |
Receivables | 18 | 16 | |
Other assets | 2 | 0 | |
Total assets at fair value | 2,145 | 1,842 | |
Liabilities | |||
Debt | [1] | 2,163 | 1,913 |
Other liabilities | 71 | 69 | |
Total liabilities at fair value | 2,234 | 1,982 | |
Recurring basis | Level 2 | Corporate debt securities | |||
Assets | |||
Investments | 8 | ||
Recurring basis | Level 2 | Common stocks | |||
Assets | |||
Investments | 2 | 1 | |
Recurring basis | Level 2 | Syndicated loans | |||
Assets | |||
Investments | 2,123 | 1,817 | |
Recurring basis | Level 3 | |||
Assets | |||
Investments | 45 | 92 | |
Other assets | 2 | ||
Total assets at fair value | 45 | 94 | |
Recurring basis | Level 3 | Syndicated loans | |||
Assets | |||
Investments | 45 | 92 | |
CLOs | |||
Liabilities | |||
Debt | $ 2,200 | $ 2,000 | |
[1] | The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
Variable Interest Entities - Ch
Variable Interest Entities - Changes in Level 3 Assets (Details) - Consolidated investment entities - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Syndicated loans | ||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | ||
Balance, beginning | $ 112 | $ 92 |
Total gains (losses) included in net income | 2 | |
Purchases | 7 | (88) |
Sales | (4) | (38) |
Settlements | (10) | (49) |
Transfers into level 3 | 5 | 90 |
Transfers out of Level 3 | (47) | (122) |
Deconsolidation of consolidated investment entities | (18) | (18) |
Balance, ending | 45 | 45 |
Other assets | ||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | ||
Balance, beginning | 2 | |
Transfers out of Level 3 | (2) | |
Balance, ending | $ 0 | $ 0 |
Variable Interest Entities - _2
Variable Interest Entities - Fair Value Option (Details) - Consolidated investment entities - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | ||
Loans | ||||
Unpaid principal balance | $ 2,223 | $ 1,990 | ||
Excess unpaid principal over fair value | (55) | (81) | ||
Fair Value | 2,168 | 1,909 | ||
Fair value of loans more than 90 days past due | 2 | 5 | ||
Fair value of loans in nonaccrual status | 5 | 19 | ||
Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both | 5 | 24 | ||
Debt | ||||
Unpaid principal balance | 2,298 | 2,069 | ||
Excess unpaid principal over fair value | (135) | (156) | ||
Carrying value and estimated fair value | [1] | 2,163 | 1,913 | |
Debt issued | $ 817 | |||
CLOs | ||||
Debt | ||||
Carrying value and estimated fair value | $ 2,200 | $ 2,000 | ||
[1] | The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
Variable Interest Entities - De
Variable Interest Entities - Debt and Stated Interest Rates (Details) - Consolidated investment entities - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Debt | |||
Debt | [1] | $ 2,163 | $ 1,913 |
Weighted Average Interest Rate | 1.70% | 2.10% | |
Minimum | |||
Debt | |||
Interest rates | 0.00% | ||
Maximum | |||
Debt | |||
Interest rates | 8.80% | ||
[1] | The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
Investments - Available-for-Sal
Investments - Available-for-Sale Securities by Type (Details) - RiverSource Life - USD ($) $ in Millions | 1 Months Ended | ||||||
Mar. 31, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Investments | |||||||
Amortized Cost | $ 14,129 | $ 20,260 | |||||
Gross Unrealized Gains | 1,707 | 2,615 | |||||
Gross Unrealized Losses | (46) | (10) | |||||
Allowance for Credit Losses | (1) | $ 0 | (10) | $ (13) | $ (13) | $ 0 | |
Fair Value | 15,789 | 22,855 | |||||
Investments purchased from affiliate | $ 368 | ||||||
Accrued interest excluded from amortized cost basis | 125 | 158 | |||||
Fair value of investment securities pledged to meet contractual obligations | 2,500 | 2,900 | |||||
Fair value of securities pledged that may be sold, pledged or rehypothecated by the counterpart | 403 | 454 | |||||
Corporate debt securities | |||||||
Investments | |||||||
Amortized Cost | 8,135 | 10,982 | |||||
Gross Unrealized Gains | 1,293 | 1,903 | |||||
Gross Unrealized Losses | (31) | (2) | |||||
Allowance for Credit Losses | 0 | 0 | (10) | $ (13) | $ (13) | $ 0 | |
Fair Value | 9,397 | 12,873 | |||||
Residential mortgage backed securities | |||||||
Investments | |||||||
Amortized Cost | 2,107 | 2,888 | |||||
Gross Unrealized Gains | 46 | 115 | |||||
Gross Unrealized Losses | (7) | (1) | |||||
Fair Value | 2,146 | 3,002 | |||||
Commercial mortgage backed securities | |||||||
Investments | |||||||
Amortized Cost | 2,448 | 3,935 | |||||
Gross Unrealized Gains | 86 | 235 | |||||
Gross Unrealized Losses | (6) | (4) | |||||
Fair Value | 2,528 | 4,166 | |||||
State and municipal obligations | |||||||
Investments | |||||||
Amortized Cost | 835 | 1,050 | |||||
Gross Unrealized Gains | 249 | 295 | |||||
Gross Unrealized Losses | (1) | (1) | |||||
Allowance for Credit Losses | (1) | $ 0 | 0 | ||||
Fair Value | 1,082 | 1,344 | |||||
Asset backed securities | |||||||
Investments | |||||||
Amortized Cost | 523 | 1,168 | |||||
Gross Unrealized Gains | 27 | 45 | |||||
Gross Unrealized Losses | (1) | ||||||
Fair Value | 550 | 1,212 | |||||
Foreign government bonds and obligations | |||||||
Investments | |||||||
Amortized Cost | 80 | 236 | |||||
Gross Unrealized Gains | 6 | 22 | |||||
Gross Unrealized Losses | (1) | (1) | |||||
Fair Value | 85 | 257 | |||||
U.S. government and agency obligations | |||||||
Investments | |||||||
Amortized Cost | 1 | 1 | |||||
Fair Value | $ 1 | $ 1 |
Investments - Summary of Fixed
Investments - Summary of Fixed Maturity Securities by Rating (Details) - RiverSource Life - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Investments | ||
Fixed maturity securities rated internally | $ 352 | $ 553 |
Amortized Cost | 14,129 | 20,260 |
Fair Value | 15,789 | 22,855 |
Ameriprise Advisor Financing, LLC ("AAF") | ||
Investments | ||
Holdings of single issuer greater than 10% of equity | 317 | 372 |
Kraft Heinz Co. | ||
Investments | ||
Holdings of single issuer greater than 10% of equity | 246 | |
Duke Energy Corp | ||
Investments | ||
Holdings of single issuer greater than 10% of equity | 227 | |
Suncor Energy Inc. | ||
Investments | ||
Holdings of single issuer greater than 10% of equity | 213 | |
AT&T Inc. | ||
Investments | ||
Holdings of single issuer greater than 10% of equity | 212 | |
AAA | ||
Investments | ||
Amortized Cost | 4,723 | 7,323 |
Fair Value | 4,858 | 7,698 |
AA | ||
Investments | ||
Amortized Cost | 785 | 1,036 |
Fair Value | 967 | 1,266 |
A | ||
Investments | ||
Amortized Cost | 1,589 | 2,663 |
Fair Value | 1,950 | 3,235 |
BBB | ||
Investments | ||
Amortized Cost | 6,074 | 7,770 |
Fair Value | 6,905 | 9,026 |
Below investment grade | ||
Investments | ||
Amortized Cost | 958 | 1,468 |
Fair Value | 1,109 | 1,630 |
Fixed maturities | ||
Investments | ||
Amortized Cost | $ 14,129 | $ 20,260 |
Total Investments | Credit concentration risk | Fixed maturities | ||
Investments | ||
Percentage of total | 85.00% | 85.00% |
Fixed maturity securities | Credit concentration risk | ||
Investments | ||
Percentage of total | 100.00% | 100.00% |
Fixed maturity securities | Credit concentration risk | AAA | ||
Investments | ||
Percentage of total | 31.00% | 34.00% |
Fixed maturity securities | Credit concentration risk | AA | ||
Investments | ||
Percentage of total | 6.00% | 6.00% |
Fixed maturity securities | Credit concentration risk | A | ||
Investments | ||
Percentage of total | 12.00% | 14.00% |
Fixed maturity securities | Credit concentration risk | BBB | ||
Investments | ||
Percentage of total | 44.00% | 39.00% |
Fixed maturity securities | Credit concentration risk | Below investment grade | ||
Investments | ||
Percentage of total | 7.00% | 7.00% |
Fixed maturity securities | Credit concentration risk | GNMA, FNMA and FHLMC mortgage backed securities. | AAA | ||
Investments | ||
Percentage of total | 42.00% | 37.00% |
Investments - Available-for Sal
Investments - Available-for Sale Securities in Continuous Unrealized Loss Position (Details) - RiverSource Life $ in Millions | Sep. 30, 2021USD ($)item | Dec. 31, 2020USD ($)item |
Number of Securities | ||
Less than 12 months | item | 164 | 56 |
12 months or more | item | 16 | 25 |
Total | item | 180 | 81 |
Fair Value | ||
Less than 12 months | $ 2,747 | $ 526 |
12 months or more | 51 | 134 |
Total | 2,798 | 660 |
Unrealized Losses | ||
Less than 12 months | (42) | (5) |
12 months or more | (4) | (5) |
Total | $ (46) | $ (10) |
Available -for-Sale Securities with gross unrealized losses considered investment grade (as a percent) | 88.00% | 83.00% |
Corporate debt securities | ||
Number of Securities | ||
Less than 12 months | item | 79 | 26 |
12 months or more | item | 5 | 1 |
Total | item | 84 | 27 |
Fair Value | ||
Less than 12 months | $ 1,454 | $ 228 |
12 months or more | 23 | 12 |
Total | 1,477 | 240 |
Unrealized Losses | ||
Less than 12 months | (29) | (1) |
12 months or more | (2) | (1) |
Total | $ (31) | $ (2) |
Residential mortgage backed securities | ||
Number of Securities | ||
Less than 12 months | item | 24 | 11 |
12 months or more | item | 2 | 7 |
Total | item | 26 | 18 |
Fair Value | ||
Less than 12 months | $ 688 | $ 47 |
12 months or more | 2 | 14 |
Total | 690 | 61 |
Unrealized Losses | ||
Less than 12 months | (7) | (1) |
Total | $ (7) | $ (1) |
Commercial mortgage backed securities | ||
Number of Securities | ||
Less than 12 months | item | 38 | 12 |
12 months or more | item | 3 | 7 |
Total | item | 41 | 19 |
Fair Value | ||
Less than 12 months | $ 550 | $ 179 |
12 months or more | 22 | 60 |
Total | 572 | 239 |
Unrealized Losses | ||
Less than 12 months | (5) | (3) |
12 months or more | (1) | (1) |
Total | $ (6) | $ (4) |
State and municipal obligations | ||
Number of Securities | ||
Less than 12 months | item | 18 | 2 |
12 months or more | item | 0 | 1 |
Total | item | 18 | 3 |
Fair Value | ||
Less than 12 months | $ 49 | $ 4 |
12 months or more | 0 | 4 |
Total | 49 | 8 |
Unrealized Losses | ||
Less than 12 months | (1) | |
12 months or more | 0 | (1) |
Total | $ (1) | $ (1) |
Asset backed securities | ||
Number of Securities | ||
Less than 12 months | item | 4 | |
12 months or more | item | 2 | |
Total | item | 6 | |
Fair Value | ||
Less than 12 months | $ 65 | |
12 months or more | 36 | |
Total | 101 | |
Unrealized Losses | ||
12 months or more | (1) | |
Total | $ (1) | |
Foreign government bonds and obligations | ||
Number of Securities | ||
Less than 12 months | item | 5 | 1 |
12 months or more | item | 6 | 7 |
Total | item | 11 | 8 |
Fair Value | ||
Less than 12 months | $ 6 | $ 3 |
12 months or more | 4 | 8 |
Total | 10 | 11 |
Unrealized Losses | ||
12 months or more | (1) | (1) |
Total | $ (1) | $ (1) |
Investments - Rollforward of Al
Investments - Rollforward of Allowance for Credit Losses (Details) - RiverSource Life - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Rollforward of available-for-Sale securities allowance for credit losses | ||||
Beginning balance | $ 0 | $ 13 | $ 10 | $ 0 |
Additions for which credit losses were not previously recorded | 1 | 0 | 1 | 13 |
Charge-offs | (10) | |||
Ending balance | 1 | 13 | 1 | 13 |
Corporate debt securities | ||||
Rollforward of available-for-Sale securities allowance for credit losses | ||||
Beginning balance | 0 | 13 | 10 | 0 |
Additions for which credit losses were not previously recorded | 0 | 0 | 13 | |
Charge-offs | (10) | |||
Ending balance | 0 | $ 13 | 0 | $ 13 |
State and municipal obligations | ||||
Rollforward of available-for-Sale securities allowance for credit losses | ||||
Beginning balance | 0 | 0 | ||
Additions for which credit losses were not previously recorded | 1 | 1 | ||
Ending balance | $ 1 | $ 1 |
Investments - Net Realized Gain
Investments - Net Realized Gains and Losses on Available-for-Sale Securities (Details) - RiverSource Life - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments | ||||
Gross realized investment gains | $ 505 | $ 2 | $ 568 | $ 12 |
Gross realized investment losses | (6) | (6) | (2) | |
Credit Losses | (1) | (1) | (13) | |
Other impairments | (13) | |||
Total | $ 498 | $ 2 | $ 548 | $ (3) |
Investments - Available-for-S_2
Investments - Available-for-Sale Securities by Contractual Maturity (Details) - RiverSource Life - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Due within one year | $ 411 | |
Due after one year through five years | 1,955 | |
Due after five years through 10 years | 3,049 | |
Due after 10 years | 3,636 | |
Total having single maturity dates | 9,051 | |
Amortized Cost | 14,129 | $ 20,260 |
Fair Value | ||
Due within one year | 417 | |
Due after one year through five years | 2,090 | |
Due after five years through 10 years | 3,166 | |
Due after 10 years | 4,892 | |
Total having single maturity dates | 10,565 | |
Fair Value | 15,789 | 22,855 |
Residential mortgage backed securities | ||
Amortized Cost | ||
Without single maturity dates | 2,107 | |
Amortized Cost | 2,107 | 2,888 |
Fair Value | ||
Without single maturity dates | 2,146 | |
Fair Value | 2,146 | 3,002 |
Commercial mortgage backed securities | ||
Amortized Cost | ||
Without single maturity dates | 2,448 | |
Amortized Cost | 2,448 | 3,935 |
Fair Value | ||
Without single maturity dates | 2,528 | |
Fair Value | 2,528 | 4,166 |
Asset backed securities | ||
Amortized Cost | ||
Without single maturity dates | 523 | |
Amortized Cost | 523 | 1,168 |
Fair Value | ||
Without single maturity dates | 550 | |
Fair Value | $ 550 | $ 1,212 |
Investments - Summary of Net In
Investments - Summary of 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 | ||||
Fixed maturities | $ 137 | $ 191 | $ 511 | $ 585 |
Mortgage loans | 21 | 29 | 82 | 86 |
Other investments | 40 | (3) | 86 | (9) |
Gross investment income | 198 | 217 | 679 | 662 |
Less: investment expenses | 5 | 5 | 15 | 15 |
Total | $ 193 | $ 212 | $ 664 | $ 647 |
Financing Receivables - Allowan
Financing Receivables - Allowance for Credit Losses - (Details) - Commercial Loans - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | ||
Rollforward of allowance for credit losses | ||||
Beginning balance | $ 35 | $ 20 | [1] | |
Provisions | (21) | 13 | ||
Ending balance | 14 | 36 | ||
Financing Receivables | ||||
Accrued interest on loans | $ 10 | $ 14 | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Rollforward of allowance for credit losses | ||||
Beginning balance | 3 | |||
Cumulative Effect, Period of Adoption, Adjusted Balance | ||||
Rollforward of allowance for credit losses | ||||
Beginning balance | $ 23 | |||
[1] | Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Financing Receivables - Purchas
Financing Receivables - Purchases, Sales and Nonperforming (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 | |
Nonperforming | |||||
Financing Receivables | |||||
Loans | $ 0 | $ 0 | $ 7 | ||
Commercial Loans | Commercial mortgage loans | |||||
Financing Receivables | |||||
Loans sold | 746 | 746 | |||
Loans | 1,790 | 1,790 | 2,602 | ||
Commercial Loans | Syndicated loans | |||||
Financing Receivables | |||||
Loans purchased | 0 | $ 84 | 26 | $ 134 | |
Loans sold | 350 | $ 2 | 354 | $ 9 | |
Loans | $ 35 | $ 35 | $ 446 |
Financing Receivables - General
Financing Receivables - General Credit Quality Information - Commercial Mortgage Loans (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
Commercial Loans | Commercial mortgage loans | ||
Financing Receivables | ||
Loans | $ 1,790 | $ 2,602 |
Commercial Loans | Commercial mortgage loans | Past due | ||
Financing Receivables | ||
Loans | $ 0 | $ 0 |
Commercial Loans | Commercial mortgage loans | COVID 19 loan modifications | ||
Financing Receivables | ||
Total number of loan modifications | loan | 88 | |
Total unpaid principal balance of loan modifications | $ 360 | |
Number of modified loans remaining | loan | 0 | |
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | ||
Financing Receivables | ||
Percentage of total | 100.00% | 100.00% |
Total commercial mortgage loans | Credit concentration risk | Highest credit risk rating | Maximum | ||
Financing Receivables | ||
Percentage of total | 1.00% | 1.00% |
Financing Receivables - Credit
Financing Receivables - Credit Quality - Commercial Mortgage Loans by LTV Ratio and Year of Origination (Details) - Commercial Loans - Commercial mortgage loans - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | $ 131 | $ 127 |
Originated in Fiscal Year before Latest Fiscal Year | 116 | 240 |
Originated Two Years before Latest Fiscal Year | 218 | 181 |
Originated Three Years before Latest Fiscal Year | 104 | 267 |
Originated Four Years before Latest Fiscal Year | 156 | 222 |
Originated Five or More Years before Latest Fiscal Year | 1,065 | 1,565 |
Total amortized cost basis | 1,790 | 2,602 |
Greater than 100 Percent | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated Two Years before Latest Fiscal Year | 19 | 2 |
Originated Three Years before Latest Fiscal Year | 11 | |
Originated Five or More Years before Latest Fiscal Year | 30 | 10 |
Total amortized cost basis | 60 | 12 |
80 to 100 Percent | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 9 | 15 |
Originated in Fiscal Year before Latest Fiscal Year | 14 | 16 |
Originated Two Years before Latest Fiscal Year | 10 | 9 |
Originated Three Years before Latest Fiscal Year | 2 | 3 |
Originated Four Years before Latest Fiscal Year | 7 | |
Originated Five or More Years before Latest Fiscal Year | 37 | 15 |
Total amortized cost basis | 72 | 65 |
60 to 80 Percent | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 93 | 85 |
Originated in Fiscal Year before Latest Fiscal Year | 64 | 152 |
Originated Two Years before Latest Fiscal Year | 66 | 27 |
Originated Three Years before Latest Fiscal Year | 25 | 29 |
Originated Four Years before Latest Fiscal Year | 59 | 46 |
Originated Five or More Years before Latest Fiscal Year | 128 | 141 |
Total amortized cost basis | 435 | 480 |
40 to 60 Percent | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 23 | 20 |
Originated in Fiscal Year before Latest Fiscal Year | 31 | 50 |
Originated Two Years before Latest Fiscal Year | 84 | 74 |
Originated Three Years before Latest Fiscal Year | 66 | 147 |
Originated Four Years before Latest Fiscal Year | 52 | 111 |
Originated Five or More Years before Latest Fiscal Year | 412 | 543 |
Total amortized cost basis | 668 | 945 |
Less than 40 Percent | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 6 | 7 |
Originated in Fiscal Year before Latest Fiscal Year | 7 | 22 |
Originated Two Years before Latest Fiscal Year | 39 | 69 |
Originated Three Years before Latest Fiscal Year | 88 | |
Originated Four Years before Latest Fiscal Year | 45 | 58 |
Originated Five or More Years before Latest Fiscal Year | 458 | 856 |
Total amortized cost basis | $ 555 | $ 1,100 |
Financing Receivables - Credi_2
Financing Receivables - Credit Quality - Commercial Mortgage Loans by Region (Details) - Commercial Loans - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | [1] | |
Financing receivables - credit quality information | |||||
Less: allowance for credit losses | $ 14 | $ 35 | $ 36 | $ 20 | |
Commercial mortgage loans | |||||
Financing receivables - credit quality information | |||||
Loans | 1,790 | 2,602 | |||
Less: allowance for credit losses | 14 | 28 | |||
Total loans | 1,776 | 2,574 | |||
Commercial mortgage loans | East North Central | |||||
Financing receivables - credit quality information | |||||
Loans | 179 | 250 | |||
Commercial mortgage loans | East South Central | |||||
Financing receivables - credit quality information | |||||
Loans | 65 | 111 | |||
Commercial mortgage loans | Middle Atlantic | |||||
Financing receivables - credit quality information | |||||
Loans | 109 | 165 | |||
Commercial mortgage loans | Mountain | |||||
Financing receivables - credit quality information | |||||
Loans | 119 | 234 | |||
Commercial mortgage loans | New England | |||||
Financing receivables - credit quality information | |||||
Loans | 23 | 47 | |||
Commercial mortgage loans | Pacific | |||||
Financing receivables - credit quality information | |||||
Loans | 571 | 784 | |||
Commercial mortgage loans | South Atlantic | |||||
Financing receivables - credit quality information | |||||
Loans | 476 | 663 | |||
Commercial mortgage loans | West North Central | |||||
Financing receivables - credit quality information | |||||
Loans | 134 | 192 | |||
Commercial mortgage loans | West South Central | |||||
Financing receivables - credit quality information | |||||
Loans | $ 114 | $ 156 | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 100.00% | 100.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | East North Central | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 10.00% | 10.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | East South Central | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 4.00% | 4.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | Middle Atlantic | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 6.00% | 6.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | Mountain | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 7.00% | 10.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | New England | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 1.00% | 2.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | Pacific | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 32.00% | 30.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | South Atlantic | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 27.00% | 25.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | West North Central | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 7.00% | 7.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | West South Central | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 6.00% | 6.00% | |||
[1] | Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Financing Receivables - Credi_3
Financing Receivables - Credit Quality - Commercial Mortgage Loans by Property Type (Details) - Commercial Loans - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | [1] | |
Financing receivables - credit quality information | |||||
Less: allowance for credit losses | $ 14 | $ 35 | $ 36 | $ 20 | |
Commercial mortgage loans | |||||
Financing receivables - credit quality information | |||||
Loans | 1,790 | 2,602 | |||
Less: allowance for credit losses | 14 | 28 | |||
Total loans | 1,776 | 2,574 | |||
Commercial mortgage loans | Apartments | |||||
Financing receivables - credit quality information | |||||
Loans | 468 | 680 | |||
Commercial mortgage loans | Hotel | |||||
Financing receivables - credit quality information | |||||
Loans | 15 | 49 | |||
Commercial mortgage loans | Industrial | |||||
Financing receivables - credit quality information | |||||
Loans | 280 | 401 | |||
Commercial mortgage loans | Mixed use | |||||
Financing receivables - credit quality information | |||||
Loans | 57 | 76 | |||
Commercial mortgage loans | Office | |||||
Financing receivables - credit quality information | |||||
Loans | 258 | 358 | |||
Commercial mortgage loans | Retail | |||||
Financing receivables - credit quality information | |||||
Loans | 597 | 843 | |||
Commercial mortgage loans | Other | |||||
Financing receivables - credit quality information | |||||
Loans | $ 115 | $ 195 | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 100.00% | 100.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | Apartments | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 26.00% | 26.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | Hotel | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 1.00% | 2.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | Industrial | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 16.00% | 16.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | Mixed use | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 3.00% | 3.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | Office | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 15.00% | 14.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | Retail | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 33.00% | 32.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial mortgage loans | Other | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 6.00% | 7.00% | |||
[1] | Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Financing Receivables - Credi_4
Financing Receivables - Credit Quality Information - Syndicated Loans (Details) - Commercial Loans - Syndicated loans - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Financing receivables - credit quality information | ||
Recorded investment | $ 35 | $ 446 |
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 16 | 37 |
Originated in Fiscal Year before Latest Fiscal Year | 74 | |
Originated Two Years before Latest Fiscal Year | 4 | 89 |
Originated Three Years before Latest Fiscal Year | 1 | 120 |
Originated Four Years before Latest Fiscal Year | 8 | 37 |
Originated Five or More Years before Latest Fiscal Year | 6 | 89 |
Total amortized cost basis | 35 | 446 |
Risk 5 | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated Five or More Years before Latest Fiscal Year | 2 | |
Total amortized cost basis | 2 | |
Risk 4 | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated Two Years before Latest Fiscal Year | 3 | |
Originated Three Years before Latest Fiscal Year | 7 | |
Originated Five or More Years before Latest Fiscal Year | 7 | |
Total amortized cost basis | 17 | |
Risk 3 | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Fiscal Year before Latest Fiscal Year | 7 | |
Originated Two Years before Latest Fiscal Year | 6 | |
Originated Three Years before Latest Fiscal Year | 19 | |
Originated Four Years before Latest Fiscal Year | 10 | |
Originated Five or More Years before Latest Fiscal Year | 1 | 18 |
Total amortized cost basis | 1 | 60 |
Risk 2 | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 12 | 23 |
Originated in Fiscal Year before Latest Fiscal Year | 42 | |
Originated Two Years before Latest Fiscal Year | 2 | 45 |
Originated Three Years before Latest Fiscal Year | 1 | 51 |
Originated Four Years before Latest Fiscal Year | 4 | 10 |
Originated Five or More Years before Latest Fiscal Year | 1 | 32 |
Total amortized cost basis | 20 | 203 |
Risk 1 | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 4 | 14 |
Originated in Fiscal Year before Latest Fiscal Year | 25 | |
Originated Two Years before Latest Fiscal Year | 2 | 35 |
Originated Three Years before Latest Fiscal Year | 43 | |
Originated Four Years before Latest Fiscal Year | 4 | 17 |
Originated Five or More Years before Latest Fiscal Year | 4 | 30 |
Total amortized cost basis | 14 | 164 |
Past due | ||
Financing receivables - credit quality information | ||
Recorded investment | $ 0 | $ 2 |
Financing Receivables -Credit Q
Financing Receivables -Credit Quality Information - Policy Loans and Deposit Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Receivable | ||
Reinsurance deposit receivable | $ 8,000 | $ 1,400 |
Deposit Receivable | ||
Receivable | ||
Allowance for credit losses | 0 | 0 |
Consumer | Policy Loans | ||
Financing Receivables | ||
Allowance for credit losses | $ 0 | $ 0 |
Financing Receivables - Trouble
Financing Receivables - Troubled Debt Restructurings (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)loan | Sep. 30, 2020loan | Sep. 30, 2021USD ($)loan | Sep. 30, 2020loan | |
Troubled Debt Restructurings | ||||
Loans accounted for as troubled debt restructuring | loan | 0 | 0 | 0 | 0 |
Commitments to lend additional funds to borrowers whose loans have been restructured | $ | $ 0 | $ 0 |
Reinsurance (Details)
Reinsurance (Details) $ in Billions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | |
Fixed annuity life contingent liabilities | ||
Reinsurance transaction | ||
Ceded premiums | $ 1.2 | $ 1.2 |
Reinsurance recoverables | $ 1.1 | $ 1.1 |
RiverSource Life Insurance Company | Fixed annuity life contingent liabilities | ||
Reinsurance transaction | ||
Percentage of risk reinsured | 100.00% |
Deferred Acquisition Costs an_3
Deferred Acquisition Costs and Deferred Sales Inducement Costs (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Balances of and changes in DAC | ||
Balance at the beginning of the period | $ 2,508 | $ 2,673 |
Capitalization of acquisition costs | 196 | 155 |
Amortization | (129) | (238) |
Amortization, impact of valuation assumptions review | 60 | (100) |
Impact of change in net unrealized (gains) losses on securities | 75 | (61) |
Balance at the end of the period | 2,710 | 2,429 |
Balances of and changes in DSIC | ||
Balance at the beginning of the period | 187 | 216 |
Deferred Sale Inducement Cost, Capitalization | 1 | 1 |
Amortization | (15) | (19) |
Amortization, impact of valuation assumptions review | 2 | (16) |
Impact of change in net unrealized (gains) losses on securities | 11 | (1) |
Balance at the end of the period | $ 186 | $ 181 |
Policyholder Account Balances_3
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities - Balances by product (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | $ 22,940 | $ 21,002 | |
Future policy benefits | 11,712 | 12,799 | |
Policy claims and other policyholders’ funds | 205 | 185 | |
Policyholder account balances, future policy benefits and claims | 34,857 | 33,986 | |
Fixed annuities | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | [1] | 8,229 | 8,531 |
Variable annuity fixed sub-accounts | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | 5,020 | 5,104 | |
UL/VUL insurance | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | 3,098 | 3,122 | |
IUL insurance | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | 2,461 | 2,269 | |
Structured variable annuities | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | 3,552 | 1,371 | |
Other life Insurance | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | 580 | 605 | |
Variable annuity GMWB | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | 2,256 | 3,049 | |
Variable annuity GMAB | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | [2] | (14) | 1 |
Other annuity liabilities | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | 73 | 211 | |
Fixed annuity life contingent liabilities | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | 1,303 | 1,370 | |
Life and disability income insurance | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | 1,152 | 1,187 | |
Long term care insurance | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | 5,664 | 5,722 | |
UL/VUL and other life insurance additional liabilities | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | $ 1,278 | $ 1,259 | |
[1] | Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts. | ||
[2] | Includes the fair value of GMAB embedded derivatives that was a net asset as of September 30, 2021 reported as a contra liability. |
Policyholder Account Balances_4
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities - Components of Separate Account Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Separate account liabilities | ||
Variable annuity | $ 81,063 | $ 79,299 |
VUL insurance | 8,931 | 8,226 |
Other insurance | 32 | 31 |
Total | $ 90,026 | $ 87,556 |
Variable Annuity and Insuranc_3
Variable Annuity and Insurance Guarantees - VA Guarantees (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | ||
GMDB | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 85,478 | $ 83,781 |
Contract value in separate accounts | [1] | 80,488 | 78,705 |
Net amount at risk | [1] | $ 119 | $ 64 |
Weighted average attained age | [1] | 69 years | 68 years |
GMDB | Return of premium | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 68,486 | $ 66,874 |
Contract value in separate accounts | [1] | 66,600 | 64,932 |
Net amount at risk | [1] | $ 18 | $ 5 |
Weighted average attained age | [1] | 69 years | 68 years |
GMDB | Five/six-year reset | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 8,181 | $ 8,116 |
Contract value in separate accounts | [1] | 5,467 | 5,386 |
Net amount at risk | [1] | $ 13 | $ 6 |
Weighted average attained age | [1] | 68 years | 68 years |
GMDB | One-year ratchet | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 6,105 | $ 6,094 |
Contract value in separate accounts | [1] | 5,786 | 5,763 |
Net amount at risk | [1] | $ 40 | $ 8 |
Weighted average attained age | [1] | 71 years | 71 years |
GMDB | Five-year ratchet | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 1,425 | $ 1,436 |
Contract value in separate accounts | [1] | 1,371 | $ 1,381 |
Net amount at risk | [1] | $ 2 | |
Weighted average attained age | [1] | 67 years | 67 years |
GMDB | Other | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 1,281 | $ 1,261 |
Contract value in separate accounts | [1] | 1,264 | 1,243 |
Net amount at risk | [1] | $ 46 | $ 45 |
Weighted average attained age | [1] | 74 years | 73 years |
GGU death benefit | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 1,221 | $ 1,183 |
Contract value in separate accounts | [1] | 1,166 | 1,126 |
Net amount at risk | [1] | $ 176 | $ 162 |
Weighted average attained age | [1] | 72 years | 71 years |
GMIB | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 186 | $ 187 |
Contract value in separate accounts | [1] | 172 | 173 |
Net amount at risk | [1] | $ 5 | $ 6 |
Weighted average attained age | [1] | 71 years | 71 years |
GMWB | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 53,178 | $ 52,114 |
Contract value in separate accounts | [1] | 53,123 | 52,024 |
Net amount at risk | [1] | $ 216 | $ 186 |
Weighted average attained age | [1] | 69 years | 69 years |
GMWB | GMWB standard benefit | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 1,903 | $ 1,972 |
Contract value in separate accounts | [1] | 1,897 | 1,967 |
Net amount at risk | [1] | $ 1 | $ 1 |
Weighted average attained age | [1] | 75 years | 74 years |
GMWB | GMWB for life | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 51,275 | $ 50,142 |
Contract value in separate accounts | [1] | 51,226 | 50,057 |
Net amount at risk | [1] | $ 215 | $ 185 |
Weighted average attained age | [1] | 69 years | 69 years |
GMAB | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 2,037 | $ 2,291 |
Contract value in separate accounts | [1] | $ 2,037 | $ 2,291 |
Weighted average attained age | [1] | 62 years | 61 years |
[1] | Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table. |
Variable Annuity and Insuranc_4
Variable Annuity and Insurance Guarantees - UL Secondary Guarantees (Details) - UL secondary guarantees - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Insurance guarantees | ||
Net amount at risk | $ 6,563 | $ 6,587 |
Weighted average attained age | 68 years | 67 years |
Variable Annuity and Insuranc_5
Variable Annuity and Insurance Guarantees - Liability Rollforward (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
GMDB & GGU | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | $ 24 | $ 16 | |
Incurred claims | 12 | 10 | |
Paid claims | (3) | (6) | |
Ending Balance | 33 | 20 | |
GMIB | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | 6 | 7 | |
Incurred claims | 1 | 1 | |
Paid claims | (1) | (1) | |
Ending Balance | 6 | 7 | |
GMWB | |||
Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees | |||
Beginning balance | [1] | 3,049 | 1,462 |
Incurred claims | [1] | (793) | 2,219 |
Ending balance | [1] | 2,256 | 3,681 |
GMAB | |||
Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees | |||
Beginning balance | [1] | 1 | (39) |
Incurred claims | [1] | (15) | 63 |
Ending balance | [1] | (14) | 24 |
UL | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | 916 | 758 | |
Incurred claims | 106 | 172 | |
Paid claims | (27) | (34) | |
Ending Balance | $ 995 | $ 896 | |
[1] | The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims. |
Variable Annuity and Insuranc_6
Variable Annuity and Insurance Guarantees - Separate Account Balances by Type (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Mutual funds | ||
Variable Annuity and Insurance Guarantees | ||
Total mutual funds | $ 80,700 | $ 78,931 |
Equity | ||
Variable Annuity and Insurance Guarantees | ||
Total mutual funds | 47,854 | 45,947 |
Bond | ||
Variable Annuity and Insurance Guarantees | ||
Total mutual funds | 24,779 | 26,073 |
Other | ||
Variable Annuity and Insurance Guarantees | ||
Total mutual funds | $ 8,067 | $ 6,911 |
Debt - Long-Term Debt (Details)
Debt - Long-Term Debt (Details) - Ameriprise Financial - Unsecured surplus note due December 31, 2050 - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Debt | ||
Long-term debt | $ 500 | $ 500 |
Interest rate (as a percent) | 3.50% |
Debt - Short-term Borrowings (D
Debt - Short-term Borrowings (Details) - RiverSource Life - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Short-term borrowings | ||
Amount of the FHLB liability | $ 200 | $ 200 |
Weighted average | ||
Short-term borrowings | ||
Interest rate on FHLB borrowings (as a percent) | 0.30% | 0.40% |
Commercial mortgage backed securities | ||
Short-term borrowings | ||
Securities pledged as collateral for FHLB borrowings | $ 1,000 | $ 1,200 |
Federal Home Loan Bank borrowings | Maximum | ||
Short-term borrowings | ||
Term | 3 months | 3 months |
Fair Values of Assets and Lia_3
Fair Values of Assets and Liabilities - Recurring Basis (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2020 | ||||
GMWB and GMAB embedded derivatives | |||||
Assets | |||||
Receivables: embedded derivatives | $ 142 | $ 67 | |||
Liabilities | |||||
Liabilities embedded derivatives | 1,600 | 2,400 | |||
RiverSource Life | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 15,789 | 22,855 | |||
Separate account assets at NAV | 90,026 | 87,556 | |||
RiverSource Life | Corporate debt securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 9,397 | 12,873 | |||
RiverSource Life | Residential mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 2,146 | 3,002 | |||
RiverSource Life | Commercial mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 2,528 | 4,166 | |||
RiverSource Life | State and municipal obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1,082 | 1,344 | |||
RiverSource Life | Asset backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 550 | 1,212 | |||
RiverSource Life | Foreign government bonds and obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 85 | 257 | |||
RiverSource Life | U.S. government and agency obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1 | 1 | |||
RiverSource Life | Policyholder account balances, future policy benefits and claims embedded derivatives | |||||
Liabilities | |||||
Cumulative increase (decrease) in embedded derivatives of adjustment for nonperformance risk | (550) | (727) | |||
RiverSource Life | Level 3 | Corporate debt securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 514 | 766 | |||
RiverSource Life | Level 3 | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | |||||
Assets | |||||
Receivables: embedded derivatives | 56 | ||||
RiverSource Life | Level 3 | Fixed deferred indexed annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 54 | 49 | |||
RiverSource Life | Level 3 | IUL embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 917 | 935 | |||
RiverSource Life | Level 3 | GMWB and GMAB embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 1,436 | 2,316 | |||
RiverSource Life | Level 3 | Structured variable annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 217 | 70 | |||
RiverSource Life | Recurring basis | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 15,789 | 22,855 | |||
Cash equivalents | 2,650 | 3,132 | |||
Other assets: derivative contracts | 5,643 | 5,758 | |||
Separate account assets at NAV | [1] | 90,026 | 87,556 | ||
Total assets at fair value | 114,164 | 119,301 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 4,041 | 4,248 | |||
Total liabilities at fair value | 6,669 | 7,621 | |||
RiverSource Life | Recurring basis | Corporate debt securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 9,397 | 12,873 | |||
RiverSource Life | Recurring basis | Residential mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 2,146 | 3,002 | |||
RiverSource Life | Recurring basis | Commercial mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 2,528 | 4,166 | |||
RiverSource Life | Recurring basis | State and municipal obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1,082 | 1,344 | |||
RiverSource Life | Recurring basis | Asset backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 550 | 1,212 | |||
RiverSource Life | Recurring basis | Foreign government bonds and obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 85 | 257 | |||
RiverSource Life | Recurring basis | U.S. government and agency obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1 | 1 | |||
RiverSource Life | Recurring basis | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | |||||
Assets | |||||
Receivables: embedded derivatives | 56 | ||||
RiverSource Life | Recurring basis | Policyholder account balances, future policy benefits and claims embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 2,628 | [2] | 3,373 | [3] | |
RiverSource Life | Recurring basis | Fixed deferred indexed annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 58 | 52 | |||
RiverSource Life | Recurring basis | IUL embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 917 | 935 | |||
RiverSource Life | Recurring basis | GMWB and GMAB embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 1,436 | [4] | 2,316 | [5] | |
RiverSource Life | Recurring basis | Structured variable annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 217 | 70 | |||
RiverSource Life | Recurring basis | Interest rate derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 1,185 | 1,755 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 476 | 734 | |||
RiverSource Life | Recurring basis | Equity derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 4,423 | 3,984 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 3,563 | 3,511 | |||
RiverSource Life | Recurring basis | Foreign exchange derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 17 | 18 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 2 | 2 | |||
RiverSource Life | Recurring basis | Credit derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 18 | 1 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 1 | ||||
RiverSource Life | Recurring basis | Level 1 | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1 | 1 | |||
Cash equivalents | 1,637 | 2,419 | |||
Other assets: derivative contracts | 487 | 408 | |||
Total assets at fair value | 2,125 | 2,828 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 169 | 184 | |||
Total liabilities at fair value | 169 | 184 | |||
RiverSource Life | Recurring basis | Level 1 | U.S. government and agency obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1 | 1 | |||
RiverSource Life | Recurring basis | Level 1 | Interest rate derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 1 | 1 | |||
RiverSource Life | Recurring basis | Level 1 | Equity derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 486 | 406 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 167 | 182 | |||
RiverSource Life | Recurring basis | Level 1 | Foreign exchange derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 1 | ||||
Liabilities | |||||
Other liabilities: derivative contracts | 2 | 2 | |||
RiverSource Life | Recurring basis | Level 2 | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 14,956 | 21,684 | |||
Cash equivalents | 1,013 | 713 | |||
Other assets: derivative contracts | 5,156 | 5,350 | |||
Total assets at fair value | 21,125 | 27,747 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 3,872 | 4,064 | |||
Total liabilities at fair value | 3,876 | 4,067 | |||
RiverSource Life | Recurring basis | Level 2 | Corporate debt securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 8,883 | 12,107 | |||
RiverSource Life | Recurring basis | Level 2 | Residential mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 2,146 | 2,993 | |||
RiverSource Life | Recurring basis | Level 2 | Commercial mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 2,528 | 4,166 | |||
RiverSource Life | Recurring basis | Level 2 | State and municipal obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1,082 | 1,344 | |||
RiverSource Life | Recurring basis | Level 2 | Asset backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 232 | 817 | |||
RiverSource Life | Recurring basis | Level 2 | Foreign government bonds and obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 85 | 257 | |||
RiverSource Life | Recurring basis | Level 2 | Policyholder account balances, future policy benefits and claims embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 4 | 3 | |||
RiverSource Life | Recurring basis | Level 2 | Fixed deferred indexed annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 4 | 3 | |||
RiverSource Life | Recurring basis | Level 2 | Interest rate derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 1,184 | 1,754 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 476 | 734 | |||
RiverSource Life | Recurring basis | Level 2 | Equity derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 3,937 | 3,578 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 3,396 | 3,329 | |||
RiverSource Life | Recurring basis | Level 2 | Foreign exchange derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 17 | 17 | |||
RiverSource Life | Recurring basis | Level 2 | Credit derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 18 | 1 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 1 | ||||
RiverSource Life | Recurring basis | Level 3 | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 832 | 1,170 | |||
Total assets at fair value | 888 | 1,170 | |||
Liabilities | |||||
Total liabilities at fair value | 2,624 | 3,370 | |||
RiverSource Life | Recurring basis | Level 3 | Corporate debt securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 514 | 766 | |||
RiverSource Life | Recurring basis | Level 3 | Residential mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 9 | ||||
RiverSource Life | Recurring basis | Level 3 | Asset backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 318 | 395 | |||
RiverSource Life | Recurring basis | Level 3 | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | |||||
Assets | |||||
Receivables: embedded derivatives | 56 | ||||
RiverSource Life | Recurring basis | Level 3 | Policyholder account balances, future policy benefits and claims embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 2,624 | 3,370 | |||
RiverSource Life | Recurring basis | Level 3 | Fixed deferred indexed annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 54 | 49 | |||
RiverSource Life | Recurring basis | Level 3 | IUL embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 917 | 935 | |||
RiverSource Life | Recurring basis | Level 3 | GMWB and GMAB embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 1,436 | 2,316 | |||
RiverSource Life | Recurring basis | Level 3 | Structured variable annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | $ 217 | $ 70 | |||
[1] | Amounts are comprised of certain financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy. | ||||
[2] | The Company’s adjustment for nonperformance risk resulted in a $550 million cumulative decrease to the embedded derivatives as of September 30, 2021. | ||||
[3] | The Company’s adjustment for nonperformance risk resulted in a $727 million cumulative decrease to the embedded derivatives as of December 31, 2020. | ||||
[4] | The fair value of the GMWB and GMAB embedded derivatives included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position (recorded as a contra liability) as of September 30, 2021. | ||||
[5] | The fair value of the GMWB and GMAB embedded derivatives included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, 2020. |
Fair Values of Assets and Lia_4
Fair Values of Assets and Liabilities - Changes in Level 3 Assets (Details) - RiverSource Life - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Available-for-Sale Securities | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | $ 721 | $ 1,139 | $ 1,170 | $ 1,141 | |
Total gains (losses) included in net income | [1] | (1) | (1) | (1) | |
Total gains (losses) included in other comprehensive income (loss) | (3) | 37 | (3) | 9 | |
Purchases | 9 | 8 | 76 | 52 | |
Settlements | (64) | (7) | (131) | (24) | |
Transfers into level 3 | 170 | 14 | 170 | 14 | |
Transfers out of Level 3 | (39) | (449) | (39) | ||
Balance, ending | 832 | 1,152 | 832 | 1,152 | |
Changes in unrealized gains (losses) in net income relating to assets held at end of period | [1] | (1) | |||
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at end of period | (4) | 37 | (1) | 9 | |
Corporate debt securities | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | 385 | 731 | 766 | 735 | |
Total gains (losses) included in net income | (1) | (1) | (1) | ||
Total gains (losses) included in other comprehensive income (loss) | (3) | 5 | (6) | 13 | |
Purchases | 9 | 7 | 76 | 13 | |
Settlements | (44) | (7) | (73) | (24) | |
Transfers into level 3 | 168 | 168 | |||
Transfers out of Level 3 | (416) | ||||
Balance, ending | 514 | 736 | 514 | 736 | |
Changes in unrealized gains (losses) in net income relating to assets held at end of period | (1) | ||||
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at end of period | (4) | 5 | (4) | 13 | |
Residential mortgage backed securities | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | 56 | 9 | 17 | ||
Total gains (losses) included in other comprehensive income (loss) | 1 | ||||
Purchases | 1 | 39 | |||
Transfers out of Level 3 | (39) | (9) | (39) | ||
Balance, ending | 0 | 18 | 0 | 18 | |
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at end of period | 1 | ||||
Asset backed securities | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | 336 | 352 | 395 | 389 | |
Total gains (losses) included in other comprehensive income (loss) | 32 | 3 | 5 | ||
Settlements | (20) | (58) | |||
Transfers into level 3 | 2 | 14 | 2 | 14 | |
Transfers out of Level 3 | (24) | ||||
Balance, ending | 318 | 398 | 318 | 398 | |
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at end of period | $ 32 | 3 | $ (5) | ||
Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | 0 | 0 | |||
Issues | [2] | 57 | 57 | ||
Settlements | (1) | (1) | |||
Transfers out of Level 3 | 0 | ||||
Balance, ending | $ 56 | $ 56 | |||
[1] | Included in net investment income in the Consolidated Statements of Income. | ||||
[2] | Represents the amount of ceded embedded derivatives associated with fixed deferred annuity products reinsured in the third quarter of 2021. See Note 1 for additional information on the reinsurance transaction. |
Fair Values of Assets and Lia_5
Fair Values of Assets and Liabilities - Changes in Level 3 Liabilities (Details) - RiverSource Life - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Net increase (decrease) to pretax income from adjustment for nonperformance risk on fair value of embedded derivatives | $ 1 | $ (123) | $ (138) | $ 446 | |
Policyholder account balances, future policy benefits and claims embedded derivatives | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 2,569 | 4,061 | 3,370 | 1,687 | |
Total (gains) losses included in net income | (37) | (240) | (1,023) | 1,967 | |
Issues | 88 | 105 | 256 | 316 | |
Settlements | 4 | (4) | 21 | (48) | |
Balance, ending | 2,624 | 3,922 | 2,624 | 3,922 | |
Changes in unrealized (gains) losses in net income relating to liabilities held at the end of the period | (46) | (233) | (1,185) | 1,989 | |
Fixed deferred indexed annuity embedded derivatives | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 54 | 41 | 49 | 43 | |
Total (gains) losses included in net income | [1] | 1 | 3 | 7 | (2) |
Issues | 3 | ||||
Settlements | (1) | (2) | |||
Balance, ending | 54 | 44 | 54 | 44 | |
IUL embedded derivatives | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 928 | 882 | 935 | 881 | |
Total (gains) losses included in net income | [1] | 14 | 50 | 51 | 53 |
Issues | 15 | 4 | 53 | ||
Settlements | (25) | (21) | (73) | (61) | |
Balance, ending | 917 | 926 | 917 | 926 | |
Changes in unrealized (gains) losses in net income relating to liabilities held at the end of the period | [1] | 14 | 50 | 51 | 53 |
GMWB and GMAB embedded derivatives | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 1,373 | 3,129 | 2,316 | 763 | |
Total (gains) losses included in net income | [2] | (69) | (296) | (1,273) | 1,900 |
Issues | 95 | 93 | 274 | 267 | |
Settlements | 37 | 17 | 119 | 13 | |
Balance, ending | 1,436 | 2,943 | 1,436 | 2,943 | |
Changes in unrealized (gains) losses in net income relating to liabilities held at the end of the period | [2] | (60) | (283) | (1,236) | 1,936 |
Structured variable annuity embedded derivatives | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 214 | 9 | 70 | ||
Total (gains) losses included in net income | [2] | 17 | 3 | 192 | 16 |
Issues | (7) | (3) | (22) | (7) | |
Settlements | (7) | (23) | |||
Balance, ending | $ 217 | $ 9 | $ 217 | $ 9 | |
[1] | Included in interest credited to fixed accounts in the Consolidated Statements of Income. | ||||
[2] | Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income. |
Fair Values of Assets and Lia_6
Fair Values of Assets and Liabilities - Significant Unobservable inputs (Details) - RiverSource Life $ in Millions | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, fair value | $ 15,789 | $ 22,855 | |
Corporate debt securities | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, fair value | 9,397 | 12,873 | |
Level 3 | Corporate debt securities | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, fair value | 514 | 766 | |
Level 3 | Asset backed securities | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, fair value | 318 | 395 | |
Level 3 | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | |||
Significant unobservable inputs used in fair value measurements | |||
Receivables: embedded derivatives | 56 | ||
Level 3 | IUL embedded derivatives | |||
Significant unobservable inputs used in fair value measurements | |||
Gross Fair Value Liabilities, embedded derivatives | 917 | 935 | |
Level 3 | Fixed deferred indexed annuity embedded derivatives | |||
Significant unobservable inputs used in fair value measurements | |||
Gross Fair Value Liabilities, embedded derivatives | 54 | 49 | |
Level 3 | GMWB and GMAB embedded derivatives | |||
Significant unobservable inputs used in fair value measurements | |||
Fair Value, embedded derivatives, net | 1,436 | 2,316 | |
Level 3 | Structured variable annuity embedded derivatives | |||
Significant unobservable inputs used in fair value measurements | |||
Gross Fair Value Liabilities, embedded derivatives | $ 217 | $ 70 | |
Level 3 | Discounted cash flow | Corporate debt securities | Minimum | Yield/spread to U.S. Treasuries | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, measurement inputs | 0.008 | 0.010 | |
Level 3 | Discounted cash flow | Corporate debt securities | Maximum | Yield/spread to U.S. Treasuries | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, measurement inputs | 0.024 | 0.033 | |
Level 3 | Discounted cash flow | Corporate debt securities | Weighted average | Yield/spread to U.S. Treasuries | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, measurement inputs | [1] | 0.012 | 0.015 |
Level 3 | Discounted cash flow | Asset backed securities | Annual default rate | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, measurement inputs | 0.056 | 0.053 | |
Level 3 | Discounted cash flow | Asset backed securities | Loss severity | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, measurement inputs | 0.250 | 0.250 | |
Level 3 | Discounted cash flow | Asset backed securities | Minimum | Yield/spread to swap rates | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, measurement inputs | 1.40 | 2.50 | |
Level 3 | Discounted cash flow | Asset backed securities | Maximum | Yield/spread to swap rates | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, measurement inputs | 2.25 | 4 | |
Level 3 | Discounted cash flow | Asset backed securities | Weighted average | Annual default rate | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, measurement inputs | 0.056 | 0.053 | |
Level 3 | Discounted cash flow | Asset backed securities | Weighted average | Loss severity | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, measurement inputs | 0.250 | 0.250 | |
Level 3 | Discounted cash flow | Asset backed securities | Weighted average | Yield/spread to swap rates | |||
Significant unobservable inputs used in fair value measurements | |||
Fixed maturities, measurement inputs | [2] | 1.46 | 2.59 |
Level 3 | Discounted cash flow | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | Minimum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative asset, measurement input | 0 | ||
Level 3 | Discounted cash flow | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | Maximum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative asset, measurement input | 0.668 | ||
Level 3 | Discounted cash flow | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | Weighted average | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative asset, measurement input | 0.014 | ||
Level 3 | Discounted cash flow | IUL embedded derivatives | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [3] | 0.60 | 0.65 |
Level 3 | Discounted cash flow | IUL embedded derivatives | Weighted average | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [3] | 0.60 | 0.65 |
Level 3 | Discounted cash flow | Fixed deferred indexed annuity embedded derivatives | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [3] | 0.60 | 0.65 |
Level 3 | Discounted cash flow | Fixed deferred indexed annuity embedded derivatives | Minimum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | 0 | 0 | |
Level 3 | Discounted cash flow | Fixed deferred indexed annuity embedded derivatives | Maximum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | 0.668 | 0.500 | |
Level 3 | Discounted cash flow | Fixed deferred indexed annuity embedded derivatives | Weighted average | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [3] | 0.60 | 0.65 |
Level 3 | Discounted cash flow | Fixed deferred indexed annuity embedded derivatives | Weighted average | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [4] | 0.014 | 0.012 |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | [3] | 0.60 | 0.65 |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Minimum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | 0.001 | 0.001 | |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Minimum | Utilization of guaranteed withdrawals | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | [5] | 0 | 0 |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Minimum | Market volatility | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | [6] | 0.044 | 0.043 |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Maximum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | 0.634 | 0.735 | |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Maximum | Utilization of guaranteed withdrawals | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | [5] | 0.480 | 0.480 |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Maximum | Market volatility | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | [6] | 0.176 | 0.171 |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Weighted average | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | [3] | 0.60 | 0.65 |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Weighted average | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | [4] | 0.036 | 0.038 |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Weighted average | Utilization of guaranteed withdrawals | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | [5],[7] | 0.106 | 0.106 |
Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Weighted average | Market volatility | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivatives, measurement inputs | [6],[8] | 0.113 | 0.110 |
Level 3 | Discounted cash flow | Structured variable annuity embedded derivatives | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [3] | 0.60 | 0.65 |
Level 3 | Discounted cash flow | Structured variable annuity embedded derivatives | Minimum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | 0.008 | 0.008 | |
Level 3 | Discounted cash flow | Structured variable annuity embedded derivatives | Maximum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | 0.400 | 0.400 | |
Level 3 | Discounted cash flow | Structured variable annuity embedded derivatives | Weighted average | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [3] | 0.60 | 0.65 |
Level 3 | Discounted cash flow | Structured variable annuity embedded derivatives | Weighted average | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [4] | 0.009 | 0.009 |
[1] | The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. | ||
[2] | The weighted average for the spread to swap rates for asset backed securities is calculated as the sum of each tranche’s balance multiplied by its spread to swap divided by the aggregate balances of the tranches. | ||
[3] | The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives. | ||
[4] | The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula. | ||
[5] | The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. | ||
[6] | Market volatility is implied volatility of fund of funds and managed volatility funds. | ||
[7] | The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals. | ||
[8] | The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit. |
Fair Values of Assets and Lia_7
Fair Values of Assets and Liabilities - Non-Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
VIEs, not primary beneficiary | Affordable Housing Partnerships and Other Real Estate Partnerships | Nonrecurring basis | Level 3 | ||
Assets and liabilities measured at fair value | ||
Investment balance | $ 99 | $ 101 |
Fair Values of Assets and Lia_8
Fair Values of Assets and Liabilities - Financial Instruments Not Reported at Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Financial Liabilities | ||
Separate account liabilities - investment contracts | $ 90,026 | $ 87,556 |
RiverSource Life | ||
Financial Assets | ||
Mortgage loans, net | 1,776 | 2,574 |
Policy loans | 836 | 846 |
Other investments | 239 | 701 |
Other receivables | 8,242 | 1,613 |
Financial Liabilities | ||
Long-term debt | 500 | 500 |
Other liabilities | 6,802 | 6,887 |
Separate account liabilities - investment contracts | 90,026 | 87,556 |
RiverSource Life | Carrying Value | ||
Financial Assets | ||
Mortgage loans, net | 1,776 | 2,574 |
Policy loans | 836 | 846 |
Other investments | 53 | 457 |
Other receivables | 7,952 | 1,430 |
Financial Liabilities | ||
Policyholder account balances, future policy benefits and claims | 11,767 | 9,990 |
Short-term borrowings | 200 | 200 |
Long-term debt | 500 | 500 |
Other liabilities | 10 | 12 |
Separate account liabilities - investment contracts | 378 | 351 |
RiverSource Life | Fair Value | ||
Financial Assets | ||
Mortgage loans, net | 1,873 | 2,724 |
Policy loans | 836 | 846 |
Other investments | 53 | 457 |
Other receivables | 8,799 | 1,732 |
Financial Liabilities | ||
Policyholder account balances, future policy benefits and claims | 12,845 | 11,686 |
Short-term borrowings | 200 | 200 |
Long-term debt | 496 | 509 |
Other liabilities | 10 | 11 |
Separate account liabilities - investment contracts | 378 | 351 |
RiverSource Life | Fair Value | Level 2 | ||
Financial Assets | ||
Policy loans | 836 | 846 |
Other investments | 35 | 417 |
Financial Liabilities | ||
Short-term borrowings | 200 | 200 |
Long-term debt | 496 | 509 |
Separate account liabilities - investment contracts | 378 | 351 |
RiverSource Life | Fair Value | Level 3 | ||
Financial Assets | ||
Mortgage loans, net | 1,873 | 2,724 |
Other investments | 18 | 40 |
Other receivables | 8,799 | 1,732 |
Financial Liabilities | ||
Policyholder account balances, future policy benefits and claims | 12,845 | 11,686 |
Other liabilities | $ 10 | $ 11 |
Offsetting Assets and Liabili_3
Offsetting Assets and Liabilities - Assets (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Derivatives: | |||
Gross Amounts of Recognized Assets | $ 5,643 | $ 5,758 | |
Amounts of Assets Presented in the Consolidated Balance Sheets | 5,643 | 5,758 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (3,566) | (3,916) |
Cash Collateral | (1,577) | (1,408) | |
Securities Collateral | (404) | (315) | |
Net amount | 96 | 119 | |
OTC | |||
Derivatives: | |||
Gross Amounts of Recognized Assets | 5,266 | 5,391 | |
Amounts of Assets Presented in the Consolidated Balance Sheets | 5,266 | 5,391 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | (3,441) | (3,801) | |
Cash Collateral | (1,364) | (1,243) | |
Securities Collateral | (404) | (315) | |
Net amount | 57 | 32 | |
OTC cleared | |||
Derivatives: | |||
Gross Amounts of Recognized Assets | 25 | 58 | |
Amounts of Assets Presented in the Consolidated Balance Sheets | 25 | 58 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | (15) | (25) | |
Net amount | 10 | 33 | |
Exchange-traded | |||
Derivatives: | |||
Gross Amounts of Recognized Assets | 352 | 309 | |
Amounts of Assets Presented in the Consolidated Balance Sheets | 352 | 309 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | (110) | (90) | |
Cash Collateral | (213) | (165) | |
Net amount | $ 29 | $ 54 | |
[1] | Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Offsetting Assets and Liabili_4
Offsetting Assets and Liabilities - Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Derivatives | |||
Gross Amounts of Recognized Liabilities | $ 4,041 | $ 4,248 | |
Amounts of Liabilities Presented in the Consolidated Balance Sheets | 4,041 | 4,248 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (3,566) | (3,916) |
Cash Collateral | (182) | (1) | |
Securities Collateral | (293) | (327) | |
Net amount | 0 | 4 | |
OTC | |||
Derivatives | |||
Gross Amounts of Recognized Liabilities | 3,916 | 4,129 | |
Amounts of Liabilities Presented in the Consolidated Balance Sheets | 3,916 | 4,129 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | (3,441) | (3,801) | |
Cash Collateral | (182) | (1) | |
Securities Collateral | (293) | (327) | |
Net amount | 0 | 0 | |
OTC cleared | |||
Derivatives | |||
Gross Amounts of Recognized Liabilities | 15 | 25 | |
Amounts of Liabilities Presented in the Consolidated Balance Sheets | 15 | 25 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | (15) | (25) | |
Net amount | 0 | 0 | |
Exchange-traded | |||
Derivatives | |||
Gross Amounts of Recognized Liabilities | 110 | 94 | |
Amounts of Liabilities Presented in the Consolidated Balance Sheets | 110 | 94 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | (110) | (90) | |
Net amount | $ 0 | $ 4 | |
[1] | Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities - Notional Value and Gross Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Derivatives and Hedging Activities | |||
Notional | $ 141,835 | $ 139,311 | |
Gross Fair Value Assets, freestanding derivatives | 5,643 | 5,758 | |
Gross Fair Value Liabilities, freestanding derivatives | 4,041 | 4,248 | |
Total Gross Fair Value, derivative assets | [1] | 5,699 | 5,758 |
Total Gross Fair Value of Derivative Liabilities | [2],[3] | 6,669 | 7,621 |
Derivative liability after application of master netting arrangements and cash collateral including embedded derivative liabilities | 2,900 | 3,700 | |
Fair value of investment securities received as collateral | 448 | 325 | |
Fair value of investment securities received as collateral that can be repledged | 448 | 325 | |
Fair value of investment securities received as collateral that were repledged | 0 | 0 | |
Receivables | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, Embedded Derivatives | [1] | 56 | |
Policyholder account balances, future policy benefits and claims | |||
Derivatives and Hedging Activities | |||
Fair Value, embedded derivatives, net | [2],[3] | 2,628 | 3,373 |
GMWB and GMAB embedded derivatives | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, Embedded Derivatives | 142 | 67 | |
Gross Fair Value Liabilities, embedded derivatives | 1,600 | 2,400 | |
GMWB and GMAB embedded derivatives | Policyholder account balances, future policy benefits and claims | |||
Derivatives and Hedging Activities | |||
Fair Value, embedded derivatives, net | [2],[3],[4] | 1,436 | 2,316 |
IUL embedded derivatives | Policyholder account balances, future policy benefits and claims | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, embedded derivatives | [2],[3] | 917 | 935 |
Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | Receivables | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, Embedded Derivatives | [1] | 56 | |
Fixed deferred indexed annuity embedded derivatives | Policyholder account balances, future policy benefits and claims | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, embedded derivatives | [2],[3] | 58 | 52 |
Structured variable annuity embedded derivatives | Policyholder account balances, future policy benefits and claims | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, embedded derivatives | [2],[3] | 217 | 70 |
Not designated as hedging instruments | |||
Derivatives and Hedging Activities | |||
Notional | 141,835 | 139,311 | |
Not designated as hedging instruments | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [1] | 5,643 | 5,758 |
Not designated as hedging instruments | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [2],[3] | 4,041 | 4,248 |
Not designated as hedging instruments | Interest rate contracts | |||
Derivatives and Hedging Activities | |||
Notional | 79,344 | 77,925 | |
Not designated as hedging instruments | Interest rate contracts | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [1] | 1,185 | 1,755 |
Not designated as hedging instruments | Interest rate contracts | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [2],[3] | 476 | 734 |
Not designated as hedging instruments | Equity contracts | |||
Derivatives and Hedging Activities | |||
Notional | 58,509 | 55,993 | |
Not designated as hedging instruments | Equity contracts | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [1] | 4,423 | 3,984 |
Not designated as hedging instruments | Equity contracts | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [2],[3] | 3,563 | 3,511 |
Not designated as hedging instruments | Credit contracts | |||
Derivatives and Hedging Activities | |||
Notional | 1,727 | 2,269 | |
Not designated as hedging instruments | Credit contracts | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [1] | 18 | 1 |
Not designated as hedging instruments | Credit contracts | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [2],[3] | 1 | |
Not designated as hedging instruments | Foreign exchange contracts | |||
Derivatives and Hedging Activities | |||
Notional | 2,255 | 3,124 | |
Not designated as hedging instruments | Foreign exchange contracts | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [1] | 17 | 18 |
Not designated as hedging instruments | Foreign exchange contracts | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [2],[3] | $ 2 | $ 2 |
[1] | The fair value of freestanding derivative assets is included in Other assets and the fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables on the Consolidated Balance Sheets. | ||
[2] | The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. | ||
[3] | The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $2.9 billion and $3.7 billion as of September 30, 2021 and December 31, 2020, respectively. See Note 13 for additional information related to master netting arrangements and cash collateral. | ||
[4] | The fair value of the GMWB and GMAB embedded derivatives as of September 30, 2021 included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2020 included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position. |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities - Derivatives Not Designated as Hedges Impact (Details) - Not designated as hedging instruments - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Investment Income | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | $ 1 | |||
Net Investment Income | Equity contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 1 | |||
Interest Credited to Fixed Accounts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | $ 12 | $ 10 | 70 | $ 3 |
Interest Credited to Fixed Accounts | Equity contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 42 | 55 | (7) | |
Interest Credited to Fixed Accounts | IUL embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 11 | (29) | 22 | 8 |
Interest Credited to Fixed Accounts | Fixed deferred indexed annuity and deposit receivables embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 1 | (7) | ||
Interest Credited to Fixed Accounts | Fixed deferred indexed annuity embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (3) | 2 | ||
Benefits, Claims, Losses and Settlement Expenses | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (249) | (691) | (1,004) | 1 |
Benefits, Claims, Losses and Settlement Expenses | Interest rate contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (171) | (371) | (1,125) | 2,204 |
Benefits, Claims, Losses and Settlement Expenses | Equity contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 1 | (468) | (613) | 58 |
Benefits, Claims, Losses and Settlement Expenses | Credit contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 2 | (12) | 41 | (91) |
Benefits, Claims, Losses and Settlement Expenses | Foreign exchange contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (23) | 6 | 26 | |
Benefits, Claims, Losses and Settlement Expenses | GMWB and GMAB embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (64) | 186 | 879 | (2,180) |
Benefits, Claims, Losses and Settlement Expenses | Structured variable annuity embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | $ (17) | $ (3) | $ (192) | $ (16) |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities - Deferred Premium, Options and Swaptions (Details) $ in Millions | Sep. 30, 2021USD ($) | |
Summary of premiums payable and receivable | ||
Premiums payable | $ 840 | |
Premiums receivable | 428 | |
2021 | ||
Summary of premiums payable and receivable | ||
Premiums payable | 60 | [1] |
Premiums receivable | 45 | [1] |
2022 | ||
Summary of premiums payable and receivable | ||
Premiums payable | 204 | |
Premiums receivable | 205 | |
2023 | ||
Summary of premiums payable and receivable | ||
Premiums payable | 51 | |
Premiums receivable | 43 | |
2024 | ||
Summary of premiums payable and receivable | ||
Premiums payable | 138 | |
Premiums receivable | 25 | |
2025 | ||
Summary of premiums payable and receivable | ||
Premiums payable | 125 | |
Premiums receivable | 22 | |
2026-2028 | ||
Summary of premiums payable and receivable | ||
Premiums payable | 262 | |
Premiums receivable | $ 88 | |
[1] | 2021 amounts represent the amounts payable and receivable for the period from October 1, 2021 to December 31, 2021. |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities - Cash Flow Hedges and Credit Risk (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Cash Flow Hedges | |||
Derivatives designated as cash flow hedges | $ 0 | $ 0 | |
Hedge relationships discontinued due to forecasted transactions no longer being expected to occur according to original hedge strategy | 0 | $ 0 | |
Credit Risk | |||
Aggregate fair value of derivative contracts in net liability position containing credit contingent provisions | 378 | $ 324 | |
Aggregate fair value of assets posted as collateral | 378 | 324 | |
Aggregate fair value of additional assets required to be posted or needed to settle | $ 0 | $ 0 |
Shareholder's Equity - OCI Comp
Shareholder's Equity - OCI Components (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Pretax | |||||
Total other comprehensive income (loss) | $ (408) | $ 112 | $ (660) | $ 280 | |
Income Tax Benefit (Expense) | |||||
Total other comprehensive income (loss) | 87 | (24) | 141 | (61) | |
Net of Tax | |||||
Total other comprehensive income (loss), net of tax | (321) | 88 | (519) | 219 | |
Net Unrealized Gains (Losses) on Securities | |||||
Pretax | |||||
Reclassification to net income | [1] | (498) | (2) | (548) | 3 |
Total other comprehensive income (loss) | (408) | 112 | (660) | 280 | |
Income Tax Benefit (Expense) | |||||
Reclassification to net income | [1] | 104 | 115 | (1) | |
Total other comprehensive income (loss) | 87 | (24) | 141 | (61) | |
Net of Tax | |||||
Arising during the period | 73 | 90 | (86) | 217 | |
Reclassification to net income | [1] | (394) | (2) | (433) | 2 |
Total other comprehensive income (loss), net of tax | (321) | 88 | (519) | 219 | |
Net unrealized gains (losses) on securities, excluding insurance related impact | |||||
Pretax | |||||
Arising during the period | [2] | (57) | 208 | (396) | 500 |
Income Tax Benefit (Expense) | |||||
Arising during the period | [2] | 14 | (44) | 86 | (107) |
Net of Tax | |||||
Arising during the period | [2] | (43) | 164 | (310) | 393 |
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables | |||||
Pretax | |||||
Arising during the period | 147 | (94) | 284 | (223) | |
Income Tax Benefit (Expense) | |||||
Arising during the period | (31) | 20 | (60) | 47 | |
Net of Tax | |||||
Arising during the period | $ 116 | $ (74) | $ 224 | $ (176) | |
[1] | Reclassification amounts are recorded in net realized investment gains (losses). | ||||
[2] | Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period. |
Shareholder's Equity - Changes
Shareholder's Equity - Changes in AOCI Components (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | $ 2,602 | $ 3,961 | $ 3,313 | $ 3,336 | |
Total other comprehensive income (loss), net of tax | (321) | 88 | (519) | 219 | |
Ending balance | 1,959 | 3,465 | 1,959 | 3,465 | |
Total AOCI | |||||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | 722 | 705 | 920 | 574 | |
OCI before reclassifications | 73 | 90 | (86) | 217 | |
Amounts reclassified from AOCI | (394) | (2) | (433) | 2 | |
Total other comprehensive income (loss), net of tax | (321) | 88 | (519) | 219 | |
Ending balance | 401 | 793 | 401 | 793 | |
Net Unrealized Gains (Losses) on Securities | |||||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | 723 | 706 | 921 | 575 | |
OCI before reclassifications | 73 | 90 | (86) | 217 | |
Amounts reclassified from AOCI | [1] | (394) | (2) | (433) | 2 |
Total other comprehensive income (loss), net of tax | (321) | 88 | (519) | 219 | |
Ending balance | 402 | 794 | 402 | 794 | |
Other | |||||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | (1) | (1) | (1) | (1) | |
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 | |
Ending balance | $ (1) | $ (1) | $ (1) | $ (1) | |
[1] | Reclassification amounts are recorded in net realized investment gains (losses). |
Income Taxes (Details)
Income Taxes (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 | |
Income taxes | |||||
Effective tax rate (as a percent) | 15.60% | 23.20% | 12.70% | 5.70% | |
Valuation allowance | $ 11 | $ 11 | $ 11 | ||
Gross unrecognized tax benefits | 39 | 39 | 38 | ||
Unrecognized tax benefits, net of federal tax benefits, that would affect the effective tax rate if recognized | 21 | 21 | 20 | ||
Amount of decrease in unrecognized tax benefits reasonably possible within next 12 months | 33 | 33 | |||
Interest and penalties recognized in income tax provision | 0 | $ 0 | 0 | $ 0 | |
Payable related to accrued interest and penalties | 2 | 2 | $ 2 | ||
State | |||||
Income taxes | |||||
Deferred tax assets, loss carryforwards | 9 | 9 | |||
Valuation allowance | 2 | 2 | |||
Valuation allowance, net operating losses | $ 9 | $ 9 |
Contingencies (Details)
Contingencies (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Estimated liability related to guaranty fund assessments | $ 12 | $ 12 |
Related premium tax asset | $ 10 | $ 10 |