Equitable Financial Life Insurance 10-Q 2024 Q2 Quarterly report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————————————

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to

Commission File No. 000-20501

————————————————

Equitable Financial Life Insurance Company

(Exact name of registrant as specified in its charter)

New York	13-5570651
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1345 Avenue of the Americas, New York, New York                 10105

(Address of principal executive offices) (Zip Code)

(212) 554-1234

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

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

Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒	Smaller reporting company	☐	Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 9, 2024, 2,000,000 shares of the registrant’s Common Stock, $1.25 par value were outstanding, all of which were owned indirectly by Equitable Holdings, Inc.

REDUCED DISCLOSURE FORMAT

Equitable Financial Life Insurance Company meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets, June 30, 2024 (Unaudited), and December 31, 2023	5
	Consolidated Statements of Income (Loss), Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	6
	Consolidated Statements of Comprehensive Income (Loss), Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	7
	Consolidated Statements of Equity, Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	8
	Consolidated Statements of Cash Flows, Six Months Ended June 30, 2024 and 2023 (Unaudited)	9
	Notes to Consolidated Financial Statements: (Unaudited)
	Note 1 - Organization	11
	Note 2 - Significant Accounting Policies	11
	Note 3 - Investments	14
	Note 4 - Derivatives	27
	Note 5 - Closed Block	36
	Note 6 - DAC and Other Deferred Assets/Liabilities	38
	Note 7 - Fair Value Disclosures	39
	Note 8 - Liabilities for Future Policyholder Benefits	56
	Note 9 - Market Risk Benefits	60
	Note 10 - Policyholder Account Balances	63
	Note 11 - Income Taxes	68
	Note 12 - Related Party Transactions	68
	Note 13 - Equity	69
	Note 14 - Redeemable Noncontrolling Interest	70
	Note 15 - Commitments and Contingent Liabilities	70
	Note 16 - Insurance Statutory Financial Information	73
	Note 17 - Reinsurance	74
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	77
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	83
Item 4.	Controls and Procedures	83
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	85
Item 1A.	Risk Factors	85
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	85
Item 3.	Defaults Upon Senior Securities	85
Item 4.	Mine Safety Disclosures	85
Item 5.	Other Information	85
Item 6.	Exhibits	85
Signatures		91

NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION

Certain of the statements included or incorporated by reference in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “intends,” “seeks,” “aims,” “plans,” “assumes,” “estimates,” “projects,” “should,” “would,” “could,” “may,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Equitable Financial Life Insurance Company (“Equitable Financial”) and its consolidated subsidiaries. “We,” “us” and “our” refer to Equitable Financial and its consolidated subsidiaries, unless the context refers only to Equitable Financial as a corporate entity. There can be no assurance that future developments affecting Equitable Financial will be those anticipated by management. Forward-looking statements include, without limitation, all matters that are not historical facts.

These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (i) conditions in the financial markets and economy, including the impact of geopolitical conflicts and related economic conditions, equity market declines and volatility, interest rate fluctuations, impacts on our goodwill and changes in liquidity and access to and cost of capital; (ii) operational factors, indebtedness, protection of confidential customer information or proprietary business information, operational failures by us or our service providers, potential strategic transactions, changes in accounting standards, and catastrophic events, such as the outbreak of pandemic diseases including COVID-19; (iii) credit, counterparties and investments, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties and affiliates and economic downturns, defaults and other events adversely affecting our investments; (iv) our reinsurance and hedging programs; (v) our products, structure and product distribution, including variable annuity guaranteed benefits features within certain of our products, variations in statutory capital requirements, financial strength and claims-paying ratings and key product distribution relationships; (vi) estimates, assumptions and valuations, including risk management policies and procedures, potential inadequacy of reserves and experience differing from pricing expectations or reserves, amortization of deferred acquisition costs and financial models; (vii) recruitment and retention of key employees at Equitable Financial and experienced and productive financial professionals; (viii) subjectivity of the determination of the amount of allowances and impairments taken on our investments; (ix) legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation and tax reform; and (x) general risks, including strong industry competition, information systems failing or being compromised and protecting our intellectual property.

Forward-looking statements should be read in conjunction with the other cautionary statements, risks, uncertainties and other factors identified in Equitable Financial’s Annual Report on Form 10-K for the year ended December 31, 2023, as amended or supplemented in our subsequently filed Quarterly Reports on Form 10-Q, including in the section entitled “Risk Factors,” and elsewhere in this Quarterly Report on Form 10-Q. You should read this Form 10-Q completely and with the understanding that actual future results may be materially different from expectations. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

Other risks, uncertainties and factors, including those discussed under “Risk Factors”, in our Annual Report on Form 10-K could cause our actual results to differ materially from those projected in any forward-looking statements we make. Readers should read carefully the factors described in “Risk Factors” in our Annual Report on Form 10-K to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements.

Throughout this Quarterly Report on Form 10-Q we use certain defined terms and abbreviations, which are summarized in the “Glossary” and “Acronyms” sections.

3

Part I FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Consolidated Balance Sheets

June 30, 2024 (Unaudited) and December 31, 2023

	June 30, 2024		December 31, 2023
	(in millions, except share data)
ASSETS
Investments:
Fixed maturities available-for-sale, at fair value (amortized cost of $61,707 and $61,884) (allowance for credit losses of $4 and $4)	$	53,935	$	55,165
Mortgage loans on real estate (net of allowance for credit losses of $229 and $277)	17,946		17,877
Policy loans	3,742		3,667
Other equity investments (1)	3,323		3,162
Trading securities, at fair value	756		257
Other invested assets	5,166		5,952
Total investments	84,868		86,080
Cash and cash equivalents	3,838		2,833
Deferred policy acquisition costs	4,722		4,759
Amounts due from reinsurers (allowance for credit losses of $9 and $7)	20,383		20,636
Loans to affiliates	1,900		1,900
Current and deferred income taxes	3,015		2,755
Purchased market risk benefits	14,185		16,729
Other assets	5,263		5,326
Assets for market risk benefits	763		574
Separate Accounts assets	125,406		121,497
Total Assets	$	264,343	$	263,089
LIABILITIES
Policyholders’ account balances	$	84,614	$	82,990
Liability for market risk benefits	12,568		14,570
Future policy benefits and other policyholders' liabilities	16,474		16,573
Broker-dealer related payables	440		796
Amounts due to reinsurers	179		216
Funds withheld payable	9,747		10,603
Reinsurance deposit liabilities	14,628		14,965
Other liabilities	2,708		2,496
Separate Accounts liabilities	125,406		121,497
Total Liabilities	$	266,764	$	264,706
Redeemable noncontrolling interest (2)	$	30	$	24
Commitments and contingent liabilities (3)
EQUITY
Equity attributable to Equitable Financial:
Common stock, $1.25 par value; 2,000,000 shares authorized, issued and outstanding	$	2	$	2
Additional paid-in capital	6,893		6,895
Accumulated deficit	(1,604)		(1,600)
Accumulated other comprehensive income (loss)	(7,742)		(6,938)
Total Equity	(2,451)		(1,641)
Total Liabilities, Redeemable Noncontrolling Interest and Equity	$	264,343	$	263,089

______________

(1)See Note 2 of the Notes to these Consolidated Financial Statements for details of balances with VIEs.

(2)See Note 14 of the Notes to these Consolidated Financial Statements for details of redeemable noncontrolling interest.

(3)See Note 15 of the Notes to these Consolidated Financial Statements for details of commitments and contingent liabilities.

See Notes to Consolidated Financial Statements (Unaudited).

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Consolidated Statements of Income (Loss)

Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
REVENUES
Policy charges and fee income	$	183	$	183	$	390	$	707
Premiums	119		156		252		353
Net derivative gains (losses)	(221)		(221)		(542)		(1,062)
Net investment income (loss)	866		885		1,800		1,743
Investment gains (losses), net:
Credit and intent to sell losses on available for sale debt securities and loans	(14)		(14)		(33)		(78)
Other investment gains (losses), net	(4)		(44)		(23)		(58)
Total investment gains (losses), net	(18)		(58)		(56)		(136)
Investment management and service fees	57		68		113		233
Amortization of reinsurance deposit liabilities	184		159		339		190
Other income	225		213		449		276
Total revenues	1,395		1,385		2,745		2,304
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits	350		335		717		953
Remeasurement of liability for future policy benefits	(2)		(14)		14		(1)
Change in market risk benefits and purchased market risk benefits	27		(92)		38		(68)
Interest credited to policyholders’ account balances	308		312		606		747
Compensation and benefits	46		48		93		103
Commissions	264		225		518		419
Interest expense	—		—		—		3
Amortization of deferred policy acquisition costs	125		123		255		245
Other operating costs and expenses	212		214		500		389
Total benefits and other deductions	1,330		1,151		2,741		2,790
Income (loss) from continuing operations, before income taxes	65		234		4		(486)
Income tax (expense) benefit	(16)		189		(8)		890
Net income (loss)	49		423		(4)		404
Less: Net income (loss) attributable to the noncontrolling interest (1)	—		1		1		1
Net income (loss) attributable to Equitable Financial	$	49	$	422	$	(5)	$	403

______________

(1)See Note 14 of the Notes to these Consolidated Financial Statements for details of redeemable noncontrolling interest.

See Notes to Consolidated Financial Statements (Unaudited).

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Consolidated Statements of Comprehensive Income (Loss)

Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$	49	$	423	$	(4)	$	404
Other comprehensive income (loss), net of income taxes:
Change in unrealized gains (losses), net of adjustments (1)	(367)		(546)		(802)		963
Change in market risk benefits - instrument-specific credit risk	(161)		(88)		(144)		845
Change in liability for future policy benefits - current discount rate	58		73		141		(36)
Change in defined benefit plan related items not yet recognized in periodic benefit cost, net of reclassification adjustment	—		—		1		—
Other comprehensive income (loss), net of income taxes	(470)		(561)		(804)		1,772
Comprehensive income (loss)	(421)		(138)		(808)		2,176
Less: Comprehensive income (loss) attributable to the noncontrolling interest (1)	—		1		1		1
Comprehensive income (loss) attributable to Equitable Financial	$	(421)	$	(139)	$	(809)	$	2,175

_____________

(1)See Note 13 of the Notes to these Consolidated Financial Statements for details of change in unrealized gains (losses), net of adjustments.

See Notes to Consolidated Financial Statements (Unaudited).

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Consolidated Statements of Equity

Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)

	Three Months Ended June 30,
	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Equity
	(in millions)
Balance, beginning of period	$	2	$	6,884	$	(1,653)	$	(7,272)	(2,039)
Dividend to parent company	—		—		—		—		—
Net income (loss)	—		—		49		—		49
Other comprehensive income (loss)	—		—		—		(470)		(470)
Other	—		9		—		—		9
Balance, June 30, 2024	$	2	$	6,893	$	(1,604)	$	(7,742)	$	(2,451)

Balance, beginning of period	$	2	$	8,524	$	(1,776)	$	(5,522)	$	1,228
Dividend to parent company	—		(1,050)		—		—		(1,050)
Net income (loss)	—		—		422		—		422
Other comprehensive income (loss)	—		—		—		(561)		(561)
Other	—		9		—		—		9
Balance, June 30, 2023	$	2	$	7,483	$	(1,354)	$	(6,083)	$	48

	Six Months Ended June 30,
	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Equity
	(in millions)
Balance, beginning of period	$	2	$	6,895	$	(1,600)	$	(6,938)	$	(1,641)
Dividend to parent company	—		(4)		—		—		(4)
Net income (loss)	—		—		(4)		—		(4)
Other comprehensive income (loss)	—		—		—		(804)		(804)
Other	—		2		—		—		2
Balance, June 30, 2024	$	2	$	6,893	$	(1,604)	$	(7,742)	$	(2,451)

Balance, beginning of period	$	2	$	8,536	$	(1,757)	$	(7,855)	$	(1,074)
Dividend to parent company	—		(1,050)				—		(1,050)
Net income (loss)	—		—		403		—		403
Other comprehensive income (loss)	—		—		—		1,772		1,772
Other	—		(3)		—		—		(3)
Balance, June 30, 2023	$	2	$	7,483	$	(1,354)	$	(6,083)	$	48

See Notes to Consolidated Financial Statements (Unaudited).

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Consolidated Statements of Cash Flows

Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)

	Six Months Ended June 30,
	2024		2023
	(in millions)
Cash flows from operating activities:
Net income (loss)	$	(4)	$	404
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Interest credited to policyholders’ account balances	606		747
Policy charges and fee income	(390)		(707)
Net derivative (gains) losses	542		1,062
Credit and intent to sell losses on available for sale debt securities and loans	33		78
Investment (gains) losses, net	23		58
Realized and unrealized (gains) losses on trading securities	(15)		(15)
Non-cash long-term incentive compensation expense	22		19
Amortization and depreciation	78		124
Equity (income) loss from limited partnerships	(86)		(14)
Remeasurement of liability for future policy benefits	14		(1)
Change in market risk benefits	38		(68)
Changes in:
Reinsurance recoverable	638		(1,122)
Capitalization of deferred policy acquisition costs	(257)		(253)
Funds withheld payable	105		(13)
Future policy benefits	250		30
Current and deferred income taxes	(53)		(891)
Other, net	(60)		210
Net cash provided by (used in) operating activities	$	1,484	$	(352)
Cash flows from investing activities:
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	$	3,150	$	4,474
Mortgage loans on real estate	456		236
Trading account securities	88		111
Short-term investments	550		949
Other	138		304
Payment for the purchase/origination of:
Fixed maturities, available-for-sale	(2,978)		(2,032)
Mortgage loans on real estate	(578)		(1,114)
Trading account securities	(579)		(126)
Short-term investments	(371)		(1,072)
Other	(159)		(425)
Cash settlements related to derivative instruments, net	(1,106)		(469)
Investment in capitalized software, leasehold improvements and EDP equipment	(51)		(27)
Other, net	(91)		(56)
Net cash provided by (used in) investing activities	$	(1,531)	$	753

See Notes to Consolidated Financial Statements (Unaudited).

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Consolidated Statements of Cash Flows

Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)

	Six Months Ended June 30,
	2024		2023
	(in millions)
Cash flows from financing activities:
Policyholders’ account balances:
Deposits	$	2,864	$	5,695
Withdrawals	(6,209)		(4,778)
Transfers (to) from Separate Accounts	874		679
Payments of market risk benefits	(13)		(194)
Changes in securities lending payable	36		29
Change in collateralized pledged assets	(77)		(45)
Change in collateralized pledged liabilities	3,568		1,939
Shareholder dividend paid	(4)		(1,050)
Purchase (redemption) of noncontrolling interests of consolidated company-sponsored investment funds	13		3
Other, net	—		(1)
Net cash provided by (used in) financing activities	$	1,052	$	2,277
Change in cash and cash equivalents	1,005		2,678
Cash and cash equivalents, beginning of period	2,833		797
Cash and cash equivalents, end of period	$	3,838	$	3,475
Non-cash transactions from investing and financing activities:
Right-of-use assets obtained in exchange for lease obligations	$	4	$	9
Securities exchanged for other equity investment	$	110	$	—

    

See Notes to Consolidated Financial Statements (Unaudited).

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited)

1)    ORGANIZATION

Equitable Financial’s (collectively with its consolidated subsidiaries, the “Company”) primary business is providing variable annuity, life insurance and employee benefit products to both individuals and businesses. The Company is an indirect, wholly-owned subsidiary of Holdings. Equitable Financial is a stock life insurance company organized in 1859 under the laws of the State of New York.

The Company’s two principal subsidiaries include Equitable Distributors, LLC (“Equitable Distributors”) and Equitable Investment Management Group, LLC (“EIMG”), which both are wholly-owned indirect subsidiaries of Holdings.

2)    SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The unaudited interim consolidated financial statements (the “consolidated financial statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to the Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”).

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying unaudited consolidated financial statements present the consolidated results of operations, financial condition and cash flows of the Company and its subsidiaries and those investment companies, partnerships and joint ventures in which the Company has control and a majority economic interest as well as those variable interest entities (“VIEs”) that meet the requirements for consolidation.

All significant intercompany transactions and balances have been eliminated in consolidation. The terms “second quarter 2024” and “second quarter 2023” refer to the three months ended June 30, 2024 and 2023, respectively. The terms “first six months of 2024” and “first six months of 2023” refer to the six months ended June 30, 2024 and 2023, respectively.

Certain prior year amounts have been reclassified to conform to the current year’s presentation.

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Future Adoption of New Accounting Pronouncements

Description	Effective Date and Method of Adoption	Effect on the Financial Statement or Other Significant Matters
ASU 2023-07: Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
This ASU provides improvements to reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple measures of segment profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and contain other disclosure requirements.	The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. A calendar year public entity will adopt the ASU for its 2024 Form 10-K. The ASU should be adopted retrospectively to all periods presented in the financial statements unless it is impracticable to do so.	The Company is currently assessing the additional required disclosures under the ASU including providing new segment disclosure requirements for entities with a single reportable segment. Management is evaluating the impact the adoption of this guidance will have on the Company’s consolidated financial statements.
ASU 2023-09: Income Taxes (Topic 740): Improvements to Income Tax Disclosures
The ASU enhanced existing income tax disclosures primarily related to the rate reconciliation and income taxes paid information. With regard to the improvements to disclosures of rate reconciliation, a public business entity is required on an annual basis to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. Similarly, a public entity is required to provide the amount of income taxes paid (net of refunds received) disaggregated by (1) federal, state, and foreign taxes and by(2) individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The ASU also includes certain other amendments to improve the effectiveness of income tax disclosures, for example, an entity is required to provide (1) pretax income (or loss) from continuing operations disaggregated between domestic and foreign, and (2) income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign.	The ASU will be effective for annual periods beginning after December 15, 2024. Entities are required to apply the ASU on a prospective basis.	The adoption of ASU 2023-09 is not expected to materially impact the Company’s financial position, results of operation, or cash flows.
SEC Release Nos. 33-11275; 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors
The SEC adopted rules requiring registrants to disclose climate-related information in registration statements and annual reports. The new rules include disclosure of material climate-related risks, including descriptions of board oversight and risk management activities. the material impacts of these risks on a registrant’s strategy, business model and outlook and any material climate-related targets or goals. In addition, registrants will need to quantify certain effects of severe weather events and other natural conditions in a note to their audited financial statements. In April 2024, citing litigation challenging the rules that commenced immediately after they were issued, the SEC issued an order staying applicability of the rules while judicial review proceeds.	Financial statement and all other disclosures are required at the beginning of the fiscal year 2027 with disclosures about material expenditure and impact required at the beginning of the fiscal year 2028. Disclosures are provided prospectively upon adoption.	The Company is currently assessing the additional required disclosures under the SEC Release. Management is evaluating the impact of the adoption of this guidance will have on the Company’s consolidated financial statements.

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EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Accounting and Consolidation of VIEs

For all new investment products and entities developed by the Company, the Company first determines whether the entity is a VIE, which involves determining an entity’s variability and variable interests, identifying the holders of the equity investment at risk and assessing the five characteristics of a VIE. Once an entity is determined to be a VIE, the Company then determines whether it is the primary beneficiary of the VIE based on its beneficial interests. If the Company is deemed to be the primary beneficiary of the VIE, the Company consolidates the entity.

Quarterly, management of the Company reviews its investment management agreements and its investments in, and other financial arrangements with, certain entities that hold client AUM to determine the entities the Company is required to consolidate under this guidance. These entities include certain mutual fund products, hedge funds, structured products, group trusts, collective investment trusts, and limited partnerships.

The analysis performed to identify variable interests held, determine whether entities are VIEs or VOEs, and evaluate whether the Company has a controlling financial interest in such entities requires the exercise of judgment and is updated on a continuous basis as circumstances change or new entities are developed. The primary beneficiary evaluation generally is performed qualitatively based on all facts and circumstances, including consideration of economic interests in the VIE held directly and indirectly through related parties and entities under common control, as well as quantitatively, as appropriate.

Consolidated VIEs

As of June 30, 2024 and December 31, 2023, the Company consolidated limited partnerships and LLCs for which it was identified as the primary beneficiary under the VIEs model. Included in other invested assets and mortgage loans on real estate in the Company’s consolidated balance sheets at June 30, 2024 and December 31, 2023 are total assets of $1.3 billion and $1.1 billion, respectively related to these VIEs.

Non-Consolidated VIEs

As of June 30, 2024 and December 31, 2023, respectively, the Company held approximately $2.7 billion and $2.5 billion of investment assets in the form of equity interests issued by non-corporate legal entities determined under the guidance to be VIEs, such as limited partnerships and limited liability companies, including CLOs, hedge funds, private equity funds and real estate-related funds. As an equity investor, the Company is considered to have a variable interest in each of these VIEs as a result of its participation in the risks and/or rewards these funds were designed to create by their defined portfolio objectives and strategies. Primarily through qualitative assessment, including consideration of related party interests or other financial arrangements, if any, the Company was not identified as the primary beneficiary of any of these VIEs, largely due to its inability to direct the activities that most significantly impact their economic performance. Consequently, the Company continues to reflect these equity interests in the consolidated balance sheets as other equity investments and applies the equity method of accounting for these positions. The net assets of these non-consolidated VIEs are approximately $342.7 billion and $268.5 billion as of June 30, 2024 and December 31, 2023, respectively. The Company’s maximum exposure to loss from its direct involvement with these VIEs is the carrying value of its investment of $2.7 billion and $2.5 billion and approximately $1.0 billion and $1.2 billion of unfunded commitments as of June 30, 2024 and December 31, 2023, respectively. The Company has no further economic interest in these VIEs in the form of guarantees, derivatives, credit enhancements or similar instruments and obligations.

13

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

3)    INVESTMENTS

Fixed Maturities AFS

The components of fair value and amortized cost for fixed maturities classified as AFS on the consolidated balance sheets excludes accrued interest receivable because the Company elected to present accrued interest receivable within other assets. Accrued interest receivable on AFS fixed maturities as of June 30, 2024 and December 31, 2023 was $535 million and $528 million, respectively. There was no accrued interest written off for AFS fixed maturities for the three and six months ended June 30, 2024 and 2023.

The following tables provide information relating to the Company’s fixed maturities classified as AFS:

AFS Fixed Maturities by Classification

	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
June 30, 2024
Fixed Maturities:
Corporate (1)	$	42,209	$	4	$	157	$	5,774	$	36,588
U.S. Treasury, government and agency	5,677		—		—		1,356		4,321
States and political subdivisions	432		—		2		71		363
Foreign governments	657		—		1		126		532
Residential mortgage-backed (2)	1,642		—		2		138		1,506
Asset-backed (3)	7,645		—		29		72		7,602
Commercial mortgage-backed	3,389		—		1		425		2,965
Redeemable preferred stock	56		—		2		—		58
Total at June 30, 2024	$	61,707	$	4	$	194	$	7,962	$	53,935
December 31, 2023:
Fixed Maturities:
Corporate (1)	$	42,014	$	4	$	217	$	4,960	$	37,267
U.S. Treasury, government and agency	5,639		—		2		1,102		4,539
States and political subdivisions	525		—		9		64		470
Foreign governments	689		—		2		110		581
Residential mortgage-backed (2)	1,469		—		3		128		1,344
Asset-backed (3)	8,092		—		20		107		8,005
Commercial mortgage-backed	3,400		—		1		501		2,900
Redeemable preferred stock	56		—		3		—		59
Total at December 31, 2023	$	61,884	$	4	$	257	$	6,972	$	55,165

______________

(1)Corporate fixed maturities include both public and private issues.

(2)Includes publicly traded agency pass-through securities and collateralized obligations.

(3)Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.

The contractual maturities of AFS fixed maturities as of June 30, 2024 are shown in the table below. Bonds not due at a single maturity date have been included in the table in the final year of maturity. Actual maturities may differ from contractual maturities because borrowers may have the right to call or pre-pay obligations with or without call or pre-payment penalties.

14

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Contractual Maturities of AFS Fixed Maturities

	Amortized Cost (Less Allowance for Credit Losses)		Fair Value
	(in millions)
June 30, 2024:
Contractual maturities:
Due in one year or less	$	1,720	$	1,699
Due in years two through five	12,032		11,534
Due in years six through ten	12,449		11,344
Due after ten years	22,770		17,227
Subtotal	48,971		41,804
Residential mortgage-backed	1,642		1,506
Asset-backed	7,645		7,602
Commercial mortgage-backed	3,389		2,965
Redeemable preferred stock	56		58
Total at June 30, 2024	$	61,703	$	53,935

The following table shows proceeds from sales, gross gains (losses) from sales and allowance for credit losses for AFS fixed maturities:

Proceeds from Sales, Gross Gains (Losses) from Sales and Allowance for Credit and Intent to Sell Losses for AFS Fixed Maturities

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Proceeds from sales	$	309	$	2,233	$	753	$	2,961
Gross gains on sales	$	2	$	5	$	2	$	7
Gross losses on sales	$	(3)	$	(46)	$	(27)	$	(64)
Net (increase) decrease in Allowance for Credit and Intent to Sell losses	$	(3)	$	(7)	$	(5)	$	(62)

The following table sets forth the amount of credit loss impairments on AFS fixed maturities held by the Company at the dates indicated and the corresponding changes in such amounts:

AFS Fixed Maturities - Credit and Intent to Sell Loss Impairments

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Balance, beginning of period	$	48	$	87	$	48	$	36
Previously recognized impairments on securities that matured, paid, prepaid or sold	(4)		(52)		(8)		(55)
Recognized impairments on securities impaired to fair value this period (1) (2)	—		—		—		50
Credit losses recognized this period on securities for which credit losses were not previously recognized	3		6		6		9
Additional credit losses this period on securities previously impaired	3		3		4		4
Balance, end of period	$	50	$	44	$	50	$	44

______________

(1)Represents circumstances where the Company determined in the current period that it intends to sell the security, or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

15

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

(2)Amounts reflected for the six months ended June 30, 2023 represent AFS fixed maturities in an unrealized loss position, which the Company sold in anticipation of the Company’s ordinary dividend to Holdings.

The tables below present a roll-forward of net unrealized investment gains (losses) recognized in AOCI:

Net Unrealized Gains (Losses) on AFS Fixed Maturities

	Three Months Ended June 30, 2024
	Net Unrealized Gains (Losses) on Investments		Policyholders’ Liabilities		Deferred Income Tax Asset (Liability)		AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, beginning of period	$	(7,274)	$	17	$	344	$	(6,913)
Net investment gains (losses) arising during the period	(499)		—		—		(499)
Reclassification adjustment:
Included in net income (loss)	4		—		—		4
Excluded from net income (loss)	—		—		—		—
Other	—		—		(5)		(5)
Impact of net unrealized investment gains (losses)	—		2		103		105
Net unrealized investment gains (losses) excluding credit losses	(7,769)		19		442		(7,308)
Net unrealized investment gains (losses) with credit losses	1		—		—		1
Balance, end of period	$	(7,768)	$	19	$	442	$	(7,307)
	Three Months Ended June 30, 2023
Balance, beginning of period	$	(7,609)	$	18	$	422	$	(7,169)
Net investment gains (losses) arising during the period	(629)		—		—		(629)
Reclassification adjustment:
Included in net income (loss)	50		—		—		50
Excluded from net income (loss)	—		—		—		—
Other	—		—		(122)		(122)
Impact of net unrealized investment gains (losses)	—		(7)		123		116
Net unrealized investment gains (losses) excluding credit losses	(8,188)		11		423		(7,754)
Net unrealized investment gains (losses) with credit losses	1		—		—		1
Balance, end of period	$	(8,187)	$	11	$	423	$	(7,753)

	Six Months Ended June 30, 2024
	Net Unrealized Gains (Losses) on Investments		Policyholders’ Liabilities		Deferred Income Tax Asset (Liability) (1)		AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses) (1)
	(in millions)
Balance, beginning of period	$	(6,715)	$	13	$	227	$	(6,475)
Net investment gains (losses) arising during the period	(1,080)		—		—		(1,080)
Reclassification adjustment:
Included in net income (loss)	30		—		—		30
Other	—		—		(5)		(5)
Impact of net unrealized investment gains (losses)	—		6		219		225

16

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Six Months Ended June 30, 2024
	Net Unrealized Gains (Losses) on Investments		Policyholders’ Liabilities		Deferred Income Tax Asset (Liability) (1)		AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses) (1)
	(in millions)
Net unrealized investment gains (losses) excluding credit losses	(7,765)		19		441		(7,305)
Net unrealized investment gains (losses) with credit losses	(3)		—		1		(2)
Balance, end of period	$	(7,768)	$	19	$	442	$	(7,307)
	Six Months Ended June 30, 2023
Balance, beginning of period	$	(9,116)	$	21	$	421	$	(8,674)
Net investment gains (losses) arising during the period	815		—		—		815
Reclassification adjustment:
Included in net income (loss)	120		—		—		120
Other	—		—		195		195
Impact of net unrealized investment gains (losses)	—		(10)		(194)		(204)
Net unrealized investment gains (losses) excluding credit losses	(8,181)		11		422		(7,748)
Net unrealized investment gains (losses) with credit losses	(6)		—		1		(5)
Balance, end of period	$	(8,187)	$	11	$	423	$	(7,753)

_____________

(1)Certain balances were revised from previously filed financial statements.

The following tables disclose the fair values and gross unrealized losses of the 3,993 issues as of June 30, 2024 and the 3,986 issues as of December 31, 2023 that are not deemed to have credit losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for the specified periods at the dates indicated:

AFS Fixed Maturities in an Unrealized Loss Position for Which No Allowance is Recorded

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
June 30, 2024
Fixed Maturities:
Corporate	$	3,350	$	120	$	27,919	$	5,650	$	31,269	$	5,770
U.S. Treasury, government and agency	12		—		4,252		1,356		4,264		1,356
States and political subdivisions	43		—		223		71		266		71
Foreign governments	35		2		474		124		509		126
Residential mortgage-backed	302		2		968		136		1,270		138
Asset-backed	714		2		1,171		70		1,885		72
Commercial mortgage-backed	93		9		2,802		416		2,895		425
Total at June 30, 2024	$	4,549	$	135	$	37,809	$	7,823	$	42,358	$	7,958

17

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
December 31, 2023:
Fixed Maturities:
Corporate	$	1,693	$	119	$	29,617	$	4,839	$	31,310	$	4,958
U.S. Treasury, government and agency	111		2		4,361		1,100		4,472		1,102
States and political subdivisions	10		—		244		64		254		64
Foreign governments	8		1		514		109		522		110
Residential mortgage-backed	74		1		1,030		127		1,104		128
Asset-backed	238		—		5,499		107		5,737		107
Commercial mortgage-backed	62		11		2,796		490		2,858		501
Total at December 31, 2023	$	2,196	$	134	$	44,061	$	6,836	$	46,257	$	6,970

The Company maintains a diversified portfolio of corporate securities across industries and issuers and does not have exposure to any single issuer in excess of 1.0% of total corporate securities. The largest exposures to a single issuer of corporate securities held as of June 30, 2024 and December 31, 2023 were $379 million and $360 million, respectively, representing 15.5% and 21.9% of the total consolidated equity of the Company.

Corporate high yield securities, consisting primarily of public high yield bonds, are classified as other than investment grade by the various rating agencies, i.e., a rating below Baa3/BBB- or the NAIC designation of 3 (medium investment grade), 4 or 5 (below investment grade) or 6 (in or near default). As of June 30, 2024 and December 31, 2023, respectively, approximately $2.0 billion and $2.5 billion, or 3.3% and 4.1%, of the $61.7 billion and $61.9 billion aggregate amortized cost of fixed maturities held by the Company were considered to be other than investment grade. These securities had gross unrealized losses of $101 million and $102 million as of June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024 and December 31, 2023, respectively, the $7.8 billion and $6.8 billion of gross unrealized losses of twelve months or more were primarily concentrated in corporate securities. In accordance with the policy described in Note 2 of the Notes to these Consolidated Financial Statements, the Company concluded that an adjustment to the allowance for credit losses for these securities was not warranted at either June 30, 2024 or December 31, 2023. As of June 30, 2024 and December 31, 2023, the Company did not intend to sell the securities nor will it likely be required to dispose of the securities before the anticipated recovery of their remaining amortized cost basis.

Based on the Company’s evaluation both qualitatively and quantitatively of the drivers of the decline in fair value of fixed maturity securities as of June 30, 2024, the Company determined that the unrealized loss was primarily due to increases in interest rates and credit spreads.

Securities Lending

Beginning in 2023, the Company has entered into securities lending agreements with an agent bank whereby blocks of securities are loaned to third parties, primarily major brokerage firms. As of June 30, 2024 and December 31, 2023, the estimated fair value of loaned securities was $128 million and $91 million. The agreements require a minimum of 102% of the fair value of the loaned securities to be held as cash collateral, calculated daily. To further minimize the credit risks related to these programs, the financial condition of counterparties is monitored on a regular basis. As of June 30, 2024 and December 31, 2023, cash collateral received in the amount of $131 million and $93 million was invested by the agent bank. A securities lending payable for the overnight and continuous loans is included in other liabilities in the amount of cash collateral received. Securities lending transactions are used to generate income. Income and expenses associated with these transactions are reported as net investment income and were not material for the June 30, 2024 and December 31, 2023.

18

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Mortgage Loans on Real Estate

In September 2023, the Company began investing in residential mortgage loans. Accrued interest receivable on commercial, agricultural and residential mortgage loans as of June 30, 2024 and December 31, 2023 was $86 million and $81 million, respectively. There was no accrued interest written off for commercial, agricultural and residential mortgage loans for the six months ended June 30, 2024 and 2023.

As of June 30, 2024, the Company foreclosed on one commercial mortgage loan that had an amortized cost of $108 million and an associated allowance of $54 million, that it re-acquired as wholly owned real estate with a cost of $56 million. As of June 30, 2024 and December 31, 2023, there were no other mortgage loans for which foreclosure was probable.

Allowance for Credit Losses on Mortgage Loans

The change in the allowance for credit losses for commercial, agricultural and residential mortgage loans were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Allowance for credit losses on mortgage loans:
Commercial mortgages:
Balance, beginning of period	$	284	$	133	$	270	$	123
Current-period provision for expected credit losses	9		7		23		17
Write-offs charged against the allowance	(75)		—		(75)		—
Recoveries of amounts previously written off	—		—		—		—
Net change in allowance	(66)		7		(52)		17
Balance, end of period	$	218	$	140	$	218	$	140
Agricultural mortgages:
Balance, beginning of period	$	6	$	6	$	6	$	6
Current-period provision for expected credit losses	3		(1)		3		(1)
Write-offs charged against the allowance	—		—		—		—
Recoveries of amounts previously written off	—		—		—		—
Net change in allowance	3		(1)		3		(1)
Balance, end of period	$	9	$	5	$	9	$	5
Residential mortgages:
Balance, beginning of period	$	3	$	—	$	1	$	—
Current-period provision for expected credit losses	(1)		—		1		—
Write-offs charged against the allowance	—		—		—		—
Recoveries of amounts previously written off	—		—		—		—
Net change in allowance	(1)		—		1		—
Balance, end of period	$	2	$	—	$	2	$	—
Total allowance for credit losses	$	229	$	145	$	229	$	145

The change in the allowance for credit losses is attributable to:

•increases/decreases in the loan balance due to new originations, maturing mortgages, and loan amortization and

•changes in credit quality and economic assumptions.

19

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Credit Quality Information

The Company’s commercial and agricultural mortgage loans segregated by risk rating exposure were as follows:

Loan to Value (“LTV”) Ratios (1) (3)

	June 30, 2024
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis		Total
	(in millions)
Commercial and agricultural mortgage loans:
Commercial:
0% - 50%	$	—	$	251	$	140	$	130	$	35	$	1,574	$	—	$	—	$	2,130
50% - 70%	73		706		1,326		664		716		2,305		495		206		6,491
70% - 90%	—		242		1,276		1,145		515		1,695		77		36		4,986
90% plus	—		—		467		158		91		833		—		—		1,549
Total commercial	$	73	$	1,199	$	3,209	$	2,097	$	1,357	$	6,407	$	572	$	242	$	15,156
Agricultural:
0% - 50%	$	23	$	101	$	159	$	188	$	248	$	903	$	—	$	—	$	1,622
50% - 70%	97		60		140		149		172		306		—		—		924
70% - 90%	—		—		—		—		—		16		—		—		16
90% plus	—		—		—		—		—		—		—		—		—
Total agricultural	$	120	$	161	$	299	$	337	$	420	$	1,225	$	—	$	—	$	2,562
Total commercial and agricultural mortgage loans:
0% - 50%	$	23	$	352	$	299	$	318	$	283	$	2,477	$	—	$	—	$	3,752
50% - 70%	170		766		1,466		813		888		2,611		495		206		7,415
70% - 90%	—		242		1,276		1,145		515		1,711		77		36		5,002
90% plus	—		—		467		158		91		833		—		—		1,549
Total commercial and agricultural mortgage loans	$	193	$	1,360	$	3,508	$	2,434	$	1,777	$	7,632	$	572	$	242	$	17,718

20

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Debt Service Coverage (“DSC”) Ratios (2) (3)

	June 30, 2024
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis		Total
	(in millions)
Commercial and agricultural mortgage loans:
Commercial:
Greater than 2.0x	$	—	$	175	$	693	$	1,222	$	1,131	$	3,527	$	—	$	—	$	6,748
1.8x to 2.0x	—		—		—		208		166		549		231		206		1,360
1.5x to 1.8x	—		141		808		143		—		992		113		—		2,197
1.2x to 1.5x	—		463		1,168		429		60		838		—		—		2,958
1.0x to 1.2x	73		412		369		61		—		443		228		36		1,622
Less than 1.0x	—		8		171		34		—		58		—		—		271
Total commercial	$	73	$	1,199	$	3,209	$	2,097	$	1,357	$	6,407	$	572	$	242	$	15,156
Agricultural:
Greater than 2.0x	$	8	$	7	$	42	$	34	$	59	$	182	$	—	$	—	$	332
1.8x to 2.0x	11		17		24		55		29		80		—		—		216
1.5x to 1.8x	47		12		49		28		110		206		—		—		452
1.2x to 1.5x	20		46		105		140		158		428		—		—		897
1.0x to 1.2x	23		47		55		69		56		297		—		—		547
Less than 1.0x	11		32		24		11		8		32		—		—		118
Total agricultural	$	120	$	161	$	299	$	337	$	420	$	1,225	$	—	$	—	$	2,562
Total commercial and agricultural mortgage loans:
Greater than 2.0x	$	8	$	182	$	735	$	1,256	$	1,190	$	3,709	$	—	$	—	$	7,080
1.8x to 2.0x	11		17		24		263		195		629		231		206		1,576
1.5x to 1.8x	47		153		857		171		110		1,198		113		—		2,649
1.2x to 1.5x	20		509		1,273		569		218		1,266		—		—		3,855
1.0x to 1.2x	96		459		424		130		56		740		228		36		2,169
Less than 1.0x	11		40		195		45		8		90		—		—		389
Total commercial and agricultural mortgage loans	$	193	$	1,360	$	3,508	$	2,434	$	1,777	$	7,632	$	572	$	242	$	17,718

_____________

(1)The LTV ratio is derived from current loan balance divided by the fair value of the property. The fair value of the underlying commercial properties is updated annually for each mortgage loan.

(2)The DSC ratio is calculated using the most recently reported operating income results from property operations divided by annual debt service.

(3)Residential mortgage loans are excluded from the above tables.

21

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

LTV Ratios (1) (3)

	December 31, 2023
	Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis		Total
	(in millions)
Commercial and agricultural mortgage loans:
Commercial:
0% - 50%	$	191	$	164	$	129	$	35	$	—	$	1,540	$	—	$	—	$	2,059
50% - 70%	703		1,916		671		750		299		2,319		463		96		7,217
70% - 90%	308		1,197		1,236		523		245		1,384		37		35		4,965
90% plus	—		—		66		54		92		858		—		—		1,070
Total commercial	$	1,202	$	3,277	$	2,102	$	1,362	$	636	$	6,101	$	500	$	131	$	15,311
Agricultural:
0% - 50%	$	102	$	162	$	191	$	235	$	132	$	802	$	—	$	—	$	1,624
50% - 70%	60		146		152		201		58		288		—		—		905
70% - 90%	—		—		—		—		—		16		—		—		16
90% plus	—		—		—		—		—		—		—		—		—
Total agricultural	$	162	$	308	$	343	$	436	$	190	$	1,106	$	—	$	—	$	2,545
Total commercial and agricultural mortgage loans:
0% - 50%	$	293	$	326	$	320	$	270	$	132	$	2,342	$	—	$	—	$	3,683
50% - 70%	763		2,062		823		951		357		2,607		463		96		8,122
70% - 90%	308		1,197		1,236		523		245		1,400		37		35		4,981
90% plus	—		—		66		54		92		858		—		—		1,070
Total commercial and agricultural mortgage loans	$	1,364	$	3,585	$	2,445	$	1,798	$	826	$	7,207	$	500	$	131	$	17,856

DSC Ratios (2) (3)

	December 31, 2023
	Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis		Total
	(in millions)
Commercial and agricultural mortgage loans:
Commercial:
Greater than 2.0x	$	175	$	693	$	1,125	$	1,135	$	249	$	3,256	$	—	$	—	$	6,633
1.8x to 2.0x	—		—		182		167		171		662		383		96		1,661
1.5x to 1.8x	80		1,060		234		—		162		924		—		—		2,460

22

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	December 31, 2023
	Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis		Total
	(in millions)
1.2x to 1.5x	469		687		457		—		11		838		41		—		2,503
1.0x to 1.2x	470		668		38		—		43		317		76		35		1,647
Less than 1.0x	8		169		66		60		—		104		—		—		407
Total commercial	$	1,202	$	3,277	$	2,102	$	1,362	$	636	$	6,101	$	500	$	131	$	15,311
Agricultural:
Greater than 2.0x	$	7	$	50	$	36	$	59	$	20	$	179	$	—	$	—	$	351
1.8x to 2.0x	18		16		56		33		23		61		—		—		207
1.5x to 1.8x	12		50		31		109		17		193		—		—		412
1.2x to 1.5x	46		111		148		170		98		365		—		—		938
1.0x to 1.2x	47		57		68		57		26		284		—		—		539
Less than 1.0x	32		24		4		8		6		24		—		—		98
Total agricultural	$	162	$	308	$	343	$	436	$	190	$	1,106	$	—	$	—	$	2,545
Total commercial and agricultural mortgage loans:
Greater than 2.0x	$	182	$	743	$	1,161	$	1,194	$	269	$	3,435	$	—	$	—	$	6,984
1.8x to 2.0x	18		16		238		200		194		723		383		96		1,868
1.5x to 1.8x	92		1,110		265		109		179		1,117		—		—		2,872
1.2x to 1.5x	515		798		605		170		109		1,203		41		—		3,441
1.0x to 1.2x	517		725		106		57		69		601		76		35		2,186
Less than 1.0x	40		193		70		68		6		128		—		—		505
Total commercial and agricultural mortgage loans	$	1,364	$	3,585	$	2,445	$	1,798	$	826	$	7,207	$	500	$	131	$	17,856

_____________

(1)The LTV ratio is derived from current loan balance divided by the fair value of the property. The fair value of the underlying commercial properties is updated annually for each mortgage loan.

(2)The DSC ratio is calculated using the most recently reported operating income results from property operations divided by annual debt service.

(3)Residential mortgage loans are excluded from the above tables.

The amortized cost of residential mortgage loans by credit quality indicator and origination year was as follows:

	June 30, 2024
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Total
	(in millions)
Performance indicators:
Performing	$	—	$	263	$	117	$	72	$	2	$	2	$	456
Nonperforming	—		—		—		—		—		—		—
Total	$	—	$	263	$	117	$	72	$	2	$	2	$	456

23

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	December 31, 2023
	Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior		Total
	(in millions)
Performance indicators:
Performing	$	98	$	121	$	74	$	2	$	1	$	2	$	298
Nonperforming	—		—		—		—		—		—		—
Total	$	98	$	121	$	74	$	2	$	1	$	2	$	298

Past-Due and Nonaccrual Mortgage Loan Status

The aging analysis of past-due mortgage loans were as follows:

Age Analysis of Past Due Mortgage Loans (1)

	Accruing Loans												Non-accruing Loans		Total Loans		Non-accruing Loans with No Allowance		Interest Income on Non-accruing Loans
	Past Due								Current		Total
	30-59 Days		60-89 Days		90 Days or More		Total
	(in millions)
June 30, 2024:
Mortgage loans:
Commercial	$	—	$	—	$	—	$	—	$	15,123	$	15,123	$	33	$	15,156	$	—	$	—
Agricultural	16		6		27		49		2,477		2,526		36		2,562		—		—
Residential	—		—		—		—		456		456		—		456		—		—
Total	$	16	$	6	$	27	$	49	$	18,056	$	18,105	$	69	$	18,174	$	—	$	—
December 31, 2023:
Mortgage loans:
Commercial	$	32	$	—	$	—	$	32	$	15,045	$	15,077	$	234	$	15,311	$	—	$	7
Agricultural	7		5		40		52		2,474		2,526		19		2,545		—		—
Residential	—		—		—		—		298		298		—		298		—		—
Total	$	39	$	5	$	40	$	84	$	17,817	$	17,901	$	253	$	18,154	$	—	$	7

_______________

(1)Amounts presented at amortized cost basis.

As of June 30, 2024 and December 31, 2023, the amortized cost of problem mortgage loans that had been classified as non-accrual loans were $36 million and $127 million, respectively.

Troubled Debt Restructuring

There was one TDR during the three months ended June 30, 2024. The Company granted a modification splitting the commercial mortgage loan into two notes. One note retaining the original loan terms and the second note with an increased interest rate to market terms and required management of excess cash. The loans have an amortized cost of $65.2 million. The impact to Investment income or gains (losses) as a result of this modification for the three months ended June 30, 2024 was not material to the consolidated financial statements.

During 2023, the Company granted modification of interest rates on four commercial mortgage loans, but not to market terms and required management of excess cash. The loans have an amortized cost of $236 million which represents 1.5% of total commercial mortgage loans. Two of the four loans also have term extensions of 17 months to 4 years. The impact to Investment income or gains (losses) as a result of these modifications in 2023 was not material to the consolidated financial statements. For the accounting policy pertaining to our TDRs see Note 2 of the Notes to these Consolidated Financial Statements.

The above modifications are performing in accordance with their restructured terms.

24

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Equity Securities

The breakdown of unrealized and realized gains and (losses) on equity securities was as follows:

Unrealized and Realized Gains (Losses) from Equity Securities

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Net investment gains (losses) recognized during the period on securities held at the end of the period	$	(5)	$	7	$	10	$	6
Net investment gains (losses) recognized on securities sold during the period	2		(2)		1		(2)
Unrealized and realized gains (losses) on equity securities	$	(3)	$	5	$	11	$	4

Trading Securities

As of June 30, 2024 and December 31, 2023, respectively, the fair value of the Company’s trading securities was $756 million and $257 million. As of June 30, 2024 and December 31, 2023, respectively, trading securities included the General Account’s investment in Separate Accounts had carrying values of $55 million and $48 million.

The breakdown of net investment income (loss) from trading securities was as follows:

Net Investment Income (Loss) from Trading Securities

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Net investment gains (losses) recognized during the period on securities held at the end of the period	$	—	$	4	$	15	$	17
Net investment gains (losses) recognized on securities sold during the period	—		(1)		—		(2)
Unrealized and realized gains (losses) on trading securities	—		3		15		15
Interest and dividend income from trading securities	4		2		5		4
Net investment income (loss) from trading securities	$	4	$	5	$	20	$	19

Net Investment Income

The following tables provide the components of net investment income by investment type:

	Three Months Ended June 30,
	2024						2023
	Excluding (1) Funds Withheld and NI Modco		Funds Withheld and NI Modco		Total		Excluding Funds Withheld and NI Modco		Funds Withheld and NI Modco		Total
	(in millions)
Fixed maturities	$	386	$	255	$	641	$	416	$	272	$	688
Mortgage loans on real estate	145		83		228		111		87		198
Policy loans	46		4		50		49		—		49
Other equity investments	41		4		45		49		(35)		14
Trading securities	4		—		4		5		—		5
Other investment income	(23)		11		(12)		6		1		7
Gross investment income (loss)	599		357		956		636		325		961
Investment expenses	(58)		(32)		(90)		(46)		(30)		(76)
Net investment income (loss)	$	541	$	325	$	866	$	590	$	295	$	885

25

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Six Months Ended June 30,
	2024						2023
	Excluding Funds Withheld and NI Modco		Funds Withheld and NI Modco		Total		Excluding (1) Funds Withheld and NI Modco		Funds Withheld and NI Modco		Total
	(in millions)
Fixed maturities	$	777	$	527	$	1,304	$	1,087	$	272	$	1,359
Mortgage loans on real estate	287		169		456		288		87		375
Policy loans	94		7		101		97		—		97
Other equity investments	96		12		108		70		(35)		35
Trading securities	20		—		20		19		—		19
Other investment income	(29)		16		(13)		12		1		13
Gross investment income (loss)	1,245		731		1,976		1,573		325		1,898
Investment expenses	(110)		(66)		(176)		(125)		(30)		(155)
Net investment income (loss)	$	1,135	$	665	$	1,800	$	1,448	$	295	$	1,743

_______________

(1)“NI Modco” represents modco arrangement on non-insulated Separate Accounts as part of the Reinsurance Treaty with Equitable America.

Investment Gains (Losses), Net

Investment gains (losses), net, including changes in the valuation allowances and credit losses were as follows:

	Three Months Ended June 30,
	2024						2023
	Excluding Funds Withheld and NI Modco		Funds Withheld and NI Modco		Total		Excluding Funds Withheld and NI Modco		Funds Withheld and NI Modco		Total
	(in millions)
Fixed maturities	$	(3)	$	(1)	$	(4)	$	(15)	$	(34)	$	(49)
Mortgage loans on real estate	(12)		(1)		(13)		(5)		(2)		(7)
Other equity investments (1)	—		—		—		—		—		—
Other	(1)		—		(1)		(2)		—		(2)
Investment gains (losses), net	$	(16)	$	(2)	$	(18)	$	(22)	$	(36)	$	(58)

	Six Months Ended June 30,
	2024						2023
	Excluding Funds Withheld and NI Modco		Funds Withheld Assets and NI Modco		Total		Excluding Funds Withheld and NI Modco		Funds Withheld and NI Modco		Total
	(in millions)
Fixed maturities	$	(6)	$	(24)	$	(30)	$	(86)	$	(34)	$	(120)
Mortgage loans on real estate	(15)		(14)		(29)		(14)		(2)		(16)
Other equity investments	—		—		—		—		—		—
Other	3		—		3		—		—		—
Investment gains (losses), net	$	(18)	$	(38)	$	(56)	$	(100)	$	(36)	$	(136)

For the three and six months ended June 30, 2024 and 2023, respectively, investment results passed through to certain participating group annuity contracts as interest credited to policyholders’ account balances totaled $0 million $1 million, $0 million and $1 million.

26

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

4)    DERIVATIVES

The Company uses derivatives as part of its overall asset/liability risk management primarily to reduce exposures to equity market and interest rate risks. Derivative hedging strategies are designed to reduce these risks from an economic perspective and are all executed within the framework of a “Derivative Use Plan” approved by applicable states’ insurance law. Derivatives are generally not accounted for using hedge accounting, with the exception of TIPS and cash flow hedges, which are discussed further below. Operation of these hedging programs is based on models involving numerous estimates and assumptions, including, among others, mortality, lapse, surrender and withdrawal rates, election rates, fund performance, market volatility and interest rates. A wide range of derivative contracts are used in these hedging programs, including exchange traded equity, currency and interest rate futures contracts, total return and/or other equity swaps, interest rate swap and floor contracts, bond and bond-index total return swaps, swaptions, variance swaps and equity options, credit and foreign exchange derivatives, as well as bond and repo transactions to support the hedging. The derivative contracts are collectively managed in an effort to reduce the economic impact of unfavorable changes in guaranteed benefits’ exposures attributable to movements in capital markets. In addition, as part of its hedging strategy, the Company targets an asset level for all variable annuity products at or above a CTE98 level under most economic scenarios (CTE is a statistical measure of tail risk which quantifies the total asset requirement to sustain a loss if an event outside a given probability level has occurred. CTE98 denotes the financial resources a company would need to cover the average of the worst 2% of scenarios.)

Derivatives Utilized to Hedge Exposure to Variable Annuities with Guarantee Features

The Company has issued and continues to offer variable annuity products with GMxB features which are accounted for as market risk benefits. The risk associated with the GMDB feature is that under-performance of the financial markets could result in GMDB benefits, in the event of death, being higher than what accumulated policyholders’ account balances would support. The risk associated with the GMIB feature is that under-performance of the financial markets could result in the present value of GMIB, in the event of annuitization, being higher than what accumulated policyholders’ account balances would support, taking into account the relationship between current annuity purchase rates and the GMIB guaranteed annuity purchase rates. The risk associated with products that have a GMxB feature and are accounted for as market risk benefits is that under-performance of the financial markets could result in the GMxB features benefits being higher than what accumulated policyholders’ account balances would support.

For GMxB features, the Company retains certain risks including basis, credit spread and some volatility risk and risk associated with actual experience compared to expected actuarial assumptions for mortality, lapse and surrender, withdrawal and policyholder election rates, among other things. The derivative contracts are managed to correlate with changes in the value of the GMxB features that result from financial markets movements. A portion of exposure to realized equity volatility is hedged using equity options and variance swaps and a portion of exposure to credit risk is hedged using total return swaps on fixed income indices. Additionally, the Company is party to total return swaps for which the reference U.S. Treasury securities are contemporaneously purchased from the market and sold to the swap counterparty. As these transactions result in a transfer of control of the U.S. Treasury securities to the swap counterparty, the Company derecognizes these securities with consequent gain or loss from the sale. The Company has also purchased reinsurance contracts to mitigate the risks associated with GMDB features and the impact of potential market fluctuations on future policyholder elections of GMIB features contained in certain annuity contracts issued by the Company. The reinsurance of these features is accounted for as purchased market risk benefits. In addition, on June 1, 2021, we ceded legacy variable annuity policies sold by Equitable Financial between 2006-2008 (the “Block”), comprised of non-New York “Accumulator” policies containing fixed rate GMIB and/or GMDB guarantees to CS Life. As this contract provides full risk transfer and thus has the same risk attributes as the underlying direct contracts, the benefits of this treaty are accounted for in the same manner as the underlying gross reserves and therefore the amounts due from reinsurers related to the GMIB and GMDB are accounted for as purchased market risk benefits.

The Company has in place an economic hedge program using U.S. Treasury futures to partially protect the overall profitability of future variable annuity sales against declining interest rates.

Derivatives Utilized to Hedge Crediting Rate Exposure on SCS, SIO, MSO and IUL Products/Investment Options

The Company hedges crediting rates in the SCS variable annuity, SIO in the EQUI-VEST variable annuity series, MSO in the variable life insurance products and IUL insurance products. These products permit the contract owner to participate in the performance of an index, ETF or commodity price movement up to a cap for a set period of time. They also contain a protection feature, in which the Company will absorb, up to a certain percentage, the loss of value in an index, ETF or commodity price, which varies by product segment.

27

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

In order to support the returns associated with these features, the Company enters into derivative contracts whose payouts, in combination with fixed income investments, emulate those of the index, ETF or commodity price, subject to caps and buffers, thereby substantially reducing any exposure to market-related earnings volatility.

Derivatives Used to Hedge Equity Market Risks Associated with the General Account’s Seed Money Investments in Retail Mutual Funds

The Company’s General Account seed money investments in retail mutual funds expose us to market risk, including equity market risk which is partially hedged through equity-index futures contracts to minimize such risk.

Derivatives Used for General Account Investment Portfolio

The Company purchased CDS to mitigate its exposure to a reference entity through cash positions. These positions do not replicate credit spreads.

The Company purchased 30-year TIPS and other sovereign bonds, both inflation-linked and non-inflation linked, as General Account investments and enters into asset or cross-currency basis swaps, to result in payment of the given bond’s coupons and principal at maturity in the bond’s specified currency to the swap counterparty in return for fixed dollar amounts. These swaps, when considered in combination with the bonds, together result in a net position that is intended to replicate a dollar-denominated fixed-coupon cash bond with a yield higher than a term-equivalent U.S. Treasury bond.

Derivatives Utilized to Hedge Exposure to Foreign Currency Denominated Cash Flows

The Company purchases private placement debt securities and issues funding agreements in the FABN program in currencies other than its functional U.S. dollar currency. The Company enters into cross currency swaps with external counterparties to hedge the exposure of the foreign currency denominated cash flows of these instruments. The foreign currency received from or paid to the cross currency swap counterparty is exchanged for fixed U.S. dollar amounts with improved net investment yields or net product costs over equivalent U.S. dollar denominated instruments issued at that time. The transactions are accounted for as cash flow hedges when they are designated in hedging relationships and qualify for hedge accounting.

These cross currency swaps are for the period the foreign currency denominated private placement debt securities and funding agreement are outstanding, with the longest cross currency swap expiring in 2033. Since these cross currency swaps are designated and qualify as cash flow hedges, the corresponding interest accruals are recognized in net investment income and in interest credited to policyholders’ account balances.

The tables below present quantitative disclosures about the Company’s derivative instruments designated in hedging relationships and derivative instruments which have not been designated in hedging relationships, including those embedded in other contracts required to be accounted for as derivative instruments.

The following table presents the gross notional amount and fair value of the Company’s derivatives:

Derivative Instruments by Category

	June 30, 2024
					Fair Value
	Notional Amount		Notional Amount- FWH and NI Modco		Derivative Assets		Derivative Assets - FWH and NI Modco		Derivative Liabilities		Derivative Liabilities - FWH and NI Modco		Net Derivatives
	(in millions)
Derivatives: designated for hedge accounting (1)
Cash flow hedges:
Currency swaps	$	2,629	$	—	$	99	$	—	$	92	$	—	$	7
Interest swaps	952		—		—		—		328		—		(328)
Total: designated for hedge accounting	3,581		—		99		—		420		—		(321)

28

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	June 30, 2024
					Fair Value
	Notional Amount		Notional Amount- FWH and NI Modco		Derivative Assets		Derivative Assets - FWH and NI Modco		Derivative Liabilities		Derivative Liabilities - FWH and NI Modco		Net Derivatives
	(in millions)
Derivatives: not designated for hedge accounting (1)
Equity contracts:
Futures	2,349		3,206		—		—		—		—		—
Swaps	840		14,197		3		51		—		17		37
Options	9,311		44,777		3,091		12,019		728		2,464		11,918
Interest rate contracts:
Futures	1,533		6,164		—		—		—		—		—
Swaps	526		2,055		1		17		4		16		(2)
Credit contracts:
Credit default swaps	102		—		—		—		1		—		(1)
Currency contracts:
Currency swaps	803		—		3		—		4		—		(1)
Other freestanding contracts:
Margin	—		—		99		204		—		—		303
Collateral	—		—		113		—		11,711		—		(11,598)
Total: Not designated for hedge accounting	15,464		70,399		3,310		12,291		12,448		2,497		656
Embedded derivatives:
SCS, SIO, MSO and IUL indexed features (2) (5)	—		—		8,960		—		11,756		—		(2,796)
Funds withheld payable (3)	—		—		—		—		(87)		—		87
Modco payable (4)	—		—		(183)		—		—		—		(183)
Total embedded derivatives	—		—		8,777		—		11,669		—		(2,892)
Total derivative instruments	$	19,045	$	70,399	$	12,186	$	12,291	$	24,537	$	2,497	$	(2,557)

______________

(1)Reported in other invested assets in the consolidated balance sheets.

(2)Reported in policyholders’ account balances in the consolidated balance sheets.

(3)Reported in funds withheld payable in the consolidated balance sheets.

(4)Recorded in amounts due to reinsurers.

(5)SCS embedded derivative asset is recorded as a modco receivable. This is presented net in the consolidated balance sheets.

29

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	December 31, 2023
					Fair Value
	Notional Amount		Notional Amount - FWH and NI Modco		Derivative Assets		Derivative Assets - FWH and NI Modco		Derivative Liabilities		Derivative Liabilities - FWH and NI Modco		Net Derivatives
	(in millions)
Derivatives: designated for hedge accounting (1)
Cash flow hedges:
Currency swaps	$	2,358	$	—	$	79	$	—	$	90	$	—	$	(11)
Interest swaps	952		—		—		—		311		—		(311)
Total: designated for hedge accounting	3,310		—		79		—		401		—		(322)
Derivatives: not designated for hedge accounting (1)
Equity contracts:
Futures	2,055		3,429		—		—		—		—		—
Swaps	1,996		12,930		7		45		—		—		52
Options	7,445		41,501		2,169		9,675		524		2,203		9,117
Interest rate contracts:
Futures	1,000		6,572		—		—		—		—		—
Swaps	495		2,381		34		83		1		1		115
Credit contracts:
Credit default swaps	103		—		—		—		2		—		(2)
Currency contracts:
Currency swaps	823		—		—		—		27		—		(27)
Other freestanding contracts:
Margin	—		—		96		231		—		—		327
Collateral	—		—		75		—		8,276		—		(8,201)
Total: Not designated for hedge accounting	13,917		66,813		2,381		10,034		8,830		2,204		1,381
Embedded derivatives:
SCS, SIO, MSO and IUL indexed features (2) (5)	—		—		7,140		—		9,081		—		(1,941)
Funds withheld payable (3)	—		—		—		—		100		—		(100)
Modco payable (4)	—		—		(411)		—		—		—		(411)
Total embedded derivatives	—		—		6,729		—		9,181		—		(2,452)
Total derivative instruments	$	17,227	$	66,813	$	9,189	$	10,034	$	18,412	$	2,204	$	(1,393)

______________

(1)Reported in other invested assets in the consolidated balance sheets.

(2)Reported in policyholders’ account balances in the consolidated balance sheets.

(3)Reported in funds withheld payable in the consolidated balance sheets.

(4)Recorded in amounts due from reinsurers in the consolidated balance sheets.

(5)SCS embedded derivative asset is recorded as a modco receivable. This is presented net in the consolidated balance sheets.

The following table presents the effects of derivative instruments on the consolidated statements of income and comprehensive income (loss):

30

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

31

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Three Months Ended June 30, 2024										Six Months Ended June 30, 2024
	Net Derivatives Gains (Losses) (1) (2)		Net-FWH and NI modco Derivatives Gains (Losses)		Net Investment Income		Interest Credited To Policyholders Account Balances		AOCI		Net Derivatives Gains (Losses) (1) (2)		Net-FWH and NI modco Derivatives Gains (Losses)		Net Investment Income		Interest Credited To Policyholders Account Balances		AOCI
	(in millions)
Derivative instruments:
Derivatives: designated for hedge accounting
Cash flow hedges:
Currency/Interest rate contracts:
Currency swaps	$	—	$	—	$	4	$	(5)	$	22	$	1	$	—	$	7	$	(23)	$	38
Interest swaps	—		—		(17)		—		13		—		—		(14)		—		6
Total: designated for hedge accounting	—		—		(13)		(5)		35		1		—		(7)		(23)		44
Derivatives: not designated for hedge accounting
Equity contracts:
Futures	15		(33)		—		—		—		115		(46)		—		—		—
Swaps	(10)		(87)		—		—		—		(158)		(1,050)		—		—		—
Options	217		770		—		—		—		656		2,732		—		—		—
Interest rate contracts:
Futures	(18)		35		—		—		—		(55)		85		—		—		—
Swaps	(15)		(74)		—		—		—		(43)		(210)		—		—		—
Swaptions	—		—		—		—		—		—		—		—		—		—
Credit contracts:
Credit default swaps	—		—		—		—		—		—		—		—		—		—
Currency contracts:
Currency swaps	1		—		—		—		—		14		—		—		—		—
Other contracts:
Margin	—		—		—		—		—		—		—		—		—		—
Collateral	—		—		—		—		—		—		—		—		—		—

32

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Three Months Ended June 30, 2024										Six Months Ended June 30, 2024
	Net Derivatives Gains (Losses) (1) (2)		Net-FWH and NI modco Derivatives Gains (Losses)		Net Investment Income		Interest Credited To Policyholders Account Balances		AOCI		Net Derivatives Gains (Losses) (1) (2)		Net-FWH and NI modco Derivatives Gains (Losses)		Net Investment Income		Interest Credited To Policyholders Account Balances		AOCI
	(in millions)
Total: not designated for hedge accounting	190		611		—		—		—		529		1,511		—		—		—
Embedded derivatives:
SCS, SIO, MSO and IUL indexed features	(255)		—		—		—		—		(854)		—		—		—		—
Funds withheld payable	89		—		—		—		—		1,106		—		—		—		—
Modco payable	(850)		—		—		—		—		(2,822)		—		—		—		—
Total embedded derivatives	(1,016)		—		—		—		—		(2,570)		—		—		—		—
Total derivatives	$	(826)	$	611	$	(13)	$	(5)	$	35	$	(2,040)	$	1,511	$	(7)	$	(23)	$	44

______________

(1)    Reported in net derivative gains (losses) in the consolidated statements of income (loss).

(2)    Investment fees of $6 million and $11 million for the three and six months ended June 30, 2024, respectively, are reported in net derivative gains (losses) in the consolidated statements of income (loss).

	Three Months Ended June 30, 2023										Six Months Ended June 30, 2023
	Net Derivatives Gain (Losses) (1) (2)		Net-FWH and NI modco Derivatives Gains (Losses)		Net Investment Income		Interest Credited To Policyholders Account Balances		AOCI		Net Derivatives Gain(Losses) (1) (2)		Net-FWH and NI modco Derivatives Gains (Losses)		Net Investment Income		Interest Credited To Policyholders Account Balances		AOCI
	(in millions)
Derivatives: Designated for hedge accounting
Cash flow hedges:
Currency Swaps	$	2	$	—	$	2	$	8	$	3	$	10	$	—	$	5	$	(26)	$	28
Interest Swaps	(16)		—		—		—		30		(21)		—		—		—		2
Total: Designated for hedge accounting	(14)				2		8		33		(11)				5		(26)		30

33

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Three Months Ended June 30, 2023					Six Months Ended June 30, 2023
	Net Derivatives Gain (Losses) (1) (2)	Net-FWH and NI modco Derivatives Gains (Losses)	Net Investment Income	Interest Credited To Policyholders Account Balances	AOCI	Net Derivatives Gain(Losses) (1) (2)	Net-FWH and NI modco Derivatives Gains (Losses)	Net Investment Income	Interest Credited To Policyholders Account Balances	AOCI
	(in millions)
Derivatives: Not designated for hedge accounting
Equity contracts:
Futures	58	(158)	—	—	—	(96)	(158)	—	—	—
Swaps	(113)	(591)	—	—	—	(716)	(591)	—	—	—
Options	361	2,032	—	—	—	1,858	2,032	—	—	—
Interest rate contracts:
Futures	(19)	76	—	—	—	(62)	76	—	—	—
Swaps	(61)	5	—	—	—	(14)	5	—	—	—
Credit contracts:
Credit default swaps	—	—	—	—	—	—	—	—	—	—
Currency contracts:
Currency swaps	(9)	—	—	—	—	(19)	—	—	—	—
Currency forwards	—	—	—	—	—	—	—	—	—	—
Other contracts:
Margin	—	—	—	—	—	—	—	—	—	—
Collateral	—	—	—	—	—	—	—	—	—	—
Total: Not designated for hedge accounting	217	1,364	—	—	—	951	1,364	—	—	—
Embedded Derivatives:
SCS, SIO, MSO and IUL indexed features	(453)	—	—	—	—	(2,027)	—	—	—	—
Funds withheld payable	599	—	—	—	—	599	—	—	—	—

34

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Three Months Ended June 30, 2023										Six Months Ended June 30, 2023
	Net Derivatives Gain (Losses) (1) (2)		Net-FWH and NI modco Derivatives Gains (Losses)		Net Investment Income		Interest Credited To Policyholders Account Balances		AOCI		Net Derivatives Gain(Losses) (1) (2)		Net-FWH and NI modco Derivatives Gains (Losses)		Net Investment Income		Interest Credited To Policyholders Account Balances		AOCI
	(in millions)
Modco payable	(1,930)		—		—		—		—		(1,930)		—		—		—		—
Total Embedded Derivatives	(1,784)		—		—		—		—		(3,358)		—		—		—		—
Total derivatives instruments	$	(1,581)	$	1,364	$	2	$	8	$	33	$	(2,418)	$	1,364	$	5	$	(26)	$	30

______________

(1)    Reported in net derivative gains (losses) in the consolidated statements of income (loss).

(2)    Investment fees of $4 million and $8 million for the three and six months ended June 30, 2023, respectively, are reported in net derivative gains (losses) in the consolidated statements of income (loss).

The following table presents a roll-forward of cash flow hedges recognized in AOCI:

Roll-forward of Cash flow hedges in AOCI

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Balance, beginning of period	$	(21)	$	19	$	(31)	$	22
Amount recorded in AOCI
Currency swaps	19		13		19		6
Interest swaps	(9)		10		(17)		(27)
Total amount recorded in AOCI	10		23		2		(21)
Amount reclassified (to) from income to AOCI
Currency swaps (1)	3		(10)		20		22
Interest swaps (1)	21		20		22		29
Total amount reclassified (to) from income to AOCI	24		10		42		51
Balance, end of period (2)	$	13	$	52	$	13	$	52

______________

(1)    Currency swaps income is reported in net investment income in the consolidated statements of income (loss). Interest swaps income is reported in net derivative gains (losses) in the consolidated statements of income (loss).

(2)     The Company does not estimate the amount of the deferred losses in AOCI at three and six months ended June 30, 2024 and 2023 which will be released and reclassified into net income (loss) over the next 12 months as the amounts cannot be reasonably estimated.

Equity-Based and Treasury Futures Contracts Margin

All outstanding equity-based and treasury futures contracts as of June 30, 2024 and December 31, 2023 are exchange-traded and net settled daily in cash. As of June 30, 2024 and December 31, 2023, respectively, the Company had open exchange-traded futures positions on: (i) the S&P 500, Nasdaq, Russell 2000 and Emerging Market indices, having initial margin requirements of $231 million and $248 million, (ii) the 2-year, 5-year and 10-year U.S. Treasury Notes on U.S. Treasury bonds and ultra-long bonds, having initial margin requirements of $92 million and $100 million, and (iii) the Euro Stoxx, FTSE 100, Topix, ASX 200 and EAFE indices as well as corresponding currency futures on the Euro/U.S. dollar, Pound/U.S. dollar, Australian dollar/U.S. dollar, and Yen/U.S. dollar, having initial margin requirements of $13 million and $14 million.

35

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Collateral Arrangements

The Company generally has executed a CSA under the ISDA Master Agreement it maintains with each of its OTC derivative counterparties that requires both posting and accepting collateral either in the form of cash or high-quality securities, such as U.S. Treasury securities, U.S. government and government agency securities and investment grade corporate bonds. The Company nets the fair value of all derivative financial instruments with counterparties for which an ISDA Master Agreement and related CSA have been executed. As of June 30, 2024 and December 31, 2023, respectively, the Company held $11.7 billion and $8.3 billion in cash and securities collateral delivered by trade counterparties, representing the fair value of the related derivative agreements. The unrestricted cash collateral is reported in other invested assets. The Company posted collateral of $113 million and $75 million as of June 30, 2024 and December 31, 2023, respectively, in the normal operation of its collateral arrangements. The Company is exposed to losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. The Company manages credit risk by: (i) entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties governed by master netting agreements, as applicable; (ii) trading through central clearing and OTC parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single party credit exposures which are subject to periodic management review.

Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position. In addition, certain of the Company’s derivative agreements contain credit-risk related contingent features; if the credit rating of one of the parties to the derivative agreement is to fall below a certain level, the party with positive fair value could request termination at the then fair value or demand immediate full collateralization from the party whose credit rating fell and is in a net liability position.

As of June 30, 2024 and December 31, 2023 there were no net liability derivative positions with counterparties with credit risk-related contingent features whose credit rating has fallen. All derivatives have been appropriately collateralized by the Company or the counterparty in accordance with the terms of the derivative agreements.

The following tables presents information about the Company’s offsetting of financial assets and liabilities and derivative instruments:

Offsetting of Financial Assets and Liabilities and Derivative Instruments

As of June 30, 2024

	Gross Amount Recognized		Gross Amount Offset in the Balance Sheets		Net Amount Presented in the Balance Sheets		Gross Amount not Offset in the Balance Sheets (1)		Net Amount
	(in millions)
Assets:
Derivative assets	$	15,700	$	12,268	$	3,432	$	(2,944)	$	488
Secured lending	131		—		131		—		131
Other financial assets	1,603		—		1,603		—		1,603
Other invested assets	$	17,434	$	12,268	$	5,166	$	(2,944)	$	2,222
Liabilities:
Derivative liabilities	$	12,422	$	12,268	$	154	$	—	$	154
Secured lending	131		—		131		—		131
Other financial liabilities	2,423		—		2,423		—		2,423
Other liabilities	$	14,976	$	12,268	$	2,708	$	—	$	2,708

______________

(1)Financial instruments sent (held).

36

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

As of December 31, 2023

	Gross Amount Recognized		Gross Amount Offset in the Balance Sheets		Net Amount Presented in the Balance Sheets		Gross Amount not Offset in the Balance Sheets (1)		Net Amount
	(in millions)
Assets:
Derivative assets	$	12,495	$	8,326	$	4,169	$	(3,076)	$	1,093
Secured lending	93		—		93		—		93
Other financial assets	1,690		—		1,690		—		1,690
Other invested assets	$	14,278	$	8,326	$	5,952	$	(3,076)	$	2,876
Liabilities:
Derivative liabilities	$	8,359	$	8,326	$	33	$	—	$	33
Secured lending	93		—		93		—		93
Other financial liabilities	2,370		—		2,370		—		2,370
Other liabilities	$	10,822	$	8,326	$	2,496	$	—	$	2,496

______________

(1)Financial instruments sent (held).

5)    CLOSED BLOCK

As a result of demutualization, the Company’s Closed Block was established in 1992 for the benefit of certain individual participating policies that were in force on that date. Assets, liabilities and earnings of the Closed Block are specifically identified to support its participating policyholders.

Assets allocated to the Closed Block insure solely to the benefit of the Closed Block policyholders and will not revert to the benefit of the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of the Company’s General Account, any of its Separate Accounts or any affiliate of the Company without the approval of the New York State Department of Financial Services (the “NYDFS”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the General Account. For more information on the Closed Block, see Note 5 to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2023.

37

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Summarized financial information for the Company’s Closed Block is as follows:

	June 30, 2024		December 31, 2023
	(in millions)
Closed Block Liabilities:
Future policy benefits, policyholders’ account balances and other	$	5,326	$	5,461
Other liabilities	55		57
Total Closed Block liabilities	5,381		5,518
Assets Designated to the Closed Block:
Fixed maturities AFS, at fair value (amortized cost of $2,924 and $2,945) (allowance for credit losses of $0 and $0)	2,752		2,800
Mortgage loans on real estate (net of allowance for credit losses of $14 and $13)	1,544		1,612
Policy loans	538		554
Cash and other invested assets	10		58
Other assets	185		150
Total assets designated to the Closed Block	5,029		5,174
Excess of Closed Block liabilities over assets designated to the Closed Block	352		344
Amounts included in AOCI:
Net unrealized investment gains (losses), net of policyholders’ dividend obligation: $0 and $0; and net of income tax: $36 and $31	(136)		(115)
Maximum future earnings to be recognized from Closed Block assets and liabilities	$	216	$	229

The Company’s Closed Block revenues and expenses were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Revenues:
Premiums and other income	$	26	$	29	$	55	$	59
Net investment income (loss)	51		52		103		103
Investment gains (losses), net	—		—		(1)		—
Total revenues	77		81		157		162
Benefits and Other Deductions:
Policyholders’ benefits and dividends	64		75		141		158
Other operating costs and expenses	—		—		—		—
Total benefits and other deductions	64		75		141		158
Net income (loss), before income taxes	13		6		16		4
Income tax (expense) benefit	(2)		(1)		(3)		(2)
Net income (loss)	$	11	$	5	$	13	$	2

38

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

6)     DAC AND OTHER DEFERRED ASSETS/LIABILITIES

The following table presents a reconciliation of DAC to the consolidated balance sheets:

	June 30, 2024		December 31, 2023
	(in millions)
Term	$	326	$	338
UL	25		22
VUL	217		182
GMxB Core	1,432		1,483
EQUI-VEST Individual	147		150
Investment Edge	150		150
SCS	1,278		1,282
GMxB Legacy	205		208
EQUI-VEST Group	725		723
Momentum	85		82
Closed Block	112		117
Other	20		22
Total	$	4,722	$	4,759

Annually, or as circumstances warrant, we review the associated decrements assumptions (i.e., mortality and lapse) based on our multi-year average of companies experience with actuarial judgements to reflect other observable industry trends. In addition to DAC, the unearned revenue liability and sales inducement asset (“SIA”) use similar techniques and quarterly update processes for balance amortization.

Changes in the DAC asset were as follows:

	Six Months Ended June 30, 2024
	Term		UL		VUL		GMxB Core		EI		IE		SCS		GMxB Legacy		EG		Momentum		CB (1)		Total
	(in millions)
Balance, beginning of period	$	338	$	22	$	182	$	1,483	$	150	$	150	$	1,282	$	208	$	723	$	82	$	117	$	4,737
Capitalization (2)	7		4		40		28		6		10		110		14		32		5		—		256
Amortization (3)	(19)		(1)		(5)		(69)		(6)		(7)		(106)		(12)		(21)		(2)		(5)		(253)
Recovery of acquisition cost (4)	—		—		—		(10)		(3)		(3)		(8)		(5)		(9)		—		—		(38)
Balance, end of period	$	326	$	25	$	217	$	1,432	$	147	$	150	$	1,278	$	205	$	725	$	85	$	112	$	4,702

______________

(1)“CB” defined as Closed Block.

(2)DAC capitalization of $1 million related to Other not reflected in table above.

(3)DAC amortization of $2 million related to Other not reflected in table above.

(4)Related to the Internal Reinsurance Transaction and is recorded in other income.

39

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Six Months Ended June 30, 2023
	Term		UL		VUL		GMxB Core		EI		IE		SCS		GMxB Legacy		EG		Momentum		CB		Total
	(in millions)
Balance, beginning of period	$	362	$	20	$	112	$	1,585	$	156	$	147	$	1,266	$	213	$	711	$	89	$	127	$	4,788
Capitalization	7		2		36		26		5		12		113		14		33		5		—		253
Amortization	(19)		(1)		(4)		(68)		(6)		(7)		(92)		(12)		(21)		(8)		(5)		(243)
Recovery of acquisition cost	—		—		—		(6)		(2)		(1)		(4)		(2)		(6)		—		—		(21)
Balance, end of period	$	350	$	21	$	144	$	1,537	$	153	$	151	$	1,283	$	213	$	717	$	86	$	122	$	4,777

Changes in the sales inducement assets were as follows:

	Six Months Ended June 30,
	2024				2023
	GMxB Core		GMxB Legacy		GMxB Core		GMxB Legacy
	(in millions)
Balance, beginning of period	$	126	$	179	$	137	$	200
Capitalization	—		—		—		—
Amortization	(6)		(10)		(6)		(10)
Balance, end of period	$	120	$	169	$	131	$	190

Changes in the unearned revenue liability were as follows:

	Six Months Ended June 30,
	2024				2023
	UL		VUL			UL		VUL
	(in millions)
Balance, beginning of period	$	105	$	551		$	95	$	525
Capitalization	8		34			9		29
Amortization	(4)		(17)			(3)		(17)
Recovery of unearned revenue	(1)		—			(1)		—
Balance, end of period	$	108	$	568		$	100	$	537

7)    FAIR VALUE DISCLOSURES

U.S. GAAP establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value, and identifies three levels of inputs that may be used to measure fair value:

Level 1    Unadjusted quoted prices for identical instruments in active markets. Level 1 fair values generally are supported by market transactions that occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2    Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, and inputs to model-derived valuations that are directly observable or can be corroborated by observable market data.

Level 3    Unobservable inputs supported by little or no market activity and often requiring significant management judgment or estimation, such as an entity’s own assumptions about the cash flows or other significant components of value that market participants would use in pricing the asset or liability.

40

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

The Company uses unadjusted quoted market prices to measure fair value for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are measured using present value or other valuation techniques. The fair value determinations are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of the timing and amount of expected future cash flows and the credit standing of counterparties. Such adjustments do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair value cannot be substantiated by direct comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument.

Management is responsible for the determination of the value of investments carried at fair value and the supporting methodologies and assumptions. Under the terms of various service agreements, the Company often utilizes independent valuation service providers to gather, analyze, and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual securities. These independent valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of widely accepted valuation models, provide a single fair value measurement for individual securities for which a fair value has been requested. As further described below with respect to specific asset classes, these inputs include, but are not limited to, market prices for recent trades and transactions in comparable securities, benchmark yields, interest rate yield curves, credit spreads, quoted prices for similar securities, and other market-observable information, as applicable. Specific attributes of the security being valued are also considered, including its term, interest rate, credit rating, industry sector, and when applicable, collateral quality and other security- or issuer-specific information. When insufficient market observable information is available upon which to measure fair value, the Company either will request brokers knowledgeable about these securities to provide a non-binding quote or will employ internal valuation models. Fair values received from independent valuation service providers and brokers and those internally modeled or otherwise estimated are assessed for reasonableness.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Fair value measurements are required on a non-recurring basis for certain assets only when an impairment or other events occur. As of June 30, 2024 and December 31, 2023, no assets or liabilities were required to be measured at fair value on a non-recurring basis.

41

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below.

Fair Value Measurements as of June 30, 2024

	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Investments:
Fixed maturities, AFS:
Corporate (1)	$	—	$	34,548	$	2,040	$	36,588
U.S. Treasury, government and agency	—		4,321		—		4,321
States and political subdivisions	—		363		—		363
Foreign governments	—		532		—		532
Residential mortgage-backed (2)	—		1,506		—		1,506
Asset-backed (3)	—		7,575		27		7,602
Commercial mortgage-backed	—		2,959		6		2,965
Redeemable preferred stock	—		58		—		58
Total fixed maturities, AFS	—		51,862		2,073		53,935
Other equity investments	143		391		52		586
Trading securities	221		535		—		756
Other invested assets:
Short-term investments	—		246		—		246
Assets of consolidated VIEs/VOEs	—		—		3		3
Swaps	—		(286)		—		(286)
Credit default swaps	—		(1)		—		(1)
Options	—		11,918		—		11,918
Total other invested assets	—		11,877		3		11,880
Cash equivalents	3,033		296		—		3,329
Purchased market risk benefits	—		—		14,185		14,185
Assets for market risk benefits	—		—		763		763
Separate Accounts assets (4)	122,256		2,599		—		124,855
Modco payable (5)	—		—		(183)		(183)
SCS, SIO, MSO and IUL indexed features’ asset	—		8,960		—		8,960
Total Assets	$	125,653	$	76,520	$	16,893	$	219,066
Liabilities:
SCS, SIO, MSO and IUL indexed features’ liability (6)	—		11,756		—		11,756
Liabilities for market risk benefits	—		—		12,568		12,568
Funds withheld payable (7)	—		—		(87)		(87)
Total Liabilities	$	—	$	11,756	$	12,481	$	24,237

______________

(1)Corporate fixed maturities includes both public and private issues.

(2)Includes publicly traded agency pass-through securities and collateralized obligations.

(3)Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.

(4)Separate Accounts assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate. As of June 30, 2024 the fair value of such investments was $338 million.

(5)Reflected in Amounts due from reinsurers.

(6)SCS embedded derivative asset is recorded as a modco receivable. This is presented net in the consolidated balance sheets.

(7)As discussed in Note 2, the funds withheld payable is created through a funds withheld and modified coinsurance arrangements where the investments supporting the reinsurance agreement are withheld by and continue to reside on the Company’s consolidated balance sheet. This embedded derivative is valued as a total return swap with references to the fair value of the invested assets held by the Company, which are primarily available for sale securities.

42

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Fair Value Measurements as of December 31, 2023

	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Investments:
Fixed maturities, AFS:
Corporate (1)	$	—	$	35,197	$	2,070	$	37,267
U.S. Treasury, government and agency	—		4,539		—		4,539
States and political subdivisions	—		443		27		470
Foreign governments	—		581		—		581
Residential mortgage-backed (2)	—		1,344		—		1,344
Asset-backed (3)	—		7,981		24		8,005
Commercial mortgage-backed	—		2,894		6		2,900
Redeemable preferred stock	—		59		—		59
Total fixed maturities, AFS	—		53,038		2,127		55,165
Other equity investments	150		445		54		649
Trading securities	207		50		—		257
Other invested assets:
Short-term investments	—		414		—		414
Assets of consolidated VIEs/VOEs	—		—		3		3
Swaps	—		(180)		—		(180)
Credit default swaps	—		(2)		—		(2)
Options	—		9,117		—		9,117
Total other invested assets	—		9,349		3		9,352
Cash equivalents	1,917		616		—		2,533
Purchased market risk benefits	—		—		16,729		16,729
Assets for market risk benefits	—		—		574		574
Separate Accounts assets (4)	118,353		2,617		—		120,970
Modco payable (5)	—		—		(411)		(411)
SCS, SIO, MSO and IUL indexed features’ asset	—		7,140		—		7,140
Total Assets	$	120,627	$	73,255	$	19,076	$	212,958
Liabilities:
SCS, SIO, MSO and IUL indexed features’ liability (6)	—		9,081		—		9,081
Liabilities for market risk benefits	—		—		14,570		14,570
Funds withheld payable (7)	—		—		100		100
Total Liabilities	$	—	$	9,081	$	14,670	$	23,751

______________

(1)Corporate fixed maturities includes both public and private issues.

(2)Includes publicly traded agency pass-through securities and collateralized obligations.

(3)Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.

(4)Separate Accounts assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate. As of December 31, 2023 the fair value of such investments was $371 million.

(5)Reflected in Amounts due from reinsurers.

(6)SCS embedded derivative asset is recorded as a modco receivable. This is presented net in the consolidated balance sheets.

(7)The funds withheld payable is created through a funds withheld and modified coinsurance arrangements where the investments supporting the reinsurance agreement are withheld by and continue to reside on the Company’s consolidated balance sheet. This embedded derivative is valued as a total return swap with references to the fair value of the invested assets held by the Company, which are primarily available for sale securities.

43

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Public Fixed Maturities

The fair values of the Company’s public fixed maturities are generally based on prices obtained from independent valuation service providers and for which the Company maintains a vendor hierarchy by asset type based on historical pricing experience and vendor expertise. Although each security generally is priced by multiple independent valuation service providers, the Company ultimately uses the price received from the independent valuation service provider highest in the vendor hierarchy based on the respective asset type, with limited exception. To validate reasonableness, prices also are internally reviewed by those with relevant expertise through comparison with directly observed recent market trades. Consistent with the fair value hierarchy, public fixed maturities validated in this manner generally are reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs.

Private Fixed Maturities

The fair values of the Company’s private fixed maturities are determined from prices obtained from independent valuation service providers. Prices not obtained from an independent valuation service provider are determined by using a discounted cash flow model or a market comparable company valuation technique. In certain cases, these models use observable inputs with a discount rate based upon the average of spread surveys collected from private market intermediaries who are active in both primary and secondary transactions, taking into account, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. Generally, these securities have been reflected within Level 2. For certain private fixed maturities, the discounted cash flow model or a market comparable company valuation technique may also incorporate unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the asset. To the extent management determines that such unobservable inputs are significant to the fair value measurement of a security, a Level 3 classification generally is made.

Freestanding Derivative Positions

The net fair value of the Company’s freestanding derivative positions as disclosed in Note 4 of the Notes to these Consolidated Financial Statements are generally based on prices obtained either from independent valuation service providers or derived by applying market inputs from recognized vendors into industry standard pricing models. The majority of these derivative contracts are traded in the OTC derivative market and are classified in Level 2. The fair values of derivative assets and liabilities traded in the OTC market are determined using quantitative models that require use of the contractual terms of the derivative instruments and multiple market inputs, including interest rates, prices, and indices to generate continuous yield or pricing curves, including overnight index swap curves, and volatility factors, which then are applied to value the positions. The predominance of market inputs is actively quoted and can be validated through external sources or reliably interpolated if less observable.

Funds Withheld Payable

Reinsurance agreements written on a funds withheld or modified coinsurance basis contain embedded derivatives. This embedded derivative is valued as a total return swap with reference to the fair value of the invested assets held by the Company. The fair value of the underlying assets is generally based on market observable inputs using industry standard valuation techniques. The valuation utilizing the asset value component for valuation of the embedded derivative requires certain significant inputs, which are generally not observable, and accordingly, the valuation is considered Level 3 in the fair value hierarchy. The fair value of the underlying assets is generally based on market observable inputs using industry standard valuation techniques. The valuation utilizing the asset value component for the valuation for the embedded derivatives requires certain significant inputs, which are generally not observable, and accordingly, the valuation is considered Level 3 in the fair value hierarchy.

Level Classifications of the Company’s Financial Instruments

Financial Instruments Classified as Level 1

Investments classified as Level 1 primarily include redeemable preferred stock, trading securities, cash equivalents and Separate Accounts assets. Fair value measurements classified as Level 1 include exchange-traded prices of fixed maturities, equity securities and derivative contracts, and net asset values for transacting subscriptions and redemptions of mutual fund shares held by Separate Accounts. Cash equivalents classified as Level 1 include money market accounts, overnight commercial paper and highly liquid debt instruments purchased with an original maturity of three months or less and are carried at cost as a proxy for fair value measurement due to their short-term nature.

44

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Financial Instruments Classified as Level 2

Investments classified as Level 2 are measured at fair value on a recurring basis and primarily include U.S. government and agency securities and certain corporate debt securities, such as public and private fixed maturities. As market quotes generally are not readily available or accessible for these securities, their fair value measures are determined utilizing relevant information generated by market transactions involving comparable securities and often are based on model pricing techniques that effectively discount prospective cash flows to present value using appropriate sector-adjusted credit spreads commensurate with the security’s duration, also taking into consideration issuer-specific credit quality and liquidity.

Observable inputs generally used to measure the fair value of securities classified as Level 2 include benchmark yields, reported secondary trades, issuer spreads, benchmark securities and other reference data. Additional observable inputs are used when available, and as may be appropriate, for certain security types, such as pre-payment, default, and collateral information for the purpose of measuring the fair value of mortgage- and asset-backed securities. The Company’s AAA-rated mortgage- and asset-backed securities are classified as Level 2 for which the observability of market inputs to their pricing models is supported by sufficient, albeit more recently contracted, market activity in these sectors.

Certain Company products, such as the SCS, EQUI-VEST variable annuity products, IUL and the MSO fund available in some life contracts offer investment options which permit the contract owner to participate in the performance of an index, ETF or commodity price. These investment options, which depending on the product and on the index selected can currently have one, three, five or six year terms, provide for participation in the performance of specified indices, ETF or commodity price movement up to a segment-specific declared maximum rate. Under certain conditions that vary by product, e.g., holding these segments for the full term, these segments also shield policyholders from some or all negative investment performance associated with these indices, ETF or commodity prices. These investment options have defined formulaic liability amounts, and the current values of the option component of these segment reserves are classified as Level 2 embedded derivatives. The fair values of these embedded derivatives are based on data obtained from independent valuation service providers.

Financial Instruments Classified as Level 3

The Company’s investments classified as Level 3 primarily include corporate debt securities, such as private fixed maturities and asset-backed securities. Determinations to classify fair value measures within Level 3 of the valuation hierarchy generally are based upon the significance of the unobservable factors to the overall fair value measurement. Included in the Level 3 classification are fixed maturities with indicative pricing obtained from brokers that otherwise could not be corroborated to market observable data.

The Company has certain variable annuity contracts with GMDB, GMIB, GIB and GWBL and other features in-force that guarantee one of the following:

•Return of Premium: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals);

•Ratchet: the benefit is the greatest of current account value, premiums paid (adjusted for withdrawals), or the highest account value on any anniversary up to contractually specified ages (adjusted for withdrawals);

•Roll-Up: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals) accumulated at contractually specified interest rates up to specified ages;

•Combo: the benefit is the greater of the ratchet benefit or the roll-up benefit, which may include either a five year or an annual reset; or

•Withdrawal: the withdrawal is guaranteed up to a maximum amount per year for life.

The Company also issues certain benefits on its variable annuity products that are accounted for as market risk benefits carried at fair value and are also considered Level 3 for fair value leveling.

The GMIBNLG feature allows the policyholder to receive guaranteed minimum lifetime annuity payments based on predetermined annuity purchase rates applied to the contract’s benefit base if and when the contract account value is depleted and the NLG feature is activated. The optional GMIB feature allows the policyholder to receive guaranteed minimum lifetime annuity payments based on predetermined annuity purchase rates.

45

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

The GMWB feature allows the policyholder to withdraw at a minimum, over the life of the contract, an amount based on the contract’s benefit base. The GWBL feature allows the policyholder to withdraw, each year for the life of the contract, a specified annual percentage of an amount based on the contract’s benefit base. The GMAB feature increases the contract account value at the end of a specified period to a GMAB base. The GIB feature provides a lifetime annuity based on predetermined annuity purchase rates if and when the contract account value is depleted. This lifetime annuity is based on predetermined annuity purchase rates applied to a GIB base. The GMDB feature guarantees that the benefit paid upon death will not be less than a guaranteed benefit base. If the contract’s account value is less than the benefit base at the time a death claim is paid, the amount payable will be equal to the benefit base.

The market risk benefits fair value will be equal to the present value of benefits less the present value of ascribed fees. Considerable judgment is utilized by management in determining the assumptions used in determining present value of benefits and ascribed fees related to lapse rates, withdrawal rates, utilization rates, non-performance risk, volatility rates, annuitization rates and mortality (collectively, the significant MRB assumptions).

Purchased MRB assets, which are accounted for as market risk benefits carried at fair value are also considered Level 3 for fair value leveling. The purchased MRB asset fair value reflects the present value of reinsurance premiums, net of recoveries, adjusted for risk margins and nonperformance risk over a range of market consistent economic scenarios while the MRB asset and liability reflects the present value of expected future payments (benefits) less fees, adjusted for risk margins and nonperformance risk, attributable to the MRB asset and liability over a range of market-consistent economic scenarios. 

The valuations of the MRBs and purchased MRB assets incorporate significant non-observable assumptions related to policyholder behavior, risk margins and projections of equity Separate Accounts funds. The credit risks of the counterparty and of the Company are considered in determining the fair values of its MRBs and purchased MRB asset after taking into account the effects of collateral arrangements. Incremental adjustment to the risk free curve for counterparty non-performance risk is made to the fair values of the purchased MRB assets. Risk margins were applied to the non-capital markets inputs to the MRBs and purchased MRB valuations.

After giving consideration to collateral arrangements, the Company reduced the fair value of its purchased MRB asset by $1.0 billion and $1.3 billion as of June 30, 2024 and December 31, 2023, respectively, to recognize incremental counterparty non-performance risk.

The funds withheld embedded derivative liability is determined based upon a total return swap technique referencing the fair value of the investments held under the reinsurance contract as collateral and requires certain unobservable inputs. The funds withheld embedded derivative are considered Level 3 in the fair value hierarchy.

The Company’s consolidated VIEs/VOEs hold investments that are classified as Level 3, primarily corporate bonds that are vendor priced with no ratings available, bank loans, non-agency collateralized mortgage obligations and asset-backed securities.

Transfers of Financial Instruments Between Levels 2 and 3

During the six months ended June 30, 2024, fixed maturities with fair values of $88 million were transferred out of Level 3 and into Level 2 principally due to the availability of trading activity and/or market observable inputs to measure and validate their fair values. In addition, fixed maturities with fair value of $57 million were transferred from Level 2 into the Level 3 classification. These transfers in the aggregate represent approximately 5.9% of total consolidated equity as of June 30, 2024.

During the six months ended June 30, 2023, fixed maturities with fair values of $301 million were transferred out of Level 3 and into Level 2 principally due to the availability of trading activity and/or market observable inputs to measure and validate their fair values. In addition, fixed maturities with fair value of $11 million were transferred from Level 2 into the Level 3 classification. These transfers in the aggregate represent approximately 650.0% of total consolidated equity as of June 30, 2023.

The tables below present reconciliations for all Level 3 assets and liabilities and changes in unrealized gains (losses). Not included below are the changes in balances related to market risk benefits and purchased market risk benefits level 3 assets and liabilities, which are included in Note 9 of the Notes to these Consolidated Financial Statements.

46

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Level 3 Instruments - Fair Value Measurements

	Three Months Ended June 30, 2024
	Corporate		State and Political Subdivisions		Asset-backed		CMBS
	(in millions)
Balance, beginning of period	$	2,238	$	—	$	33	$	6
Total gains and (losses), realized and unrealized, included in:
Net income (loss) as:
Net investment income (loss)	2		—		—		—
Investment gains (losses), net	(1)		—		—		—
Subtotal	1		—		—		—
Other comprehensive income (loss)	—		—		—		—
Purchases	124		—		(6)		—
Sales	(323)		—		—		—
Activity related to consolidated VIEs/VOEs	—		—		—		—
Transfers into Level 3 (1)	—		—		—		—
Transfers out of Level 3 (1)	—		—		—		—
Balance, end of period	$	2,040	$	—	$	27	$	6
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—

_______________

(1)Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.

(2)For instruments held as of June 30, 2024 amounts are included in net investment income or net derivative gains (losses) in the consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive income.

	Three Months Ended June 30, 2024
	Other Equity Investments (3)		Separate Accounts Assets		Funds Withheld Payable		Modco Payable (4)
	(in millions)
Balance, beginning of period	$	58	$	1	$	(29)	$	(292)
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income	—		—		—		—
Net derivative gains (losses)	—		—		—		—
Total realized and unrealized gains (losses)	—		—		—		—
Other comprehensive income (loss)	—		—		—		—
Purchases	(42)		(1)		—		—
Sales	39		—		—		—
Change in fair value of funds withheld assets	—		—		(58)		109
Other	—		—		—		—
Activity related to consolidated VIEs/VOEs	—		—		—		—
Transfers into Level 3 (1)	—		—		—		—
Transfers out of Level 3 (1)	—		—		—		—
Balance, end of period	$	55	$	—	$	(87)	$	(183)

47

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Three Months Ended June 30, 2024
	Other Equity Investments (3)		Separate Accounts Assets		Funds Withheld Payable		Modco Payable (4)
	(in millions)
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—

______________

(1)Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.

(2)For instruments held as of June 30, 2024, amounts are included in net investment income or net derivative gains (losses) in the consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive income.

(3)Other Equity Investments include other invested assets.

(4)Reflected in Amounts due from reinsurers.

	Three Months Ended June 30, 2023
	Corporate		State and Political Subdivisions		Asset-backed		CMBS
	(in millions)
Balance, beginning of period	$	1,914	$	28	$	12	$	34
Total gains and (losses), realized and unrealized, included in:
Net income (loss) as:
Net investment income (loss)	2		—		—		—
Investment gains (losses), net	(8)		—		—		—
Subtotal	(6)		—		—		—
Other comprehensive income (loss)	(8)		1		—		—
Purchases	180		—		(12)		—
Sales	(72)		(2)		—		—
Activity related to consolidated VIEs/VOEs	—		—		—		—
Transfers into Level 3 (1)	11		—		—		—
Transfers out of Level 3 (1)	(43)		—		—		—
Balance, end of period	$	1,976	$	27	$	—	$	34
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)	$	(8)	$	1	$	—	$	—

_______________

(1)Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.

(2)For instruments held as of June 30, 2023 amounts are included in net investment income or net derivative gains (losses) in the consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive income.

48

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Three Months Ended June 30, 2023
	Other Equity Investments (3)		Separate Accounts Assets		Funds Withheld Payable		Modco Payable
	(in millions)
Balance, beginning of period	$	14	$	1	$	—	$	—
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income	—		—		—		—
Net derivative gains (losses)	—		—		(136)		166
Total realized and unrealized gains (losses)	—		—		(136)		166
Other comprehensive income (loss)	—		—		—		—
Purchases	44		—		—		—
Sales	—		—		—		—
Other	—		—		—		—
Activity related to consolidated VIEs/VOEs	47		—		—		—
Transfers into Level 3 (1)	—		—		—		—
Transfers out of Level 3 (1)	—		—		—		—
Balance, end of period	$	105	$	1	$	(136)	$	166
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—

______________

(1)Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.

(2)For instruments held as of June 30, 2023, amounts are included in net investment income or net derivative gains (losses) in the consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive income.

(3)Other Equity Investments include other invested assets.

49

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Six Months Ended June 30, 2024
	Corporate		State and Political Subdivisions		Asset-backed		CMBS
	(in millions)
Balance, beginning of period	$	2,070	$	27	$	24	$	6
Total gains and (losses), realized and unrealized, included in:
Net income (loss) as:
Net investment income (loss)	4		—		—		—
Investment gains (losses), net	(2)		—		—		—
Subtotal	2		—		—		—
Other comprehensive income (loss)	10		—		—		—
Purchases	325		—		17		—
Sales	(377)		—		—		—
Activity related to consolidated VIEs/VOEs	—		—		—		—
Transfers into Level 3 (1)	57		—		—		—
Transfers out of Level 3 (1)	(47)		(27)		(14)		—
Balance, end of period	$	2,040	$	—	$	27	$	6
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)	$	10	$	—	$	—	$	—

_______________

(1)Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.

(2)For instruments held as of June 30, 2024 amounts are included in net investment income or net derivative gains (losses) in the consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive income.

	Six Months Ended June 30, 2024
	Other Equity Investments (3)		Separate Accounts Assets		Funds Withheld Payable		Modco Payable
	(in millions)
Balance, beginning of period	$	57	$	—	$	100	$	(411)
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income	1		—		—		—
Net derivative gains (losses)	—		—		—		—
Total realized and unrealized gains (losses)	1		—		—		—
Other comprehensive income (loss)	—		—		—		—
Purchases	—		—		—		—
Sales	(3)		—		—		—
Change in fair value of funds withheld assets	—		—		(187)		228
Other	—		—		—		—
Activity related to consolidated VIEs/VOEs	—		—		—		—
Transfers into Level 3 (1)	—		—		—		—
Transfers out of Level 3 (1)	—		—		—		—
Balance, end of period	$	55	$	—	$	(87)	$	(183)

50

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Six Months Ended June 30, 2024
	Other Equity Investments (3)		Separate Accounts Assets		Funds Withheld Payable		Modco Payable
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—

_______________

(1)Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.

(2)For instruments held as of June 30, 2024, amounts are included in net investment income or net derivative gains (losses) in the consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive income.

(3)Other Equity Investments include other invested assets.

	Six Months Ended June 30, 2023
	Corporate		State and Political Subdivisions		Asset-backed		CMBS
	(in millions)
Balance, beginning of period	$	2,103	$	29	$	—	$	32
Total gains and (losses), realized and unrealized, included in:
Net income (loss) as:
Net investment income (loss)	3		—		—		—
Investment gains (losses), net	(11)		—		—		—
Subtotal	(8)		—		—		—
Other comprehensive income (loss)	10		—		—		—
Purchases	323		—		—		2
Sales	(162)		(2)		—		—
Activity related to consolidated VIEs/VOEs	—		—		—		—
Transfers into Level 3 (1)	11		—		—		—
Transfers out of Level 3 (1)	(301)		—		—		—
Balance, end of period	$	1,976	$	27	$	—	$	34
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)	$	9	$	1	$	—	$	—

_______________

(1)Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.

(2)For instruments held as of June 30, 2023 amounts are included in net investment income or net derivative gains (losses) in the consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive income.

51

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Six Months Ended June 30, 2023
	Other Equity Investments (3)		Separate Accounts Assets		Funds Withheld Payable		Modco Payable
	(in millions)
Balance, beginning of period	$	17	$	1	$	—	$	—
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income	(3)		—		—		—
Net derivative gains (losses)	—		—		(136)		166
Total realized and unrealized gains (losses)	(3)		—		(136)		166
Other comprehensive income (loss)	—		—		—		—
Purchases	44		—		—		—
Sales	—		—		—		—
Activity related to consolidated VIEs/VOEs	47		—		—		—
Transfers into Level 3 (1)	—		—		—		—
Transfers out of Level 3 (1)	—		—		—		—
Balance, end of period	$	105	$	1	$	(136)	$	166
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)	$	(3)	$	—	$	—	$	—
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)	$	—	$	—	$	—	$	—

_______________

(1)Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.

(2)For instruments held as of June 30, 2023, amounts are included in net investment income or net derivative gains (losses) in the consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive income.

(3)Other Equity Investments include other invested assets.

Quantitative and Qualitative Information about Level 3 Fair Value Measurements

The following tables disclose quantitative information about Level 3 fair value measurements by category for assets and liabilities:

Quantitative Information about Level 3 Fair Value Measurements as of June 30, 2024

	Fair Value		Valuation Technique	Significant Unobservable Input	Range	Weighted Average (2)
	(Dollars in millions)
Assets:
Investments:
Fixed maturities, AFS:
Corporate	$	311	Matrix pricing model	Spread over benchmark	45 bps - 220 bps	139 bps
	699		Market  comparable  companies	EBITDA multiples Discount rate Cash flow multiples Loan to value	4.0x - 33.0x 0.0% - 28.9% 0.0x - 9.0x 9.6% - 12.8%	12.7x 5.2% 5.8x 5.0%

52

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Fair Value		Valuation Technique	Significant Unobservable Input	Range	Weighted Average (2)
Other equity investments	—		Discounted Cash Flow	Earnings multiple	6.9x - 0.0x	0.0x
Purchased MRB asset (1) (2) (4)	14,185		Discounted cash flow	Lapse rates Withdrawal rates GMIB utilization rates Non-performance risk Volatility rates - equity Mortality: Ages 0-40 Ages 41-60 Ages 61-115	0.21% - 29.37% 0.00% - 14.97% 0.04% - 100.00% 21 bps - 101 bps 11% - 31% 0.01% - 0.18% 0.07% - 0.53% 0.33% - 42.00%	2.86% 0.63% 5.19% 33 bps 24% 2.95% (same for all ages) (same for all ages)
Liabilities: (5)
Direct MRB (1) (2) (3) (4)	$	11,805	Discounted cash flow	Non-performance risk Lapse rates Withdrawal rates Annuitization Mortality (1): Ages 0-40 Ages 41-60 Ages 61-115	109 bps 0.21% - 29.37% 0.00% - 14.97% 0.04% - 100.00% 0.01% - 0.18% 0.07% - 0.53% 0.33% - 42.00%	109 bps 3.18% 0.73% 5.26% 2.84% (same for all ages) (same for all ages)

______________

(1)Mortality rates vary by age and demographic characteristic such as gender. Mortality rate assumptions are based on a combination of company and industry experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuating the embedded derivatives.

(2)For lapses, withdrawals, and utilizations the rates were weighted by counts, for mortality weighted average rates are shown for all ages combined and for withdrawals the weighted averages were based on an estimated split of partial withdrawal and dollar-for-dollar withdrawals.

(3)MRB liabilities are shown net of MRB assets. Net amount is made up of $12.6 billion of MRB liabilities and $763 million of MRB assets.

(4)Includes Legacy and Core products.

(5)    Funds withheld and modco payable that contain embedded derivatives held at fair value are excluded from the tables above. The funds withheld payable embedded derivative utilizes a total return swap technique which incorporates the fair value of the invested assets supporting the reinsurance agreement as a component of the valuation.

Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2023

	Fair Value		Valuation Technique	Significant Unobservable Input	Range	Weighted Average (2)
	(Dollars in millions)
Assets:
Investments:
Fixed maturities, AFS:
Corporate	$	330	Matrix pricing model	Spread over benchmark	20 - 747 bps	187 bps
	979		Market comparable companies	EBITDA multiples Discount rate Cash flow multiples Loan to value	3.3x - 29.0x 0.0% - 22.8% 0.8x -10.0x 3.4%-61.0%	13.6x 3.9% 6.3x 13.8%
Other equity investments	2		Discounted cash flow	Earnings multiple	6.5x - 6.2x	6.0x
Purchased MRB asset (1) (2) (4)	16,729		Discounted cash flow	Lapse rates Withdrawal rates GMIB utilization rates Non-performance risk (bps) Volatility rates - Equity Mortality: Ages 0-40 Ages 41 - 60 Ages 61 - 115	0.21% - 29.37% 0.00%-14.97% 0.04%-100.00% 23 bps - 97 bps 11%-28% 0.01%-0.18% 0.07%-0.53% 0.33%-42.00%	2.75% 0.55% 5.51% 35 bps 23% 2.87% (same for all ages) (same for all ages)

53

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Liabilities: (5)
Direct MRB (1) (2) (3) (4)	$	13,996	Discounted cash flow	Non-performance risk Lapse rates Withdrawal rates Annuitization rates Mortality: Ages 0-40 Ages 41 - 60 Ages 61 - 115	118 bps 0.21%-29.37% 0.00%-14.97% 0.04%-100.00% 0.01%-0.18% 0.07%-0.53% 0.33%-42.00%	118 bps 3.03% 0.64% 5.44% 2.63% (same for all ages) (same for all ages)

______________

(1)Mortality rates vary by age and demographic characteristic such as gender. Mortality rate assumptions are based on a combination of company and industry experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuating the embedded derivatives.

(2)Lapses and pro-rata withdrawal rates were developed as a function of the policy account value. Dollar for dollar withdrawal rates were developed as a function of the dollar for dollar threshold, the dollar for dollar limit. GMIB utilization rates were developed as a function of the GMIB benefit base.

(3)MRB liabilities are shown net of MRB assets. Net amount is made up of $14.6 billion of MRB liabilities and $574 million of MRB assets.

(4)Includes Legacy and Core products.

(5)Funds withheld and modco payable that contain embedded derivatives held at fair value are excluded from the tables above. The funds withheld payable embedded derivative utilizes a total return swap technique which incorporates the fair value of the invested assets supporting the reinsurance agreement as a component of the valuation

Level 3 Financial Instruments for which Quantitative Inputs are Not Available

Certain Privately Placed Debt Securities with Limited Trading Activity

Excluded from the tables above as of June 30, 2024 and December 31, 2023, respectively, are approximately $1.1 billion and $873 million of Level 3 fair value measurements of investments for which the underlying quantitative inputs are not developed by the Company and are not readily available. These investments primarily consist of certain privately placed debt securities with limited trading activity, including residential mortgage- and asset-backed instruments, and their fair values generally reflect unadjusted prices obtained from independent valuation service providers and indicative, non-binding quotes obtained from third-party broker-dealers recognized as market participants. Significant increases or decreases in the fair value amounts received from these pricing sources may result in the Company reporting significantly higher or lower fair value measurements for these Level 3 investments.

•The fair value of private placement securities is determined by application of a matrix pricing model or a market comparable company value technique. The significant unobservable input to the matrix pricing model valuation technique is the spread over the industry-specific benchmark yield curve. Generally, an increase or decrease in spreads would lead to directionally inverse movement in the fair value measurements of these securities. The significant unobservable input to the market comparable company valuation technique is the discount rate. Generally, a significant increase (decrease) in the discount rate would result in significantly lower (higher) fair value measurements of these securities.

•Residential mortgage-backed securities classified as Level 3 primarily consist of non-agency paper with low trading activity. Included in the tables above as of June 30, 2024 and December 31, 2023, there were no Level 3 securities that were determined by application of a matrix pricing model and for which the spread over the U.S. Treasury curve is the most significant unobservable input to the pricing result. Generally, a change in spreads would lead to directionally inverse movement in the fair value measurements of these securities.

•Asset-backed securities classified as Level 3 primarily consist of non-agency mortgage loan trust certificates, including subprime and Alt-A paper, credit risk transfer securities, and equipment financings. Included in the tables above as of June 30, 2024 and December 31, 2023, there were no securities that were determined by the application of matrix-pricing for which the spread over the U.S. Treasury curve is the most significant unobservable input to the pricing result. Significant increases (decreases) in spreads would have resulted in significantly lower (higher) fair value measurements.

54

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Market Risk Benefits

Significant unobservable inputs with respect to the fair value measurement of the purchased MRB assets and MRB liabilities identified in the table above are developed using Company data. Future policyholder behavior is an unobservable market assumption and as such all aspects of policyholder behavior are derived based on recent historical experience. These policyholder behaviors include lapses, pro-rata withdrawals, dollar for dollar withdrawals, GMIB utilization, deferred mortality and payout phase mortality. Many of these policyholder behaviors have dynamic adjustment factors based on the relative value of the rider as compared to the account value in different economic environments. This applies to all variable annuity related products; products with GMxB riders including but not limited to GMIB, GMDB and GWL.

Lapse rates are adjusted at the contract level based on a comparison of the value of the embedded GMxB rider and the current policyholder account value, which include other factors such as considering surrender charges. Generally, lapse rates are assumed to be lower in periods when a surrender charge applies. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in-the-money contracts are less likely to lapse. For valuing purchased MRB assets and MRB liabilities, lapse rates vary throughout the period over which cash flows are projected.

Carrying Value of Financial Instruments Not Otherwise Disclosed in Note 3 and Note 4 of the Notes to these Consolidated Financial Statements

The carrying values and fair values for financial instruments not otherwise disclosed in Note 3 and Note 4 of the Notes to these Consolidated Financial Statements were as follows:

Carrying Values and Fair Values for Financial Instruments Not Otherwise Disclosed

	Carrying Value		Fair Value
			Level 1		Level 2		Level 3		Total
	(in millions)
June 30, 2024:
Mortgage loans on real estate	$	17,946	$	—	$	—	$	16,259	$	16,259
Policy loans	$	3,742	$	—	$	—	$	3,964	$	3,964
Loans to affiliates	$	1,900	$	—	$	1,786	$	—	$	1,786
Policyholders’ liabilities: Investment contracts	$	1,980	$	—	$	—	$	1,930	$	1,930
Funds withheld payable	$	9,834	$	—	$	—	$	9,834	$	9,834
Modco payable (1)	$	31,042	$	—	$	—	$	31,042	$	31,042
FHLB funding agreements	$	7,167	$	—	$	7,090	$	—	$	7,090
FABN funding agreements	$	6,251	$	—	$	5,870	$	—	$	5,870
Funding agreement-backed commercial paper (FABCP)	$	242	$	—	$	250	$	—	$	250
Separate Accounts liabilities	$	10,777	$	—	$	—	$	10,777	$	10,777
December 31, 2023:
Mortgage loans on real estate	$	17,877	$	—	$	—	$	16,174	$	16,174
Policy loans	$	3,667	$	—	$	—	$	3,961	$	3,961
Loans to affiliates	$	1,900	$	—	$	1,790	$	—	$	1,790
Policyholders’ liabilities: Investment contracts	$	1,554	$	—	$	—	$	1,526	$	1,526
Funds withheld payable	$	10,503	$	—	$	—	$	10,503	$	10,503
Modco payable	$	29,912	$	—	$	—	$	29,912	$	29,912
FHLB funding agreements	$	7,618	$	—	$	7,567	$	—	$	7,567
FABN funding agreements	$	6,267	$	—	$	5,840	$	—	$	5,840
Funding agreement-backed commercial paper (FABCP)	$	939	$	—	$	948	$	—	$	948
Separate Accounts liabilities	$	10,343	$	—	$	—	$	10,343	$	10,343

______________

(1)Modco payable is reported in amounts due from reinsurers in the consolidated balance sheets.

55

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Mortgage Loans on Real Estate

Fair values for commercial, agricultural and residential mortgage loans on real estate are measured by discounting future contractual cash flows to be received on the mortgage loan using interest rates at which loans with similar characteristics and credit quality would be made. The discount rate is derived based on the appropriate U.S. Treasury rate with a like term to the remaining term of the loan to which a spread reflective of the risk premium associated with the specific loan is added. Fair values for mortgage loans anticipated to be foreclosed and problem mortgage loans are limited to the fair value of the underlying collateral, if lower.

Policy Loans

The fair value of policy loans is calculated by discounting expected cash flows based upon the U.S. Treasury yield curve and historical loan repayment patterns.

Loans to Affiliates

The fair value of loans to affiliates is calculated by matrix or model pricing. The matrix pricing approach to fair value is a discounted cash flow methodology that incorporates market interest rates commensurate with the credit quality and duration of the investment.

FHLB Funding Agreements

The fair values of the Company’s FHLB long term funding agreements’ fair values are determined based on indicative market rates published by the FHLB, provided to AB and modeled for each note’s FMV. FHLB short-term funding agreements’ fair values are reflective of notional/par value plus accrued interest.

FABN Funding Agreements

The fair values of the Company’s FABN funding agreements are determined by Bloomberg’s evaluated pricing service, which uses direct observations or observed comparables.

FABCP Funding Agreements

The fair value of Equitable Financial’s FABCP funding agreements are reflective of the notional/par value outstanding.

Policyholder Liabilities - Investment Contracts and Separate Accounts Liabilities

The fair values for deferred annuities and certain annuities, which are included in policyholders’ account balances and liabilities for investment contracts with fund investments in Separate Accounts are estimated using projected cash flows discounted at rates reflecting current market rates. Significant unobservable inputs reflected in the cash flows include lapse rates and withdrawal rates. Incremental adjustments may be made to the fair value to reflect non-performance risk. Certain other products such as the Company’s association plans contracts, supplementary contracts not involving life contingencies, Access Accounts and Escrow Shield Plus product reserves are held at book value.

Financial Instruments Exempt from Fair Value Disclosure or Otherwise Not Required to be Disclosed

Exempt from Fair Value Disclosure Requirements

Certain financial instruments are exempt from the requirements for fair value disclosure, such as insurance liabilities other than financial guarantees and investment contracts, limited partnerships accounted for under the equity method and pension and other postretirement obligations.

Otherwise Not Required to be Included in the Table Above

The Company’s investment in COLI policies are recorded at their cash surrender value and therefore are not required to be included in the table above.

56

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

8)    LIABILITIES FOR FUTURE POLICYHOLDER BENEFITS

The following table reconciles the net liability for future policy benefits and liability of death benefits to the liability for future policy benefits in the consolidated balance sheets:

	June 30, 2024		December 31, 2023
	(in millions)
Reconciliation
Term	$	1,291	$	1,341
Payout - Non-Legacy	802		844
Payout - Legacy	3,900		3,620
Group Pension - Benefit Reserve & DPL	457		490
Health	1,414		1,505
UL	1,241		1,220
Subtotal	9,105		9,020
Whole Life Closed Block and Open Block products	5,318		5,463
Other (1)	603		657
Future policyholder benefits total	15,026		15,140
Other policyholder funds and dividends payable	1,448		1,433
Total	$	16,474	$	16,573

______________

(1)Primarily consists of future policy benefits related to Assumed Life and Disability, Group Life Run off, Variable Interest Sensitive Life rider and Major Medical products.

The following table summarizes balances and changes in the liability for future policy benefits for nonparticipating traditional and limited pay contracts:

	Six Months Ended June 30, 2024										Six Months Ended June 30, 2023
	Term		Payout - Non-Legacy		Payout-Legacy		Group Pension		Health		Term		Payout-Non-Legacy		Payout-Legacy		Group Pension		Health
	(in millions)
Present Value of Expected Net Premiums
Balance, beginning of period	$	2,125	$	—	$	—	$	—	$	(21)	$	2,090	$	—	$	—	$	—	$	(6)
Beginning balance at original discount rate	2,051		—		—		—		(22)		2,069		—		—		—		(6)
Effect of changes in cash flow assumptions	(18)		—		—		—		(3)		8		—		—		—		—
Effect of actual variances from expected experience	(52)		—		—		—		1		4		—		—		—		(6)
Adjusted beginning of period balance	1,981		—		—		—		(24)		2,081		—		—		—		(12)
Issuances	26		—		—		—		—		32		—		—		—		—
Interest accrual	49		—		—		—		—		50		—		—		—		—
Net premiums collected	(94)		—		—		—		2		(99)		—		—		—		1
Ending Balance at original discount rate	1,962		—		—		—		(22)		2,064		—		—		—		(11)
Effect of changes in discount rate assumptions	(21)		—		—		—		1		35		—		—		—		—
Balance, end of period	$	1,941	$	—	$	—	$	—	$	(21)	$	2,099	$	—	$	—	$	—	$	(11)

57

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Six Months Ended June 30, 2024										Six Months Ended June 30, 2023
	Term		Payout - Non-Legacy		Payout-Legacy		Group Pension		Health		Term		Payout-Non-Legacy		Payout-Legacy		Group Pension		Health
	(in millions)
Present Value of Expected Future Policy Benefits
Balance, beginning of period	$	3,466	$	844	$	3,620	$	490	$	1,484	$	3,449	$	828	$	2,689	$	523	$	1,554
Beginning balance of original discount rate	3,317		840		3,840		536		1,672		3,376		845		3,024		583		1,795
Effect of changes in cash flow assumptions	(20)		—		—		—		—		9		—		—		—		(1)
Effect of actual variances from expected experience	(65)		(2)		—		1		6		6		—		—		—		(6)
Adjusted beginning of period balance	3,232		838		3,840		537		1,678		3,391		845		3,024		583		1,788
Issuances	28		22		500		—		—		34		26		474		—		—
Interest accrual	82		20		69		9		27		84		19		44		10		29
Benefits payments	(115)		(47)		(181)		(31)		(79)		(182)		(46)		(132)		(34)		(71)
Ending balance at original discount rate	3,227		833		4,228		515		1,626		3,327		844		3,410		559		1,746
Effect of changes in discount rate assumptions	5		(31)		(328)		(58)		(234)		90		(10)		(309)		(56)		(224)
Balance, end of period	$	3,232	$	802	$	3,900	$	457	$	1,392	$	3,417	$	834	$	3,101	$	503	$	1,522
Net liability for future policy benefits	$	1,291	$	802	$	3,900	$	457	$	1,414	$	1,318	$	834	$	3,101	$	503	$	1,533
Less: Reinsurance recoverable	(207)		(44)		(1,698)		—		(1,116)		(199)		(9)		(797)		—		(1,217)
Net liability for future policy benefits, after reinsurance recoverable	$	1,084	$	758	$	2,202	$	457	$	298	$	1,119	$	825	$	2,304	$	503	$	316
Weighted-average duration of liability for future policyholder benefits (years)	6.9		9.3		7.5		7.0		8.6		7.0		9.4		7.8		7.1		8.8

    

The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses related to nonparticipating traditional and limited payment contracts:

	June 30, 2024		December 31, 2023
	(in millions)
Term
Expected future benefit payments and expenses (undiscounted)	$	5,677	$	5,860
Expected future gross premiums (undiscounted)	6,802		6,956
Expected future benefit payments and expenses (discounted)	3,232		3,466
Expected future gross premiums (discounted)	3,613		3,862

58

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	June 30, 2024		December 31, 2023
	(in millions)
Payout-Legacy
Expected future benefit payments and expenses (undiscounted)	5,798		5,204
Expected future gross premiums (undiscounted)	—		—
Expected future benefit payments and expenses (discounted)	3,820		3,538
Expected future gross premiums (discounted)	—		—
Payout-Non-Legacy
Expected future benefit payments and expenses (undiscounted)	1,404		1,426
Expected future gross premiums (undiscounted)	—		—
Expected future benefit payments and expenses (discounted)	767		812
Expected future gross premiums (discounted)	—		—
Group Pension
Expected future benefit payments and expenses (undiscounted)	640		668
Expected future gross premiums (undiscounted)	—		—
Expected future benefit payments and expenses (discounted)	439		471
Expected future gross premiums (discounted)	—		—
Health
Expected future benefit payments and expenses (undiscounted)	2,246		2,318
Expected future gross premiums (undiscounted)	78		85
Expected future benefit payments and expenses (discounted)	1,378		1,468
Expected future gross premiums (discounted)	$	61	$	68

The table below summarizes the revenue and interest related to nonparticipating traditional and limited payment contracts:

	Six Months Ended June 30,				Six Months Ended June 30,
	2024		2023			2024		2023
	Gross Premium				Interest Accretion
	(in millions)
Revenue and Interest Accretion
Term	$	170	$	117		$	33	$	34
Payout - Legacy	109		45			79		44
Payout - Non-Legacy	18		16			20		19
Group Pension	—		—			9		10
Health	6		4			28		29
Total	$	303	$	182		$	169	$	136

59

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

The following table provides the weighted average interest rates for the liability for future policy benefits:

	June 30, 2024		December 31, 2023
Weighted Average Interest Rate
Term
Interest accretion rate	5.6	%	5.6	%
Current discount rate	5.3	%	4.8	%
Payout - Legacy
Interest accretion rate	4.1	%	4.0	%
Current discount rate	5.3	%	4.9	%
Payout - Non-Legacy
Interest accretion rate	5.0	%	5.0	%
Current discount rate	5.4	%	4.9	%
Group Pension
Interest accretion rate	3.3	%	3.3	%
Current discount rate	5.3	%	4.8	%
Health
Interest accretion rate	3.4	%	3.4	%
Current discount rate	5.4	%	4.9	%

The following table provides the balance, changes in and the weighted average durations of the additional insurance liabilities:

	Six Months Ended June 30,
		2024		2023
		UL
		(Dollars in millions)
Balance, beginning of period		$	1,220	$	1,120
Beginning balance before AOCI adjustments		1,230		1,135
Effect of changes in interest rate and cash flow assumptions and model changes		—		—
Effect of actual variances from expected		(2)		4
Adjusted beginning of period balance		1,228		1,139
Interest accrual		27		25
Net assessments collected		35		36
Benefit payments		(35)		(30)
Ending balance before shadow reserve adjustments		1,255		1,170
Effect of reserve adjustment recorded in AOCI		(14)		(8)
Balance, end of period		$	1,241	$	1,162
Net liability for additional liability		$	1,241	$	1,162
Less: Reinsurance recoverable		(959)		(901)
Net liability for additional liability, after reinsurance recoverable		$	282	$	261
Weighted-average duration of additional liability - death benefit (years)		19.5		21.4

60

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

The following tables provide the revenue, interest and weighted average interest rates, related to the additional insurance liabilities:

	Six Months Ended June 30,
			2024		2023		2024		2023
		Assessments	Interest Accretion
			(in millions)
Revenue and Interest Accretion
UL			$	338	$	350	$	27	$	25
Total			$	338	$	350	$	27	$	25

	Six Months Ended June 30,
		2024		2023
Weighted Average Interest Rate
UL		4.5	%	4.5	%
Interest accretion rate		4.5	%	4.5	%

9)    MARKET RISK BENEFITS

The following table presents the balances and changes to the balances for market risk benefits for the GMxB benefits on deferred variable annuities:

	Three Months Ended June 30, 2024
	GMxB Core		Purchased MRB Core		Net GMxB Core		GMxB Legacy		Purchased MRB Legacy		Net GMxB Legacy
	(Dollars in millions)
Balance, beginning of period	$	328	$	(900)	$	(572)	$	11,701	$	(13,783)	$	(2,082)
Beginning balance before changes in the instrument specific credit risk	97		(992)		(895)		11,326		(13,819)		(2,493)
Model changes and effect of changes in cash flow assumptions	—		—		—		—		—		—
Actual market movement effect	(3)		(2)		(5)		45		(10)		35
Interest accrual	15		(5)		10		153		(163)		(10)
Attributed fees accrued (1)	107		(95)		12		198		(146)		52
Benefit payments	(11)		11		—		(311)		304		(7)
Actual policyholder behavior different from expected behavior	6		(1)		5		—		(5)		(5)
Changes in future economic assumptions	(60)		53		(7)		(514)		537		23
Issuances	—		1		1		—		—		—
Ending balance before changes in the instrument-specific credit risk	151		(1,030)		(879)		10,897		(13,302)		(2,405)
Changes in the instrument-specific credit risk (2)	268		98		366		520		48		568
Balance, end of period	$	419	$	(932)	$	(513)	$	11,417	$	(13,254)	$	(1,837)
Weighted-average age of policyholders (years)	65.0		65.4		N/A		73.3		73.7		N/A
Net amount at risk	$	2,866	$	2,834	N/A		$	19,710	$	19,397	N/A

_______________

(1)    Attributed fees accrued represents the portion of the fees needed to fund future GMxB claims.

(2)    Changes are recorded in OCI.

61

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

	Three Months Ended June 30, 2023
	GMxB Core		Purchased MRB Core		Net GMxB Core		GMxB Legacy		Purchased MRB Legacy		Net GMxB Legacy
	(Dollars in millions)
Balance, beginning of period	$	333	$	—	$	333	$	14,082	$	(10,746)	$	3,336
Beginning balance before changes in the instrument specific credit risk	560		—		560		15,599		(10,648)		4,952
Model changes and effect of changes in cash flow assumptions	—		—		—		—		—		—
Actual market movement effect	(116)		105		(11)		(637)		585		(52)
Interest accrual	19		(9)		10		195		(202)		(7)
Attributed fees accrued (1)	110		(99)		11		208		(155)		53
Benefit payments	(12)		12		—		(345)		338		(7)
Actual policyholder behavior different from expected behavior	3		(4)		(1)		(6)		(3)		(9)
Changes in future economic assumptions	(193)		217		24		(872)		822		(50)
Issuances	(1)		(1,294)		(1,295)		—		(6,865)		(6,866)
Ending balance before changes in the instrument-specific credit risk	370		(1,072)		(702)		14,142		(16,128)		(1,986)
Changes in the instrument-specific credit risk (2)	(215)		1		(214)		(1,422)		(95)		(1,517)
Balance, end of period	$	155	$	(1,071)	$	(916)	$	12,720	$	(16,223)	$	(3,503)
Weighted-average age of policyholders (years)	64.0		64.4		N/A		72.8		73.0		N/A
Net amount at risk	$	3,159	$	3,072	N/A		$	22,195	$	21,728	N/A

_______________

(1)    Attributed fees accrued represents the portion of the fees needed to fund future GMxB claims.

(2)    Changes are recorded in OCI.

	Six Months Ended June 30, 2024
	GMxB Core		Purchased MRB Core		Net GMxB Core		GMxB Legacy		Purchased MRB Legacy (4)		Net GMxB Legacy
	(Dollars in millions)
Balance, beginning of period	$	578	$	(1,180)	$	(602)	$	13,410	$	(15,519)	$	(2,109)
Beginning balance before changes in the instrument specific credit risk	324		(1,266)		(942)		13,020		(15,543)		(2,523)
Model changes and effect of changes in cash flow assumptions	—		—		—		—		1		1
Actual market movement effect	(154)		145		(9)		(743)		736		(7)
Interest accrual	30		(9)		21		314		(331)		(17)
Attributed fees accrued (1)	199		(178)		21		398		(300)		98
Benefit payments	(21)		21		—		(632)		618		(14)
Actual policyholder behavior different from expected behavior	9		—		9		(23)		8		(15)
Changes in future economic assumptions	(236)		256		20		(1,437)		1,509		72
Issuances (2)	—		1		1		—		—		—
Ending balance before changes in the instrument-specific credit risk	151		(1,030)		(879)		10,897		(13,302)		(2,405)
Changes in the instrument-specific credit risk (3)	268		98		366		520		48		568
Balance, end of period	$	419	$	(932)	$	(513)	$	11,417	$	(13,254)	$	(1,837)

62

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Weighted-average age of policyholders (years)	65.0		65.4		N/A	73.3		73.7		N/A
Net amount at risk	$	2,866	$	2,834	N/A	$	19,710	$	19,397	N/A

_______________

(1)Attributed fees accrued represents the portion of the fees needed to fund future GMxB claims.

(2)Issuances are from a non-affiliated recapture of reinsurance..

(3)Changes are recorded in OCI.

(4)Purchased MRB is the impact of non-affiliated reinsurance and affiliated reinsurance with Equitable America.

	Six Months Ended June 30, 2023
	GMxB Core		Purchased MRB Core		Net GMxB Core		GMxB Legacy		Purchased MRB Legacy (3)		Net GMxB Legacy
	(Dollars in millions)
Balance, beginning of period	$	539	$	—	$	539	$	14,699	$	(10,492)	$	4,207
Beginning balance before changes in the instrument specific credit risk	538		—		538		15,314		(10,438)		4,876
Model changes and effect of changes in cash flow assumptions	—		—		—		—		—		—
Actual market movement effect	(322)		105		(217)		(1,381)		978		(403)
Interest accrual	37		(9)		28		392		(358)		34
Attributed fees accrued (1)	204		(99)		105		418		(238)		180
Benefit payments	(24)		12		(12)		(687)		523		(164)
Actual policyholder behavior different from expected behavior	8		(4)		4		15		(20)		(5)
Changes in future economic assumptions	(70)		217		147		71		290		361
Issuances	(1)		(1,294)		(1,295)		—		(6,865)		(6,865)
Ending balance before changes in the instrument-specific credit risk	370		(1,072)		(702)		14,142		(16,128)		(1,986)
Changes in the instrument-specific credit risk (2)	(215)		1		(214)		(1,422)		(95)		(1,517)
Balance, end of period	$	155	$	(1,071)	$	(916)	$	12,720	$	(16,223)	$	(3,503)
Weighted-average age of policyholders (years)	64.0		64.4		N/A		72.8		73.0		N/A
Net amount at risk (4)	$	3,159	$	3,072	N/A		$	22,195	$	21,728	N/A

_______________

(1)Attributed fees accrued represents the portion of the fees needed to fund future GMxB claims.

(2)Changes are recorded in OCI.

(3)Purchased MRB is the impact of non-affiliated reinsurance.

(4)GMxB legacy and Purchased MRB prior period amounts have been revised for errors deemed immaterial to previously issued financial statements.

63

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

The following table reconciles market risk benefits by the amounts in an asset position and amounts in a liability position to the market risk benefit amounts in the consolidated balance sheets:

	June 30, 2024										December 31, 2023
	MRB Asset		MRB Liability		Net MRB		Purchased MRB		Total		MRB Asset		MRB Liability		Net MRB		Purchased MRB		Total
	(in millions)
GMxB Core	$	(497)	$	916	$	419	$	(932)	$	(513)	$	(410)	$	988	$	578	$	(1,180)	$	(602)
GMxB Legacy	(180)		11,597		11,417		(13,254)		(1,837)		(103)		13,513		13,410		(15,519)		(2,109)
Other	(86)		55		(31)		1		(30)		(61)		69		8		(30)		(22)
Total	$	(763)	$	12,568	$	11,805	$	(14,185)	$	(2,380)	$	(574)	$	14,570	$	13,996	$	(16,729)	$	(2,733)

10)     POLICYHOLDER ACCOUNT BALANCES

The following table reconciles the policyholders account balances to the policyholders’ account balance liability in the consolidated balance sheets:

	June 30, 2024		December 31, 2023
	(in millions)
Policyholders’ account balance reconciliation
UL	$	5,129	$	5,202
VUL	4,165		4,145
GMxB Legacy	595		618
GMxB Core	(8)		(5)
SCS	43,344		40,649
EQUI-VEST Individual	2,182		2,322
EQUI-VEST Group	11,369		11,563
Momentum	575		608
Other (1)	3,552		2,995
Balance (exclusive of Funding Agreements)	70,903		68,097
Funding Agreements	13,711		14,893
Balance, end of period	$	84,614	$	82,990

_______________

(1) Primarily reflects products, IR Payout, IR Other, Investment Edge, Association, Indexed Universal Life, Group Pension and Closed Block.

The following tables summarize the balances and changes in policyholder’s account balances:

	Six Months Ended June 30, 2024
	Universal Life		Variable Universal Life		GMxB Legacy		GMxB Core		SCS (1)		EQUI-VEST Individual		EQUI-VEST Group		Momentum
	(Dollars in millions)
Balance, beginning of period	$	5,202	$	4,145	$	618	$	(5)	$	40,649	$	2,322	$	11,563	$	608
Issuances	—		—		—		—		—		—		—		—
Premiums received	327		52		36		23		8		15		305		37
Policy charges	(359)		(109)		18		7		(5)		—		(3)		—
Surrenders and withdrawals	(45)		(23)		(43)		(18)		(1,824)		(168)		(806)		(69)
Benefit payments	(106)		(52)		(49)		(1)		(132)		(27)		(35)		(1)
Net transfers from (to) separate account	—		59		3		(17)		1,009		7		170		(7)
Interest credited (2)	110		93		12		3		3,639		33		175		7
Other	—		—		—		—		—		—		—		—
Balance, end of period	$	5,129	$	4,165	$	595	$	(8)	$	43,344	$	2,182	$	11,369	$	575

64

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Weighted-average crediting rate	3.80		%	3.75		%	2.74		%	1.38		%	N/A		2.98		%	2.67		%	2.32		%
Net amount at risk (3)	$	34,364		$	82,517		$	19,710		$	2,866		$	—	$	104		$	9		$	—
Cash surrender value	$	3,393		$	2,617		$	531		$	205		$	40,408	$	2,176		$	11,313		$	576

	Six Months Ended June 30, 2023
	Universal Life		Variable Universal Life		GMxB Legacy		GMxB Core		SCS (1)		EQUI-VEST Individual		EQUI-VEST Group		Momentum
	(Dollars in millions)
Balance, beginning of period	$	5,341	$	4,253	$	688	$	42	$	35,460	$	2,652	$	12,046	$	703
Issuances	—		—		—		—		—		—		—		—
Premiums received	358		64		41		26		—		19		317		35
Policy charges	(384)		(109)		20		8		(3)		—		(3)		—
Surrenders and withdrawals	(38)		(22)		(47)		(16)		(1,319)		(178)		(820)		(71)
Benefit payments	(128)		(58)		(51)		(1)		(121)		(40)		(35)		(4)
Net transfers from (to) separate account	—		(89)		2		(38)		1,591		4		144		(12)
Interest credited (2)	111		94		13		2		4,059		38		210		6
Other	—		—		—		—		—		3		11		—
Balance, end of period	$	5,260	$	4,133	$	666	$	23	$	39,667	$	2,498	$	11,870	$	657
Weighted-average crediting rate	3.67%		3.72%		2.71%		1.32%		N/A		3.04%		2.52%		2.33%
Net amount at risk (3)	$	36,505	$	83,438	$	22,195	$	3,159	$	11	$	118	$	24	$	—
Cash surrender value	$	3,463	$	2,691	$	630	$	238	$	36,091	$	2,490	$	11,782	$	657

______________

(1)SCS sales are recorded as a Separate Account liability until they are swept into the General Account. This sweep is recorded as Net Transfers from (to) separate account.

(2)SCS and EQUI-VEST Group includes amounts related to the change in embedded derivative.

(3)For life insurance products the net amount at risk is death benefit less account value for the policyholder. For variable annuity products the net amount risk is the maximum GMxB NAR for the policyholder.

The following tables present the account values by range of guaranteed minimum crediting rates and the related range of the difference in basis points, between rates being credited policyholders and the respective guaranteed minimums:

June 30, 2024
Product	Range of Guaranteed Minimum Crediting Rate	At Guaranteed Minimum		1 Basis Point - 50 Basis Points Above		51 Basis Points - 150 Basis Points Above		Greater Than 150 Basis Points Above		Total
		(in millions)
UL	0% - 1.50%	$	—	$	—	$	—	$	6	$	6
	1.51% - 2.50%	29		88		366		542		1,025
	Greater than 2.50%	3,455		612		—		—		4,067
	Total	$	3,484	$	700	$	366	$	548	$	5,098
VUL	0% - 1.50%	$	10	$	5	$	24	$	14	$	53
	1.51% - 2.50%	34		337		117		—		488
	Greater than 2.50%	3,217		—		—		—		3,217
	Total	$	3,261	$	342	$	141	$	14	$	3,758
GMxB Legacy	0% - 1.50%	$	73	$	3	$	—	$	—	$	76
	1.51% - 2.50%	20		—		—		—		20
	Greater than 2.50%	436		—		—		—		436
	Total	$	529	$	3	$	—	$	—	$	532

65

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

June 30, 2024
Product	Range of Guaranteed Minimum Crediting Rate	At Guaranteed Minimum		1 Basis Point - 50 Basis Points Above		51 Basis Points - 150 Basis Points Above		Greater Than 150 Basis Points Above		Total
		(in millions)
GMxB Core	0% - 1.50%	$	13	$	172	$	—	$	—	$	185
	1.51% - 2.50%	12		—		—		—		12
	Greater than 2.50%	12		—		—		—		12
	Total	$	37	$	172	$	—	$	—	$	209
EQUI-VEST Individual	0% - 1.50%	$	45	$	209	$	—	$	—	$	254
	1.51% - 2.50%	40		—		—		—		40
	Greater than 2.50%	1,887		—		—		—		1,887
	Total	$	1,972	$	209	$	—	$	—	$	2,181
EQUI-VEST Group	0% - 1.50%	$	746	$	2,372	$	35	$	279	$	3,432
	1.51% - 2.50%	349		—		—		—		349
	Greater than 2.50%	6,352		—		—		—		6,352
	Total	$	7,447	$	2,372	$	35	$	279	$	10,133
SCS	Products with either a fixed rate or no guaranteed minimum	N/A		N/A		N/A		N/A		N/A
Momentum	0% - 1.50%	$	—	$	13	$	315	$	52	$	380
	1.51% - 2.50%	122		1		—		—		123
	Greater than 2.50%	67		—		5		—		72
	Total	$	189	$	14	$	320	$	52	$	575

December 31, 2023
Product	Range of Guaranteed Minimum Crediting Rate	At Guaranteed Minimum		1 Basis Point - 50 Basis Points Above		51 Basis Points - 150 Basis Points Above		Greater Than 150 Basis Points Above		Total
		(in millions)
UL	0% - 1.50%	$	—	$	—	$	—	$	6	$	6
	1.51% - 2.50%	61		69		462		430		1,022
	Greater than 2.50%	3,515		627		—		—		4,142
	Total	$	3,576	$	696	$	462	$	436	$	5,170
VUL	0% - 1.50%	$	8	$	9	$	18	$	6	$	41
	1.51% - 2.50%	34		408		28		—		470
	Greater than 2.50%	3,259		—		—		—		3,259
	Total	$	3,301	$	417	$	46	$	6	$	3,770
GMxB Legacy	0% - 1.50%	$	75	$	16	$	—	$	—	$	91
	1.51% - 2.50%	21		—		—		—		21
	Greater than 2.50%	461		—		—		—		461
	Total	$	557	$	16	$	—	$	—	$	573
GMxB Core	0% - 1.50%	$	13	$	187	$	—	$	—	$	200
	1.51% - 2.50%	13		—		—		—		13
	Greater than 2.50%	7		—		—		—		7
	Total	$	33	$	187	$	—	$	—	$	220

66

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

December 31, 2023
Product	Range of Guaranteed Minimum Crediting Rate	At Guaranteed Minimum		1 Basis Point - 50 Basis Points Above		51 Basis Points - 150 Basis Points Above		Greater Than 150 Basis Points Above		Total
		(in millions)
EQUI-VEST Individual	0% - 1.50%	$	49	$	218	$	—	$	—	$	267
	1.51% - 2.50%	43		—		—		—		43
	Greater than 2.50%	2,011		—		—		—		2,011
	Total	$	2,103	$	218	$	—	$	—	$	2,321
EQUI-VEST Group	0% - 1.50%	$	773	$	2,338	$	36	$	315	$	3,462
	1.51% - 2.50%	345		—		—		—		345
	Greater than 2.50%	6,610		—		—		—		6,610
	Total	$	7,728	$	2,338	$	36	$	315	$	10,417
SCS	Products with either a fixed rate or no guaranteed minimum	N/A		N/A		N/A		N/A		N/A
Momentum	0% - 1.50%	$	—	$	12	$	330	$	53	$	395
	1.51% - 2.50%	138		1		—		—		139
	Greater than 2.50%	68		—		5		—		73
	Total	$	206	$	13	$	335	$	53	$	607

Separate Account - Summary

The following table reconciles the Separate Account liabilities to the Separate Account liability balance in the consolidated balance sheets:

	June 30, 2024		December 31, 2023
	(in millions)
Separate Account Reconciliation
VUL	$	14,826	$	13,694
GMxB Legacy	33,965		33,793
GMxB Core	27,336		27,664
EQUI-VEST Individual	4,787		4,584
Investment Edge	4,188		4,048
EQUI-VEST Group	29,226		26,960
Momentum	4,701		4,421
Other (1)	6,377		6,333
Total	$	125,406	$	121,497

_____________

(1)Primarily reflects Corporate and Other products and Employer Sponsored products including Association and Other.

67

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

The following tables present the balances of and changes in Separate Account liabilities:

	Six Months Ended June 30, 2024
	VUL		GMxB Legacy		GMxB Core		EQUI-VEST Individual		Investment Edge		EQUI-VEST Group		Momentum
	(in millions)
Balance, beginning of period	$	13,694	$	33,793	$	27,664	$	4,584	$	4,048	$	26,960	$	4,421
Premiums and deposits	406		112		233		40		152		1,180		379
Policy charges	(215)		(324)		(238)		(1)		—		(8)		(11)
Surrenders and withdrawals	(306)		(1,629)		(1,685)		(248)		(247)		(1,113)		(477)
Benefit payments	(25)		(385)		(131)		(26)		(15)		(32)		(8)
Investment performance (1)	1,331		2,401		1,476		445		290		2,409		390
Net transfers from (to) general account	(59)		(3)		17		(7)		(40)		(170)		7
Other charges	—		—		—		—		—		—		—
Balance, end of period	$	14,826	$	33,965	$	27,336	$	4,787	$	4,188	$	29,226	$	4,701
Cash surrender value	$	14,791	$	33,702	$	26,722	$	4,752	$	4,120	$	28,935	$	4,694

______________

(1)Investment performance is reflected net of M&E fees.

	Six Months Ended June 30, 2023
	VUL		GMxB Legacy		GMxB Core		EQUI-VEST Individual		Investment Edge		EQUI-VEST Group		Momentum
	(in millions)
Balance, beginning of period	$	11,535	$	32,616	$	27,017	$	4,162	$	3,772	$	22,393	$	3,884
Premiums and deposits	382		110		259		49		200		1,116		332
Policy charges	(213)		(340)		(241)		(1)		—		(8)		(10)
Surrenders and withdrawals	(259)		(1,324)		(1,216)		(198)		(195)		(744)		(364)
Benefit payments	(45)		(382)		(117)		(27)		(24)		(28)		(5)
Investment performance (1)	1,495		3,392		2,065		538		321		2,849		452
Net transfers from (to) general account	89		(2)		38		(3)		(94)		(144)		12
Other charges (2)	—		—		—		4		—		25		—
Balance, end of period	$	12,984	$	34,070	$	27,805	$	4,524	$	3,980	$	25,459	$	4,301
Cash surrender value	$	12,971	$	33,792	$	27,055	$	4,491	$	3,894	$	25,210	$	4,295

______________

(1)Investment performance is reflected net of M&E fees.

(2)For the six months ended June 30, 2023, EQUI-VEST Individual and EQUI-VEST Group amounts reflect a total special payment applied to the accounts of active clients as part of a previously disclosed settlement agreement between Equitable Financial Life Insurance Company and the Securities & Exchange Commission.

68

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

The following tables present the aggregate fair value of Separate Account assets by major asset category:

	June 30, 2024
	Life Insurance & Employee Benefits Products		Individual Variable Annuity Products		Employer - Sponsored Products		Other		Total
	(in millions)
Asset Type
Debt securities	$	51	$	1	$	7	$	19	$	78
Common Stock	67		35		452		1,706		2,260
Mutual Funds	14,662		71,000		35,388		658		121,708
Bonds and Notes	110		4		14		1,232		1,360
Total	$	14,890	$	71,040	$	35,861	$	3,615	$	125,406

	December 31, 2023
	Life Insurance & Employee Benefits Products		Individual Variable Annuity Products		Employer - Sponsored Products		Other		Total
	(in millions)
Asset Type
Debt securities	$	48	$	1	$	21	$	6	$	76
Common Stock	65		34		447		1,667		2,213
Mutual Funds	13,557		70,815		32,780		677		117,829
Bonds and Notes	91		4		1		1,283		1,379
Total	$	13,761	$	70,854	$	33,249	$	3,633	$	121,497

11)    INCOME TAXES

Income tax expense for the three and six months ended June 30, 2024 and 2023 was computed using an estimated annual effective tax rate (“ETR”), with discrete items recognized in the period in which they occur. The estimated ETR is revised, as necessary, at the end of successive interim reporting periods.

During the fourth quarter of 2022, the Company established a valuation allowance against its deferred tax asset related to unrealized capital losses in the available for sale securities portfolio. During the year ended December 31, 2023, management took actions to increase its available liquidity so that the Company has the ability and intent to hold the majority of securities in its available for sale portfolio to recovery. For liquidity and other purposes, the Company maintains a smaller pool of securities that it does not intend to hold to recovery. The Company maintains a valuation allowance against the deferred tax asset on available for sale securities that will not be held to recovery.

There were no material changes to the valuation allowance for the three months ended March 31, 2024. For the six months ended June 30, 2024, the Company recorded an increase to the valuation allowance of $5 million, due to changes in the value of unrealized losses in the available for sale portfolio that will not be held to recovery. This adjustment was recorded in other comprehensive income. A valuation allowance of $222 million remains against the portion of the deferred tax asset that is still not more-likely-than-not to be realized.

The Company uses the aggregate portfolio approach related to the stranded or disproportionate income tax effects in accumulated other comprehensive income related to available for sale securities. Under this approach, the disproportionate tax effect remains intact as long as the investment portfolio remains.

12)    RELATED PARTY TRANSACTIONS

The Company did not enter into any new significant transactions with related parties during the three and six months ended June 30, 2024.

On May 17, 2023, the Company entered into a reinsurance agreement with Equitable America, effective April 1, 2023. See Note 17 of the Notes to these Consolidated Financial Statements for further details.

69

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

13)    EQUITY

AOCI represents cumulative gains (losses) on items that are not reflected in net income (loss). The balances of AOCI were as follows:

	June 30, 2024		December 31, 2023
	(in millions)
Unrealized gains (losses) on investments	$	(7,165)	$	(6,363)
Market risk benefits - instrument-specific credit risk component	(945)		(764)
Liability for future policy benefits - current discount rate component	372		194
Defined benefit pension plans	(4)		(5)
Accumulated other comprehensive income (loss) attributable to Equitable Financial	$	(7,742)	$	(6,938)

The components of OCI, net of taxes were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Change in net unrealized gains (losses) on investments:
Net unrealized gains (losses) arising during the period	$	(399)	$	(616)	$	(861)	$	836
(Gains) losses reclassified into net income (loss) during the period (1)	3		39		24		94
Net unrealized gains (losses) on investments	(396)		(577)		(837)		930
Adjustments for policyholders’ liabilities, insurance liability loss recognition and other	29		31		35		33
Change in unrealized gains (losses), net of adjustments (net of deferred income tax expense (benefit) of $(91), $(310), $(206), and $7)	(367)		(546)		(802)		963
Change in LFPB discount rate and MRB credit risk, net of tax
Market risk benefits - change in instrument-specific credit risk (net of deferred income tax expense (benefit) of $(42), $(23), $(38) and $225)	(161)		(88)		(144)		845
Liability for future policy benefits - change in current discount rate (net of deferred income tax expense (benefit) of $15, $19, $37 and $(10) )	58		73		141		(36)
Change in defined benefit plans:
Reclassification to Net income (loss) of amortization of net prior service credit included in net periodic cost	—		—		1		—
Change in defined benefit plans (net of deferred income tax expense (benefit) of $0, $0, $0 and $0)	—		—		1		—
Change in accumulated other comprehensive income (loss) attributable to Equitable Financial	$	(470)	$	(561)	$	(804)	$	1,772

______________

(1)See “Reclassification adjustment” in Note 3 of the Notes to these Consolidated Financial Statements. Reclassification amounts presented net of income tax expense (benefit) of $(1) million, $(10) million, $(6) million and $(25) million for the three and six months ended June 30, 2024 and 2023, respectively.

Investment gains and losses reclassified from AOCI to net income (loss) primarily consist of realized gains (losses) on sales and credit losses of AFS securities and are included in total investment gains (losses), net on the consolidated statements of income (loss). Amounts reclassified from AOCI to net income (loss) as related to defined benefit plans primarily consist of amortization of net (gains) losses and net prior service cost (credit) recognized as a component of net periodic cost and reported in compensation and benefits in the consolidated statements of income (loss). Amounts presented in the table above are net of tax.

70

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

14)     REDEEMABLE NONCONTROLLING INTEREST

The changes in the components of redeemable noncontrolling interests are presented in the following table:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Balance, beginning of period	$	29	$	19	$	24	$	21
Net earnings (loss) attributable to redeemable noncontrolling interests	—		1		1		1
Purchase/change of redeemable noncontrolling interests	1		1		5		(1)
Balance, end of period	$	30	$	21	$	30	$	21

15)    COMMITMENTS AND CONTINGENT LIABILITIES

Litigation and Regulatory Matters

Litigation, regulatory and other loss contingencies arise in the ordinary course of the Company’s activities as a diversified financial services firm. The Company is a defendant in a number of litigation matters arising from the conduct of its business. In some of these matters, claimants seek to recover very large or indeterminate amounts, including compensatory, punitive, treble and exemplary damages. Modern pleading practice permits considerable variation in the assertion of monetary damages and other relief. Claimants are not always required to specify the monetary damages they seek, or they may be required only to state an amount sufficient to meet a court’s jurisdictional requirements. Moreover, some jurisdictions allow claimants to allege monetary damages that far exceed any reasonably possible verdict. The variability in pleading requirements and past experience demonstrates that the monetary and other relief that may be requested in a lawsuit or claim often bears little relevance to the merits or potential value of a claim. Litigation against the Company includes a variety of claims including, among other things, insurers’ sales practices, alleged agent misconduct, alleged failure to properly supervise agents, contract administration, product design, features and accompanying disclosure, COI increases, payments of death benefits and the reporting and escheatment of unclaimed property, alleged breach of fiduciary duties, alleged mismanagement of client funds and other matters.

The outcome of a litigation or regulatory matter is difficult to predict, and the amount or range of potential losses associated with these or other loss contingencies requires significant management judgment. It is not possible to predict the ultimate outcome or to provide reasonably possible losses or ranges of losses for all pending regulatory matters, litigation and other loss contingencies. While it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company’s financial position, based on information currently known, management believes that neither the outcome of pending litigation and regulatory matters, nor potential liabilities associated with other loss contingencies, are likely to have such an effect. However, given the large and indeterminate amounts sought in certain litigation and the inherent unpredictability of all such matters, it is possible that an adverse outcome in certain of the Company’s litigation or regulatory matters, or liabilities arising from other loss contingencies, could, from time to time, have a material adverse effect upon the Company’s results of operations or cash flows in a particular quarterly or annual period.

For some matters, the Company is able to estimate a range of loss. For such matters in which a loss is probable, an accrual has been made. For matters where the Company believes a loss is reasonably possible, but not probable, no accrual is required. For matters for which an accrual has been made, but there remains a reasonably possible range of loss in excess of the amounts accrued or for matters where no accrual is required, the Company develops an estimate of the unaccrued amounts of the reasonably possible range of losses. As of June 30, 2024, the Company estimates the aggregate range of reasonably possible losses, in excess of any amounts accrued for these matters as of such date, to be up to approximately $100 million.

71

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

For other matters, the Company is currently not able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from plaintiffs and other parties, investigation of factual allegations, rulings by a court on motions or appeals, analysis by experts and the progress of settlement discussions. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation and regulatory contingencies and updates the Company’s accruals, disclosures and reasonably possible losses or ranges of loss based on such reviews.

In February 2016, a lawsuit was filed in the Southern District of New York entitled Brach Family Foundation, Inc. v. AXA Equitable Life Insurance Company. This lawsuit is a putative class action brought on behalf of all owners of UL policies subject to Equitable Financial’s COI rate increase. In early 2016, Equitable Financial raised COI rates for certain UL policies issued between 2004 and 2008, which had both issue ages 70 and above and a current face value amount of $1 million and above. A second putative class action was filed in the District of Arizona in 2017 and consolidated with the Brach matter in federal court in New York. The consolidated amended class action complaint alleged the following claims: breach of contract; misrepresentations in violation of Section 4226 of the New York Insurance Law; violations of New York General Business Law Section 349; and violations of the California Unfair Competition Law, and the California Elder Abuse Statute. Plaintiffs sought: (a) compensatory damages, costs, and, pre- and post-judgment interest; (b) with respect to their claim concerning Section 4226, a penalty in the amount of premiums paid by the plaintiffs and the putative class; and (c) injunctive relief and attorneys’ fees in connection with their statutory claims. In August 2020, the federal district court issued a decision certifying nationwide breach of contract and Section 4226 classes, and a New York State Section 349 class. Owners of a substantial number of policies opted out of the Brach class action. Most have settled pre-litigation, but a minority of opt-out policies are not yet the subject of litigation. Others filed suit previously, including three pending individual federal actions that were coordinated with the Brach action and contained similar allegations. In May 2023, the Brach class action and Equitable Financial informed the federal district court that they had mutually agreed to settle the class action, and in October 2023, the federal district court entered an order of final approval of the settlement agreement. Equitable Financial is fully accrued for the class settlement, which will have no impact on earnings or distributable cash projections. In October 2023, Equitable Financial and the three plaintiffs with individual federal actions coordinated with the Brach action informed the court that they had reached a settlement, and those actions were dismissed. Equitable Financial is likewise fully accrued for those individual settlements, which will have no impact on earnings or distributable cash projections. Equitable Financial has settled other actual and threatened litigations challenging the COI increase by individual policy owners and entities.

Finally, one action is also pending against Equitable Financial in New York State Court. In July 2022, the trial court in Hobish v. AXA Equitable Life Insurance Company, granted in significant part Equitable Financial’s motion for summary judgment and denied plaintiff’s cross motion. That plaintiff appealed but the appellate court affirmed the trial court’s decision. In March 2024, the intermediate appellate court granted plaintiff’s motion for leave to appeal to the state’s highest appellate court. Equitable Financial is vigorously defending each of these matters.

As with other financial services companies, Equitable Financial periodically receives informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations in connection with inquiries and investigations of the products and practices of the Company or the financial services industry. It is the practice of the Company to cooperate fully in these matters.

Obligations under Funding Agreements

FHLB

As a member of the FHLB, Equitable Financial has access to collateralized borrowings. It also may issue funding agreements to the FHLB. Both the collateralized borrowings and funding agreements would require Equitable Financial to pledge qualified mortgage-backed assets and/or government securities as collateral. Equitable Financial issues short-term funding agreements to the FHLB and uses the funds for asset, liability, and cash management purposes. Equitable Financial issues long-term funding agreements to the FHLB and uses the funds for spread lending purposes.

Entering into FHLB membership, borrowings and funding agreements requires the ownership of FHLB stock and the pledge of assets as collateral. Equitable Financial has purchased FHLB stock of $336 million and pledged collateral with a carrying value of $10.0 billion as of June 30, 2024. 

72

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Funding agreements are reported in policyholders’ account balances in the consolidated balance sheets. For other instruments used for asset/liability and cash management purposes, see “Offsetting of Financial Assets and Liabilities and Derivative Instruments” included in Note 4 of the Notes to these Consolidated Financial Statements. The table below summarizes the Company’s activity of funding agreements with the FHLB.

Change in FHLB Funding Agreements during the Six Months Ended June 30, 2024

	Outstanding Balance at December 31, 2023		Issued During the Period		Repaid During the Period		Long-term Agreements Maturing Within One Year		Long-term Agreements Maturing Within Five Years		Outstanding Balance at June 30, 2024
	(in millions)
Short-term funding agreements:
Due in one year or less	$	6,168	$	30,425	$	(30,875)	$	125	$	—	$	5,843
Long-term funding agreements:
Due in years two through five	799		—		—		(82)		—		717
Due in more than five years	648		—		—		(43)		—		605
Total long-term funding agreements	1,447		—		—		(125)		—		1,322
Total funding agreements (1)	$	7,615	$	30,425	$	(30,875)	$	—	$	—	$	7,165

____________

(1)The $2 million and $3 million difference between the funding agreements carrying value shown in fair value table for June 30, 2024 and December 31, 2023, respectively, reflects the remaining amortization of a hedge implemented and closed, which locked in the funding agreements borrowing rates.

FABN

Under the FABN program, Equitable Financial may issue funding agreements in U.S. dollar or foreign currencies to a Delaware special purpose statutory trust (the “Trust”) in exchange for the proceeds from issuances of fixed and floating rate medium-term marketable notes issued by the Trust from time to time (the “Trust Notes”). The funding agreements have matching interest, maturity and currency payment terms to the applicable Trust Notes. The Company hedges the foreign currency exposure of foreign currency denominated funding agreements using cross currency swaps as discussed in Note 4 of the Notes to these Consolidated Financial Statements. As of June 30, 2024, the maximum aggregate principal amount of Trust Notes permitted to be outstanding at any one time is $10.0 billion. Funding agreements issued to the Trust, including any foreign currency transaction adjustments, are reported in policyholders’ account balances in the consolidated balance sheets. Foreign currency transaction adjustments to policyholder’s account balances are recognized in net income (loss) as an adjustment to interest credited to policyholders’ account balances and are offset in interest credited to policyholders’ account balances by a release of AOCI from deferred changes in fair value of designated and qualifying cross currency swap cash flow hedges. The table below summarizes Equitable Financial’s activity of funding agreements under the FABN program.

Change in FABN Funding Agreements during the Six Months Ended June 30, 2024

	Outstanding Balance at December 31, 2023		Issued During the Period		Repaid During the Period		Long-term Agreements Maturing Within One Year		Long-term Agreements Maturing Within Five Years		Foreign Currency Transaction Adjustment		Outstanding Balance at June 30, 2024
	(in millions)
Short-term funding agreements:
Due in one year or less	$	1,000	$	—	$	—	$	—	$	—	$	—	$	1,000
Long-term funding agreements:
Due in years two through five	4,984		—		—		—		—		(19)		4,965
Due in more than five years	300		—		—		—		—		—		300
Total long-term funding agreements	5,284		—		—		—		—		(19)		5,265
Total funding agreements (1)	$	6,284	$	—	$	—	$	—	$	—	$	(19)	$	6,265

______________

73

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

(1)The $14 million and $17 million difference between the funding agreements notional value shown and carrying value table as of June 30, 2024 and December 31, 2023, respectively, reflects the remaining amortization of the issuance cost of the funding agreements and the foreign currency transaction adjustment.

FABCP Program

In May 2023, the Company established a funding agreement-backed commercial paper program (the “FABCP Program”), pursuant to which a special purpose limited liability company (the “SPLLC”) may issue commercial paper and deposit the proceeds with the Company pursuant to a funding agreement issued by the Company to the SPLLC. The current maximum aggregate principal amount permitted to be outstanding at any one time under the FABCP Program is $3.0 billion. The Company had $250 million outstanding as of June 30, 2024.

Guarantees and Other Commitments

The Company provides certain guarantees or commitments to affiliates and others. As of June 30, 2024, these arrangements include commitments by the Company to provide equity financing of $1.1 billion to certain limited partnerships and real estate joint ventures under certain conditions. Management believes the Company will not incur material losses as a result of these commitments.

The Company had $17 million of undrawn letters of credit related to reinsurance as of June 30, 2024. The Company had $683 million of commitments under existing mortgage loan agreements as of June 30, 2024.

The Company is the obligor under certain structured settlement agreements it had entered into with unaffiliated insurance companies and beneficiaries. To satisfy its obligations under these agreements, the Company owns single premium annuities issued by previously wholly-owned life insurance subsidiaries. The Company has directed payment under these annuities to be made directly to the beneficiaries under the structured settlement agreements. A contingent liability exists with respect to these agreements should the previously wholly-owned subsidiaries be unable to meet their obligations. Management believes the need for the Company to satisfy those obligations is remote.

16)    INSURANCE STATUTORY FINANCIAL INFORMATION

Prescribed and Permitted Accounting Practices

As of June 30, 2024, the following three prescribed and permitted practices resulted in surplus that is different from the statutory surplus that would have been reported had NAIC statutory accounting practices been applied.

Equitable Financial was granted a permitted practice by the NYDFS to apply SSAP 108, Derivatives Hedging Variable Annuity Guarantees on a retroactive basis from January 1, 2021 through June 30, 2021, after reflecting the impacts of our reinsurance transaction with Venerable. The permitted practice was amended to also permit Equitable Financial to adopt SSAP 108 prospectively as of July 1, 2021 and to consider the impact of both the interest rate derivatives and the general account assets used to fully hedge the interest rate risk inherent in its variable annuity guarantees when determining the amount of the deferred asset or liability under SSAP 108. Application of the permitted practice partially mitigates the New York Insurance Regulation 213 (“Reg 213”) impact of the Venerable Transaction on Equitable Financial’s statutory capital and surplus and enables Equitable Financial to more effectively neutralize the impact of interest rates on its statutory surplus and to better align with our economic hedging program. The impact of applying this permitted practice relative to SSAP 108 as written was a decrease of approximately $60 million in statutory special surplus funds as of June 30, 2024. The Reinsurance Treaty reduced the amount of interest rate hedging needed going forward, affecting future deferrals, but leaves our historical SSAP 108 deferred amounts unchanged. The permitted practice also reset Equitable Financial’s unassigned surplus to zero as of June 30, 2021 to reflect the transformative nature of the Venerable Transaction.

The NAIC Accounting Practices and Procedures manual (“NAIC SAP”) has been adopted as a component of prescribed or permitted practices by the State of New York. However, Reg 213 adopted in May of 2019 and as amended in February 2020 and March 2021, differs from the NAIC variable annuity reserve and capital framework. Reg 213 requires Equitable Financial to carry statutory basis reserves for its variable annuity contract obligations equal to the greater of those required under (i) the NAIC standard or (ii) a revised version of the NYDFS requirement in effect prior to the adoption of the first amendment for contracts issued prior to January 1, 2020, and for policies issued after that date a new standard that in current market conditions imposes more conservative reserving requirements for variable annuity contracts than the NAIC standard.

74

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

The impact of the application of Reg 213 was a decrease of approximately $333 million in statutory surplus as of June 30, 2024 compared to statutory surplus under the NAIC variable annuity framework. Our hedging program is designed to hedge the economics of our insurance liabilities and largely offsets Reg 213 and NAIC framework reserve movements due to interest rates and equities. The NYDFS allows domestic insurance companies a five year phase-in provision for Reg 213 reserves. As of September 30, 2022, Equitable Financial’s Reg 213 reserves were 100% phased-in. As of June 30, 2024, given the prevailing market conditions and business mix, there are $323 million Reg 213 redundant reserves over the US RBC CTE 98 total asset requirement (“TAR”).

During the fourth quarter 2020, Equitable Financial received approval from NYDFS for its proposed amended Plan of Operation for Separate Account No. 68 (“SA 68”) for our Structured Capital Strategies product and Separate Account No. 69 (“SA 69”) for our EQUI-VEST product Structured Investment Option, to change the accounting basis of these two non-insulated Separate Accounts from fair value to book value in accordance with Section 1414 of the Insurance Law to align with how we manage and measure our overall general account asset portfolio. In order to facilitate this change and comply with Section 4240(a)(10), the Company also sought approval to amend the Plans to remove the requirement to comply with Section 4240(a)(5)(iii) and substitute it with a commitment to comply with Section 4240(a)(5)(i). Similarly, the Company updated the reserves section of each Plan to reflect the fact that Regulation 128 would no longer be applicable upon the change in accounting basis. We applied this change effective January 1, 2021. The impact of the application is an increase of approximately $1.4 billion in statutory surplus as of June 30, 2024.

17)    REINSURANCE

The Company assumes and cedes reinsurance with other insurance companies. The Company evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Ceded reinsurance does not relieve the originating insurer of liability.

The following table summarizes the effect of reinsurance. The impact of the reinsurance transaction described below results in an increase in reinsurance ceded:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Direct charges and fee income	$	686	$	678	$	1,376	$	1,352
Reinsurance assumed	4		3		4		4
Reinsurance ceded - Equitable America	(352)		(345)		(679)		(345)
Reinsurance ceded - third party	(155)		(153)		(311)		(304)
Policy charges and fee income	$	183	$	183	$	390	$	707
Direct premiums	$	191	$	203	$	393	$	408
Reinsurance assumed	18		44		57		96
Reinsurance ceded - Equitable America	(35)		(40)		(80)		(40)
Reinsurance ceded - third party	(55)		(51)		(118)		(111)
Premiums	$	119	$	156	$	252	$	353
Direct policyholders’ benefits	$	684	$	742	$	1,360	$	1,449
Reinsurance assumed	25		39		64		77
Reinsurance ceded - Equitable America	(181)		(264)		(369)		(264)
Reinsurance ceded - third party	(178)		(182)		(338)		(309)
Policyholders’ benefits	$	350	$	335	$	717	$	953
Direct Interest credited to policyholders’ account balances	$	484	$	490	$	962	$	953
Reinsurance assumed	—		—		—		—
Reinsurance ceded - Equitable America	(152)		(151)		(306)		(151)
Reinsurance ceded - third party	(24)		(27)		(50)		(55)
Interest credited to policyholders’ account balances	$	308	$	312	$	606	$	747

75

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY

Notes to Consolidated Financial Statements (Unaudited), Continued

Ceded Reinsurance

The Company reinsures most of its new variable life, UL and term life policies on an excess of retention basis. The Company generally retains on a per life basis up to $25 million for single lives and $30 million for joint lives with the excess 100% reinsured. The Company also reinsures risk on certain substandard underwriting risks and in certain other cases.

On October 3, 2022, as part of the Global Atlantic Transaction, Equitable Financial ceded to First Allmerica Financial Life Insurance Company on a combined coinsurance and modified coinsurance basis, a 50% quota share of approximately 360,000 legacy Group EQUI-VEST deferred variable annuity contracts issued by Equitable Financial between 1980 and 2008.

In addition to the above, the Company cedes a portion of its group health, extended term insurance, and paid-up life insurance and substantially all of its individual disability income business through various coinsurance agreements.

Internal Reinsurance Treaty

On May 17, 2023, Equitable Financial entered into a reinsurance agreement with Equitable America, effective April 1, 2023. Pursuant to the Reinsurance Treaty, virtually all of Equitable Financial’s net retained General Account liabilities, including all of its net retained liabilities relating to the living benefit and death riders related to (i) its variable annuity contracts issued outside the State of New York prior to October 1, 2022 (and with respect to its EQUI-VEST variable annuity contracts, issued outside the State of New York prior to February 1, 2023) and (ii) certain universal life insurance policies issued outside the State of New York prior to October 1, 2022, were reinsured to Equitable America on a coinsurance funds withheld basis. In addition, all of the Separate Accounts liabilities relating to such variable annuity contracts were reinsured to Equitable America on a modified coinsurance basis. Equitable America’s obligations under the Reinsurance Treaty are secured through Equitable Financial’s retention of certain assets supporting the reinsured liabilities.

There is a diverse pool of assets supporting the funds withheld and NI modco arrangement with Equitable America. The following table summarizes the composition of the pool of assets:

	June 30, 2024				December 31, 2023
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in millions)
Fixed maturities	$	23,018	$	23,018	$	24,725	$	24,725
Mortgage loans on real estate	8,160		7,197		8,405		7,409
Policy loans	264		265		248		250
Other equity investments	190		190		238		238
Other invested assets (1)	10,704		10,704		8,256		8,257
Total assets supporting funds withheld	$	42,336	$	41,374	$	41,872	$	40,879

______________

(1)Other invested assets includes derivatives and cash and cash equivalents.

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The impact of the funds withheld and NI modco arrangement with Equitable America was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Net derivative gains (losses):
Freestanding derivatives	$	611	$	1,364	$	1,511	$	1,364
Embedded derivatives	(761)		(1,331)		(1,716)		(1,331)
Net derivative gains (losses)	(150)		33		(205)		33
Net investment income (loss)	325		295		665		295
Investment gains (losses), net	(3)		(36)		(38)		(36)
Income (loss) from continuing operations, before income taxes	172		292		422		292
Income tax (expense) benefit	(36)		(53)		(89)		(53)
Net income (loss)	136		239		333		239
Change in unrealized gains (losses), net of income taxes	(178)		(173)		(353)		(173)
Comprehensive income (loss)	$	(42)	$	66	$	(20)	$	66

Various assets supporting the Equitable America funds withheld and NI modco arrangement are reported at amortized cost, and as such, changes in fair value of these assets are not reflected in the consolidated financial statements. However, changes in the fair value of these assets are included in the embedded derivative in the Equitable America funds withheld arrangement and the appreciation of the assets is the primary driver of the comprehensive income (loss) reflected above.

Assumed Reinsurance

In addition to the sale of insurance products, the Company currently acts as a professional retrocessionaire by assuming risk from professional reinsurers. The Company assumes accident, life, health, aviation, special risk and space risks by participating in or reinsuring various reinsurance pools and arrangements.

The following table summarizes the ceded purchased market risk benefits, internal reinsurance recoverable and third-party recoverables including amount due to reinsurance and assumed reserves:

	June 30, 2024		December 31, 2023
	(in millions)
Ceded Reinsurance:
Estimated net fair values of purchased market risk benefits	$	14,185	$	16,729
Reinsurance recoverables related to insurance contracts	20,383		20,636
Related party - Equitable America (1)	13,402		13,492
Third parties	6,981		7,144
Top reinsurers:
First Allmerica-GAF	3,421		3,605
Venerable Insurance and Annuity Company (A- KBRA (IFRS) rating)	1,210		1,057
Ceded group health reserves	12		14
Amount due to reinsurers	179		216
Top reinsurers:
First Allmerica-GAF	75		73
Assumed Reinsurance:
Reinsurance assumed reserves	621		731

______________

(1)Includes ceded PAB on NI Modco portion of the Reinsurance Treaty of $34.3 billion offset by $(31.2) billion of modco payable for the same portion of the Reinsurance Treaty.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of financial condition and results of operations is presented pursuant to General Instruction (H)(2)(a) of Form 10-Q. The management’s narrative that follows should be read in conjunction with the consolidated financial statements and the related Notes to Consolidated Financial Statements included elsewhere herein, with the information provided under “Note Regarding Forward-looking Statements and Information” included elsewhere herein and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) in Part II, Item 7 and “Risk Factors” in Part I, Item 1A included in Equitable Financial’s Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). The management’s narrative that follows represents a discussion and analysis of Equitable Financial’s financial condition and results of operations and not the financial condition and results of operations of Equitable Holdings, Inc. (“Holdings”).

Executive Summary

Overview

We are one of America’s leading financial services companies, providing advice and solutions for helping Americans set and meet their retirement goals and protect and transfer their wealth across generations. We operate as a single segment entity based on the manner in which we use financial information to evaluate business performance and to determine the allocation of resources. We benefit from our complementary mix of product offerings. This mix of product offerings provides diversity in our earnings sources, which helps offset fluctuations in market conditions and variability in business results, while offering growth opportunities.

Macroeconomic and Industry Trends

Our business and consolidated results of operations are significantly affected by economic conditions and consumer confidence, conditions in the global capital markets and the interest rate environment.

Financial and Economic Environment

A wide variety of factors continue to impact financial and economic conditions. These factors include, among others, uncertainty regarding the federal debt limit, concerns regarding inflation, high fuel and energy costs, changes in fiscal or monetary policy and geopolitical tensions, including the U.S. presidential election. The Russian invasion of the Ukraine the Israel-Hamas war and the potential for broader regional hostilities, and the ensuing conflicts and the sanctions and other measures imposed in response to these conflicts significantly increased the level of volatility in the financial markets and have increased the level of economic and political uncertainty.

Stressed conditions, volatility and disruptions in the capital markets, particular markets, or financial asset classes can have an adverse effect on us, in part because we have a large investment portfolio. In addition, our insurance liabilities and derivatives are sensitive to changing market factors, including equity market performance and interest rates. An increase in market volatility could continue to affect our business, including through effects on the yields we earn on invested assets, changes in required reserves and capital and fluctuations in the value of our AUM and AV, from which we derive our fee income. These effects could be exacerbated by uncertainty about future fiscal policy, changes in tax policy, the scope of potential deregulation and levels of global trade.

The potential for increased volatility could pressure sales and reduce demand for our products as consumers consider purchasing alternative products to meet their objectives. In addition, this environment could make it difficult to consistently develop products that are attractive to customers. Financial performance can be adversely affected by market volatility and equity market declines as fees driven by AV and AUM fluctuate, hedging costs increase and revenues decline due to reduced sales and increased outflows. Despite the U.S. economy showing signs of slowing early in 2024, equity markets demonstrated overall resilience in the second quarter, benefiting from job creation that consistently exceeded expectations, cooling inflation, and a widely held outlook for monetary easing, including expected interest rate reductions (based on statements of members of the Board of Governors of the Federal Reserve System). However, following the U.S. Bureau of Labor Statistics’s release on August 2, 2024 of a weaker than expected July jobs report, which reported the increase of the unemployment rate to 4.3%, the highest level in nearly three years, markets fell sharply and market expectations of volatility increased.

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We will continue to monitor the behavior of our customers and other factors, including mortality rates, morbidity rates, annuitization rates and lapse and surrender rates, which change in response to changes in capital market conditions, to ensure that our products and solutions remain attractive and profitable. For additional information on our sensitivity to interest rates and capital market prices, see “Risk Factors-Risks Relating to Conditions in the Financial Markets and Economy” and “Quantitative and Qualitative Disclosures About Market Risk” in the Annual Report on the 2023 Form 10-K.

Regulatory Developments

Insurance Regulation

Regulation of Investments

We are regulated primarily by the NYDFS, with some policies and products also subject to federal regulation. On an ongoing basis, regulators refine capital requirements and introduce new reserving standards. Regulations recently adopted or currently under review can potentially impact our statutory reserve, capital requirements and profitability of the industry and result in increased regulation and oversight for the industry.

The NAIC is evaluating the risks associated with insurers’ investments in certain categories of structured securities, including CLOs. In March 2023, the NAIC adopted an amendment to the Purposes and Procedures Manual to give the NAIC’s Structured Securities Group, housed within the SVO, responsibility for modeling CLO securities and evaluating tranche level losses across all debt and equity tranches under a series of calibrated and weighted collateral stress scenarios in order to assign NAIC designations. Under the amended Purposes and Procedures Manual, CLO investments will no longer be broadly exempt from filing with the SVO based on ratings from Credit Rating Providers. The NAIC’s goal is to ensure that the weighted average RBC factor for owning all tranches of a CLO more closely aligns with what would be required for directly owning all of the underlying loan collateral, in order to avoid RBC arbitrage. In June 2024, the NAIC approved interim rules that raise capital requirements for holdings of CLO and other asset-backed security residual interests. The NAIC is also collaborating with interested parties to develop and refine the process for modeling CLO investments. Insurers are required to begin reporting the financially modeled NAIC designations for CLOs with their year-end 2024 financial statement filings, although the NAIC announced in March 2024 that implementation is expected to be delayed by a year to allow more time to develop the modeling methodology. The delay requires an amendment to the Purposes and Procedures Manual, which the NAIC is likely to adopt in August 2024.

Fiduciary Rules

In 2023, the U.S. Department of Labor (the “DOL”) proposed a regulation to change the definition of “fiduciary” for purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”) and parallel provisions of the Internal Revenue Code of 1986, as amended (the “Code”), when a financial professional, including an insurance producer, provides investment advice, and proposed amendments to various existing prohibited transaction exemptions (“PTEs”), including PTE 84-14 that financial professionals rely on when they make investment recommendations to retirement investors. On April 23, 2024, the DOL finalized and published this new definition of “fiduciary” for purposes of ERISA and parallel provisions of the Code and finalized and published amendments to these PTEs (the “Final Rule”). Shortly thereafter, these changes were challenged in court, including by a coalition of insurance industry trade associations that filed a motion for a preliminary injunction and stay of portions of the Final Rule, including the regulation that changes the definition of “fiduciary” and PTE 84-14. On July 25, 2024, a federal district court entered a stay of the effective date of portions of the Final Rule, including the regulation that changes the definition of “fiduciary” and the amendments to PTE 84-14. While this litigation proceeds, we are evaluating the potential impact of the Final Rule on our business, particularly as it pertains to the sale of insurance products to retirement investors.

In August 2023, the SEC adopted final rule private fund adviser reform rules under the Investment Advisers Act requiring private fund advisers registered with the SEC to, among other things, provide investors with quarterly and annual statements detailing information regarding private fund performance, fees and expenses; obtain an annual audit for each private fund; obtain a fairness opinion or valuation opinion in connection with an adviser-led secondary transaction; not provide certain preferential rights to investors in a fund and disclose other preferential rights prior to an investor closing into the fund; and obtain investor consent prior to allocating certain fees or expenses to a fund or borrowing or receiving credit from a fund. On June 5, 2024, the United States Court of Appeals for the Fifth Circuit unanimously vacated the private fund adviser reform rules in their entirety. The SEC missed a deadline to ask for a rehearing after the Fifth Circuit Court of Appeals ruling, and it is unclear the SEC will petition the United States Supreme Court to review the Fifth Circuit’s ruling.

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Privacy and Security of Customer Information and Cybersecurity Regulation

Innovation and Technology

The NAIC and state insurance regulators have been focused on addressing unfair discrimination in the use of consumer data and technology, and some states have passed laws targeting unfair discrimination practices. In New York, the NYDFS released a proposed circular letter for public comment in January 2024 on how insurers should develop and manage their use of external consumer data and artificial intelligence (“AI”) systems in underwriting and pricing so as not to harm consumers. On July 11, 2024, the NYDFS issued the final version of the circular letter, which applies to all authorized insurers in New York. Pursuant to the guidance, the NYDFS expects a licensed insurer to: (i) use a risk-based approach for utilizing external consumer data and information sources (“ECDIS”) and AI systems based on the company’s business model and the materiality of the risks inherent in using ECDIS and AI systems; (ii) analyze ECDIS and AI systems for unfair and unlawful discrimination; (iii) develop a corporate governance framework that provides oversight of the insurer’s use of ECDIS and AI systems; (iv) maintain appropriate risk management (e.g., using qualified personnel with clearly defined responsibilities) and internal controls, including over third-party vendors; and (v) provide notice to an insured or potential insured with certain information, such as whether the insurer uses AI systems in its underwriting or pricing process.

For additional information on the regulatory developments and risk we face, see “Business—Regulation” in the Annual Report on Form 10-K for the year ended December 31, 2023 and “Risk Factors—Legal and Regulatory Risks” in the 2023 Form 10-K.

Revenues

Our revenues come from three principal sources:

•fee income derived from our products;

•premiums from our traditional life insurance and annuity products; and

•investment income from our General Account investment portfolio.

Our fee income varies directly in relation to the amount of the underlying AV or benefit base of our life insurance and annuity products which are influenced by changes in economic conditions, primarily equity market returns, as well as net flows. Our premium income is driven by the growth in new policies written and the persistency of our in-force policies, both of which are influenced by a combination of factors, including our efforts to attract and retain customers and market conditions that influence demand for our products. Our investment income is driven by the yield on our General Account investment portfolio and is impacted by the prevailing level of interest rates as we reinvest cash associated with maturing investments and net flows to the portfolio.

Benefits and Other Deductions

Our primary expenses are:

•policyholders’ benefits and interest credited to policyholders’ account balances;

•sales commissions and compensation paid to intermediaries and advisors that distribute our products and services; and

•compensation and benefits provided to our employees and other operating expenses.

Policyholders’ benefits are driven primarily by mortality, customer withdrawals and benefits which change in response to changes in capital market conditions. In addition, some of our policyholders’ benefits are directly tied to the AV and benefit base of our variable annuity products. Interest credited to policyholders varies in relation to the amount of the underlying AV or benefit base. Sales commissions and compensation paid to intermediaries and advisors vary in relation to premium and fee income generated from these sources, whereas compensation and benefits to our employees are more constant and impacted by market wages and decline with increases in efficiency. Our ability to manage these expenses across various economic cycles and products is critical to the profitability of our company.

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Net Income Volatility

We have offered and continue to offer variable annuity products with GMxB features. The future claims exposure on these features is sensitive to movements in the equity markets and interest rates. Accordingly, we have implemented hedging and reinsurance programs designed to mitigate the economic exposure to us from these features due to equity market and interest rate movements. Changes in the values of the derivatives associated with these programs due to equity market and interest rate movements, together with the GMxB MRBs assets and liabilities are recognized in the periods in which they occur. This results in net income volatility as further described below. In addition, net income is impacted by changes in our reinsurers credit spread, while changes in the Company’s credit spread is recorded in other comprehensive income (“OCI”). See “—Significant Factors Impacting Our Results—Impact of Hedging and GMxB Reinsurance on Results.”

In addition to our dynamic hedging strategy, we have static hedge positions designed to mitigate the adverse impact of changing market conditions on our statutory capital. We believe this program will continue to preserve the economic value of our variable annuity contracts and better protect our target variable annuity asset level. However, these static hedge positions increase the size of our derivative positions and may result in higher net income volatility on a period-over-period basis.

An additional source of net income (loss) volatility is the impact of the Company’s annual actuarial assumption review. See “—Significant Factors Impacting Our Results—Effect of Assumption Updates on Operating Results”, for further detail of the impact of assumption updates on net income (loss).

Significant Factors Impacting Our Results

The following significant factors have impacted, and may in the future impact, our financial condition, and results of operations or cash flows.

Impact of Hedging and GMxB Reinsurance on Results

We have offered and continue to offer variable annuity products with GMxB features. The future claims exposure on these features is sensitive to movements in the equity markets and interest rates. Accordingly, we have implemented hedging and reinsurance programs designed to mitigate the economic exposure to us from these features due to equity market and interest rate movements. These programs include:

•Variable annuity hedging programs. We use a dynamic hedging program (within this program, generally, we reevaluate our economic exposure at least daily and rebalance our hedge positions accordingly) to mitigate certain risks associated with the GMxB features that are embedded in our liabilities for our variable annuity products. This program utilizes various derivative instruments that are managed in an effort to reduce the economic impact of unfavorable changes in GMxB features’ exposures attributable to movements in the equity markets and interest rates. Although this program is designed to provide a measure of economic protection against the impact of adverse market conditions, it does not qualify for hedge accounting treatment. Accordingly, changes in value of the derivatives will be recognized in the period in which they occur with offsetting changes in reserves partially recognized in the current period, resulting in net income volatility. In addition to our dynamic hedging program, we have a hedging program using static hedge positions (derivative positions intended to be held-to-maturity with less frequent re-balancing) to protect our statutory capital against stress scenarios. This program complements our dynamic hedge program and may result in net income volatility.

•GMxB reinsurance contracts. Historically, GMxB reinsurance contracts were used to cede to affiliated and non-affiliated reinsurers a portion of our exposure to variable annuity products that offer a GMxB feature. We account for the reinsurance contracts as MRBs and report them at fair value. In addition, on June 1, 2021, we ceded the block comprised of non-New York “Accumulator” policies containing fixed rate GMIB and/or GMDB guarantees. On April 1, 2023, we ceded the remaining block of the living benefit and death riders related to its variable annuity contracts issued outside the State of New York prior to October 1, 2022 (and with respect to its EQUI-VEST variable annuity contracts issued outside the State of New York prior to February 1, 2023).

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Effect of Assumption Updates on Operating Results

Our actuaries oversee the valuation of the product liabilities and assets and review the underlying inputs and assumptions. We comprehensively review the actuarial assumptions underlying these valuations and update assumptions during the third quarter of each year. Assumptions are based on a combination of Company experience, industry experience, management actions and expert judgment and reflect our best estimate as of the date of the applicable financial statements. Changes in assumptions can result in a significant change to the carrying value of product liabilities and assets and, consequently, the impact could be material to earnings in the period of the change.

Most of the variable annuity products, variable universal life insurance and universal life insurance products we offer maintain policyholder deposits that are reported as liabilities and classified within either Separate Accounts liabilities or policyholder account balances. Our products and riders also impact liabilities for future policyholder benefits, market risk benefits and unearned revenues and assets for DAC and DSI. The valuation of these assets and liabilities (other than deposits) is based on differing accounting methods depending on the product, each of which requires numerous assumptions and considerable judgment. The accounting guidance applied in the valuation of these assets and liabilities includes, but is not limited to, the following: (i) traditional life insurance products for which assumptions are updated annually to estimate the value of future death, morbidity or income benefits; (ii) universal life insurance and variable life insurance secondary guarantees for which benefit liabilities are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments; and (iii) certain product guarantees reported as market risk benefits at fair value.

For further details of our accounting policies and related judgments pertaining to assumption updates, see Note 2 of the Notes to the Consolidated Financial Statements.

Consolidated Results of Operations

Our consolidated results of operations are significantly affected by conditions in the capital markets and the economy because we offer market sensitive products. These products have been a significant driver of our results of operations. Because the future claims exposure on these products is sensitive to movements in the equity markets and interest rates, we have in place various hedging and reinsurance programs that are designed to mitigate the economic risk of movements in the equity markets and interest rates. The volatility in net income is primarily attributable to the mismatch between: (i) the change in carrying value of the MRBs; and (ii) our hedging and reinsurance programs.

The following table summarizes our consolidated statements of income (loss):

Consolidated Statements of Income (Loss)

	Six Months Ended June 30,
	2024		2023
	(in millions)
REVENUES
Policy charges and fee income	$	390	$	707
Premiums	252		353
Net derivative gains (losses)	(542)		(1,062)
Net investment income (loss)	1,800		1,743
Investment gains (losses), net:
Credit losses on AFS debt securities and loans	(33)		(78)
Other investment gains (losses), net	(23)		(58)
Total investment gains (losses), net	(56)		(136)
Investment management and service fees	113		233
Amortization of reinsurance deposit liabilities	339		190
Other income	449		276
Total revenues	2,745		2,304

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	Six Months Ended June 30,
	2024		2023
	(in millions)
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits	717		953
Remeasurement of liability for future policy benefits	14		(1)
Change in market risk benefits and purchased market risk benefits	38		(68)
Interest credited to policyholders’ account balances	606		747
Compensation and benefits	93		103
Commissions	518		419
Interest expense	—		3
Amortization of deferred policy acquisition costs	255		245
Other operating costs and expenses	500		389
Total benefits and other deductions	2,741		2,790
Income (loss) from continuing operations, before income taxes	4		(486)
Income tax (expense) benefit	(8)		890
Net income (loss)	(4)		404
Less: Net income (loss) attributable to the noncontrolling interest	1		1
Net income (loss) attributable to Equitable Financial	$	(5)	$	403

The following discussion compares the results for the six months ended June 30, 2024 to the six months ended June 30, 2023.

Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

Net Income (Loss) Attributable to Equitable Financial

Equitable Financial net income decreased $408 million to a net loss of $5 million for the six months ended June 30, 2024 from net income of $403 million for the six months ended June 30, 2023. The following were notable changes in net income (loss):

Unfavorable items included:

•Fee-type revenue decreased by $216 million mainly due to the ceding of assets, partially offset by recognition of deferred revenue on deposit accounting and reimbursements of expenses from the Reinsurance Treaty.

•Change in market risk benefits and purchased market risk benefits increased by $106 million mainly due to less favorable equity market and interest rate movements in the second quarter of 2024 compared to the second quarter 2023.

•Commissions increased by $99 million mainly due to higher distributions expenses from Equitable America’s wholesale products, which are reimbursed by Equitable America in other income.

•Compensation, benefits, interest and other operating expenses increased by $98 million mainly due to an increase in legal expenses.

•Income tax benefit decreased by $898 million primarily due to a partial release of the valuation allowance of $940 million on the deferred tax asset for the six months ended June 30, 2023 and pre-tax income for the six months ended June 30, 2024 compared to a pre-tax loss for the six months ended June 30, 2023.

These were partially offset by the following favorable items:

•Net derivative losses decreased by $520 million due to lower equity market appreciation and gains attributed to funds withheld and modified coinsurance portfolios related to the Reinsurance Treaty.

•Policyholders’ benefits decreased by $236 million mainly due to favorable claims and the impact of the Reinsurance Treaty effective April 1, 2023.

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•Interest credited to policyholders’ account balances decreased by $141 million mainly due to ceded interest credit as a result of the Reinsurance Treaty.

•Investment losses decreased by $80 million mainly due to credit losses recognized in the first quarter of 2023 when intending to sell securities in an unrealized loss position in anticipation of the Company’s ordinary dividend to Holdings and liquidity sales.

•Net investment income increased by $57 million mainly due to higher assets, higher investment yields, and higher income from alternative investments.

See “—Significant Factors Impacting Our Results—Effect of Assumption Updates on Operating Results” for more information regarding the assumption update.

Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in our consolidated financial statements included elsewhere herein. For a discussion of our significant accounting policies, see Note 2 of the Notes to the Consolidated Financial Statements. The most critical estimates include those used in determining:

•market risk benefits and purchased market risk benefits;

•accounting for reinsurance;

•estimated fair values of investments in the absence of quoted market values and investment impairments;

•estimated fair values of freestanding derivatives and the recognition and estimated fair value of embedded derivatives requiring bifurcation;

•measurement of income taxes and the valuation of deferred tax assets; and

•liabilities for litigation and regulatory matters.

In applying our accounting policies, we make subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries while others are specific to our business and operations. Actual results could differ from these estimates.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the quantitative and qualitative disclosures about market risk described in the Annual Report on Form 10-K for the year ended December 31, 2023 in “Quantitative and Qualitative Disclosures About Market Risk”.

Item 4.     Controls and Procedures

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act. Due to the material weakness described below, the Company’s CEO and CFO, concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2024.

As previously reported, the Company identified a material weakness in the design and operation of the Company’s internal control over financial reporting. We did not timely design and implement effective controls over the Internal Reinsurance Treaty. Specifically, controls were not adequately designed or implemented to ensure the completeness and accuracy of the recording of the transaction in accordance with the contractual terms of the Internal Reinsurance Treaty. We have concluded that the deficiency constituted a material weakness in internal controls over financial reporting.

Remediation Status of Material Weakness

Management continues to execute its plan moving towards remediation of the material weakness. Since identifying the material weakness, management is in the process of designing and implementing new controls to capture the completeness and accuracy of the Internal Reinsurance Treaty contractual terms. The material weakness will not be considered remediated until the applicable remedial processes and procedures have been in place for a sufficient period of time and management has

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concluded, through testing, that these controls are effective. Accordingly, the material weakness is not remediated as of June 30, 2024.

Changes in Internal Control Over Financial Reporting

Other than as described above, with respect to ongoing remediation efforts, there were no changes in our internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f) during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II     OTHER INFORMATION

Item 1.     Legal Proceedings

For information regarding certain legal proceedings pending against us, see Note 18 of the Notes to the Consolidated Financial Statements (unaudited) in this Form 10-Q. Also see “Risk Factors—Legal and Regulatory Risks—Legal proceedings and regulatory actions” included in our 2023 Annual Report on Form 10-K.

Item 1A. Risk Factors

You should carefully consider the risks described in the “Risk Factors” section included in the 2023 Form 10-K. Risks to which we are subject also include, but are not limited to, the factors mentioned under “Note Regarding Forward-Looking Statements and Information” above and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3.     Defaults Upon Senior Securities

Not applicable.

Item 4.    Mine Safety Disclosures

Not applicable.

Item 5.     Other Information

Insider Trading Arrangements During the Three Months Ended June 30, 2024

None of our Section 16 officers or directors (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 trading arrangement” (as defined in Section 408(c) of Regulation S-K of the Securities Act of 1933, as amended).

Item 6.    Exhibits

INDEX TO EXHIBITS

Number		Description
31.1	#	Section 302 Certification made by the registrant’s Chief Executive Officer
31.2	#	Section 302 Certification made by the registrant’s Chief Financial Officer
32.1	#	Section 906 Certification made by the registrant’s Chief Executive Officer
32.2	#	Section 906 Certification made by the registrant’s Chief Financial Officer
101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibits 101).

______________

#    Filed herewith.

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GLOSSARY

Selected Financial Terms

Account Value (“AV”)	Generally equals the aggregate policy account value of our retirement and protection products. General Account AV refers to account balances in investment options that are backed by the General Account while Separate Accounts AV refers to Separate Accounts investment assets.
Alternative investments	Investments in real estate and real estate joint ventures and other limited partnerships.
Assets under management (“AUM”)	Investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB, (ii) the assets in our GAIA portfolio and (iii) the Separate Account assets of our retirement and protection businesses. Total AUM reflects exclusions between segments to avoid double counting.
Combined RBC Ratio	Calculated as the overall aggregate RBC ratio for the Company’s insurance subsidiaries including capital held for its life insurance and variable annuity liabilities and non-variable annuity insurance liabilities.
Conditional tail expectation (“CTE”)	Calculated as the average amount of total assets required to satisfy obligations over the life of the contract or policy in the worst x% of scenarios. Represented as CTE (100 less x). Example: CTE95 represents the worst five percent of scenarios.
Deferred policy acquisition cost (“DAC”)	Represents the incremental costs related directly to the successful acquisition of new and certain renewal insurance policies and annuity contracts and which have been deferred on the consolidated balance sheets as an asset.
Deferred sales inducements (“DSI”)	Represent amounts that are credited to a policyholder’s account balance that are higher than the expected crediting rates on similar contracts without such an inducement and that are an incentive to purchase a contract and also meet the accounting criteria to be deferred as an asset that is amortized over the life of the contract.
Fee-Type Revenue	Revenue from fees and related items, including policy charges and fee income, premiums, investment management and service fees, amortization of reinsurance deposit liabilities and other income.
Gross Premiums	First year premium and deposits and renewal premium and deposits.

Invested assets	Includes fixed maturity securities, equity securities, mortgage loans, policy loans, alternative investments and short-term investments.
Premium and deposits	Amounts a policyholder agrees to pay for an insurance policy or annuity contract that may be paid in one or a series of payments as defined by the terms of the policy or contract.
Reinsurance	Insurance policies purchased by insurers to limit the total loss they would experience from an insurance claim.
Renewal premium and deposits	Premiums and deposits after the first twelve months of the policy or contract.
Risk-based capital (“RBC”)	Rules to determine insurance company statutory capital requirements. It is based on rules published by the National Association of Insurance Commissioners (“NAIC”).
Product Terms
Annuitant	The person who receives annuity payments or the person whose life expectancy determines the amount of variable annuity payments upon annuitization of an annuity to be paid for life.
Annuitization	The process of converting an annuity investment into a series of periodic income payments, generally for life.

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Benefit base	A notional amount (not actual cash value) used to calculate the owner’s guaranteed benefits within an annuity contract. The death benefit and living benefit within the same contract may not have the same benefit base.
Cash surrender value	The amount an insurance company pays (minus any surrender charge) to the policyholder when the contract or policy is voluntarily terminated prematurely.
Dollar-for-dollar withdrawal	A method of calculating the reduction of a variable annuity benefit base after a withdrawal in which the benefit is reduced by one dollar for every dollar withdrawn.
EQUI-VEST Group (“EG”)	A traditional variable deferred annuity without enhanced guaranteed benefits with single and ongoing premiums sold in the tax-exempt 403(b)/(457(b) markets.
EQUI-VEST Individual (“EI”)	A traditional variable deferred annuity without enhanced guaranteed benefits sold in the individual market.
Future policy benefits	Future policy benefits for the annuities business are comprised mainly of liabilities for life-contingent income annuities, and liabilities for the variable annuity guaranteed minimum benefits accounted for as insurance. Future policy benefits for the life business are comprised mainly of liabilities for traditional life and certain liabilities for universal and variable life insurance contracts (other than the Policyholders’ account balance).
General Account Investment Portfolio	The invested assets held in the General Account.
General Account	The assets held in the general accounts of our insurance companies as well as assets held in our Separate Accounts on which we bear the investment risk.
GMxB	A general reference to all forms of variable annuity guaranteed benefits, including guaranteed minimum living benefits, or GMLBs (such as GMIBs, GMWBs and GMABs), and guaranteed minimum death benefits, or GMDBs (inclusive of return of premium death benefit guarantees).
GMxB Core	Retirement Cornerstone and Accumulator sold 2011 and later.
GMxB Legacy	Fixed-rate GMxB business written prior to 2011
Guaranteed income benefit (“GIB”)	An optional benefit which provides the policyholder with a guaranteed lifetime annuity based on predetermined annuity purchase rates applied to a GIB benefit base, with annuitization automatically triggered if and when the contract AV falls to zero.

Guaranteed minimum accumulation benefits (“GMAB”)	An optional benefit (available for an additional cost) which entitles an annuitant to a minimum payment, typically in lump-sum, after a set period of time, typically referred to as the accumulation period. The minimum payment is based on the benefit base, which could be greater than the underlying AV.
Guaranteed minimum death benefits (“GMDB”)	An optional benefit (available for an additional cost) that guarantees an annuitant’s beneficiaries are entitled to a minimum payment based on the benefit base, which could be greater than the underlying AV, upon the death of the annuitant.
Guaranteed minimum income benefits (“GMIB”)	An optional benefit (available for an additional cost) where an annuitant is entitled to annuitize the policy and receive a minimum payment stream based on the benefit base, which could be greater than the underlying AV.
Guaranteed minimum living benefits (“GMLB”)	A reference to all forms of guaranteed minimum living benefits, including GMIBs, GMWBs and GMABs (does not include GMDBs).
Guaranteed minimum withdrawal benefits (“GMWB”)	An optional benefit (available for an additional cost) where an annuitant is entitled to withdraw a maximum amount of their benefit base each year, for which cumulative payments to the annuitant could be greater than the underlying AV.
Guaranteed withdrawal benefit for life (“GWBL”)	An optional benefit (available for an additional cost) where an annuitant is entitled to withdraw a maximum amount of their benefit base each year, for the duration of the policyholder’s life, regardless of account performance.

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Investment Edge (“IE”)	A traditional variable deferred annuity without enhanced guaranteed benefits that provides tax-efficient distribution.
Indexed Universal Life (“IUL”)	A permanent life insurance offering built on a universal life insurance framework that uses an equity-linked approach for generating policy investment returns.
Living benefits	Optional benefits (available at an additional cost) that guarantee that the policyholder will get back at least his original investment when the money is withdrawn.
Mortality and expense risk fee (“M&E fee”)	A fee charged by insurance companies to compensate for the risk they take by issuing life insurance and variable annuity contracts.

Net flows	Net change in customer account balances in a period including, but not limited to, gross premiums, surrenders, withdrawals and benefits. It excludes investment performance, interest credited to customer accounts and policy charges.
Policyholder account balances	Annuities. Policyholder account balances are held for fixed deferred annuities, the fixed account portion of variable annuities and non-life contingent income annuities. Interest is credited to the policyholder’s account at interest rates we determine which are influenced by current market rates, subject to specified minimums. Life Insurance Policies. Policyholder account balances are held for retained asset accounts, universal life policies and the fixed account of universal variable life insurance policies. Interest is credited to the policyholder’s account at interest rates we determine which are influenced by current market rates, subject to specified minimums.
Return of premium (“ROP”) death benefit	This death benefit pays the greater of the account value at the time of a claim following the owner’s death or the total contributions to the contract (subject to adjustment for withdrawals). The charge for this benefit is usually included in the M&E fee that is deducted daily from the net assets in each variable investment option. We also refer to this death benefit as the Return of Principal death benefit.
Rider	An optional feature or benefit that a policyholder can purchase at an additional cost.
Roll-up rate	The guaranteed percentage that the benefit base increases by each year.
Separate Account	Refers to the Separate Account investment assets of our insurance subsidiaries excluding the assets held in those Separate Accounts on which we bear the investment risk.
Surrender charge	A fee paid by a contract owner for the early withdrawal of an amount that exceeds a specific percentage or for cancellation of the contract within a specified amount of time after purchase.

Surrender rate	Represents annualized surrenders and withdrawals as a percentage of average AV.
Universal life (“UL”) products	Life insurance products that provide a death benefit in return for payment of specified annual policy charges that are generally related to specific costs, which may change over time. To the extent that the policyholder chooses to pay more than the charges required in any given year to keep the policy in-force, the excess premium will be placed into the AV of the policy and credited with a stated interest rate on a monthly basis.
Variable annuity	A type of annuity that offers guaranteed periodic payments for a defined period of time or for life and gives purchasers the ability to invest in various markets though the underlying investment options, which may result in potentially higher, but variable, returns.
Variable Universal Life (“VUL”)	Universal life products where the excess amount paid over policy charges can be directed by the policyholder into a variety of Separate Account investment options. In the Separate Account investment options, the policyholder bears the entire risk and returns of the investment results.

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ACRONYMS

•“AB” or “AllianceBernstein” means AB Holding and ABLP.

•“AFS” means available-for-sale

•“AOCI” means accumulated other comprehensive income

•“ASC” means Accounting Standards Codification

•“ASU” means Accounting Standards Update

•“AXA” means AXA S.A., a société anonyme organized under the laws of France, and formerly our controlling stockholder.

•“AXA Financial” means AXA Financial, Inc., a Delaware corporation and a former wholly-owned direct subsidiary of Holdings. On October 1, 2018, AXA Financial merged with and into Holdings, with Holdings assuming the obligations of AXA Financial.

•“BPs” means basis points

•“CDS” means credit default swaps

•“CECL” means current expected credit losses

•“COI” means cost of insurance

•“COLI” means corporate owned life insurance

•“Holdings” means Equitable Holdings, Inc. with its consolidated subsidiaries

•“CS Life” means Corporate Solutions Life Reinsurance Company, a Delaware corporation and a wholly-owned direct subsidiary of Holdings.

•“CS Life RE” means CS Life RE Company, an Arizona corporation and a wholly-owned indirect subsidiary of Holdings.

•“CSA” means credit support annex

•“CTE” means conditional tail expectation

•“DAC” means deferred policy acquisition costs

•“DSC” means debt service coverage

•“DSI” means deferred sales inducement

•“EAFE” means European, Australasia, and Far East

•“EFS” means Equitable Financial Services, LLC, a Delaware corporation and a wholly-owned direct subsidiary of Holdings.

•“EIMG” means Equitable Investment Management Group, LLC, a Delaware limited liability company and a wholly-owned indirect subsidiary of Holdings.

•“EIM” means Equitable Investment Management, LLC, a Delaware limited liability company and wholly-owned indirect subsidiary of Holdings.

•“Equitable Distributors” means Equitable Distributors, LLC, a Delaware limited liability company, our wholesale broker/dealer for our retirement and protection businesses and a wholly-owned indirect subsidiary of Holdings.

•“Equitable Financial” means Equitable Financial Life Insurance Company, a New York corporation, a life insurance company and a wholly-owned subsidiary of EFS.

•“ETF” means exchange traded funds

•“Exchange Act” means Securities Exchange Act of 1934, as amended

•“FABCP” means Funding Agreement-Backed Commercial Paper program

•“FABN” means Funding Agreement Backed Notes program

•“FASB” means Financial Accounting Standards Board

•“FHLB” means Federal Home Loan Bank

•“Holdings” means Equitable Holdings, Inc.

•“ISDA Master Agreement” means International Swaps and Derivatives Association Master Agreement

•“IUS” means Investments Under Surveillance

•“LIBOR” means London Interbank Offered Rate

•“LTV” means loan-to-value

•“MD&A” means Management’s Discussion and Analysis of Financial Condition and Results of Operations

•“MRBs” means market risk benefits

•“MSO” means Market Stabilizer Option

•“NAIC” means National Association of Insurance Commissioners

•“NAR” means net amount at risk

•“NAV” means net asset value

•“NLG” means no-lapse guarantee

•“NYDFS” means New York State Department of Financial Services

•“OCI” means other comprehensive income

•“OTC” means over-the-counter

•“REIT” means real estate investment trusts

•“SCS” means Structured Capital Strategies

•“SEC” means U.S. Securities and Exchange Commission

•“SIO” means structured investment option

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•“SPE” means special purpose entity

•“SPLLC” means special purpose limited liability company

•“TDRs” means troubled debt restructurings

•“TIPS” means treasury inflation-protected securities

•“U.S. GAAP” means accounting principles generally accepted in the United States of America

•“UL” means universal life

•“ULSG” means universal life products with secondary guarantee

•“VIAC” means Venerable Insurance and Annuity Company

•“VIE” means variable interest entity

•“VOE” means voting interest entity

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Equitable Financial Life Insurance Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 12, 2024	EQUITABLE FINANCIAL LIFE INSURANCE COMPANY
	By:	/s/ Robin M. Raju
		Name:	Robin M. Raju
		Title:	Chief Financial Officer (Principal Financial Officer)
Date: August 12, 2024	By:	/s/ William Eckert
		Name:	William Eckert
		Title:	Chief Accounting Officer (Principal Accounting Officer)