Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 04, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 333-65423 | ||
Entity Registrant Name | EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA | ||
Entity Incorporation, State or Country Code | AZ | ||
Entity Tax Identification Number | 86-0222062 | ||
Entity Address, Address Line One | 525 Washington Boulevard | ||
Entity Address, City or Town | Jersey City | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 07310 | ||
City Area Code | 212 | ||
Local Phone Number | 554-1234 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 2,500,000 | ||
Documents Incorporated by Reference [Text Block] | Equitable Financial Life Insurance Company of America meets the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K and is therefore filing this Form with the reduced disclosure format. | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0000835357 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Firm ID | 238 |
Auditor Location | New York, New York |
Balance Sheets
Balance Sheets - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Investments: | ||
Fixed maturities available-for-sale, at fair value (amortized cost of $2,444 and $2,197) (allowance for credit losses of $0 and $0 ) | $ 2,572 | $ 2,445 |
Mortgage loans on real estate (net of allowance for credit losses of $0 and $0) | 17 | 17 |
Policy loans | 238 | 229 |
Other equity investments | 23 | 0 |
Other invested assets | 19 | 82 |
Total investments | 2,869 | 2,773 |
Cash and cash equivalents | 127 | 161 |
Deferred policy acquisition costs | 637 | 477 |
Amounts due from reinsurers (allowance for credit losses of $0 and $0) | 1,136 | 1,186 |
Current and deferred income taxes | 15 | 27 |
Other assets | 57 | 81 |
Separate Accounts assets | 3,394 | 2,601 |
Total Assets | 8,235 | 7,306 |
LIABILITIES | ||
Policyholders’ account balances | 3,504 | 3,306 |
Future policy benefits and other policyholders' liabilities | 470 | 415 |
Amounts due to reinsurers | 117 | 126 |
Other liabilities | 42 | 72 |
Separate Accounts liabilities | 3,394 | 2,601 |
Total Liabilities | 7,527 | 6,520 |
Commitments and contingent liabilities (Note 13) | ||
EQUITY | ||
Common stock, $1.00 par value; 2,500,000 shares authorized, issued and outstanding | 3 | 3 |
Additional paid-in capital | 679 | 692 |
Retained earnings | (60) | (47) |
Accumulated other comprehensive income (loss) | 86 | 138 |
Total Equity | 708 | 786 |
Total Liabilities and Equity | $ 8,235 | $ 7,306 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Fixed maturities available-for-sale, amortized cost | $ 2,444 | $ 2,197 |
Fixed maturities available-for-sale, allowance for credit losses | 0 | 0 |
Mortgage loans on real estate, valuation allowances | 0 | 0 |
Reinsurance recoverable, allowance for credit loss | $ 0 | $ 0 |
Common stock par value (in dollars per share) | $ 1 | $ 1 |
Common stock authorized (in shares) | 2,500,000 | 2,500,000 |
Common stock issued (in shares) | 2,500,000 | 2,500,000 |
Common stock outstanding (in shares) | 2,500,000 | 2,500,000 |
Statements of Income (Loss)
Statements of Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
REVENUES | |||
Policy charges and fee income | $ 275 | $ 261 | $ 245 |
Premiums | 157 | 106 | 67 |
Net derivative gains (losses) | (1) | (16) | 4 |
Net investment income (loss) | 90 | 83 | 71 |
Investment gains (losses), net | 4 | 1 | 0 |
Other income | 10 | 8 | 9 |
Total revenues | 535 | 443 | 396 |
BENEFITS AND OTHER DEDUCTIONS | |||
Policyholders’ benefits | 239 | 184 | 107 |
Interest credited to policyholders’ account balances | 82 | 90 | 84 |
Compensation and benefits | 35 | 35 | 22 |
Commissions | 76 | 58 | 50 |
Amortization of deferred policy acquisition costs | 25 | 31 | 92 |
Other operating costs and expenses | 96 | 83 | 99 |
Total benefits and other deductions | 553 | 481 | 454 |
Income (loss) from continuing operations, before income taxes | (18) | (38) | (58) |
Income tax (expense) benefit | 5 | 29 | 13 |
Net income (loss) | $ (13) | $ (9) | $ (45) |
Statements of Comprehensive Inc
Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | $ (13) | $ (9) | $ (45) | |
Other comprehensive income (loss), net of income taxes: | ||||
Change in unrealized gains (losses), net of adjustment | [1] | (52) | 90 | 60 |
Other comprehensive income (loss), net of income taxes | (52) | 90 | 60 | |
Comprehensive income (loss) | $ (65) | $ 81 | $ 15 | |
[1] | See Note 12 of the Notes to these Financial Statements for details of change in unrealized gains (losses), net of adjustments. |
Statements of Equity
Statements of Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2018 | $ 331 | $ 3 | $ 333 | $ 7 | $ (12) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (45) | (45) | |||
Capital contribution from parent | 70 | 70 | |||
Other comprehensive income (loss) | 60 | 60 | |||
Ending balance at Dec. 31, 2019 | 416 | 3 | 403 | (38) | 48 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (9) | (9) | |||
Capital contribution from parent | 285 | 285 | |||
Other comprehensive income (loss) | 90 | 90 | |||
Other | 4 | 4 | |||
Ending balance at Dec. 31, 2020 | 786 | 3 | 692 | (47) | 138 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (13) | (13) | |||
Capital contribution from parent | 50 | 50 | |||
Other comprehensive income (loss) | (52) | (52) | |||
Dividend of AB Units to parent | (61) | (61) | |||
Other | (2) | (2) | |||
Ending balance at Dec. 31, 2021 | $ 708 | $ 3 | $ 679 | $ (60) | $ 86 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Cash Flows [Abstract] | |||
Net income (loss) | $ (13) | $ (9) | $ (45) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Interest credited to policyholders’ account balances | 82 | 90 | 84 |
Policy charges and fee income | (275) | (261) | (245) |
Net derivative (gains) losses | 1 | 16 | (4) |
Dividend from AB Units | 5 | 8 | 7 |
Equity in (income) loss from AB | (3) | (8) | (7) |
Investment (gains) losses, net | (4) | (1) | 0 |
Non-cash long-term incentive compensation expense | (2) | 4 | 0 |
Amortization of deferred cost of reinsurance asset | 0 | 1 | 2 |
Amortization and depreciation | 30 | 35 | 99 |
Changes in: | |||
Reinsurance recoverable | 19 | 19 | (96) |
Capitalization of deferred policy acquisition costs | (122) | (95) | (108) |
Future policy benefits | 20 | 34 | (20) |
Current and deferred income taxes | 25 | (28) | (13) |
Other, net | (13) | (10) | 5 |
Net cash provided by (used in) operating activities | (250) | (205) | (341) |
Proceeds from the sale/maturity/prepayment of: | |||
Fixed maturities, available-for-sale | 381 | 200 | 121 |
Other | 2 | 0 | 2 |
Payment for the purchase/origination of: | |||
Fixed maturities, available-for-sale | (647) | (620) | (407) |
Cash settlements related to derivative instruments, net | 74 | 35 | 87 |
Other, net | (9) | (21) | 23 |
Net cash provided by (used in) investing activities | (199) | (406) | (174) |
Cash flows from financing activities: | |||
Deposits | 776 | 712 | 599 |
Withdrawals | (364) | (357) | (118) |
Transfer (to) from Separate Accounts | (45) | 34 | 11 |
Change in collateralized pledged liabilities | 0 | (11) | 3 |
Cash contribution from parent company | 50 | 285 | 70 |
Other, net | (2) | 4 | (2) |
Net cash provided by (used in) financing activities | 415 | 667 | 563 |
Change in cash and cash equivalents | (34) | 56 | 48 |
Cash and cash equivalents, beginning of year | 161 | 105 | 57 |
Cash and cash equivalents, end of year | 127 | 161 | 105 |
Supplemental cash flow information: | |||
Income taxes (refunded) paid | $ (31) | $ (1) | $ (1) |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2021 | |
Organization [Abstract] | |
ORGANIZATION | ORGANIZATION Equitable America’s primary business is providing annuity, life insurance and employee benefit products to both individuals and businesses. The Company is an indirect, wholly-owned subsidiary of Holdings. Equitable America is a stock life insurance company organized under the laws of Arizona. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions (including normal, recurring accruals) that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Financial results in the historical financial statements may not be indicative of the results of operations, comprehensive income (loss), financial position, equity or cash flows that would have been achieved had we operated as a separate, standalone entity during the reporting periods presented. The years “2021”, “2020” and “2019” refer to the years ended December 31, 2021, 2020 and 2019, respectively. Adoption of New Accounting Pronouncements Description Effect on the Financial Statement or Other Significant Matters ASU 2016-13 : Financial Instruments—Credit Losses (Topic 326), as clarified and amended by ASU 2018-19: Codification Improvements to Topic 326, Financial Instruments—Credit Losses, ASU 2019-04: Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-05: Financial Instruments—Credit Losses (Topic 326) Targeted Transition Relief, ASU 2019-11: Codification Improvements to Topic 326, Financial Instruments-Credit Losses ASU 2016-13 contains new guidance which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for AFS debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2019-05 provides entities that have instruments within the scope of Subtopic 326-20 an option to irrevocably elect the fair value option on an instrument-by-instrument basis upon adoption of Topic 326. On January 1, 2020, the Company adopted the new standard and completed implementation of its updated CECL models, processes and controls related to the identified financial assets that fall within the scope of the new standard. Upon adoption, the Company recorded an immaterial adjustment to reduce the opening retained earnings balance. The adjustment is primarily attributable to an increase in the allowance for credit losses associated with the Company’s commercial mortgage loan portfolios and reinsurance. Results for reporting periods beginning after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. ASU 2018-13 : Fair Value Measurement (Topic 820) This ASU improves the effectiveness of fair value disclosures in the notes to financial statements. Amendments in this ASU impact the disclosure requirements in Topic 820, including the removal, modification and addition to existing disclosure requirements. The Company elected to early adopt during 2019 the removal of disclosures relating to transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and valuation processes for Level 3 fair value measurements. The Company adopted the additional disclosures related to Level 3 fair value information on January 1, 2020. ASU 2019-12 : Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, as well as clarifying and amending existing guidance. On January 1, 2021, the Company adopted the new accounting standards update. The new guidance was applied either on a retrospective, modified retrospective or prospective basis based on the items to which the amendments relate. The adoption did not have a material impact on the Company’s financial position, results of operations and cash flows as of the adoption date. Future Adoption of New Accounting Pronouncements Description Effective Date and Method of Adoption Effect on the Financial Statement or Other Significant Matters ASU 2018-12 : Financial Services - Insurance (Topic 944); ASU 2020-11: Financial Services - Insurance (Topic 944): Effective Date and Early Application Description Effective Date and Method of Adoption Effect on the Financial Statement or Other Significant Matters This ASU provides targeted improvements to existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance entity. The ASU primarily impacts four key areas, including: 1. Measurement of the liability for future policy benefits for traditional and limited payment contracts. The ASU requires companies to review, and if necessary, update cash flow assumptions at least annually for non-participating traditional and limited-payment insurance contracts. The ASU also prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts. 2. Measurement of MRBs. MRBs, as defined under the ASU, will encompass certain GMxB features associated with variable annuity products and other general account annuities with other than nominal market risk. 3. Amortization of deferred acquisition costs. The ASU simplifies the amortization of deferred acquisition costs and other balances amortized in proportion to premiums, gross profits, or gross margins, requiring such balances to be amortized on a constant level basis over the expected term of the contracts. 4. Expanded footnote disclosures. The ASU requires additional disclosures including information about significant inputs, judgements, assumptions and methods used in measurement In November 2020, the FASB issued ASU 2020-11 which deferred the effective date of the amendments in ASU 2018-12 for all insurance entities. ASU 2018-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is allowed. For the liability for future policyholder benefits for traditional and limited payment contracts, companies can elect one of two adoption methods. Companies can either elect a modified retrospective transition method applied to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or a full retrospective transition method using actual historical experience information as of contract inception. The same adoption method must be used for deferred policy acquisition costs. For MRBs, the ASU should be applied retrospectively as of the beginning of the earliest period presented. The Company continues to progress with implementation efforts and the evaluation of the impact that adoption of this guidance will have on the Company’s financial statements. Due to its extensive nature, the adoption of the ASU is expected to have a significant impact on the Company’s financial statements, as well as systems, processes and controls. Effective January 1, 2023, the new guidance will be adopted using the modified retrospective approach, except for MRBs which will use the full retrospective approach. The Company has created a governance framework and implementation plan to ensure timely adoption of the guidance. In preparation for implementation, the Company continues to refine key accounting policy decisions, modernize processes and update internal controls. These changes include modifications of actuarial valuation systems, data sourcing, analytical procedures and reporting processes. The impact on total equity of applying this ASU is estimated to be less than the current amount of reported AOCI as of December 31, 2021. The impact on total equity is mostly driven by the DAC and URR updates to amortize DAC and URR on a constant level basis, remove amortization associated with unrealized gains or losses, and excluding future deferrals in the calculation of the DAC and URR balances. Description Effective Date and Method of Adoption Effect on the Financial Statement or Other Significant Matters ASU2020-04 : Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting The amendments in this ASU provide optional expedients and exceptions to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. On December 15, 2021, the FASB tentatively approved deferring the sunset date of the guidance in Topic 848 to December 31, 2024. The Company is currently assessing the applicability of the optional expedients and exceptions provided under the ASU. Management is evaluating the impact that adoption of this guidance will have on the Company’s financial statements. Investments The carrying values of fixed maturities classified as AFS are reported at fair value. Changes in fair value are reported in OCI, net of allowance for credit losses, policy related amounts and deferred income taxes. Prior to January 1, 2020, the amortized cost of fixed maturities was adjusted for impairments in value deemed to be other than temporary which were recognized in Investment gains (losses), net. With the adoption of the new Financial Instruments-Credit Losses standard, changes in credit losses are recognized in investment gains (losses), net. The redeemable preferred stock investments that are reported in fixed maturities include REITs, perpetual preferred stock and redeemable preferred stock. These securities may not have a stated maturity, may not be cumulative and do not provide for mandatory redemption by the issuer. Effective January 1, 2021, the Company began classifying certain preferred stock as equity securities to better reflect the economics and nature of these securities. These preferred stock securities are reported in other equity investments. The Company determines the fair values of fixed maturities and equity securities based upon quoted prices in active markets, when available, or through the use of alternative approaches when market quotes are not readily accessible or available. These alternative approaches include matrix or model pricing and use of independent pricing services, each supported by reference to principal market trades or other observable market assumptions for similar securities. More specifically, 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. The Company’s management, with the assistance of its investment advisors, evaluates AFS debt securities that experienced a decline in fair value below amortized cost for credit losses which are evaluated in accordance with the new financial instruments credit losses guidance effective January 1, 2020. The remainder of the unrealized loss related to other factors, if any, is recognized in OCI. Integral to this review is an assessment made each quarter, on a security-by-security basis, by the Company’s IUS Committee, of various indicators of credit deterioration to determine whether the investment security has experienced a credit loss. This assessment includes, but is not limited to, consideration of the severity of the unrealized loss, failure, if any, of the issuer of the security to make scheduled payments, actions taken by rating agencies, adverse conditions specifically related to the security or sector, the financial strength, liquidity and continued viability of the issuer. The Company recognizes an allowance for credit losses on AFS debt securities with a corresponding adjustment to earnings rather than a direct write down that reduces the cost basis of the investment, and credit losses are limited to the amount by which the security’s amortized cost basis exceeds its fair value. Any improvements in estimated credit losses on AFS debt securities are recognized immediately in earnings. Management does not use the length of time a security has been in an unrealized loss position as a factor, either by itself or in combination with other factors, to conclude that a credit loss does not exist, as they were permitted to do prior to January 1, 2020. When the Company determines that there is more than 50% likelihood that it is not going to recover the principal and interest cash flows related to an AFS debt security, the security is placed on nonaccrual status and the Company reverses accrued interest receivable against interest income. Since the nonaccrual policy results in a timely reversal of accrued interest receivable, the Company does not record an allowance for credit losses on accrued interest receivable. If there is no intent to sell or likely requirement to dispose of the fixed maturity security before its recovery, only the credit loss component of any resulting allowance is recognized in income (loss) and the remainder of the fair value loss is recognized in OCI. The amount of credit loss is the shortfall of the present value of the cash flows expected to be collected as compared to the amortized cost basis of the security. The present value is calculated by discounting management’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security at the date of acquisition. Projections of future cash flows are based on assumptions regarding probability of default and estimates regarding the amount and timing of recoveries. These assumptions and estimates require use of management judgment and consider internal credit analyses as well as market observable data relevant to the collectability of the security. For mortgage and asset-backed securities, projected future cash flows also include assumptions regarding prepayments and underlying collateral value. Write-offs of AFS debt securities are recorded when all or a portion of a financial asset is deemed uncollectible. Full or partial write-offs are recorded as reductions to the amortized cost basis of the AFS debt security and deducted from the allowance in the period in which the financial assets are deemed uncollectible. The Company elected to reverse accrued interest deemed uncollectible as a reversal of interest income. In instances where the Company collects cash that it has previously written off, the recovery will be recognized through earnings. Policy loans represent funds loaned to policyholders up to the cash surrender value of the associated insurance policies and are carried at the unpaid principal balances due to the Company from the policyholders. Interest income on policy loans is recognized in net investment income at the contract interest rate when earned. Policy loans are fully collateralized by the cash surrender value of the associated insurance policies. Cash and cash equivalents includes cash on hand, demand deposits, money market accounts, overnight commercial paper and highly liquid debt instruments purchased with an original maturity of three months or less. Due to the short-term nature of these investments, the recorded value is deemed to approximate fair value. All securities owned, including U.S. government and agency securities, mortgage-backed securities, futures and forwards transactions, are reported in the financial statements on a trade-date basis. Units in AB are carried on the equity method and reported in Other invested assets with equity in earnings reported in Net investment income (loss). Derivatives Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices, values of securities or commodities, credit spreads, market volatility, expected returns and liquidity. Values can also be affected by changes in estimates and assumptions, including those related to counterparty behavior and non-performance risk used in valuation models. Derivative financial instruments generally used by the Company include equity and interest rate futures and equity options, all of which may be exchange-traded or contracted in the OTC market. All derivative positions are carried in the balance sheets at fair value, generally by obtaining quoted market prices or through the use of valuation models. Freestanding derivative contracts are reported in the balance sheets either as assets within “other invested assets” or as liabilities within “other liabilities.” 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. The Company uses derivatives to manage asset/liability risk. All changes in the fair value of the Company’s freestanding derivative positions, including net receipts and payments, are included in “net derivative gains (losses)” without considering changes in the fair value of the economically associated assets or liabilities. The Company is a party to financial instruments and other contracts that contain “embedded” derivative instruments. At inception, the Company assesses whether the economic characteristics of the embedded instrument are “clearly and closely related” to the economic characteristics of the remaining component of the “host contract” and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. When those criteria are satisfied, the resulting embedded derivative is bifurcated from the host contract, carried in the balance sheets at fair value, and changes in its fair value are recognized immediately and captioned in the statements of income (loss) according to the nature of the related host contract. For certain financial instruments that contain an embedded derivative that otherwise would need to be bifurcated and reported at fair value, the Company instead may elect to carry the entire instrument at fair value. Mortgage Loans on Real Estate Mortgage loans are stated at unpaid principal balances, net of unamortized discounts and the allowance for credit losses. The Company calculates the allowance for credit losses in accordance with the CECL model in order to provide for the risk of credit losses in the lending process. Prior to the adoption of CECL on January 1, 2020, mortgage loans were stated at unpaid principal balances, net of unamortized discounts, premiums and valuation allowances. Valuation allowances were based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or on its collateral value if the loan was collateral dependent. For commercial mortgage loans, an allowance for credit loss was typically recommended when management believed it was probable that principal and interest would not be collected according to the contractual terms. Expected credit losses for loans with similar risk characteristics are estimated on a collective (i.e., pool) basis in order to meet CECL’s risk of loss concept which requires the Company to consider possibilities of loss, even if remote. For collectively evaluated mortgages, the Company estimates the allowance for credit losses based on the amortized cost basis of its mortgages over their expected life using a PD / LGD model. The PD/LGD model incorporates the Company’s reasonable and supportable forecast of macroeconomic information over a specified period. The length of the reasonable and supportable forecast period is reassessed on a quarterly basis and may be adjusted as appropriate over time to be consistent with macroeconomic conditions and the environment as of the reporting date. For periods beyond the reasonable and supportable forecast period, the model reverts to historical loss information. The PD and LGD are estimated at the loan-level based on loans’ current and forecasted risk characteristics as well as macroeconomic forecasts. The PD is estimated using both macroeconomic conditions as well as individual loan risk characteristics including LTV ratios, DSC ratios, seasoning, collateral type, geography, and underlying credit. The LGD is driven primarily by the type and value of collateral, and secondarily by expected liquidation costs and time to recovery. For individually evaluated mortgages, the Company continues to recognize a valuation allowance on the present value of expected future cash flows discounted at the loan’s original effective interest rate or on its collateral value. The CECL model is configured to the Company’s specifications and takes into consideration the detailed risk attributes of each discrete loan in the mortgage portfolio which include, but are not limited to the following: • LTV ratio - Derived from current loan balance divided by the fair market value of the property. An LTV ratio in excess of 100% indicates an underwater mortgage. • DSC ratio - Derived from actual operating earnings divided by annual debt service. If the ratio is below 1.0x, then the income from the property does not support the debt. • Occupancy - Criteria varies by property type but low or below market occupancy is an indicator of sub-par property performance. • Lease expirations - The percentage of leases expiring in the upcoming 12 to 36 months are monitored as a decline in rent and/or occupancy may negatively impact the debt service coverage ratio. In the case of single-tenant properties or properties with large tenant exposure, the lease expiration is a material risk factor. • Other - Any other factors such as maturity, borrower/tenant related issues, payment status, property condition, or current economic conditions may call into question the performance of the loan. Mortgage loans that do not share similar risk characteristics with other loans in the portfolio are individually evaluated quarterly by the Company’s IUS Committee. The allowance for credit losses on these individually evaluated mortgages is a loan-specific reserve as a result of the loan review process that is recorded based on the present value of expected future cash flows discounted at the loan’s effective interest rate or based on the fair value of the collateral. The individually assessed allowance for mortgage loans can increase or decrease from period to period based on such factors. Individually assessed loans may include, but are not limited to, mortgages that have deteriorated in credit quality such as a TDR and reasonably expected TDRs, mortgages for which foreclosure is probable, and mortgages which have been classified as “potential problem” or “problem” loans within the Company’s IUS Committee processes as described below. Within the IUS process, commercial mortgages 60 days or more past due, as well as all mortgages in the process of foreclosure, are identified as problem mortgage loans. Based on its monthly monitoring of mortgages, a class of potential problem mortgage loans are also identified, consisting of mortgage loans not currently classified as problem mortgage loans but for which management has doubts as to the ability of the borrower to comply with the present loan payment terms and which may result in the loan becoming a problem or being modified. The decision whether to classify a performing mortgage loan as a potential problem involves judgments by management as to likely future industry conditions and developments with respect to the borrower or the individual mortgaged property. Individually assessed mortgage loans without provision for losses are mortgage loans where the fair value of the collateral or the net present value of the expected future cash flows related to the loan equals or exceeds the recorded investment. Interest income earned on mortgage loans where the collateral value is used to measure impairment is recorded on a cash basis. Interest income on mortgage loans where the present value method is used to measure impairment is accrued on the net carrying value amount of the loan at the interest rate used to discount the cash flows. Mortgage loans are placed on nonaccrual status once management believes the collection of accrued interest is not probable. Once mortgage loans are classified as nonaccrual mortgage loans, interest income is recognized under the cash basis of accounting and the resumption of the interest accrual would commence only after all past due interest has been collected or the mortgage loan has been restructured to where the collection of interest is considered likely. The Company charges off loan balances and accrued interest that are deemed uncollectible. The components of amortized cost for mortgage loans on the balance sheets excludes accrued interest amounts because the Company presents accrued interest receivables within other assets. Once mortgage loans are placed on nonaccrual status, the Company reverses accrued interest receivable against interest income. Since the nonaccrual policy results in the timely reversal of accrued interest receivable, the Company does not record an allowance for credit losses on accrued interest receivable. Net Investment Income (Loss), Investment Gains (Losses), Net, and Unrealized Investment Gains (Losses) Realized investment gains (losses) are determined by identification with the specific asset and are presented as a component of revenue. Changes in the allowance for credit losses are included in investment gains (losses), net. Unrealized investment gains (losses) on fixed maturities designated as AFS held by the Company are accounted for as a separate component of AOCI, net of related deferred income taxes, as are amounts attributable to insurance liability loss recognition, DAC and URR related to UL policies, and investment-type products. Changes in unrealized gains (losses) reflect changes in fair value of only those fixed maturities classified as AFS and do not reflect any change in fair value of policyholders’ account balances and future policy benefits. Fair Value of Financial Instruments See Note 6 of the Notes to these Financial Statements for additional information regarding determining the fair value of financial instruments. Recognition of Insurance Income and Related Expenses Deposits related to UL and investment-type contracts are reported as deposits to policyholders’ account balances. Revenues from these contracts consist of fees assessed during the period against policyholders’ account balances for mortality charges, policy administration charges and surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policyholders’ account balances. Premiums from traditional life and annuity policies with life contingencies generally are recognized in income when due. Benefits and expenses are matched with such income so as to result in the recognition of profits over the life of the contracts. This match is accomplished by means of the provision for liabilities for future policy benefits and the deferral and subsequent amortization of DAC. For contracts with a single premium or a limited number of premium payments due over a significantly shorter period than the total period over which benefits are provided, premiums are recorded as revenue when due with any excess profit deferred and recognized in income in a constant relationship to insurance in-force or, for annuities, the amount of expected future benefit payments. Premiums from group health contracts are recognized as income over the period to which the premiums relate in proportion to the amount of insurance protection provided. DAC Acquisition costs that vary with and are primarily related to the acquisition of new and renewal insurance business, reflecting incremental direct costs of contract acquisition with independent third parties or employees that are essential to the contract transaction, as well as the portion of employee compensation, including payroll fringe benefits and other costs directly related to underwriting, policy issuance and processing, medical inspection, and contract selling for successfully negotiated contracts including commissions, underwriting, agency and policy issue expenses, are deferred. In each reporting period, DAC amortization, net of the accrual of imputed interest on DAC balances, is recorded to amortization of deferred policy acquisition costs. DAC is subject to recoverability testing at the time of policy issue and loss recognition testing at the end of each accounting period. The determination of DAC, including amortization and recoverability estimates, is based on models that involve numerous assumptions and subjective judgments, including those regarding policyholder behavior, surrender and withdrawal rates, mortality experience, and other inputs including financial market volatility and market rates of return. After the initial establishment of reserves, premium deficiency and loss recognition tests are performed each period end using best estimate assumptions as of the testing date without provisions for adverse deviation. When the liabilities for future policy benefits plus the present value of expected future gross premiums for the aggregate product group are insufficient to provide for expected future policy benefits and expenses for that line of business (i.e., reserves including URR net of any DAC asset), DAC would first be written off and thereafter, if required, a premium deficiency reserve would be established by a charge to earnings. Amortization Policy In accordance with the guidance for the accounting and reporting by insurance enterprises for certain long-duration contracts and participating contracts and for realized gains and losses from the sale of investments, current and expected future profit margins for products covered by this guidance are examined regularly in determining the amortization of DAC. DAC associated with certain variable annuity products is amortized based on estimated assessments, with DAC on UL and investment-type products amortized over the expected total life of the contract group as a constant percentage of estimated gross profits arising principally from investment results, Separate Accounts fees, mortality and expense margins and surrender charges based on historical and anticipated future experience, changes in embedded derivatives and the reserve of products that have indexed features such as IUL and MSO, updated at the end of each accounting period. When estimated gross profits are expected to be negative for multiple years of a contract life, DAC is amortized using the present value of estimated assessments. The effect on the amortization of DAC of revisions to estimated gross profits or assessments is reflected in earnings (loss) in the period such estimated gross profits or assessments are revised. A decrease in expected gross profits or assessments would accelerate DAC amortization. Conversely, an increase in expected gross profits or assessments would slow DAC amortization. The effect on the DAC assets that would result from realization of unrealized gains (losses) is recognized with an offset to AOCI in equity as of the balance sheet date. A significant assumption in the amortization of DAC relates to projected future separate account performance. Management sets estimated future gross profit or assessment assumptions related to separate account performance using a long-term view of expected average market returns by applying a RTM approach, a commonly used industry practice. This future return approach influences the projection of fees earned, as well as other sources of estimated gross profits. Returns that are higher than expectations for a given period produce higher than expected account balances, increase the fees earned resulting in higher expected future gross profits and lower DAC amortization for the period. The opposite occurs when returns are lower than expected. In applying this approach to develop estimates of future returns, it is assumed that the market will return to an average gross long-term return estimate, developed with reference to historical long-term equity market performance. Management has set limitations as to maximum and minimum future rate of return assumptions, as well as a limitation on the duration of use of these maximum or |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS Fixed Maturities AFS Accounting for credit impairments of fixed maturities classified as AFS has changed from a direct write-down, or OTTI approach to an allowance for credit loss model starting in 2020 upon adoption of CECL (see Note 2 of the Notes to these Financial Statements). The components of fair value and amortized cost for fixed maturities classified as AFS on the 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 December 31, 2021 was $20 million. There was no accrued interest written off for AFS fixed maturities for the years ended December 31, 2021 and 2020. The following tables provide information relating to the Company’s fixed maturities classified as AFS. Comparative tables as of December 31, 2021 include OTTI, reported net of tax in OCI and in AOCI until realized. AFS Fixed Maturities by Classification Amortized Allowance for Credit Losses Gross Gross Fair Value (in millions) December 31, 2021: Fixed Maturities: Corporate (1) $ 2,237 $ — $ 135 $ 10 $ 2,362 U.S. Treasury, government and agency 66 — 1 1 66 States and political subdivisions 31 — 3 — 34 Asset-backed (2) 30 — — — 30 Commercial mortgage-backed 80 — — — 80 Redeemable preferred stock (3) — — — — — Total at December 31, 2021 $ 2,444 $ — $ 139 $ 11 $ 2,572 December 31, 2020: Fixed Maturities: Corporate (1) $ 2,082 $ — $ 242 $ 2 $ 2,322 U.S. Treasury, government and agency 61 — 2 — 63 States and political subdivisions 27 — 3 — 30 Asset-backed (2) 4 — 1 — 5 Commercial mortgage-backed — — — — — Redeemable preferred stock (3) 23 — 2 — 25 Total at December 31, 2020 $ 2,197 $ — $ 250 $ 2 $ 2,445 — ______________ (1) Corporate fixed maturities include both public and private issues. (2) Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities. and other asset types. (3) Effective January 1, 2021, certain preferred stock have been reclassified to other equity investments (see Note 2 of the Notes to these Financial Statements). The contractual maturities of AFS fixed maturities as of December 31, 2021 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 prepay obligations with or without call or prepayment penalties. Contractual Maturities of AFS Fixed Maturities Amortized Cost (Less Allowance for Credit Losses) Fair Value (in millions) December 31, 2021: Contractual maturities: Due in one year or less $ 44 $ 44 Due in years two through five 572 604 Due in years six through ten 860 907 Due after ten years 858 907 Subtotal 2,334 2,462 Asset-backed 30 30 Commercial mortgage-backed 80 80 Total at December 31, 2021 $ 2,444 $ 2,572 The following table shows proceeds from sales, gross gains (losses) from sales and credit losses for AFS fixed maturities for the years ended December 31, 2021, 2020 and 2019: Proceeds from Sales, Gross Gains (Losses) from Sales and Credit Losses for AFS Fixed Maturities Year Ended December 31, 2021 2020 2019 (in millions) Proceeds from sales $ 302 $ 153 $ 101 Gross gains on sales $ 8 $ 5 $ 1 Gross losses on sales $ (4) $ (4) $ (1) Credit losses (1) $ — $ — $ — ______________ (1) Commencing with the Company’s adoption of ASU 2016-13 on January 1, 2020, credit losses on AFS debt securities were recognized as an allowance for credit losses. Prior to this, credit losses on AFS fixed maturities were recognized as OTTI. 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 Loss Impairments Year Ended December 31, 2021 2020 2019 (in millions) Balance, beginning of period $ 2 $ 2 $ 5 Previously recognized impairments on securities that matured, paid, prepaid or sold — — (3) Recognized impairments on securities impaired to fair value this period (1) — — — Credit losses recognized this period on securities for which credit losses were not previously recognized — — — Additional credit losses this period on securities previously impaired — — — Increases due to passage of time on previously recorded credit losses — — — Accretion of previously recognized impairments due to increases in expected cash flows (for OTTI securities 2019 and prior) — — — Balance, end of period $ 2 $ 2 $ 2 ______________ (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. The tables that follow below present a roll-forward of net unrealized investment gains (losses) recognized in AOCI. Net Unrealized Gains (Losses) on AFS Fixed Maturities Net Unrealized Gains (Losses) on Investments DAC Policyholders’ Liabilities Deferred Income Tax Asset (Liability) AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses) (in millions) Balance, January 1, 2021 $ 248 $ (111) $ 37 $ (36) $ 138 Net investment gains (losses) arising during the period (114) — — — (114) Reclassification adjustment: Included in net income (loss) (4) — — — (4) Other (1) (2) — — — (2) Impact of net unrealized investment gains (losses) — 65 (9) 12 68 Net unrealized investment gains (losses) excluding credit losses 128 (46) 28 (24) 86 Net unrealized investment gains (losses) with credit losses — — — — — Balance, December 31, 2021 $ 128 $ (46) $ 28 $ (24) $ 86 Balance, January 1, 2020 $ 101 $ (53) $ 12 $ (12) $ 48 Net investment gains (losses) arising during the period 148 — — — 148 Reclassification adjustment: Included in net income (loss) (1) — — — (1) Impact of net unrealized investment gains (losses) — (58) 25 (24) (57) Net unrealized investment gains (losses) excluding credit losses 248 (111) 37 (36) 138 Net unrealized investment gains (losses) with credit losses — — — — — Balance, December 31, 2020 $ 248 $ (111) $ 37 $ (36) $ 138 Balance, January 1, 2019 $ (57) $ 48 $ (6) $ 3 $ (12) Net investment gains (losses) arising during the period 158 — — — 158 Reclassification adjustment: Included in net income (loss) — — — — — Impact of net unrealized investment gains (losses) — (101) 18 (15) (98) Net unrealized investment gains (losses) excluding credit losses 101 (53) 12 (12) 48 Net unrealized investment gains (losses) with credit losses — — — — — Balance, December 31, 2019 $ 101 $ (53) $ 12 $ (12) $ 48 ______________ (1) Effective January 1, 2021, certain preferred stock have been reclassified to other equity investments (see Note 2 of the Notes to these Consolidated Financial Statements- Investments). The following tables disclose the fair values and gross unrealized losses of the 119 issues as of December 31, 2021 and the 14 issues as of December 31, 2020 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) December 31, 2021: Fixed Maturities: Corporate $ 243 $ 4 $ 111 $ 6 $ 354 $ 10 U.S. Treasury, government and agency 45 1 2 — 47 1 Total at December 31, 2021 $ 288 $ 5 $ 113 $ 6 $ 401 $ 11 December 31, 2020: Fixed Maturities: Corporate $ 52 $ 1 $ 3 $ 1 $ 55 $ 2 Total at December 31, 2020 $ 52 $ 1 $ 3 $ 1 $ 55 $ 2 The Company’s investments in fixed maturities do not include concentrations of credit risk of any single issuer greater than 10% of the equity of the Company, other than securities of the U.S. government, U.S. government agencies, and certain securities guaranteed by the U.S. government. 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 1.1% of total corporate securities. The largest exposures to a single issuer of corporate securities held as of December 31, 2021 and 2020 were $27 million and $28 million, respectively, representing 3.8% and 3.5% of the 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 December 31, 2021 and 2020, respectively, approximately $10 million and $26 million, or 0.4% and 1.2%, of the $2,444 million and $2,197 million 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 $0 million and $1 million as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, respectively, the $6 million and $1 million of gross unrealized losses of twelve months or more were concentrated in corporate securities. In accordance with the policy described in Note 2 of the Notes to these Financial Statements, the Company concluded that an allowance for credit losses for these securities was not warranted at either December 31, 2021 or 2020. As of December 31, 2021 and 2020, 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 December 31, 2021, the Company determined that the unrealized loss was primarily due to increases in credit spreads and changes in credit ratings. Mortgage Loans on Real Estate The Company held two commercial mortgage loans with a carrying value of $17 million at December 31, 2021 and 2020. The loans were issued prior to 2017 for apartment complex properties located in the Mid-Atlantic region. The loans were current as of December 31, 2021 and 2020 with LTV ratios between 0%-50% and DSC ratios greater than 2.0x. Accrued interest receivable as of December 31, 2021 and 2020 was $0 million and no accrued interest was written off for the years ended December 31, 2021 and 2020. The allowance for credit losses was $0 million as of December 31, 2021 and 2020, with a change of $0 million for the years then ended. As of December 31, 2021 and 2020, the Company had no loans for which foreclosure was probable included within the individually assessed mortgage loans, and accordingly had no associated allowance for credit losses. Equity Method Investments The following table presents the Company’s investment in 2.6 million units of AB (approximately 0.95% ownership) with a fair value of $0 million and $63 million at December 31, 2021 and 2020, respectively. The Company transferred the AB units to its parent in May 2021 as a return of capital. The Company’s investment in AB, an affiliate, is included in Other invested assets at December 31, 2020: Year Ended December 31, 2021 2020 (in millions) Balance at January 1 , $ 63 $ 63 Equity in net income (loss) 3 8 Dividends received (5) (8) Dividend to parent (61) — Balance at December 31, $ — $ 63 The tables below detail the condensed balance sheets and statements of income (loss) of AB and the Company’s equity investment and equity in income (loss) of AB. Year Ended December 31, 2021 2020 Balance Sheets: (in millions) Total Assets $ 10,510 $ 9,698 Total Liabilities 5,928 5,484 Redeemable non-controlling interest 421 102 Total Partners Capital 4,161 4,112 Total Liabilities and Partners Capital 10,510 9,698 Equitable America’s Equity investment in AB $ — $ 63 Year Ended December 31, 2021 2020 2019 Statement of Income (loss) (in millions) Total Revenues $ 4,442 $ 3,709 $ 3,518 Total Expenses 3,225 2,801 2,695 Net Income (Loss) 1,154 862 782 Equitable America’s Equity Income (loss) of AB $ 3 $ 8 $ 7 Net Investment Income (Loss) The following table breaks out net investment income (loss) by asset category: Year Ended December 31, 2021 2020 2019 (in millions) Fixed maturities $ 83 $ 74 $ 61 Mortgage loans on real estate 1 1 1 Other equity investments 3 — — Policy loans 3 3 3 Equity in income (loss) from AB 3 8 7 Other investment income — — 2 Gross investment income (loss) 93 86 74 Investment expenses (3) (3) (3) Net investment income (loss) $ 90 $ 83 $ 71 |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | 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. The Company does not designate any derivatives as hedge accounting. 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 can be used in these hedging programs, including exchange traded equity and interest rate futures contracts as well as equity options. 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. Derivatives Utilized to Hedge Crediting Rate Exposure on MSO and IUL Products/Investment Options The Company hedges crediting rates in the MSO that are 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. 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. The tables below present quantitative disclosures about the Company’s derivative instruments, including those embedded in other contracts required to be accounted for as derivative instruments: The following table presents the gross notional amount and estimated fair value of the Company’s derivatives: Derivative Instruments by Category December 31, 2021 December 31, 2020 Fair Value Fair Value Notional Derivative Assets Derivative Notional Derivative Assets Derivative (in millions) Derivatives: (1) Equity contracts: Futures $ 295 $ — $ — $ 278 $ — $ — Options 59 8 5 59 13 10 Interest rate contracts: Futures 120 — — — — — Other contracts: Margin — 18 — — 17 — Collateral — — 3 — — 3 Total: 474 26 8 337 30 13 Embedded derivatives: MSO and IUL indexed features (2) — — 132 — — 131 Total embedded derivatives — — 132 — — 131 Total derivative instruments $ 474 $ 26 $ 140 $ 337 $ 30 $ 144 ______________ (1) Reported in other invested assets in the balance sheets. (2) Reported in policyholders’ account balances in the balance sheets. The following table presents the effects of derivative instruments on the statements of income and comprehensive income (loss). Year Ended December 31, 2021 2020 2019 Net Derivatives Gain(Losses) (1) (in millions) Derivatives: Equity contracts: Futures $ 68 $ 25 $ 78 Options 3 3 18 Interest rate contracts: Futures 1 — — Total: 72 28 96 Embedded Derivatives: MSO and IUL indexed features (73) (44) (92) Total Embedded Derivatives (73) (44) (92) Total Derivatives $ (1) $ (16) $ 4 (1) Reported in net derivative gains (losses) in the statements of income (loss). Equity-Based and Treasury Futures Contracts Margin All outstanding equity-based futures contracts as of December 31, 2021 and 2020 are exchange-traded and net settled daily in cash. As of December 31, 2021 and 2020, 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 $14 million and $16 million and (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 $3 million and $0 million. 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 December 31, 2021 and 2020, respectively, the Company held $3 million and $3 million in cash and securities collateral delivered by trade counterparties, representing the fair value of the related derivative agreements. The following table presents information about the Company’s offsetting of financial assets and liabilities and derivative instruments as of December 31, 2021 and 2020: Offsetting of Financial Assets and Liabilities and Derivative Instruments As of December 31, 2021 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 $ 26 $ 8 $ 18 $ — $ 18 Other financial assets 1 — 1 — 1 Other invested assets $ 27 $ 8 $ 19 $ — $ 19 Liabilities: Derivative liabilities $ 8 $ 8 $ — $ — $ — Other financial liabilities 42 — 42 — 42 Other liabilities $ 50 $ 8 $ 42 $ — $ 42 ______________ (1) Financial instruments sent (held). Offsetting of Financial Assets and Liabilities and Derivative Instruments As of December 31, 2020 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 $ 30 $ 13 $ 17 $ — $ 17 Other financial instruments 65 — 65 — 65 Other invested assets $ 95 $ 13 $ 82 $ — $ 82 Liabilities: Derivative liabilities $ 13 $ 13 $ — $ — $ — Other financial liabilities 72 — 72 — 72 Other liabilities $ 85 $ 13 $ 72 $ — $ 72 ______________ (1) Financial instruments sent (held). |
DAC
DAC | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Charges, Insurers [Abstract] | |
DAC | DAC Changes in the DAC asset for the years ended December 31, 2021, 2020 and 2019 were as follows: Year Ended December 31, 2021 2020 2019 (in millions) Balance, beginning of year $ 477 $ 471 $ 555 Capitalization of commissions, sales and issue expenses 122 95 108 Amortization: Impact of assumptions updates and model changes (4) (8) (39) All other (21) (23) (53) Total amortization (25) (31) (92) Change in unrealized investment gains and losses 63 (58) (100) Balance, end of year $ 637 $ 477 $ 471 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | 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. 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 also are 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 December 31, 2021 and 2020, no assets or liabilities were required to be measured at fair value on a non-recurring basis. 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 December 31, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets: Investments: Fixed maturities, AFS: Corporate (1) $ — $ 2,351 $ 11 $ 2,362 U.S. Treasury, government and agency — 66 — 66 States and political subdivisions — 34 — 34 Asset-backed (2) — 30 — 30 Commercial mortgage-backed — 80 — 80 Redeemable preferred stock — — — — Total fixed maturities, AFS — 2,561 11 2,572 Other equity investments — 23 — 23 Other invested assets: Trading securities 1 — — 1 Options — 3 — 3 Total other invested assets 1 3 — 4 Cash equivalents 106 — — 106 Separate Accounts assets 3,384 7 — 3,391 Total Assets $ 3,491 $ 2,594 $ 11 $ 6,096 Liabilities: MSO and IUL indexed features’ liability $ — $ 132 $ — $ 132 Total Liabilities $ — $ 132 $ — $ 132 ______________ (1) Corporate fixed maturities includes both public and private issues. (2) Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types. Fair Value Measurements as of December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets: Investments: Fixed maturities, AFS: Corporate (1) $ — $ 2,308 $ 14 $ 2,322 U.S. Treasury, government and agency — 63 — 63 States and political subdivisions — 30 — 30 Asset-backed (2) — 5 — 5 Redeemable preferred stock 2 23 — 25 Total fixed maturities, AFS 2 2,429 14 2,445 Other equity investments — — — — Other invested assets: Trading securities 1 — — 1 Options — 3 — 3 Total other invested assets 1 3 — 4 Cash equivalents 128 — — 128 Separate Accounts assets 2,591 7 — 2,598 Total Assets $ 2,722 $ 2,439 $ 14 $ 5,175 Liabilities: MSO and IUL indexed features’ liability $ — $ 131 $ — $ 131 Total Liabilities $ — $ 131 $ — $ 131 ______________ (1) Corporate fixed maturities includes both public and private issues. (2) Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types. 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 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. 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. 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 prepayment, 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 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 accounted for 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. Transfers of Financial Instruments Between Levels 2 and 3 During the year ended December 31, 2021, there were no AFS fixed maturities transferred out of Level 3 and into Level 2 or AFS fixed maturities transferred out of Level 2 and into Level 3. During the year ended December 31, 2020, fixed maturities with fair values of $5 million were were transferred from Level 2 into the Level 3 classification principally due to the availability of trading activity and/or market observable inputs to measure and validate their fair values. These transfers in the aggregate represent approximately 0.6% of total equity as of December 31, 2020. The tables below present reconciliations for all Level 3 assets and liabilities for the years ended December 31, 2021, 2020 and 2019, respectively. Level 3 Instruments - Fair Value Measurements Corporate State and Political Subdivisions (in millions) Balance, January 1, 2021 $ 14 $ — Total gains and (losses), realized and unrealized, included in: Net income (loss) as: Net investment income (loss) — — Investment gains (losses), net — — Subtotal — — Other comprehensive income (loss) — — Purchases 1 — Sales (4) — Transfers into Level 3 (1) — — Transfers out of Level 3 (1) — — Balance, December 31, 2021 $ 11 $ — Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period. $ — $ — Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period. $ — $ — Balance, January 1, 2020 $ 10 $ — Total gains and (losses), realized and unrealized, included in: Net income (loss) as: Net investment income (loss) — — Investment gains (losses), net — — Subtotal — — Other comprehensive income (loss) — — Purchases — — Sales (1) — Transfers into Level 3 (1) 5 — Transfers out of Level 3 (1) — — Balance, December 31, 2020 $ 14 $ — Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period. $ — $ — Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period. $ — $ — Corporate State and Political Subdivisions (in millions) Balance, January 1, 2019 $ 11 $ 1 Total gains (losses), realized and unrealized, included in: Net income (loss) as: Net investment income (loss) — — Investment gains (losses), net — — Subtotal — — Other comprehensive income (loss) — — Purchases — — Sales (1) (1) Transfers into Level 3 (1) — — Transfers out of Level 3 (1) — — Balance, December 31, 2019 $ 10 $ — Balance, Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period. $ — $ — Balance, Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period. $ — $ — ____________ (1) Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values. 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 as of December 31, 2021 and 2020, respectively. Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2021 Fair Valuation Technique Significant Range Weighted Average (in millions) Assets: Investments: Fixed maturities, AFS: Corporate $ 9 Matrix pricing Spread over Benchmark 70 bps - 145 bps 104 bps Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2020 Fair Value Valuation Technique Significant Unobservable Input Range Weighted Average (in millions) Assets: Investments: Fixed maturities, AFS: Corporate $ 6 Matrix pricing model Spread over benchmark 195 bps 195 bps 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 December 31, 2021 and 2020, respectively, are approximately $2 million and $8 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, 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’s 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. Carrying Value of Financial Instruments Not Otherwise Disclosed in Note 3 and Note 4 of the Notes to these Financial Statements The carrying values and fair values as of December 31, 2021 and 2020 for financial instruments not otherwise disclosed in Note 3 and Note 4 of the Notes to these Financial Statements are presented in the table below. Carrying Values and Fair Values for Financial Instruments Not Otherwise Disclosed Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) December 31, 2021: Mortgage loans on real estate $ 17 $ — $ — $ 18 $ 18 Policy loans $ 238 $ — $ — $ 292 $ 292 Policyholders’ liabilities: Investment contracts $ 120 $ — $ — $ 124 $ 124 December 31, 2020: Mortgage loans on real estate $ 17 $ — $ — $ 18 $ 18 Policy loans $ 229 $ — $ — $ 291 $ 291 Policyholders’ liabilities: Investment contracts $ 129 $ — $ — $ 142 $ 142 Mortgage Loans on Real Estate Fair values for commercial 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. 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, and pension and other postretirement obligations. |
INSURANCE LIABILITIES
INSURANCE LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
INSURANCE LIABILITIES | INSURANCE LIABILITIES Variable Annuity Contracts – GMDB and GMIB Features The Company has certain variable annuity contracts with GMDB and GMIB 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; or • Combo: the benefit is the greater of the ratchet benefit or the roll-up benefit, which may include an annual reset. Liabilities for Variable Annuity Contracts with GMDB and GMIB Features without NLG Rider Feature The change in the liabilities for variable annuity contracts with GMDB and GMIB features and without a NLG feature are summarized in the tables below. The amounts for the direct contracts (before reinsurance ceded) and assumed contracts are reflected in the balance sheets in future policy benefits and other policyholders’ liabilities. The amounts for the ceded contracts are reflected in the balance sheets in amounts due from reinsurers. Change in Liability for Variable Annuity Contracts with GMDB and GMIB Features and No NLG Feature Year Ended December 31, 2021, 2020 and 2019 GMDB GMIB Direct Ceded Direct Ceded (in millions) Balance, January 1, 2019 $ 5 $ (5) $ 2 $ (2) Paid guarantee benefits — — — — Other changes in reserve — — — — Balance, December 31, 2019 5 (5) 2 (2) Paid guarantee benefits — — — — Other changes in reserve (1) 1 (1) 1 Balance, December 31, 2020 4 (4) 1 (1) Paid guarantee benefits — — — — Other changes in reserve 1 (1) — — Balance, December 31, 2021 $ 5 $ (5) $ 1 $ (1) Liabilities for Embedded and Freestanding Insurance Related Derivatives The liability for the GMxB derivative features and the liability for MSO and IUL indexed features are considered embedded or freestanding insurance derivatives and are reported at fair value. For the fair value of the assets and liabilities associated with these embedded or freestanding insurance derivatives, see Note 6 of the Notes to these Financial Statements. Account Values and Net Amount at Risk Account Values and NAR for direct variable annuity contracts in force with GMDB and GMIB features as of December 31, 2021 are presented in the following tables by guarantee type. For contracts with the GMDB feature, the NAR in the event of death is the amount by which the GMDB feature exceeds the related Account Values. For contracts with the GMIB feature, the NAR in the event of annuitization is the amount by which the present value of the GMIB benefits exceed the related Account Values, taking into account the relationship between current annuity purchase rates and the GMIB guaranteed annuity purchase rates. Since variable annuity contracts with GMDB features may also offer GMIB guarantees in the same contract, the GMDB and GMIB amounts listed are not mutually exclusive. Direct Variable Annuity Contracts with GMDB and GMIB Features as of December 31, 2021 Guarantee Type Return of Premium Ratchet Roll-Up Combo Total (in millions, except age and interest rate) Variable annuity contracts with GMDB features Account Values invested in: General Account $ — $ — $ — $ — $ — Separate Accounts 216 56 — — 272 Total Account Values $ 216 $ 56 $ — $ — $ 272 NAR, gross (1) $ — $ — $ — $ — $ — NAR, net of amounts reinsured (1) $ — $ — $ — $ — $ — Average attained age of policyholders (in years) 59.4 61.4 N/A N/A 59.8 Percentage of policyholders over age 70 10.7 % 13.3 % N/A N/A 11.3 % Range of contractually specified interest rates N/A N/A N/A N/A N/A Variable annuity contracts with GMIB features Account Values invested in: General Account $ — $ — $ — $ — $ — Separate Accounts — — 270 — 270 Total Account Values $ — $ — $ 270 $ — $ 270 NAR, gross (1) $ — $ — $ — $ — $ — NAR, net of amounts reinsured (1) $ — $ — $ — $ — $ — Average attained age of policyholders (in years) N/A N/A 64.1 N/A 64.1 Weighted average years remaining until annuitization N/A N/A 10.0 N/A 10.0 Range of contractually specified interest rates N/A N/A — % N/A — % ____________ (1) Amounts reported for NAR are $0 as the values are less than $1 million at December 31, 2021. Separate Accounts Investments by Investment Category Underlying Variable Annuity Contracts with GMDB and GMIB Features The total Account Values of variable annuity contracts with GMDB and GMIB features include amounts allocated to the guaranteed interest option, which is part of the General Account and variable investment options that invest through Separate Accounts in variable insurance trusts. The following table presents the aggregate fair value of assets, by major investment category, held by Separate Accounts that support variable annuity contracts with GMDB and GMIB features. The investment performance of the assets impacts the related Account Values and, consequently, the NAR associated with the GMDB and GMIB benefits and guarantees. Because the Company’s variable annuity contracts offer both GMDB and GMIB features, GMDB and GMIB amounts are not mutually exclusive. Investment in Variable Insurance Trust Mutual Funds December 31, 2021 2020 (1) Mutual Fund Type GMDB GMIB GMDB GMIB (in millions) Equity $ 27 $ 5 $ — $ — Fixed income 6 2 — — Balanced 238 263 — — Other 1 — — — Total $ 272 $ 270 $ — $ — (1) No investment in variable insurance trust mutual funds at December 31, 2020 due to the initial offering of Retirement Cornerstone in February 2021. Hedging Programs for GMDB and GMIB Features The Company has a program intended to hedge certain risks associated first with the GMDB feature and with the GMIB feature of the Retirement Cornerstone series of variable annuity products.This program utilizes derivative contracts, such as exchange-traded equity and interest rate futures contracts as well as equity options, that collectively are managed in an effort to reduce the economic impact of unfavorable changes in guaranteed benefits’ exposures attributable to movements in the capital markets. At the present time, this program hedges certain economic risks on these products to the extent such risks are not externally reinsured. These programs do not qualify for hedge accounting treatment. Therefore, gains (losses) on the derivatives contracts used in these programs, including current period changes in fair value, are recognized in net derivative gains (losses) in the period in which they occur, and may contribute to income (loss) volatility. Variable and Interest-Sensitive Life Insurance Policies - NLG The NLG feature contained in variable and interest-sensitive life insurance policies keeps them in force in situations where the policy value is not sufficient to cover monthly charges then due. The NLG remains in effect so long as the policy meets a contractually specified premium funding test and certain other requirements. The change in the NLG liabilities, reflected in future policy benefits and other policyholders’ liabilities in the balance sheets, is summarized in the table below. 2020 Direct Liability Reinsurance Ceded Net (in millions) Balance, January 1, 2019 $ 4 $ (2) $ 2 Paid guarantee benefits — — — Other changes in reserves — — — Balance, December 31, 2019 4 (2) 2 Paid guarantee benefits — — — Other changes in reserves 2 (1) 1 Balance, December 31, 2020 6 (3) 3 Paid guarantee benefits — — — Other changes in reserves — — — Balance, December 31, 2021 $ 6 $ (3) $ 3 |
REINSURANCE
REINSURANCE | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
REINSURANCE | 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: Year Ended December 31, 2021 2020 2019 (in millions) Direct premiums $ 201 $ 149 $ 113 Reinsurance assumed — 1 1 Reinsurance ceded (44) (44) (47) Premiums $ 157 $ 106 $ 67 Direct charges and fee income $ 333 $ 323 $ 307 Reinsurance ceded (58) (62) (62) Policy charges and fee income $ 275 $ 261 $ 245 Direct policyholders’ benefits $ 402 $ 360 $ 238 Reinsurance ceded (163) (176) (131) Policyholders’ benefits $ 239 $ 184 $ 107 Direct interest credited to policyholders’ account balances $ 139 $ 148 $ 154 Reinsurance ceded (57) (58) (70) Interest credited to policyholders’ account balances $ 82 $ 90 $ 84 Ceded Reinsurance In 2013, the Company entered into the Reinsurance Agreement with Protective to reinsure an in-force book of life insurance and annuity policies written prior to 2004. In addition to the Reinsurance Agreement, the Company entered into a long-term administrative services agreement with Protective whereby Protective will provide all administrative and other services with respect to the reinsured business. For business not reinsured with Protective, the Company generally reinsures its variable life and interest-sensitive life insurance policies on an excess of retention basis. In 2021, the Company generally retained up to a maximum of $4 million of mortality risk on single-life policies and up to a maximum of $6 million of mortality risk on second-to die policies. For amounts applied for in excess of those limits, reinsurance is ceded to Equitable Financial up to a combined maximum of $20 million of risk on single-life policies and up to a maximum of $25 million on second-to die policies. For amounts issued in excess of these limits, reinsurance is typically obtained from unaffiliated third parties. These reinsurance arrangements obligate the reinsurers to pay a portion of any death claim in excess of the amount the Company retains in exchange for an agreed-upon premium. Equitable America has a quota share arrangement with AXA Global Re (formerly AXA Cessions), assuming a percentage of excess Life/Disability/A&H business. The contract is now closed to new business. Beginning in 2015, group short and long-term disability is being reinsured with Group Reinsurance Plus (GRP) via a quota share arrangement. For reinsurance agreements with affiliates, see “Related Party Transactions” in Note 9 of the Notes to these Financial Statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party in making financial or operating decisions. The Company has entered into related party transactions that are described herein. On May 14, 2021, the Company transferred its investment in AB to its parent EFS as a non-cash dividend (non-cash financing activity for purposes of cash flow), which subsequently distributed such units to Holdings. The units were transferred at their carrying value of $61 million. Under Equitable America’s service agreement with Equitable Financial, personnel services, employee benefits, facilities, supplies and equipment are provided to Equitable America to conduct its business. The associated costs related to the service agreement are allocated to Equitable America based on methods that management believes are reasonable, including a review of the nature of such costs and activities performed to support Equitable America. As a result of such allocations, Equitable America incurred expenses of $132 million, $133 million, and $133 million during 2021, 2020, and 2019, respectively. Equitable America incurred distribution fee charges from Equitable Network, LLC of $136 million, $90 million, and $106 million in 2021, 2020, and 2019, respectively, and from Equitable Distributors, LLC of $59 million, $55 million, and $52 million in 2021, 2020, and 2019, respectively, for distributing Equitable America’s products. In addition to the Equitable Financial service agreement, Equitable America has various other service and investment advisory agreements with AB. The amount of expenses incurred by Equitable America related to these agreements were $2 million, $2 million, and $2 million for 2021, 2020, and 2019, respectively. Equitable America cedes a portion of its life business through excess of retention treaties to Equitable Financial on a yearly renewal term basis and reinsured the no-lapse guarantee riders through EQ AZ Life Re Company on a 90% first dollar quota share basis. The letter of credit amount as of December 31, 2021 was $45 million and is guaranteed by Holdings. Premiums earned from the above mentioned affiliated reinsurance transactions during 2021, 2020 and 2019, were $7 million, $6 million and $5 million, respectively. There were no claims ceded for any of the years. |
SHARE-BASED COMPENSATION PROGRA
SHARE-BASED COMPENSATION PROGRAMS | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION PROGRAMS | SHARE-BASED COMPENSATION PROGRAMSCertain employees of Equitable Financial who perform services for the Company participate in various share-based payment arrangements sponsored by Equitable Financial or Holdings. The Company was allocated $3 million, $3 million, and $3 million of compensation costs, included in compensation and benefits in the statements of income (loss), for share-based payment arrangements during the years ended December 31, 2021, 2020, and 2019, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES A summary of the income tax (expense) benefit in the statements of income (loss) follows: Year Ended December 31, 2021 2020 2019 (in millions) Income tax (expense) benefit: Current (expense) benefit $ — $ 40 $ (1) Deferred (expense) benefit 5 (11) 14 Total $ 5 $ 29 $ 13 The Federal income taxes attributable to operations are different from the amounts determined by multiplying the earnings before income taxes and noncontrolling interest by the expected Federal income tax rate of 21% . The sources of the difference and their tax effects are as follows: Year Ended December 31, 2021 2020 2019 (in millions) Expected income tax (expense) benefit $ 4 $ 8 $ 12 Non-taxable investment income 1 1 1 Tax settlements/uncertain tax position release — 8 Change in tax law — 12 Income tax (expense) benefit $ 5 $ 29 $ 13 On March 27 2020, in response to the COVID 19 pandemic, the Coronavirus AID, Relief, and Economic Security (CARES) Act was signed into law. Under the CARES Act, Net Operating Losses arising in tax years beginning after December 31, 2017 and before January 1, 2021 may be carried back five years. The impact on the Company’s financial statement was a tax benefit of $12 million. During the fourth quarter of 2020, the Company agreed to the Internal Revenue Service’s Revenue Agent’s Report for its consolidated 2010 through 2013 Federal corporate income tax returns. The impact on the Company’s financial statements and unrecognized tax benefits was a tax benefit of $8 million. The components of the net deferred income taxes are as follows: December 31, 2021 2020 Assets Liabilities Assets Liabilities (in millions) Net operating loss and credits 24 — 7 — Reserves and reinsurance 193 — 189 — DAC — 66 — 43 Unrealized investment gains (losses) — 27 — 52 Investments — 131 — 128 Other 24 — 24 — Total $ 241 $ 224 $ 220 $ 223 The Company has Federal net operating loss carryforwards of $100 million and $23 million, for the years ending December 31, 2021 and 2020, respectively, which do not expire. A reconciliation of unrecognized tax benefits (excluding interest and penalties) follows: Year Ended December 31, 2021 2020 2019 (in millions) Balance at January 1, $ 1 $ 4 $ 4 Additions for tax positions of prior years — — — Reductions for tax positions of prior years — (3) — Additions for tax positions of current year — — — Settlements with tax authorities — — — Balance at December 31, $ 1 $ 1 $ 4 Unrecognized tax benefits that, if recognized, would impact the effective rate $ 1 $ 1 $ 4 It is reasonably possible that the total amount of unrecognized tax benefits will change within the next 12 months due to the addition of new issues for open tax years. The possible change in the amount of unrecognized tax benefits cannot be estimated at this time. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
EQUITY | EQUITY AOCI represents cumulative gains (losses) on items that are not reflected in net income (loss). The balances as of December 31, 2021, 2020, and 2019 follow: December 31, 2021 2020 (in millions) Unrealized gains (losses) on investments $ 86 $ 138 Accumulated other comprehensive income (loss) $ 86 $ 138 The components of OCI, net of taxes for the years ended December 31, 2021, 2020 and 2019, follow: Year Ended December 31, 2021 2020 2019 (in millions) Change in net unrealized gains (losses) on investments: Net unrealized gains (losses) arising during the period $ (90) $ 117 $ 125 (Gains) losses reclassified into net income (loss) during the period (1) (5) (1) — Net unrealized gains (losses) on investments (95) 116 125 Adjustments for policyholders’ liabilities, DAC, insurance liability loss recognition and other 43 (26) (65) Other comprehensive income (loss), net of adjustments (net of deferred income tax expense (benefit) of, $(13), $24, and $16) (52) 90 60 Other comprehensive income (loss) $ (52) $ 90 $ 60 ____________ (1) See “Reclassification adjustment” in Note 3 of the Notes to these Financial Statements. Reclassification amounts presented net of income tax expense (benefit) of $1 million, $0 million, and $0 million for the years ended December 31, 2021, 2020 and 2019, 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 statements of income (loss). Amounts presented in the table above are net of tax. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | COMMITMENTS AND CONTINGENT LIABILITIES Litigation A number of lawsuits, claims, assessments and regulatory inquiries have been filed or commenced against life insurers in the jurisdictions in which Equitable America does business. These actions and proceedings involve, among other things, insurers’ sales practices, alleged agent misconduct, alleged failure to properly supervise agents, contract administration, product design, features and accompanying disclosure, cost of insurance 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. Some of the matters have resulted in the award of substantial fines and judgments against other insurers, including punitive damages, or in substantial settlements. Courts, juries and regulators often have substantial discretion in awarding damage awards and fines, including punitive damages. Equitable America, from time to time, is involved in such actions and proceedings. While the ultimate outcome of such matters cannot be predicted with certainty, in the opinion of management no such matter is likely to have a material adverse effect on Equitable America’s financial position or results of operations. However, it should be noted that the frequency of large damage awards, including large punitive damage awards and regulatory fines that bear little or no relation to actual economic damages incurred, continues to create the potential for an unpredictable judgment in any given matter. Guarantees and Other Commitments |
INSURANCE GROUP STATUTORY FINAN
INSURANCE GROUP STATUTORY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Insurance Group Statutory Financial Information [Abstract] | |
INSURANCE GROUP STATUTORY FINANCIAL INFORMATION | INSURANCE GROUP STATUTORY FINANCIAL INFORMATION For 2021, 2020 and 2019, respectively, Equitable America’s statutory net income (loss) totaled $(44) million, $(20) million and $(30) million. Statutory surplus, Capital stock and AVR totaled $338 million and $457 million as of December 31, 2021 and 2020, respectively. As of December 31, 2021, Equitable America, in accordance with various government and state regulations, had $7 million of securities on deposit with such government or state agencies. Dividend Restrictions As a domestic insurance subsidiary regulated by the insurance laws of Arizona, Equitable America is subject to restrictions as to the amounts the Company may pay as dividends and amounts the Company may repay of surplus notes to EFS. Under Arizona Insurance Law, a domestic life insurer may without prior approval of the Superintendent, pay a dividend to its shareholders not exceeding an amount calculated based on a statutory formula. Based on this formula, the Company would not be permitted to pay ordinary shareholder dividends during 2022. Any payment of a dividend would require the Company to file notice of its intent to declare such dividends with the Superintendent who then has 30 days to disapprove the distribution. On April 13, 2021, the Company was granted permission by the Arizona Department of Insurance and Financial Institutions to pay an extraordinary distribution of its 2.6 million AB units to its parent, EFS. On May 14, 2021, the Company recorded the transfer of the units as a return of capital at its carrying value of $61 million. Intercompany Reinsurance Equitable America reinsured the no lapse guarantee riders contained in certain variable and interest-sensitive life policies to EQ AZ Life Re. Equitable America receives statutory reserve credits for reinsurance treaties with EQ AZ Life Re to the extent EQ AZ Life Re held letters of credit ($45 million at December 31, 2021 and 2020). These letters of credit were guaranteed by Holdings. Prescribed and Permitted Accounting Practices As of December 31, 2021 and for the year then ended, there were no differences in net income (loss) and capital and surplus resulting from practices prescribed and permitted by the Arizona Department of Insurance and Financial Institutions and those prescribed by NAIC Accounting Practices and Procedures effective as of December 31, 2021. Differences between Statutory Accounting Principles and U.S. GAAP Accounting practices used to prepare statutory financial statements for regulatory filings of stock life insurance companies differ in certain instances from U.S. GAAP. The differences between statutory surplus and capital stock determined in accordance with SAP and total equity under U.S. GAAP are primarily: (a) the inclusion in SAP of an AVR intended to stabilize surplus from fluctuations in the value of the investment portfolio; (b) future policy benefits and policyholders’ account balances under SAP differ from U.S. GAAP due to differences between actuarial assumptions and reserving methodologies; (c) certain policy acquisition costs are expensed under SAP but deferred under U.S. GAAP and amortized over future periods to achieve a matching of revenues and expenses; (d) under SAP, Federal income taxes are provided on the basis of amounts currently payable with limited recognition of deferred tax assets while under U.S. GAAP, deferred taxes are recorded for temporary differences between the financial statements and tax basis of assets and liabilities where the probability of realization is reasonably assured; (e) the valuation of assets under SAP and U.S. GAAP differ due to different investment valuation and depreciation methodologies, as well as the deferral of interest-related realized capital gains and losses on fixed income investments; (f) the valuation of the investment in AllianceBernstein L.P. ("AllianceBernstein") under SAP reflects a portion of the market value change rather than the equity in the underlying net assets as required under GAAP; (g) certain assets, primarily prepaid assets, are not admissible under SAP but are admissible under U.S. GAAP; (h) the fair valuing of all acquired assets and liabilities including intangible assets required for GAAP purchase accounting is not recognized in SAP; (i) reserves and reinsurance recoverables on unpaid claims on reinsured business are netted in aggregate reserves and the liability for life policy claims, respectively, under SAP while under GAAP these reinsured amounts are reflected as an asset; (j) under SAP, premiums, regardless of policy type, are recognized when due and include the change in the deferred |
UNPAID CLAIM AND CLAIM EXPENSES
UNPAID CLAIM AND CLAIM EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
UNPAID CLAIM AND CLAIM EXPENSES | UNPAID CLAIM AND CLAIM EXPENSES The liability for unpaid claims and claim expenses as of December 31, 2021 and 2020 is as follows: Liability for Unpaid Claims and Claim Expenses December 31 2021 2020 (in millions) Gross Balance at January 1, 40 29 Less Reinsurance 15 12 Net Balance at January 1, 25 17 Incurred Claims (net) Related to: Current Year 139 78 Prior Year 11 (3) Total Incurred 150 75 Paid Claims (net) Related to: Current Year 101 57 Prior Year 19 10 Total Paid 120 67 Net Balance at December 31, 55 25 Add Reinsurance 23 15 Gross Balance at December 31, $ 78 $ 40 The table below presents incurred claims development as of December 31, 2021, net of reinsurance, cumulative claims frequency, and the total incurred but not reported liability (“IBNR”) for Equitable America’s long-term disability business: 2021 2020 2019 2018 2017 IBNR Claim Frequency (in millions) Long-term Disability Incurral Year 2017 $ 1 $ 2 $ 2 $ 2 $ 2 113 2018 4 4 4 5 191 2019 5 6 7 265 2020 9 10 371 2021 16 5 391 Cumulative LTD Incurred Claims $ 35 $ 22 $ 13 $ 7 $ 2 $ 5 The table below presents incurred claims development as of December 31, 2020, net of reinsurance, cumulative claims frequency, and total IBNR for Equitable America's long-term disability business: 2020 2019 2018 2017 IBNR Claim Frequency Long-term Disability Incurral Year 2017 $ 2 $ 2 $ 2 $ 2 113 2018 4 4 5 191 2019 6 7 265 2020 10 3 345 Cumulative LTD Incurred Claims $ 22 $ 13 $ 7 $ 2 $ 3 The claim frequency for long-term disability represents the number of unique claim events for which benefit payments have been made. Claim events are identified using a unique claimant identifier and incurral date (claim event date). Thus, if an individual has multiple claims for different disabling events (and thus different disability dates), each will be reported as a unique claim event. However, if an individual receives multiple benefits under more than one policy (for example, supplementary disability benefits in addition to the base policy), we treat it as a single claim occurrence because they are related to a single claim event. Claim frequency is expected to be lower for the most recent incurral year because claimants have to satisfy elimination period before being eligible for benefits. The historical claim payout pattern for the long-term disability for the years presented in the development table is not available because this is a relatively new line of business. Equitable America discounts long-term disability liabilities as benefit payments are made over extended periods. Discount rate assumptions for these liabilities are based on the best estimate GAAP rates by year of incurral. The following table reconciles the long-term disability net incurred claims development table to the liability for unpaid claims and claim expenses in the Company’s balance sheet as of December 31, 2021 and 2020: December 31, 2021 2020 (in millions) Long-Term Disability Claim Development Table, net of reinsurance Undiscounted LTD Incurred Claims, net of reinsurance $ 35 $ 22 Subtract Cumulative LTD Paid Claims, net of reinsurance (12) (7) Subtract Impact of LTD Discounting, net of reinsurance (3) (2) LTD liabilities for unpaid claim and claim expense, net of reinsurance 20 13 Unpaid Claims and Claim Expenses, net of reinsurance LTD liabilities for unpaid claim and claim expense, net of reinsurance 20 13 Other short-duration contracts, net of reinsurance 35 12 Total liabilities for unpaid claim and claim expense, net of reinsurance 55 25 Reinsurance Recoverable on unpaid claims Long-term disability 21 13 Other short-duration contracts 2 2 Total Reinsurance Recoverable 23 15 Total liability for unpaid claim and claim expense $ 78 $ 40 |
REVENUES FROM EXTERNAL CUSTOMER
REVENUES FROM EXTERNAL CUSTOMERS | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES FROM EXTERNAL CUSTOMERS | REVENUES FROM EXTERNAL CUSTOMERS Revenue from external customers, by product, is shown in the table that follows: December 31, 2021 2020 2019 (in millions) Individual Variable Annuity Products Premiums $ — $ — $ — Fees 2 — — Others 3 3 2 Total $ 5 $ 3 $ 2 Life Insurance Products Premiums $ — $ 1 $ 1 Fees 310 284 262 Others 2 2 3 Total $ 312 $ 287 $ 266 Employee Benefit Products Premiums $ 157 $ 105 $ 66 Fees — — — Others — — 1 Total $ 157 $ 105 $ 67 Other Premiums $ — $ — $ — Fees — — — Others — — 2 Total $ — $ — $ 2 |
SCHEDULE I - SUMMARY OF INVESTM
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Schedule I - Summary of Investments - Other than Investments in Related Parties | SCHEDULE I SUMMARY OF INVESTMENTS—OTHER THAN INVESTMENTS IN RELATED PARTIES AS OF DECEMBER 31, 2021 Cost (1) Fair Value Carrying Value (in millions) Fixed maturities, AFS: U.S. government, agencies and authorities $ 66 $ 66 $ 66 State, municipalities and political subdivisions 31 34 34 Public utilities 292 303 303 All other corporate bonds 1,945 2,059 2,059 Asset-backed 30 30 30 Commercial mortgage-backed 80 80 80 Total fixed maturities, AFS 2,444 2,572 2,572 Mortgage loans on real estate (2) 17 18 17 Policy loans 238 292 238 Other equity investments 21 23 23 Other invested assets 19 19 19 Total Investments $ 2,739 $ 2,924 $ 2,869 ______________ (1) Cost for fixed maturities represents original cost, reduced by repayments and write-downs and adjusted for amortization of premiums or accretion of discount; cost for equity securities represents original cost reduced by write-downs. (2) Carrying value for mortgage loans on real estate represents original cost adjusted for amortization of premiums or accretion of discount and reduced by credit loss allowance. |
SCHEDULE IV - REINSURANCE
SCHEDULE IV - REINSURANCE | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule IV - Reinsurance | SCHEDULE IV REINSURANCE (1) AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019 Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount Assumed to Net (in millions) 2021 Life insurance in-force $ 93,301 $ 18,697 $ — $ 74,604 — % Premiums: Life insurance and annuities $ 85 $ 24 $ — $ 61 — % Accident and health 116 20 — 96 — % Total premiums $ 201 $ 44 $ — $ 157 — % 2020 Life insurance in-force $ 82,162 $ 22,785 $ 766 $ 60,143 1.3 % Premiums: Life insurance and annuities $ 77 $ 30 $ 1 $ 48 3.0 % Accident and health 72 14 — 58 — % Total premiums $ 149 $ 44 $ 1 $ 106 0.9 % 2019 Life insurance in-force $ 76,120 $ 24,343 $ 420 $ 52,197 0.8 % Premiums: Life insurance and annuities $ 71 $ 37 $ 1 $ 35 3.1 % Accident and health 42 10 — 32 — % Total premiums $ 113 $ 47 $ 1 $ 67 1.5 % ______________ (1) Includes amounts related to the discontinued group life and health business. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions (including normal, recurring accruals) that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Financial results in the historical financial statements may not be indicative of the results of operations, comprehensive income (loss), financial position, equity or cash flows that would have been achieved had we operated as a separate, standalone entity during the reporting periods presented. The years “2021”, “2020” and “2019” refer to the years ended December 31, 2021, 2020 and 2019, respectively. |
Adoption of New Accounting Pronouncements and Future Adoption of New Accounting Pronouncements | Adoption of New Accounting Pronouncements Description Effect on the Financial Statement or Other Significant Matters ASU 2016-13 : Financial Instruments—Credit Losses (Topic 326), as clarified and amended by ASU 2018-19: Codification Improvements to Topic 326, Financial Instruments—Credit Losses, ASU 2019-04: Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-05: Financial Instruments—Credit Losses (Topic 326) Targeted Transition Relief, ASU 2019-11: Codification Improvements to Topic 326, Financial Instruments-Credit Losses ASU 2016-13 contains new guidance which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for AFS debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2019-05 provides entities that have instruments within the scope of Subtopic 326-20 an option to irrevocably elect the fair value option on an instrument-by-instrument basis upon adoption of Topic 326. On January 1, 2020, the Company adopted the new standard and completed implementation of its updated CECL models, processes and controls related to the identified financial assets that fall within the scope of the new standard. Upon adoption, the Company recorded an immaterial adjustment to reduce the opening retained earnings balance. The adjustment is primarily attributable to an increase in the allowance for credit losses associated with the Company’s commercial mortgage loan portfolios and reinsurance. Results for reporting periods beginning after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. ASU 2018-13 : Fair Value Measurement (Topic 820) This ASU improves the effectiveness of fair value disclosures in the notes to financial statements. Amendments in this ASU impact the disclosure requirements in Topic 820, including the removal, modification and addition to existing disclosure requirements. The Company elected to early adopt during 2019 the removal of disclosures relating to transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and valuation processes for Level 3 fair value measurements. The Company adopted the additional disclosures related to Level 3 fair value information on January 1, 2020. ASU 2019-12 : Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, as well as clarifying and amending existing guidance. On January 1, 2021, the Company adopted the new accounting standards update. The new guidance was applied either on a retrospective, modified retrospective or prospective basis based on the items to which the amendments relate. The adoption did not have a material impact on the Company’s financial position, results of operations and cash flows as of the adoption date. Future Adoption of New Accounting Pronouncements Description Effective Date and Method of Adoption Effect on the Financial Statement or Other Significant Matters ASU 2018-12 : Financial Services - Insurance (Topic 944); ASU 2020-11: Financial Services - Insurance (Topic 944): Effective Date and Early Application Description Effective Date and Method of Adoption Effect on the Financial Statement or Other Significant Matters This ASU provides targeted improvements to existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance entity. The ASU primarily impacts four key areas, including: 1. Measurement of the liability for future policy benefits for traditional and limited payment contracts. The ASU requires companies to review, and if necessary, update cash flow assumptions at least annually for non-participating traditional and limited-payment insurance contracts. The ASU also prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts. 2. Measurement of MRBs. MRBs, as defined under the ASU, will encompass certain GMxB features associated with variable annuity products and other general account annuities with other than nominal market risk. 3. Amortization of deferred acquisition costs. The ASU simplifies the amortization of deferred acquisition costs and other balances amortized in proportion to premiums, gross profits, or gross margins, requiring such balances to be amortized on a constant level basis over the expected term of the contracts. 4. Expanded footnote disclosures. The ASU requires additional disclosures including information about significant inputs, judgements, assumptions and methods used in measurement In November 2020, the FASB issued ASU 2020-11 which deferred the effective date of the amendments in ASU 2018-12 for all insurance entities. ASU 2018-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is allowed. For the liability for future policyholder benefits for traditional and limited payment contracts, companies can elect one of two adoption methods. Companies can either elect a modified retrospective transition method applied to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or a full retrospective transition method using actual historical experience information as of contract inception. The same adoption method must be used for deferred policy acquisition costs. For MRBs, the ASU should be applied retrospectively as of the beginning of the earliest period presented. The Company continues to progress with implementation efforts and the evaluation of the impact that adoption of this guidance will have on the Company’s financial statements. Due to its extensive nature, the adoption of the ASU is expected to have a significant impact on the Company’s financial statements, as well as systems, processes and controls. Effective January 1, 2023, the new guidance will be adopted using the modified retrospective approach, except for MRBs which will use the full retrospective approach. The Company has created a governance framework and implementation plan to ensure timely adoption of the guidance. In preparation for implementation, the Company continues to refine key accounting policy decisions, modernize processes and update internal controls. These changes include modifications of actuarial valuation systems, data sourcing, analytical procedures and reporting processes. The impact on total equity of applying this ASU is estimated to be less than the current amount of reported AOCI as of December 31, 2021. The impact on total equity is mostly driven by the DAC and URR updates to amortize DAC and URR on a constant level basis, remove amortization associated with unrealized gains or losses, and excluding future deferrals in the calculation of the DAC and URR balances. Description Effective Date and Method of Adoption Effect on the Financial Statement or Other Significant Matters ASU2020-04 : Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting The amendments in this ASU provide optional expedients and exceptions to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. On December 15, 2021, the FASB tentatively approved deferring the sunset date of the guidance in Topic 848 to December 31, 2024. The Company is currently assessing the applicability of the optional expedients and exceptions provided under the ASU. Management is evaluating the impact that adoption of this guidance will have on the Company’s financial statements. |
Investments | Investments The carrying values of fixed maturities classified as AFS are reported at fair value. Changes in fair value are reported in OCI, net of allowance for credit losses, policy related amounts and deferred income taxes. Prior to January 1, 2020, the amortized cost of fixed maturities was adjusted for impairments in value deemed to be other than temporary which were recognized in Investment gains (losses), net. With the adoption of the new Financial Instruments-Credit Losses standard, changes in credit losses are recognized in investment gains (losses), net. The redeemable preferred stock investments that are reported in fixed maturities include REITs, perpetual preferred stock and redeemable preferred stock. These securities may not have a stated maturity, may not be cumulative and do not provide for mandatory redemption by the issuer. Effective January 1, 2021, the Company began classifying certain preferred stock as equity securities to better reflect the economics and nature of these securities. These preferred stock securities are reported in other equity investments. The Company determines the fair values of fixed maturities and equity securities based upon quoted prices in active markets, when available, or through the use of alternative approaches when market quotes are not readily accessible or available. These alternative approaches include matrix or model pricing and use of independent pricing services, each supported by reference to principal market trades or other observable market assumptions for similar securities. More specifically, 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. The Company’s management, with the assistance of its investment advisors, evaluates AFS debt securities that experienced a decline in fair value below amortized cost for credit losses which are evaluated in accordance with the new financial instruments credit losses guidance effective January 1, 2020. The remainder of the unrealized loss related to other factors, if any, is recognized in OCI. Integral to this review is an assessment made each quarter, on a security-by-security basis, by the Company’s IUS Committee, of various indicators of credit deterioration to determine whether the investment security has experienced a credit loss. This assessment includes, but is not limited to, consideration of the severity of the unrealized loss, failure, if any, of the issuer of the security to make scheduled payments, actions taken by rating agencies, adverse conditions specifically related to the security or sector, the financial strength, liquidity and continued viability of the issuer. The Company recognizes an allowance for credit losses on AFS debt securities with a corresponding adjustment to earnings rather than a direct write down that reduces the cost basis of the investment, and credit losses are limited to the amount by which the security’s amortized cost basis exceeds its fair value. Any improvements in estimated credit losses on AFS debt securities are recognized immediately in earnings. Management does not use the length of time a security has been in an unrealized loss position as a factor, either by itself or in combination with other factors, to conclude that a credit loss does not exist, as they were permitted to do prior to January 1, 2020. When the Company determines that there is more than 50% likelihood that it is not going to recover the principal and interest cash flows related to an AFS debt security, the security is placed on nonaccrual status and the Company reverses accrued interest receivable against interest income. Since the nonaccrual policy results in a timely reversal of accrued interest receivable, the Company does not record an allowance for credit losses on accrued interest receivable. If there is no intent to sell or likely requirement to dispose of the fixed maturity security before its recovery, only the credit loss component of any resulting allowance is recognized in income (loss) and the remainder of the fair value loss is recognized in OCI. The amount of credit loss is the shortfall of the present value of the cash flows expected to be collected as compared to the amortized cost basis of the security. The present value is calculated by discounting management’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security at the date of acquisition. Projections of future cash flows are based on assumptions regarding probability of default and estimates regarding the amount and timing of recoveries. These assumptions and estimates require use of management judgment and consider internal credit analyses as well as market observable data relevant to the collectability of the security. For mortgage and asset-backed securities, projected future cash flows also include assumptions regarding prepayments and underlying collateral value. Write-offs of AFS debt securities are recorded when all or a portion of a financial asset is deemed uncollectible. Full or partial write-offs are recorded as reductions to the amortized cost basis of the AFS debt security and deducted from the allowance in the period in which the financial assets are deemed uncollectible. The Company elected to reverse accrued interest deemed uncollectible as a reversal of interest income. In instances where the Company collects cash that it has previously written off, the recovery will be recognized through earnings. Policy loans represent funds loaned to policyholders up to the cash surrender value of the associated insurance policies and are carried at the unpaid principal balances due to the Company from the policyholders. Interest income on policy loans is recognized in net investment income at the contract interest rate when earned. Policy loans are fully collateralized by the cash surrender value of the associated insurance policies. Cash and cash equivalents includes cash on hand, demand deposits, money market accounts, overnight commercial paper and highly liquid debt instruments purchased with an original maturity of three months or less. Due to the short-term nature of these investments, the recorded value is deemed to approximate fair value. All securities owned, including U.S. government and agency securities, mortgage-backed securities, futures and forwards transactions, are reported in the financial statements on a trade-date basis. Units in AB are carried on the equity method and reported in Other invested assets with equity in earnings reported in Net investment income (loss). |
Derivatives | Derivatives Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices, values of securities or commodities, credit spreads, market volatility, expected returns and liquidity. Values can also be affected by changes in estimates and assumptions, including those related to counterparty behavior and non-performance risk used in valuation models. Derivative financial instruments generally used by the Company include equity and interest rate futures and equity options, all of which may be exchange-traded or contracted in the OTC market. All derivative positions are carried in the balance sheets at fair value, generally by obtaining quoted market prices or through the use of valuation models. Freestanding derivative contracts are reported in the balance sheets either as assets within “other invested assets” or as liabilities within “other liabilities.” 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. The Company uses derivatives to manage asset/liability risk. All changes in the fair value of the Company’s freestanding derivative positions, including net receipts and payments, are included in “net derivative gains (losses)” without considering changes in the fair value of the economically associated assets or liabilities. The Company is a party to financial instruments and other contracts that contain “embedded” derivative instruments. At inception, the Company assesses whether the economic characteristics of the embedded instrument are “clearly and closely related” to the economic characteristics of the remaining component of the “host contract” and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. When those criteria are satisfied, the resulting embedded derivative is bifurcated from the host contract, carried in the balance sheets at fair value, and changes in its fair value are recognized immediately and captioned in the statements of income (loss) according to the nature of the related host contract. For certain financial instruments that contain an embedded derivative that otherwise would need to be bifurcated and reported at fair value, the Company instead may elect to carry the entire instrument at fair value. |
Mortgage Loans on Real Estate | Mortgage Loans on Real Estate Mortgage loans are stated at unpaid principal balances, net of unamortized discounts and the allowance for credit losses. The Company calculates the allowance for credit losses in accordance with the CECL model in order to provide for the risk of credit losses in the lending process. Prior to the adoption of CECL on January 1, 2020, mortgage loans were stated at unpaid principal balances, net of unamortized discounts, premiums and valuation allowances. Valuation allowances were based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or on its collateral value if the loan was collateral dependent. For commercial mortgage loans, an allowance for credit loss was typically recommended when management believed it was probable that principal and interest would not be collected according to the contractual terms. Expected credit losses for loans with similar risk characteristics are estimated on a collective (i.e., pool) basis in order to meet CECL’s risk of loss concept which requires the Company to consider possibilities of loss, even if remote. For collectively evaluated mortgages, the Company estimates the allowance for credit losses based on the amortized cost basis of its mortgages over their expected life using a PD / LGD model. The PD/LGD model incorporates the Company’s reasonable and supportable forecast of macroeconomic information over a specified period. The length of the reasonable and supportable forecast period is reassessed on a quarterly basis and may be adjusted as appropriate over time to be consistent with macroeconomic conditions and the environment as of the reporting date. For periods beyond the reasonable and supportable forecast period, the model reverts to historical loss information. The PD and LGD are estimated at the loan-level based on loans’ current and forecasted risk characteristics as well as macroeconomic forecasts. The PD is estimated using both macroeconomic conditions as well as individual loan risk characteristics including LTV ratios, DSC ratios, seasoning, collateral type, geography, and underlying credit. The LGD is driven primarily by the type and value of collateral, and secondarily by expected liquidation costs and time to recovery. For individually evaluated mortgages, the Company continues to recognize a valuation allowance on the present value of expected future cash flows discounted at the loan’s original effective interest rate or on its collateral value. The CECL model is configured to the Company’s specifications and takes into consideration the detailed risk attributes of each discrete loan in the mortgage portfolio which include, but are not limited to the following: • LTV ratio - Derived from current loan balance divided by the fair market value of the property. An LTV ratio in excess of 100% indicates an underwater mortgage. • DSC ratio - Derived from actual operating earnings divided by annual debt service. If the ratio is below 1.0x, then the income from the property does not support the debt. • Occupancy - Criteria varies by property type but low or below market occupancy is an indicator of sub-par property performance. • Lease expirations - The percentage of leases expiring in the upcoming 12 to 36 months are monitored as a decline in rent and/or occupancy may negatively impact the debt service coverage ratio. In the case of single-tenant properties or properties with large tenant exposure, the lease expiration is a material risk factor. • Other - Any other factors such as maturity, borrower/tenant related issues, payment status, property condition, or current economic conditions may call into question the performance of the loan. Mortgage loans that do not share similar risk characteristics with other loans in the portfolio are individually evaluated quarterly by the Company’s IUS Committee. The allowance for credit losses on these individually evaluated mortgages is a loan-specific reserve as a result of the loan review process that is recorded based on the present value of expected future cash flows discounted at the loan’s effective interest rate or based on the fair value of the collateral. The individually assessed allowance for mortgage loans can increase or decrease from period to period based on such factors. Individually assessed loans may include, but are not limited to, mortgages that have deteriorated in credit quality such as a TDR and reasonably expected TDRs, mortgages for which foreclosure is probable, and mortgages which have been classified as “potential problem” or “problem” loans within the Company’s IUS Committee processes as described below. Within the IUS process, commercial mortgages 60 days or more past due, as well as all mortgages in the process of foreclosure, are identified as problem mortgage loans. Based on its monthly monitoring of mortgages, a class of potential problem mortgage loans are also identified, consisting of mortgage loans not currently classified as problem mortgage loans but for which management has doubts as to the ability of the borrower to comply with the present loan payment terms and which may result in the loan becoming a problem or being modified. The decision whether to classify a performing mortgage loan as a potential problem involves judgments by management as to likely future industry conditions and developments with respect to the borrower or the individual mortgaged property. Individually assessed mortgage loans without provision for losses are mortgage loans where the fair value of the collateral or the net present value of the expected future cash flows related to the loan equals or exceeds the recorded investment. Interest income earned on mortgage loans where the collateral value is used to measure impairment is recorded on a cash basis. Interest income on mortgage loans where the present value method is used to measure impairment is accrued on the net carrying value amount of the loan at the interest rate used to discount the cash flows. Mortgage loans are placed on nonaccrual status once management believes the collection of accrued interest is not probable. Once mortgage loans are classified as nonaccrual mortgage loans, interest income is recognized under the cash basis of accounting and the resumption of the interest accrual would commence only after all past due interest has been collected or the mortgage loan has been restructured to where the collection of interest is considered likely. The Company charges off loan balances and accrued interest that are deemed uncollectible. The components of amortized cost for mortgage loans on the balance sheets excludes accrued interest amounts because the Company presents accrued interest receivables within other assets. Once mortgage loans are placed on nonaccrual status, the Company reverses accrued interest receivable against interest income. Since the nonaccrual policy results in the timely reversal of accrued interest receivable, the Company does not record an allowance for credit losses on accrued interest receivable. |
Net Investment Income (Loss), Investment Gains (Losses), Net and Unrealized Investment Gains (Losses) | Net Investment Income (Loss), Investment Gains (Losses), Net, and Unrealized Investment Gains (Losses) Realized investment gains (losses) are determined by identification with the specific asset and are presented as a component of revenue. Changes in the allowance for credit losses are included in investment gains (losses), net. Unrealized investment gains (losses) on fixed maturities designated as AFS held by the Company are accounted for as a separate component of AOCI, net of related deferred income taxes, as are amounts attributable to insurance liability loss recognition, DAC and URR related to UL policies, and investment-type products. Changes in unrealized gains (losses) reflect changes in fair value of only those fixed maturities classified as AFS and do not reflect any change in fair value of policyholders’ account balances and future policy benefits. |
Fair Value of Financial Instruments | Fair Value of Financial InstrumentsSee Note 6 of the Notes to these Financial Statements for additional information regarding determining the fair value of financial instruments. |
Recognition of Insurance Income and Related Expenses | Recognition of Insurance Income and Related Expenses Deposits related to UL and investment-type contracts are reported as deposits to policyholders’ account balances. Revenues from these contracts consist of fees assessed during the period against policyholders’ account balances for mortality charges, policy administration charges and surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policyholders’ account balances. Premiums from traditional life and annuity policies with life contingencies generally are recognized in income when due. Benefits and expenses are matched with such income so as to result in the recognition of profits over the life of the contracts. This match is accomplished by means of the provision for liabilities for future policy benefits and the deferral and subsequent amortization of DAC. For contracts with a single premium or a limited number of premium payments due over a significantly shorter period than the total period over which benefits are provided, premiums are recorded as revenue when due with any excess profit deferred and recognized in income in a constant relationship to insurance in-force or, for annuities, the amount of expected future benefit payments. Premiums from group health contracts are recognized as income over the period to which the premiums relate in proportion to the amount of insurance protection provided. |
DAC | DAC Acquisition costs that vary with and are primarily related to the acquisition of new and renewal insurance business, reflecting incremental direct costs of contract acquisition with independent third parties or employees that are essential to the contract transaction, as well as the portion of employee compensation, including payroll fringe benefits and other costs directly related to underwriting, policy issuance and processing, medical inspection, and contract selling for successfully negotiated contracts including commissions, underwriting, agency and policy issue expenses, are deferred. In each reporting period, DAC amortization, net of the accrual of imputed interest on DAC balances, is recorded to amortization of deferred policy acquisition costs. DAC is subject to recoverability testing at the time of policy issue and loss recognition testing at the end of each accounting period. The determination of DAC, including amortization and recoverability estimates, is based on models that involve numerous assumptions and subjective judgments, including those regarding policyholder behavior, surrender and withdrawal rates, mortality experience, and other inputs including financial market volatility and market rates of return. After the initial establishment of reserves, premium deficiency and loss recognition tests are performed each period end using best estimate assumptions as of the testing date without provisions for adverse deviation. When the liabilities for future policy benefits plus the present value of expected future gross premiums for the aggregate product group are insufficient to provide for expected future policy benefits and expenses for that line of business (i.e., reserves including URR net of any DAC asset), DAC would first be written off and thereafter, if required, a premium deficiency reserve would be established by a charge to earnings. Amortization Policy In accordance with the guidance for the accounting and reporting by insurance enterprises for certain long-duration contracts and participating contracts and for realized gains and losses from the sale of investments, current and expected future profit margins for products covered by this guidance are examined regularly in determining the amortization of DAC. DAC associated with certain variable annuity products is amortized based on estimated assessments, with DAC on UL and investment-type products amortized over the expected total life of the contract group as a constant percentage of estimated gross profits arising principally from investment results, Separate Accounts fees, mortality and expense margins and surrender charges based on historical and anticipated future experience, changes in embedded derivatives and the reserve of products that have indexed features such as IUL and MSO, updated at the end of each accounting period. When estimated gross profits are expected to be negative for multiple years of a contract life, DAC is amortized using the present value of estimated assessments. The effect on the amortization of DAC of revisions to estimated gross profits or assessments is reflected in earnings (loss) in the period such estimated gross profits or assessments are revised. A decrease in expected gross profits or assessments would accelerate DAC amortization. Conversely, an increase in expected gross profits or assessments would slow DAC amortization. The effect on the DAC assets that would result from realization of unrealized gains (losses) is recognized with an offset to AOCI in equity as of the balance sheet date. A significant assumption in the amortization of DAC relates to projected future separate account performance. Management sets estimated future gross profit or assessment assumptions related to separate account performance using a long-term view of expected average market returns by applying a RTM approach, a commonly used industry practice. This future return approach influences the projection of fees earned, as well as other sources of estimated gross profits. Returns that are higher than expectations for a given period produce higher than expected account balances, increase the fees earned resulting in higher expected future gross profits and lower DAC amortization for the period. The opposite occurs when returns are lower than expected. In applying this approach to develop estimates of future returns, it is assumed that the market will return to an average gross long-term return estimate, developed with reference to historical long-term equity market performance. Management has set limitations as to maximum and minimum future rate of return assumptions, as well as a limitation on the duration of use of these maximum or minimum rates of return. As of December 31, 2021, the average gross short-term and long-term annual return estimate on variable and interest-sensitive life insurance and variable annuities was 7.0% (5.8% net of product weighted average Separate Accounts fees), and the gross maximum and minimum short-term annual rate of return limitations were 15.0% (13.8% net of product weighted average Separate Accounts fees) and 0.0% (-1.2% net of product weighted average Separate Accounts fees), respectively. The maximum duration over which these rate limitations may be applied is five years. This approach will continue to be applied in future periods. These assumptions of long-term growth are subject to assessment of the reasonableness of resulting estimates of future return assumptions. In addition, projections of future mortality assumptions related to variable and interest-sensitive life products are based on a long-term average of actual experience. This assumption is updated periodically to reflect recent experience as it emerges. Improvement of life mortality in future periods from that currently projected would result in future deceleration of DAC amortization. Conversely, deterioration of life mortality in future periods from that currently projected would result in future acceleration of DAC amortization. Other significant assumptions underlying gross profit estimates for UL and investment type products relate to contract persistency and General Account investment spread. DAC associated with traditional life policies are amortized in proportion to anticipated premiums. Assumptions as to anticipated premiums are estimated at the date of policy issue and are consistently applied during the life of the contracts. Deviations from estimated experience are reflected in income (loss) in the period such deviations occur. For these contracts, the amortization periods generally are for the total life of the policy. DAC related to these policies are subject to recoverability testing as part of the Company’s premium deficiency testing. If a premium deficiency exists, DAC are reduced by the amount of the deficiency or to zero through a charge to current period earnings (loss). If the deficiency exceeds the DAC balance, the reserve for future policy benefits is increased by the excess, reflected in earnings (loss) in the period such deficiency occurs. For some products, policyholders can elect to modify product benefits, features, rights or coverages that occur by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. These transactions are known as internal replacements. If such modification substantially changes the contract, the associated DAC is written off immediately through income and any new deferrable costs associated with the replacement contract are deferred. If the modification does not substantially change the contract, the DAC amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed. |
Reinsurance | Reinsurance For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under reinsurance agreements do not discharge the Company’s obligations as the primary insurer. The Company reviews all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying contracts is considered the net cost of reinsurance at the inception of the reinsurance agreement. The net cost of reinsurance is recorded as an adjustment to DAC and recognized as a component of other expenses on a basis consistent with the way the acquisition costs on the underlying reinsured contracts would be recognized. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are recorded as premiums ceded (assumed); and amounts due from reinsurers (amounts due to reinsurers) are established. Assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the reinsurance agreement. In the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, reinsurance recoverable balances could become uncollectible. In such instances, reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance. Premiums, policy charges and fee income, and policyholders’ benefits include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other revenues. If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabilities and deposits made are included within other assets. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other income or other operating costs and expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other expenses, as appropriate. |
Policyholders' Account Balances and Future Policy Benefits | Policyholders’ Account Balances and Future Policy Benefits Policyholders’ account balances relate to contracts or contract features where the Company has no significant insurance risk. This liability represents the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. For traditional life insurance policies, future policy benefit liabilities are estimated using a net level premium method on the basis of actuarial assumptions as to mortality, persistency and interest established at policy issue. Assumptions established at policy issue as to mortality and persistency are based on the Company’s experience that, together with interest and expense assumptions, includes a margin for adverse deviation. Benefit liabilities for traditional annuities during the accumulation period are equal to accumulated policyholders’ fund balances and, after annuitization, are equal to the present value of expected future payments. Interest rates used in establishing such liabilities range from 3.5% to 4.5% of life insurance liabilities and a rate of 0.25% for retained annuity liabilities. Liabilities for unpaid claims and claim adjustment expenses are established for the Company’s employee benefits products which include the following Group products: long-term and short-term disability, life insurance, vision, dental, critical Illness, and accident. Unpaid claim and claim adjustment expenses consist of (i) claim reserves for known claims that are unpaid as of the balance sheet date; (ii) Incurred But Not Reported reserves for claims where the insured event occurred but has not yet been reported to the Company or the insured has not yet satisfied elimination period to be eligible for the benefits; and (iii) claim adjustment expense reserves for settling the claim run-out. The Company determines Incurred But Not Reported reserves and reviews the claim reserves for the long-term disability claims provided by a reinsurer managing the claims on the Company’s behalf. The claim adjustment expense reserves are set based on the Company’s anticipated cost associated with claim administration expenses on the run-out of business. For long-term disability (“LTD”) the claim reserves for the reported claims are calculated as the present value of the net monthly LTD benefits (Social Security and other offsets may be estimated if unknown) and the best estimate probabilities of the claimant remaining disabled for a given benefit payment which are based on a termination rates table adjusted for experience. Should the offsets be estimated, they are estimated using the claimant’s salary, duration of disability and the probability of the offset award. The disability termination rates vary based on the insured’s age at disability, gender, elimination period, the duration of disability, social security status and the number of months remaining in the benefit period. The rates account for the probabilities of both recovery and death. The reserves vary with plan provisions such as monthly benefit, offsets, own occupation period, benefit duration, cost of living adjustment (“COLA”), and minimum and maximum benefits. The discount rate assumptions for these liabilities are set annually and are based on projected investment returns for the asset portfolios. The interest rate is locked in for each claimant based on the year of disability. For long-term disability, critical illness, and group accident the incurred but not reported reserves are determined using the expected loss ratio method, where the expected loss ratio is applied to the premiums to determine ultimate liabilities. For dental and vision the incurred but not reported reserves are determined using completion factors, where these factors complete paid-to-date claims to the ultimate liability based on past experience. For short-term disability and group life the incurred but not reported reserves are determined using a combination of expected loss ratio and completion factor methods. The Company has issued and continues to offer certain variable annuity products with GMDB and/or contain a GMLB (collectively, the “GMxB features”) which, if elected by the policyholder after a stipulated waiting period from contract issuance, guarantees a minimum lifetime annuity based on predetermined annuity purchase rates that may be in excess of what the contract account value can purchase at then-current annuity purchase rates. This minimum lifetime annuity is based on predetermined annuity purchase rates applied to a GMIB base. Reserves for products that have GMIB features, but do not have no-lapse guarantee features, and products with GMDB features are determined by estimating the expected value of death or income benefits in excess of the projected contract accumulation value and recognizing the excess over the estimated life based on expected assessments (i.e., benefit ratio). The liability equals the current benefit ratio multiplied by cumulative assessments recognized to date, plus interest, less cumulative excess payments to date. These reserves are recorded within future policy benefits and other policyholders’ liabilities. The determination of this estimated liability is based on models that involve numerous assumptions and subjective judgments, including those regarding expected market rates of return and volatility, contract surrender and withdrawal rates, mortality experience, and, for contracts with the GMIB feature, GMIB election rates. Assumptions regarding separate account performance used for purposes of this calculation are set using a long-term view of expected average market returns by applying a RTM approach, consistent with that used for DAC amortization. There can be no assurance that actual experience will be consistent with management’s estimates. For products that have a GMIB feature with no-lapse guarantee rider (“GMIBNLG”), the GMIBNLG is considered an embedded derivative and are discussed further under (“Embedded and Freestanding Insurance Derivatives”). After the initial establishment of reserves, premium deficiency and loss recognition tests are performed each period end using best estimate assumptions as of the testing date without provisions for adverse deviation. When the liabilities for future policy benefits plus the present value of expected future gross premiums for the aggregate product group are insufficient to provide for expected future policy benefits and expenses for that line of business (i.e., reserves net of any DAC asset), DAC would first be written off and thereafter, if required, a premium deficiency reserve would be established by a charge to earnings. Premium deficiency reserves are recorded for the group single premium annuity business, certain interest-sensitive life contracts, structured settlements, individual disability income, major medical, and group business. At December 31, 2021, the Company established premium deficiency reserves of $10 million due to higher losses on our employee benefits products. The Company had no premium deficiency reserves at December 31, 2020. Additionally, in certain instances the policyholder liability for a particular line of business may not be deficient in the aggregate to trigger loss recognition, but the pattern of earnings may be such that profits are expected to be recognized in earlier years followed by losses in later years. This pattern of profits followed by losses has been exhibited in our VISL business and is generated by the cost structure of the product or secondary guarantees in the contract. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges. If needed, we accrue for these PFBL using a dynamic approach that changes over time as the projection of future losses change. As of December 31, 2021, no PFBL reserve was required. URR primarily relates to the variable and universal life products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and are generally amortized over the expected life of the contract in proportion to the product’s estimated gross profits, consistent with DAC. As a member of the FHLB, the Company has access to collateralized borrowings. Collateralized borrowings require the Company to pledge qualified mortgage-backed assets and/or government securities as collateral, and are reported in policyholders’ account balances in the balance sheets. The Company had no collateralized borrowings outstanding at December 31, 2021 or 2020. |
Embedded and Freestanding Insurance Derivatives | Embedded and Freestanding Insurance Derivatives Reserves for products considered either embedded or freestanding derivatives are measured at estimated fair value separately from the host variable annuity product, with changes in estimated fair value reported in net derivative gains (losses). The estimated fair values of these derivatives are determined based on the present value of projected future benefits minus the present value of projected future fees attributable to the guarantee. The projections of future benefits and future fees require capital markets and actuarial assumptions, including expectations concerning policyholder behavior. A risk-neutral valuation methodology is used under which the cash flows from the guarantees are projected under multiple capital market scenarios using observable risk-free rates. Changes in the fair value of embedded and freestanding derivatives are reported in net derivative gains (losses). Embedded derivatives in direct contracts are reported in future policyholders’ benefits and other policyholders’ liabilities at fair value in the balance sheets. Embedded derivatives fair values are determined based on the present value of projected future benefits minus the present value of projected future fees. At policy inception, a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits is attributed to the embedded derivative. The percentage of fees included in the fair value measurement is locked-in at inception. Fees above those amounts represent “excess” fees and are reported in policy charges and fee income. |
Separate Accounts | Separate Accounts Generally, Separate Accounts established under Arizona Insurance Law are not chargeable with liabilities that arise from any other business of the Company. Separate Accounts assets are subject to General Account claims only to the extent Separate Accounts assets exceed separate accounts liabilities. Assets and liabilities of the Separate Account represent the net deposits and accumulated net investment earnings (loss) less fees, held primarily for the benefit of policyholders, and for which the Company does not bear the investment risk. Separate Accounts assets and liabilities are shown on separate lines in the balance sheets. Assets held in Separate Accounts are reported at quoted market values or, where quoted values are not readily available or accessible for these securities, their fair value measures most often are determined through the use of model pricing that effectively discounts 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. Investment performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to policyholders of such Separate Accounts are offset within the same line in the statements of income (loss). Deposits to Separate Accounts are reported as increases in Separate Accounts assets and liabilities and are not reported in the statements of income (loss). Mortality, policy administration and surrender charges on all policies including those funded by Separate Accounts are included in revenues. The Company reports the General Account’s interests in Separate Accounts as trading securities, at fair value in the balance sheets. |
Income Taxes | Income Taxes The Company files as part of a consolidated Federal income tax return. The Company provides for federal and state income taxes currently payable, as well as those deferred due to temporary differences between the financial reporting and tax bases of assets and liabilities. Current federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. Deferred income tax assets and liabilities are recognized based on the difference between financial statement carrying amounts and income tax bases of assets and liabilities using enacted income tax rates and laws. Valuation allowances are established when management determines, based on available information, that it is more likely than not that deferred tax assets will not be realized. Under accounting for uncertainty in income taxes guidance, the Company determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. Tax positions are then measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. |
Fair Value Measurement | 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. 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 also are 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 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Adoption of New Accounting Pronouncements Description Effect on the Financial Statement or Other Significant Matters ASU 2016-13 : Financial Instruments—Credit Losses (Topic 326), as clarified and amended by ASU 2018-19: Codification Improvements to Topic 326, Financial Instruments—Credit Losses, ASU 2019-04: Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-05: Financial Instruments—Credit Losses (Topic 326) Targeted Transition Relief, ASU 2019-11: Codification Improvements to Topic 326, Financial Instruments-Credit Losses ASU 2016-13 contains new guidance which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for AFS debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2019-05 provides entities that have instruments within the scope of Subtopic 326-20 an option to irrevocably elect the fair value option on an instrument-by-instrument basis upon adoption of Topic 326. On January 1, 2020, the Company adopted the new standard and completed implementation of its updated CECL models, processes and controls related to the identified financial assets that fall within the scope of the new standard. Upon adoption, the Company recorded an immaterial adjustment to reduce the opening retained earnings balance. The adjustment is primarily attributable to an increase in the allowance for credit losses associated with the Company’s commercial mortgage loan portfolios and reinsurance. Results for reporting periods beginning after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. ASU 2018-13 : Fair Value Measurement (Topic 820) This ASU improves the effectiveness of fair value disclosures in the notes to financial statements. Amendments in this ASU impact the disclosure requirements in Topic 820, including the removal, modification and addition to existing disclosure requirements. The Company elected to early adopt during 2019 the removal of disclosures relating to transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and valuation processes for Level 3 fair value measurements. The Company adopted the additional disclosures related to Level 3 fair value information on January 1, 2020. ASU 2019-12 : Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, as well as clarifying and amending existing guidance. On January 1, 2021, the Company adopted the new accounting standards update. The new guidance was applied either on a retrospective, modified retrospective or prospective basis based on the items to which the amendments relate. The adoption did not have a material impact on the Company’s financial position, results of operations and cash flows as of the adoption date. Future Adoption of New Accounting Pronouncements Description Effective Date and Method of Adoption Effect on the Financial Statement or Other Significant Matters ASU 2018-12 : Financial Services - Insurance (Topic 944); ASU 2020-11: Financial Services - Insurance (Topic 944): Effective Date and Early Application Description Effective Date and Method of Adoption Effect on the Financial Statement or Other Significant Matters This ASU provides targeted improvements to existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance entity. The ASU primarily impacts four key areas, including: 1. Measurement of the liability for future policy benefits for traditional and limited payment contracts. The ASU requires companies to review, and if necessary, update cash flow assumptions at least annually for non-participating traditional and limited-payment insurance contracts. The ASU also prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts. 2. Measurement of MRBs. MRBs, as defined under the ASU, will encompass certain GMxB features associated with variable annuity products and other general account annuities with other than nominal market risk. 3. Amortization of deferred acquisition costs. The ASU simplifies the amortization of deferred acquisition costs and other balances amortized in proportion to premiums, gross profits, or gross margins, requiring such balances to be amortized on a constant level basis over the expected term of the contracts. 4. Expanded footnote disclosures. The ASU requires additional disclosures including information about significant inputs, judgements, assumptions and methods used in measurement In November 2020, the FASB issued ASU 2020-11 which deferred the effective date of the amendments in ASU 2018-12 for all insurance entities. ASU 2018-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is allowed. For the liability for future policyholder benefits for traditional and limited payment contracts, companies can elect one of two adoption methods. Companies can either elect a modified retrospective transition method applied to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or a full retrospective transition method using actual historical experience information as of contract inception. The same adoption method must be used for deferred policy acquisition costs. For MRBs, the ASU should be applied retrospectively as of the beginning of the earliest period presented. The Company continues to progress with implementation efforts and the evaluation of the impact that adoption of this guidance will have on the Company’s financial statements. Due to its extensive nature, the adoption of the ASU is expected to have a significant impact on the Company’s financial statements, as well as systems, processes and controls. Effective January 1, 2023, the new guidance will be adopted using the modified retrospective approach, except for MRBs which will use the full retrospective approach. The Company has created a governance framework and implementation plan to ensure timely adoption of the guidance. In preparation for implementation, the Company continues to refine key accounting policy decisions, modernize processes and update internal controls. These changes include modifications of actuarial valuation systems, data sourcing, analytical procedures and reporting processes. The impact on total equity of applying this ASU is estimated to be less than the current amount of reported AOCI as of December 31, 2021. The impact on total equity is mostly driven by the DAC and URR updates to amortize DAC and URR on a constant level basis, remove amortization associated with unrealized gains or losses, and excluding future deferrals in the calculation of the DAC and URR balances. Description Effective Date and Method of Adoption Effect on the Financial Statement or Other Significant Matters ASU2020-04 : Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting The amendments in this ASU provide optional expedients and exceptions to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. On December 15, 2021, the FASB tentatively approved deferring the sunset date of the guidance in Topic 848 to December 31, 2024. The Company is currently assessing the applicability of the optional expedients and exceptions provided under the ASU. Management is evaluating the impact that adoption of this guidance will have on the Company’s financial statements. |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Fixed Maturities by Classification | The following tables provide information relating to the Company’s fixed maturities classified as AFS. Comparative tables as of December 31, 2021 include OTTI, reported net of tax in OCI and in AOCI until realized. AFS Fixed Maturities by Classification Amortized Allowance for Credit Losses Gross Gross Fair Value (in millions) December 31, 2021: Fixed Maturities: Corporate (1) $ 2,237 $ — $ 135 $ 10 $ 2,362 U.S. Treasury, government and agency 66 — 1 1 66 States and political subdivisions 31 — 3 — 34 Asset-backed (2) 30 — — — 30 Commercial mortgage-backed 80 — — — 80 Redeemable preferred stock (3) — — — — — Total at December 31, 2021 $ 2,444 $ — $ 139 $ 11 $ 2,572 December 31, 2020: Fixed Maturities: Corporate (1) $ 2,082 $ — $ 242 $ 2 $ 2,322 U.S. Treasury, government and agency 61 — 2 — 63 States and political subdivisions 27 — 3 — 30 Asset-backed (2) 4 — 1 — 5 Commercial mortgage-backed — — — — — Redeemable preferred stock (3) 23 — 2 — 25 Total at December 31, 2020 $ 2,197 $ — $ 250 $ 2 $ 2,445 — ______________ (1) Corporate fixed maturities include both public and private issues. (2) Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities. and other asset types. (3) Effective January 1, 2021, certain preferred stock have been reclassified to other equity investments (see Note 2 of the Notes to these Financial Statements). |
Contractual Maturities of Available-for-Sale Fixed Maturities | The contractual maturities of AFS fixed maturities as of December 31, 2021 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 prepay obligations with or without call or prepayment penalties. Contractual Maturities of AFS Fixed Maturities Amortized Cost (Less Allowance for Credit Losses) Fair Value (in millions) December 31, 2021: Contractual maturities: Due in one year or less $ 44 $ 44 Due in years two through five 572 604 Due in years six through ten 860 907 Due after ten years 858 907 Subtotal 2,334 2,462 Asset-backed 30 30 Commercial mortgage-backed 80 80 Total at December 31, 2021 $ 2,444 $ 2,572 |
Proceeds and Gains (Losses) on Sales for Available-for-Sale Fixed Maturities | The following table shows proceeds from sales, gross gains (losses) from sales and credit losses for AFS fixed maturities for the years ended December 31, 2021, 2020 and 2019: Proceeds from Sales, Gross Gains (Losses) from Sales and Credit Losses for AFS Fixed Maturities Year Ended December 31, 2021 2020 2019 (in millions) Proceeds from sales $ 302 $ 153 $ 101 Gross gains on sales $ 8 $ 5 $ 1 Gross losses on sales $ (4) $ (4) $ (1) Credit losses (1) $ — $ — $ — ______________ |
AFS Fixed Maturities - Credit Loss Impairments | 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 Loss Impairments Year Ended December 31, 2021 2020 2019 (in millions) Balance, beginning of period $ 2 $ 2 $ 5 Previously recognized impairments on securities that matured, paid, prepaid or sold — — (3) Recognized impairments on securities impaired to fair value this period (1) — — — Credit losses recognized this period on securities for which credit losses were not previously recognized — — — Additional credit losses this period on securities previously impaired — — — Increases due to passage of time on previously recorded credit losses — — — Accretion of previously recognized impairments due to increases in expected cash flows (for OTTI securities 2019 and prior) — — — Balance, end of period $ 2 $ 2 $ 2 ______________ (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. |
Net Unrealized Gains (Losses) on Available-for-Sale Fixed Maturities | The tables that follow below present a roll-forward of net unrealized investment gains (losses) recognized in AOCI. Net Unrealized Gains (Losses) on AFS Fixed Maturities Net Unrealized Gains (Losses) on Investments DAC Policyholders’ Liabilities Deferred Income Tax Asset (Liability) AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses) (in millions) Balance, January 1, 2021 $ 248 $ (111) $ 37 $ (36) $ 138 Net investment gains (losses) arising during the period (114) — — — (114) Reclassification adjustment: Included in net income (loss) (4) — — — (4) Other (1) (2) — — — (2) Impact of net unrealized investment gains (losses) — 65 (9) 12 68 Net unrealized investment gains (losses) excluding credit losses 128 (46) 28 (24) 86 Net unrealized investment gains (losses) with credit losses — — — — — Balance, December 31, 2021 $ 128 $ (46) $ 28 $ (24) $ 86 Balance, January 1, 2020 $ 101 $ (53) $ 12 $ (12) $ 48 Net investment gains (losses) arising during the period 148 — — — 148 Reclassification adjustment: Included in net income (loss) (1) — — — (1) Impact of net unrealized investment gains (losses) — (58) 25 (24) (57) Net unrealized investment gains (losses) excluding credit losses 248 (111) 37 (36) 138 Net unrealized investment gains (losses) with credit losses — — — — — Balance, December 31, 2020 $ 248 $ (111) $ 37 $ (36) $ 138 Balance, January 1, 2019 $ (57) $ 48 $ (6) $ 3 $ (12) Net investment gains (losses) arising during the period 158 — — — 158 Reclassification adjustment: Included in net income (loss) — — — — — Impact of net unrealized investment gains (losses) — (101) 18 (15) (98) Net unrealized investment gains (losses) excluding credit losses 101 (53) 12 (12) 48 Net unrealized investment gains (losses) with credit losses — — — — — Balance, December 31, 2019 $ 101 $ (53) $ 12 $ (12) $ 48 ______________ (1) Effective January 1, 2021, certain preferred stock have been reclassified to other equity investments (see Note 2 of the Notes to these Consolidated Financial Statements- Investments). |
Continuous Gross Unrealized Losses for Available-for-Sale Fixed Maturities | The following tables disclose the fair values and gross unrealized losses of the 119 issues as of December 31, 2021 and the 14 issues as of December 31, 2020 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) December 31, 2021: Fixed Maturities: Corporate $ 243 $ 4 $ 111 $ 6 $ 354 $ 10 U.S. Treasury, government and agency 45 1 2 — 47 1 Total at December 31, 2021 $ 288 $ 5 $ 113 $ 6 $ 401 $ 11 December 31, 2020: Fixed Maturities: Corporate $ 52 $ 1 $ 3 $ 1 $ 55 $ 2 Total at December 31, 2020 $ 52 $ 1 $ 3 $ 1 $ 55 $ 2 |
Equity Method Investments | The following table presents the Company’s investment in 2.6 million units of AB (approximately 0.95% ownership) with a fair value of $0 million and $63 million at December 31, 2021 and 2020, respectively. The Company transferred the AB units to its parent in May 2021 as a return of capital. The Company’s investment in AB, an affiliate, is included in Other invested assets at December 31, 2020: Year Ended December 31, 2021 2020 (in millions) Balance at January 1 , $ 63 $ 63 Equity in net income (loss) 3 8 Dividends received (5) (8) Dividend to parent (61) — Balance at December 31, $ — $ 63 The tables below detail the condensed balance sheets and statements of income (loss) of AB and the Company’s equity investment and equity in income (loss) of AB. Year Ended December 31, 2021 2020 Balance Sheets: (in millions) Total Assets $ 10,510 $ 9,698 Total Liabilities 5,928 5,484 Redeemable non-controlling interest 421 102 Total Partners Capital 4,161 4,112 Total Liabilities and Partners Capital 10,510 9,698 Equitable America’s Equity investment in AB $ — $ 63 Year Ended December 31, 2021 2020 2019 Statement of Income (loss) (in millions) Total Revenues $ 4,442 $ 3,709 $ 3,518 Total Expenses 3,225 2,801 2,695 Net Income (Loss) 1,154 862 782 Equitable America’s Equity Income (loss) of AB $ 3 $ 8 $ 7 |
Net Investment Income (Loss) | The following table breaks out net investment income (loss) by asset category: Year Ended December 31, 2021 2020 2019 (in millions) Fixed maturities $ 83 $ 74 $ 61 Mortgage loans on real estate 1 1 1 Other equity investments 3 — — Policy loans 3 3 3 Equity in income (loss) from AB 3 8 7 Other investment income — — 2 Gross investment income (loss) 93 86 74 Investment expenses (3) (3) (3) Net investment income (loss) $ 90 $ 83 $ 71 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments by Category | The tables below present quantitative disclosures about the Company’s derivative instruments, including those embedded in other contracts required to be accounted for as derivative instruments: The following table presents the gross notional amount and estimated fair value of the Company’s derivatives: Derivative Instruments by Category December 31, 2021 December 31, 2020 Fair Value Fair Value Notional Derivative Assets Derivative Notional Derivative Assets Derivative (in millions) Derivatives: (1) Equity contracts: Futures $ 295 $ — $ — $ 278 $ — $ — Options 59 8 5 59 13 10 Interest rate contracts: Futures 120 — — — — — Other contracts: Margin — 18 — — 17 — Collateral — — 3 — — 3 Total: 474 26 8 337 30 13 Embedded derivatives: MSO and IUL indexed features (2) — — 132 — — 131 Total embedded derivatives — — 132 — — 131 Total derivative instruments $ 474 $ 26 $ 140 $ 337 $ 30 $ 144 ______________ (1) Reported in other invested assets in the balance sheets. (2) Reported in policyholders’ account balances in the balance sheets. The following table presents the effects of derivative instruments on the statements of income and comprehensive income (loss). Year Ended December 31, 2021 2020 2019 Net Derivatives Gain(Losses) (1) (in millions) Derivatives: Equity contracts: Futures $ 68 $ 25 $ 78 Options 3 3 18 Interest rate contracts: Futures 1 — — Total: 72 28 96 Embedded Derivatives: MSO and IUL indexed features (73) (44) (92) Total Embedded Derivatives (73) (44) (92) Total Derivatives $ (1) $ (16) $ 4 (1) Reported in net derivative gains (losses) in the statements of income (loss). |
Offsetting Financial Assets and Liabilities and Derivative Instruments | The following table presents information about the Company’s offsetting of financial assets and liabilities and derivative instruments as of December 31, 2021 and 2020: Offsetting of Financial Assets and Liabilities and Derivative Instruments As of December 31, 2021 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 $ 26 $ 8 $ 18 $ — $ 18 Other financial assets 1 — 1 — 1 Other invested assets $ 27 $ 8 $ 19 $ — $ 19 Liabilities: Derivative liabilities $ 8 $ 8 $ — $ — $ — Other financial liabilities 42 — 42 — 42 Other liabilities $ 50 $ 8 $ 42 $ — $ 42 ______________ (1) Financial instruments sent (held). Offsetting of Financial Assets and Liabilities and Derivative Instruments As of December 31, 2020 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 $ 30 $ 13 $ 17 $ — $ 17 Other financial instruments 65 — 65 — 65 Other invested assets $ 95 $ 13 $ 82 $ — $ 82 Liabilities: Derivative liabilities $ 13 $ 13 $ — $ — $ — Other financial liabilities 72 — 72 — 72 Other liabilities $ 85 $ 13 $ 72 $ — $ 72 ______________ (1) Financial instruments sent (held). |
DAC AND POLICYHOLDER BONUS INTE
DAC AND POLICYHOLDER BONUS INTEREST CREDITS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Charges, Insurers [Abstract] | |
Deferred Policy Acquisition Costs | Changes in the DAC asset for the years ended December 31, 2021, 2020 and 2019 were as follows: Year Ended December 31, 2021 2020 2019 (in millions) Balance, beginning of year $ 477 $ 471 $ 555 Capitalization of commissions, sales and issue expenses 122 95 108 Amortization: Impact of assumptions updates and model changes (4) (8) (39) All other (21) (23) (53) Total amortization (25) (31) (92) Change in unrealized investment gains and losses 63 (58) (100) Balance, end of year $ 637 $ 477 $ 471 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below. Fair Value Measurements as of December 31, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets: Investments: Fixed maturities, AFS: Corporate (1) $ — $ 2,351 $ 11 $ 2,362 U.S. Treasury, government and agency — 66 — 66 States and political subdivisions — 34 — 34 Asset-backed (2) — 30 — 30 Commercial mortgage-backed — 80 — 80 Redeemable preferred stock — — — — Total fixed maturities, AFS — 2,561 11 2,572 Other equity investments — 23 — 23 Other invested assets: Trading securities 1 — — 1 Options — 3 — 3 Total other invested assets 1 3 — 4 Cash equivalents 106 — — 106 Separate Accounts assets 3,384 7 — 3,391 Total Assets $ 3,491 $ 2,594 $ 11 $ 6,096 Liabilities: MSO and IUL indexed features’ liability $ — $ 132 $ — $ 132 Total Liabilities $ — $ 132 $ — $ 132 ______________ (1) Corporate fixed maturities includes both public and private issues. (2) Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types. Fair Value Measurements as of December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets: Investments: Fixed maturities, AFS: Corporate (1) $ — $ 2,308 $ 14 $ 2,322 U.S. Treasury, government and agency — 63 — 63 States and political subdivisions — 30 — 30 Asset-backed (2) — 5 — 5 Redeemable preferred stock 2 23 — 25 Total fixed maturities, AFS 2 2,429 14 2,445 Other equity investments — — — — Other invested assets: Trading securities 1 — — 1 Options — 3 — 3 Total other invested assets 1 3 — 4 Cash equivalents 128 — — 128 Separate Accounts assets 2,591 7 — 2,598 Total Assets $ 2,722 $ 2,439 $ 14 $ 5,175 Liabilities: MSO and IUL indexed features’ liability $ — $ 131 $ — $ 131 Total Liabilities $ — $ 131 $ — $ 131 ______________ (1) Corporate fixed maturities includes both public and private issues. (2) Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types. |
Reconciliation of Assets and Liabilities at Level 3 | The tables below present reconciliations for all Level 3 assets and liabilities for the years ended December 31, 2021, 2020 and 2019, respectively. Level 3 Instruments - Fair Value Measurements Corporate State and Political Subdivisions (in millions) Balance, January 1, 2021 $ 14 $ — Total gains and (losses), realized and unrealized, included in: Net income (loss) as: Net investment income (loss) — — Investment gains (losses), net — — Subtotal — — Other comprehensive income (loss) — — Purchases 1 — Sales (4) — Transfers into Level 3 (1) — — Transfers out of Level 3 (1) — — Balance, December 31, 2021 $ 11 $ — Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period. $ — $ — Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period. $ — $ — Balance, January 1, 2020 $ 10 $ — Total gains and (losses), realized and unrealized, included in: Net income (loss) as: Net investment income (loss) — — Investment gains (losses), net — — Subtotal — — Other comprehensive income (loss) — — Purchases — — Sales (1) — Transfers into Level 3 (1) 5 — Transfers out of Level 3 (1) — — Balance, December 31, 2020 $ 14 $ — Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period. $ — $ — Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period. $ — $ — Corporate State and Political Subdivisions (in millions) Balance, January 1, 2019 $ 11 $ 1 Total gains (losses), realized and unrealized, included in: Net income (loss) as: Net investment income (loss) — — Investment gains (losses), net — — Subtotal — — Other comprehensive income (loss) — — Purchases — — Sales (1) (1) Transfers into Level 3 (1) — — Transfers out of Level 3 (1) — — Balance, December 31, 2019 $ 10 $ — Balance, Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period. $ — $ — Balance, Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period. $ — $ — ____________ (1) Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values. |
Quantitative Information About Level 3 Fair Value Measurement | The following tables disclose quantitative information about Level 3 fair value measurements by category for assets and liabilities as of December 31, 2021 and 2020, respectively. Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2021 Fair Valuation Technique Significant Range Weighted Average (in millions) Assets: Investments: Fixed maturities, AFS: Corporate $ 9 Matrix pricing Spread over Benchmark 70 bps - 145 bps 104 bps Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2020 Fair Value Valuation Technique Significant Unobservable Input Range Weighted Average (in millions) Assets: Investments: Fixed maturities, AFS: Corporate $ 6 Matrix pricing model Spread over benchmark 195 bps 195 bps |
Fair Value Disclosure Financial Instruments Not Carried At Fair Value | The carrying values and fair values as of December 31, 2021 and 2020 for financial instruments not otherwise disclosed in Note 3 and Note 4 of the Notes to these Financial Statements are presented in the table below. Carrying Values and Fair Values for Financial Instruments Not Otherwise Disclosed Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) December 31, 2021: Mortgage loans on real estate $ 17 $ — $ — $ 18 $ 18 Policy loans $ 238 $ — $ — $ 292 $ 292 Policyholders’ liabilities: Investment contracts $ 120 $ — $ — $ 124 $ 124 December 31, 2020: Mortgage loans on real estate $ 17 $ — $ — $ 18 $ 18 Policy loans $ 229 $ — $ — $ 291 $ 291 Policyholders’ liabilities: Investment contracts $ 129 $ — $ — $ 142 $ 142 |
INSURANCE LIABILITIES (Tables)
INSURANCE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
GMDB and GMIB Liabilities and Other Policyholder's Liabilities | Change in Liability for Variable Annuity Contracts with GMDB and GMIB Features and No NLG Feature Year Ended December 31, 2021, 2020 and 2019 GMDB GMIB Direct Ceded Direct Ceded (in millions) Balance, January 1, 2019 $ 5 $ (5) $ 2 $ (2) Paid guarantee benefits — — — — Other changes in reserve — — — — Balance, December 31, 2019 5 (5) 2 (2) Paid guarantee benefits — — — — Other changes in reserve (1) 1 (1) 1 Balance, December 31, 2020 4 (4) 1 (1) Paid guarantee benefits — — — — Other changes in reserve 1 (1) — — Balance, December 31, 2021 $ 5 $ (5) $ 1 $ (1) |
Variable Annuity Contracts with GMDB and GMIB Features | Account Values and NAR for direct variable annuity contracts in force with GMDB and GMIB features as of December 31, 2021 are presented in the following tables by guarantee type. For contracts with the GMDB feature, the NAR in the event of death is the amount by which the GMDB feature exceeds the related Account Values. For contracts with the GMIB feature, the NAR in the event of annuitization is the amount by which the present value of the GMIB benefits exceed the related Account Values, taking into account the relationship between current annuity purchase rates and the GMIB guaranteed annuity purchase rates. Since variable annuity contracts with GMDB features may also offer GMIB guarantees in the same contract, the GMDB and GMIB amounts listed are not mutually exclusive. Direct Variable Annuity Contracts with GMDB and GMIB Features as of December 31, 2021 Guarantee Type Return of Premium Ratchet Roll-Up Combo Total (in millions, except age and interest rate) Variable annuity contracts with GMDB features Account Values invested in: General Account $ — $ — $ — $ — $ — Separate Accounts 216 56 — — 272 Total Account Values $ 216 $ 56 $ — $ — $ 272 NAR, gross (1) $ — $ — $ — $ — $ — NAR, net of amounts reinsured (1) $ — $ — $ — $ — $ — Average attained age of policyholders (in years) 59.4 61.4 N/A N/A 59.8 Percentage of policyholders over age 70 10.7 % 13.3 % N/A N/A 11.3 % Range of contractually specified interest rates N/A N/A N/A N/A N/A Variable annuity contracts with GMIB features Account Values invested in: General Account $ — $ — $ — $ — $ — Separate Accounts — — 270 — 270 Total Account Values $ — $ — $ 270 $ — $ 270 NAR, gross (1) $ — $ — $ — $ — $ — NAR, net of amounts reinsured (1) $ — $ — $ — $ — $ — Average attained age of policyholders (in years) N/A N/A 64.1 N/A 64.1 Weighted average years remaining until annuitization N/A N/A 10.0 N/A 10.0 Range of contractually specified interest rates N/A N/A — % N/A — % ____________ (1) Amounts reported for NAR are $0 as the values are less than $1 million at December 31, 2021. |
Investment in Variable Insurance Trust Mutual Funds | The following table presents the aggregate fair value of assets, by major investment category, held by Separate Accounts that support variable annuity contracts with GMDB and GMIB features. The investment performance of the assets impacts the related Account Values and, consequently, the NAR associated with the GMDB and GMIB benefits and guarantees. Because the Company’s variable annuity contracts offer both GMDB and GMIB features, GMDB and GMIB amounts are not mutually exclusive. Investment in Variable Insurance Trust Mutual Funds December 31, 2021 2020 (1) Mutual Fund Type GMDB GMIB GMDB GMIB (in millions) Equity $ 27 $ 5 $ — $ — Fixed income 6 2 — — Balanced 238 263 — — Other 1 — — — Total $ 272 $ 270 $ — $ — (1) No investment in variable insurance trust mutual funds at December 31, 2020 due to the initial offering of Retirement Cornerstone in February 2021. |
No Lapse Guarantee Liabilities | The change in the NLG liabilities, reflected in future policy benefits and other policyholders’ liabilities in the balance sheets, is summarized in the table below. 2020 Direct Liability Reinsurance Ceded Net (in millions) Balance, January 1, 2019 $ 4 $ (2) $ 2 Paid guarantee benefits — — — Other changes in reserves — — — Balance, December 31, 2019 4 (2) 2 Paid guarantee benefits — — — Other changes in reserves 2 (1) 1 Balance, December 31, 2020 6 (3) 3 Paid guarantee benefits — — — Other changes in reserves — — — Balance, December 31, 2021 $ 6 $ (3) $ 3 |
REINSURANCE (Tables)
REINSURANCE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Schedule Of Effect Of Reinsurance | The following table summarizes the effect of reinsurance: Year Ended December 31, 2021 2020 2019 (in millions) Direct premiums $ 201 $ 149 $ 113 Reinsurance assumed — 1 1 Reinsurance ceded (44) (44) (47) Premiums $ 157 $ 106 $ 67 Direct charges and fee income $ 333 $ 323 $ 307 Reinsurance ceded (58) (62) (62) Policy charges and fee income $ 275 $ 261 $ 245 Direct policyholders’ benefits $ 402 $ 360 $ 238 Reinsurance ceded (163) (176) (131) Policyholders’ benefits $ 239 $ 184 $ 107 Direct interest credited to policyholders’ account balances $ 139 $ 148 $ 154 Reinsurance ceded (57) (58) (70) Interest credited to policyholders’ account balances $ 82 $ 90 $ 84 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Summary Of Income Tax Expense (benefit) | A summary of the income tax (expense) benefit in the statements of income (loss) follows: Year Ended December 31, 2021 2020 2019 (in millions) Income tax (expense) benefit: Current (expense) benefit $ — $ 40 $ (1) Deferred (expense) benefit 5 (11) 14 Total $ 5 $ 29 $ 13 |
Schedule Of Effective Income Tax Rate Reconciliation | The sources of the difference and their tax effects are as follows: Year Ended December 31, 2021 2020 2019 (in millions) Expected income tax (expense) benefit $ 4 $ 8 $ 12 Non-taxable investment income 1 1 1 Tax settlements/uncertain tax position release — 8 Change in tax law — 12 Income tax (expense) benefit $ 5 $ 29 $ 13 |
Schedule Of Net Deferred Income Taxes | The components of the net deferred income taxes are as follows: December 31, 2021 2020 Assets Liabilities Assets Liabilities (in millions) Net operating loss and credits 24 — 7 — Reserves and reinsurance 193 — 189 — DAC — 66 — 43 Unrealized investment gains (losses) — 27 — 52 Investments — 131 — 128 Other 24 — 24 — Total $ 241 $ 224 $ 220 $ 223 |
Unrecognized Tax Benefits Reconciliation | A reconciliation of unrecognized tax benefits (excluding interest and penalties) follows: Year Ended December 31, 2021 2020 2019 (in millions) Balance at January 1, $ 1 $ 4 $ 4 Additions for tax positions of prior years — — — Reductions for tax positions of prior years — (3) — Additions for tax positions of current year — — — Settlements with tax authorities — — — Balance at December 31, $ 1 $ 1 $ 4 Unrecognized tax benefits that, if recognized, would impact the effective rate $ 1 $ 1 $ 4 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | AOCI represents cumulative gains (losses) on items that are not reflected in net income (loss). The balances as of December 31, 2021, 2020, and 2019 follow: December 31, 2021 2020 (in millions) Unrealized gains (losses) on investments $ 86 $ 138 Accumulated other comprehensive income (loss) $ 86 $ 138 |
Components of Accumulated Other Comprehensive Income (Loss), Net of Taxes | The components of OCI, net of taxes for the years ended December 31, 2021, 2020 and 2019, follow: Year Ended December 31, 2021 2020 2019 (in millions) Change in net unrealized gains (losses) on investments: Net unrealized gains (losses) arising during the period $ (90) $ 117 $ 125 (Gains) losses reclassified into net income (loss) during the period (1) (5) (1) — Net unrealized gains (losses) on investments (95) 116 125 Adjustments for policyholders’ liabilities, DAC, insurance liability loss recognition and other 43 (26) (65) Other comprehensive income (loss), net of adjustments (net of deferred income tax expense (benefit) of, $(13), $24, and $16) (52) 90 60 Other comprehensive income (loss) $ (52) $ 90 $ 60 ____________ (1) See “Reclassification adjustment” in Note 3 of the Notes to these Financial Statements. Reclassification amounts presented net of income tax expense (benefit) of $1 million, $0 million, and $0 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
UNPAID CLAIM AND CLAIM EXPENS_2
UNPAID CLAIM AND CLAIM EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Schedules of Liability for Unpaid Claims and Claims Adjustment Expense | The liability for unpaid claims and claim expenses as of December 31, 2021 and 2020 is as follows: Liability for Unpaid Claims and Claim Expenses December 31 2021 2020 (in millions) Gross Balance at January 1, 40 29 Less Reinsurance 15 12 Net Balance at January 1, 25 17 Incurred Claims (net) Related to: Current Year 139 78 Prior Year 11 (3) Total Incurred 150 75 Paid Claims (net) Related to: Current Year 101 57 Prior Year 19 10 Total Paid 120 67 Net Balance at December 31, 55 25 Add Reinsurance 23 15 Gross Balance at December 31, $ 78 $ 40 The following table reconciles the long-term disability net incurred claims development table to the liability for unpaid claims and claim expenses in the Company’s balance sheet as of December 31, 2021 and 2020: December 31, 2021 2020 (in millions) Long-Term Disability Claim Development Table, net of reinsurance Undiscounted LTD Incurred Claims, net of reinsurance $ 35 $ 22 Subtract Cumulative LTD Paid Claims, net of reinsurance (12) (7) Subtract Impact of LTD Discounting, net of reinsurance (3) (2) LTD liabilities for unpaid claim and claim expense, net of reinsurance 20 13 Unpaid Claims and Claim Expenses, net of reinsurance LTD liabilities for unpaid claim and claim expense, net of reinsurance 20 13 Other short-duration contracts, net of reinsurance 35 12 Total liabilities for unpaid claim and claim expense, net of reinsurance 55 25 Reinsurance Recoverable on unpaid claims Long-term disability 21 13 Other short-duration contracts 2 2 Total Reinsurance Recoverable 23 15 Total liability for unpaid claim and claim expense $ 78 $ 40 |
Long-Term Disability Development Tables | The table below presents incurred claims development as of December 31, 2021, net of reinsurance, cumulative claims frequency, and the total incurred but not reported liability (“IBNR”) for Equitable America’s long-term disability business: 2021 2020 2019 2018 2017 IBNR Claim Frequency (in millions) Long-term Disability Incurral Year 2017 $ 1 $ 2 $ 2 $ 2 $ 2 113 2018 4 4 4 5 191 2019 5 6 7 265 2020 9 10 371 2021 16 5 391 Cumulative LTD Incurred Claims $ 35 $ 22 $ 13 $ 7 $ 2 $ 5 The table below presents incurred claims development as of December 31, 2020, net of reinsurance, cumulative claims frequency, and total IBNR for Equitable America's long-term disability business: 2020 2019 2018 2017 IBNR Claim Frequency Long-term Disability Incurral Year 2017 $ 2 $ 2 $ 2 $ 2 113 2018 4 4 5 191 2019 6 7 265 2020 10 3 345 Cumulative LTD Incurred Claims $ 22 $ 13 $ 7 $ 2 $ 3 |
REVENUES FROM EXTERNAL CUSTOM_2
REVENUES FROM EXTERNAL CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues Disaggregated by Product | Revenue from external customers, by product, is shown in the table that follows: December 31, 2021 2020 2019 (in millions) Individual Variable Annuity Products Premiums $ — $ — $ — Fees 2 — — Others 3 3 2 Total $ 5 $ 3 $ 2 Life Insurance Products Premiums $ — $ 1 $ 1 Fees 310 284 262 Others 2 2 3 Total $ 312 $ 287 $ 266 Employee Benefit Products Premiums $ 157 $ 105 $ 66 Fees — — — Others — — 1 Total $ 157 $ 105 $ 67 Other Premiums $ — $ — $ — Fees — — — Others — — 2 Total $ — $ — $ 2 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Amortization Policy (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Average annual rate of return, gross | 7.00% |
Average annual rate of return, net | 5.80% |
Future annual rate of return, gross, maximum | 15.00% |
Future annual rate of return, net, maximum | 13.80% |
Future annual rate of return, gross, minimum | 0.00% |
Future annual rate of return, net, minimum | 1.20% |
Future annual rate of return assumption duration maximum | 5 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Policyholders’ Account Balances and Future Policy Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Liability for Future Policy Benefit, by Liability [Line Items] | ||
Premium deficiency reserve | $ 10,000,000 | $ 0 |
Annuity Liabilities | ||
Liability for Future Policy Benefit, by Liability [Line Items] | ||
Liability for policyholder contract deposits, interest rate | 0.25% | |
Minimum | ||
Liability for Future Policy Benefit, by Liability [Line Items] | ||
Percentage of life insurance liabilities calculate within traditional life interest rate range | 3.50% | |
Maximum | ||
Liability for Future Policy Benefit, by Liability [Line Items] | ||
Percentage of life insurance liabilities calculate within traditional life interest rate range | 4.50% | |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 0 | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Assumption Updates and Model Changes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Change in Accounting Estimate [Line Items] | |||||
Income (loss) from operations, before income taxes | $ (18) | $ (38) | $ (58) | ||
Net income (loss) | (13) | (9) | (45) | ||
Policy charges and fee income | 275 | 261 | 245 | ||
Policyholders’ benefits | 239 | 184 | 107 | ||
Amortization of deferred policy acquisition costs, net | 25 | 31 | 92 | ||
Assumptions Updates | |||||
Change in Accounting Estimate [Line Items] | |||||
Income (loss) from operations, before income taxes | $ 21 | $ 2 | (12) | (16) | (17) |
Net income (loss) | $ 17 | $ 2 | (9) | (13) | (14) |
Policy charges and fee income | 2 | (9) | 14 | ||
Policyholders’ benefits | 10 | (1) | (8) | ||
Amortization of deferred policy acquisition costs, net | $ 4 | $ 8 | $ 39 | ||
5-year Historical Average Over A 10-year Period | |||||
Change in Accounting Estimate [Line Items] | |||||
Interest rate assumptions | 2.25% |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) shares in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)securityloanshares | Dec. 31, 2020USD ($)loansecurity | Dec. 31, 2019USD ($) | |
Net Investment Income [Line Items] | |||
Number of unrealized loss positions | security | 119 | 14 | |
Debt securities exposure in single issuer greater than stated percentage of total investments | 1.10% | ||
Unrealized loss on available for sale securities | $ 0 | $ 1,000,000 | |
Gross unrealized losses | 6,000,000 | 1,000,000 | |
Financing receivable, allowance for credit loss, excluding accrued interest | $ 0 | 0 | |
Alliance Bernstein | |||
Net Investment Income [Line Items] | |||
Equity method investment, ownership percentage | 0.95% | ||
Alliance Bernstein | |||
Net Investment Income [Line Items] | |||
Equity method investments, shares held (in units) | shares | 2.6 | ||
Equity investment | $ 0 | 63,000,000 | $ 63,000,000 |
Fixed maturities | |||
Net Investment Income [Line Items] | |||
Accrued investment income receivable | 20,000,000 | ||
Accrued interest, written off | 0 | 0 | |
Amortized cost | 2,444,000,000 | 2,197,000,000 | |
Corporate | |||
Net Investment Income [Line Items] | |||
Debt securities exposure in single issuer of total investments | $ 27,000,000 | $ 28,000,000 | |
Debt securities exposure in single issuer of total investments, percent | 3.80% | 3.50% | |
Gross unrealized losses | $ 6,000,000 | $ 1,000,000 | |
Commercial Mortgage Loans | |||
Net Investment Income [Line Items] | |||
Accrued investment income receivable | 0 | 0 | |
Accrued interest, written off | $ 0 | $ 0 | |
Number of loans held | loan | 2 | 2 | |
Financing receivable, allowance for credit loss, excluding accrued interest | $ 0 | $ 0 | |
Financing receivable, allowance for credit loss, excluding accrued interest, period increase (decrease) | 0 | 0 | |
Commercial Mortgage Loans | Greater than 2.0x | 0% - 50% | |||
Net Investment Income [Line Items] | |||
Financing receivable, excluding accrued interest, before allowance for credit loss | 17,000,000 | 17,000,000 | |
Individually Assessed Mortgage Loans | |||
Net Investment Income [Line Items] | |||
Financing receivable, allowance for credit loss, excluding accrued interest | 0 | 0 | |
Mortgage loans foreclosure probable | 0 | 0 | |
Other Than Investment Grade | External Credit Rating, Non Investment Grade | Fixed maturities | |||
Net Investment Income [Line Items] | |||
Available-for-sale securities, amortized cost | $ 10,000,000 | $ 26,000,000 | |
Percentage of available for sale securities | 0.40% | 1.20% |
INVESTMENTS - Available-for-sal
INVESTMENTS - Available-for-sale Securities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, amortized cost | $ 2,444 | $ 2,197 | |
Fixed maturities, allowance for credit losses | 0 | 0 | |
Fixed maturities, gross unrealized gains | 139 | 250 | |
Fixed maturities, gross unrealized losses | 11 | 2 | |
Fixed maturities available for sale, at fair value | 2,572 | 2,445 | |
Amortized Cost | |||
Due in one year or less, Amortized Cost | 44 | ||
Due in years two through five, Amortized Cost | 572 | ||
Due in years six through ten, Amortized Cost | 860 | ||
Due after ten years, Amortized Cost | 858 | ||
Subtotal, Amortized Cost | 2,334 | ||
Amortized Cost | 2,444 | ||
Fair Value | |||
Due in one year or less | 44 | ||
Due in years two through five | 604 | ||
Due in years six through ten | 907 | ||
Due after ten years | 907 | ||
Subtotal | 2,462 | ||
Fair value | 2,572 | 2,445 | |
Available For Sale Fixed Maturities Proceeds Gross Gains And Gross Losses From Sales And Other Than Temporary Impairments [Abstract] | |||
Proceeds from sales | 302 | 153 | $ 101 |
Gross gains on sales | 8 | 5 | 1 |
Gross losses on sales | (4) | (4) | (1) |
Credit losses | 0 | 0 | 0 |
Fixed Maturities - Credit Loss Impairments | |||
Balance, beginning of period | 2 | 2 | 5 |
Previously recognized impairments on securities that matured, paid, prepaid or sold | 0 | 0 | 3 |
Recognized impairments on securities impaired to fair value this period | 0 | 0 | 0 |
Credit losses recognized this period on securities for which credit losses were not previously recognized | 0 | 0 | 0 |
Additional credit losses this period on securities previously impaired | 0 | 0 | 0 |
Increases due to passage of time on previously recorded credit losses | 0 | 0 | 0 |
Accretion of previously recognized impairments due to increases in expected cash flows (for OTTI securities 2019 and prior) | 0 | 0 | 0 |
Balance, end of period | 2 | 2 | $ 2 |
Corporate | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, amortized cost | 2,237 | 2,082 | |
Fixed maturities, allowance for credit losses | 0 | 0 | |
Fixed maturities, gross unrealized gains | 135 | 242 | |
Fixed maturities, gross unrealized losses | 10 | 2 | |
Fixed maturities available for sale, at fair value | 2,362 | 2,322 | |
Fair Value | |||
Fair value | 2,362 | 2,322 | |
U.S. government, agencies and authorities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, amortized cost | 66 | 61 | |
Fixed maturities, allowance for credit losses | 0 | 0 | |
Fixed maturities, gross unrealized gains | 1 | 2 | |
Fixed maturities, gross unrealized losses | 1 | 0 | |
Fixed maturities available for sale, at fair value | 66 | 63 | |
Fair Value | |||
Fair value | 66 | 63 | |
States and political subdivisions | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, amortized cost | 31 | 27 | |
Fixed maturities, allowance for credit losses | 0 | 0 | |
Fixed maturities, gross unrealized gains | 3 | 3 | |
Fixed maturities, gross unrealized losses | 0 | 0 | |
Fixed maturities available for sale, at fair value | 34 | 30 | |
Fair Value | |||
Fair value | 34 | 30 | |
Asset-backed | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, amortized cost | 30 | 4 | |
Fixed maturities, allowance for credit losses | 0 | 0 | |
Fixed maturities, gross unrealized gains | 0 | 1 | |
Fixed maturities, gross unrealized losses | 0 | 0 | |
Fixed maturities available for sale, at fair value | 30 | 5 | |
Amortized Cost | |||
Maturity, without single maturity date, Amortized cost | 30 | ||
Fair Value | |||
Without single maturity date | 30 | ||
Fair value | 30 | 5 | |
Commercial mortgage-backed | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, amortized cost | 80 | 0 | |
Fixed maturities, allowance for credit losses | 0 | 0 | |
Fixed maturities, gross unrealized gains | 0 | 0 | |
Fixed maturities, gross unrealized losses | 0 | 0 | |
Fixed maturities available for sale, at fair value | 80 | 0 | |
Amortized Cost | |||
Maturity, without single maturity date, Amortized cost | 80 | ||
Fair Value | |||
Without single maturity date | 80 | ||
Fair value | 80 | 0 | |
Redeemable preferred stock | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, amortized cost | 0 | 23 | |
Fixed maturities, allowance for credit losses | 0 | 0 | |
Fixed maturities, gross unrealized gains | 0 | 2 | |
Fixed maturities, gross unrealized losses | 0 | 0 | |
Fixed maturities available for sale, at fair value | 0 | 25 | |
Fair Value | |||
Fair value | $ 0 | $ 25 |
INVESTMENTS - Net Unrealized In
INVESTMENTS - Net Unrealized Investment (Details) - AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent - Unrealized Investment Gains Losses All Other - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Unrealized Gains (Losses) on Investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 248 | $ 101 | $ (57) |
Net investment gains (losses) arising during the period | (114) | 148 | 158 |
Included in net income (loss) | (4) | (1) | 0 |
Other (1) | (2) | ||
Impact of net unrealized investment gains (losses) | 0 | 0 | 0 |
Net unrealized investment gains (losses) excluding credit losses | 128 | 248 | 101 |
Net unrealized investment gains (losses) with credit losses | 0 | 0 | 0 |
Ending balance | 128 | 248 | 101 |
DAC | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (111) | (53) | 48 |
Impact of net unrealized investment gains (losses) | 65 | (58) | (101) |
Net unrealized investment gains (losses) excluding credit losses | (46) | (111) | (53) |
Ending balance | (46) | (111) | (53) |
Policyholders’ Liabilities | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | 37 | 12 | (6) |
Impact of net unrealized investment gains (losses) | (9) | 25 | 18 |
Net unrealized investment gains (losses) excluding credit losses | 28 | 37 | 12 |
Ending balance | 28 | 37 | 12 |
Deferred Income Tax Asset (Liability) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (36) | (12) | 3 |
Impact of net unrealized investment gains (losses) | 12 | (24) | (15) |
Net unrealized investment gains (losses) excluding credit losses | (24) | (36) | (12) |
Ending balance | (24) | (36) | (12) |
AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | 138 | 48 | (12) |
Net investment gains (losses) arising during the period | (114) | 148 | 158 |
Included in net income (loss) | (4) | (1) | 0 |
Other (1) | (2) | ||
Impact of net unrealized investment gains (losses) | 68 | (57) | (98) |
Net unrealized investment gains (losses) excluding credit losses | 86 | 138 | 48 |
Net unrealized investment gains (losses) with credit losses | 0 | 0 | 0 |
Ending balance | 86 | 138 | 48 |
Fixed maturities | DAC | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Net unrealized investment gains (losses) with credit losses | 0 | 0 | 0 |
Fixed maturities | Policyholders’ Liabilities | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Net unrealized investment gains (losses) with credit losses | 0 | 0 | 0 |
Fixed maturities | Deferred Income Tax Asset (Liability) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Net unrealized investment gains (losses) with credit losses | $ 0 | $ 0 | $ 0 |
INVESTMENTS - Fixed Maturities
INVESTMENTS - Fixed Maturities Available-for-sale (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Available For Sale Securities Continuous Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | $ 288 | $ 52 |
Less than 12 months, gross unrealized losses | 5 | 1 |
12 months or longer, fair value | 113 | 3 |
12 Months or Longer, gross unrealized Losses | 6 | 1 |
Fair value | 401 | 55 |
Gross unrealized losses | 11 | 2 |
Corporate | ||
Available For Sale Securities Continuous Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 243 | 52 |
Less than 12 months, gross unrealized losses | 4 | 1 |
12 months or longer, fair value | 111 | 3 |
12 Months or Longer, gross unrealized Losses | 6 | 1 |
Fair value | 354 | 55 |
Gross unrealized losses | 10 | $ 2 |
U.S. government, agencies and authorities | ||
Available For Sale Securities Continuous Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 45 | |
Less than 12 months, gross unrealized losses | 1 | |
12 months or longer, fair value | 2 | |
12 Months or Longer, gross unrealized Losses | 0 | |
Fair value | 47 | |
Gross unrealized losses | $ 1 |
INVESTMENTS - Equity Method Inv
INVESTMENTS - Equity Method Investments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Equity Method Investments [Roll Forward] | |||
Equity in net income (loss) | $ 3 | $ 8 | $ 7 |
Dividends received | (5) | (8) | (7) |
Alliance Bernstein | |||
Equity Method Investments [Roll Forward] | |||
Beginning of period | 63 | 63 | |
Equity in net income (loss) | 3 | 8 | 7 |
Dividends received | (5) | (8) | |
Dividend to parent | (61) | 0 | |
End of period | $ 0 | $ 63 | $ 63 |
INVESTMENTS - Equity Method I_2
INVESTMENTS - Equity Method Investments - Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | |||
Total Assets | $ 8,235 | $ 7,306 | |
Total Liabilities | 7,527 | 6,520 | |
Total Liabilities and Equity | 8,235 | 7,306 | |
Alliance Bernstein | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity investment | 0 | 63 | $ 63 |
Alliance Bernstein | |||
Schedule of Equity Method Investments [Line Items] | |||
Total Assets | 10,510 | 9,698 | |
Total Liabilities | 5,928 | 5,484 | |
Redeemable non-controlling interest | 421 | 102 | |
Total Partners Capital | 4,161 | 4,112 | |
Total Liabilities and Equity | $ 10,510 | $ 9,698 |
INVESTMENTS - Equity Method I_3
INVESTMENTS - Equity Method Investments - Statement of Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity in income (loss) from AB | $ 3 | $ 8 | $ 7 |
Alliance Bernstein | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity in income (loss) from AB | 3 | 8 | 7 |
Alliance Bernstein | |||
Schedule of Equity Method Investments [Line Items] | |||
Total Revenues | 4,442 | 3,709 | 3,518 |
Total Expenses | 3,225 | 2,801 | 2,695 |
Net income (loss) | $ 1,154 | $ 862 | $ 782 |
INVESTMENTS - Net Investment In
INVESTMENTS - Net Investment Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Investment Income [Line Items] | |||
Equity in income (loss) from AB | $ 3 | $ 8 | $ 7 |
Gross investment income (loss) | 93 | 86 | 74 |
Investment expenses | (3) | (3) | (3) |
Net investment income (loss) | 90 | 83 | 71 |
Alliance Bernstein | |||
Net Investment Income [Line Items] | |||
Equity in income (loss) from AB | 3 | 8 | 7 |
Fixed maturities | |||
Net Investment Income [Line Items] | |||
Investment income | 83 | 74 | 61 |
Mortgage loans on real estate | |||
Net Investment Income [Line Items] | |||
Investment income | 1 | 1 | 1 |
Other equity investments | |||
Net Investment Income [Line Items] | |||
Investment income | 3 | 0 | 0 |
Policy loans | |||
Net Investment Income [Line Items] | |||
Investment income | 3 | 3 | 3 |
Other | |||
Net Investment Income [Line Items] | |||
Investment income | $ 0 | $ 0 | $ 2 |
DERIVATIVES - Derivatives by Ca
DERIVATIVES - Derivatives by Category (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 474 | $ 337 |
Derivative Assets | 26 | 30 |
Derivative Liabilities | 140 | 144 |
Futures | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 295 | 278 |
Derivative Assets | 0 | 0 |
Derivative Liabilities | 0 | 0 |
Options | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 59 | 59 |
Derivative Assets | 8 | 13 |
Derivative Liabilities | 5 | 10 |
Futures | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 120 | 0 |
Derivative Assets | 0 | 0 |
Derivative Liabilities | 0 | 0 |
Margin | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 0 | 0 |
Derivative Assets | 18 | 17 |
Derivative Liabilities | 0 | 0 |
Collateral | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 0 | 0 |
Derivative Assets | 0 | 0 |
Derivative Liabilities | 3 | 3 |
Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 474 | 337 |
Derivative Assets | 26 | 30 |
Derivative Liabilities | 8 | 13 |
MSO and IUL indexed features | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 0 | 0 |
Derivative Assets | 0 | 0 |
Derivative Liabilities | 132 | 131 |
Embedded derivative | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 0 | 0 |
Derivative Assets | 0 | 0 |
Derivative Liabilities | $ 132 | $ 131 |
DERIVATIVES - Financial Stateme
DERIVATIVES - Financial Statement Impact of Derivatives By Category (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Derivatives, Fair Value [Line Items] | |||
Net derivative gains (losses) | $ (1) | $ (16) | $ 4 |
Futures | |||
Derivatives, Fair Value [Line Items] | |||
Net derivative gains (losses) | 68 | 25 | 78 |
Options | |||
Derivatives, Fair Value [Line Items] | |||
Net derivative gains (losses) | 3 | 3 | 18 |
Futures | |||
Derivatives, Fair Value [Line Items] | |||
Net derivative gains (losses) | 1 | 0 | 0 |
Derivatives | |||
Derivatives, Fair Value [Line Items] | |||
Net derivative gains (losses) | 72 | 28 | 96 |
MSO and IUL indexed features | |||
Derivatives, Fair Value [Line Items] | |||
Net derivative gains (losses) | (73) | (44) | (92) |
Embedded derivative | |||
Derivatives, Fair Value [Line Items] | |||
Net derivative gains (losses) | $ (73) | $ (44) | $ (92) |
DERIVATIVES - Narrative (Detail
DERIVATIVES - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Cash and securities collateral for derivative contract | $ 3 | $ 3 |
S&P 500, Russell 1000, NASDAQ 100 and Emerging Market Indices | ||
Derivative [Line Items] | ||
Initial margin requirements | 14 | 16 |
Us Treasury Notes Ultra Long Bonds And Euro Dollar | ||
Derivative [Line Items] | ||
Initial margin requirements | $ 3 | $ 0 |
DERIVATIVES - Offsetting of Fin
DERIVATIVES - Offsetting of Financial Assets and Liabilities and Derivative Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative assets | ||
Assets | ||
Gross Amount Recognized | $ 26 | $ 30 |
Gross Amount Offset in the Balance Sheets | 8 | 13 |
Net Amount Presented in the Balance Sheets | 18 | 17 |
Gross Amount not Offset in the Balance Sheets | 0 | 0 |
Net Amount | 18 | 17 |
Liabilities | ||
Gross Amount Recognized | 8 | 13 |
Gross Amount Offset in the Balance Sheets | 8 | 13 |
Net Amount Presented in the Balance Sheets | 0 | 0 |
Gross Amount not Offset in the Balance Sheets | 0 | 0 |
Net Amount | 0 | 0 |
Other financial instruments | ||
Assets | ||
Gross Amount Recognized | 1 | 65 |
Gross Amount Offset in the Balance Sheets | 0 | 0 |
Net Amount Presented in the Balance Sheets | 1 | 65 |
Gross Amount not Offset in the Balance Sheets | 0 | 0 |
Net Amount | 1 | 65 |
Other invested assets | ||
Assets | ||
Gross Amount Recognized | 27 | 95 |
Gross Amount Offset in the Balance Sheets | 8 | 13 |
Net Amount Presented in the Balance Sheets | 19 | 82 |
Gross Amount not Offset in the Balance Sheets | 0 | 0 |
Net Amount | 19 | 82 |
Other financial liabilities | ||
Liabilities | ||
Gross Amount Recognized | 42 | 72 |
Gross Amount Offset in the Balance Sheets | 0 | 0 |
Net Amount Presented in the Balance Sheets | 42 | 72 |
Gross Amount not Offset in the Balance Sheets | 0 | 0 |
Net Amount | 42 | 72 |
Other liabilities | ||
Liabilities | ||
Gross Amount Recognized | 50 | 85 |
Gross Amount Offset in the Balance Sheets | 8 | 13 |
Net Amount Presented in the Balance Sheets | 42 | 72 |
Gross Amount not Offset in the Balance Sheets | 0 | 0 |
Net Amount | $ 42 | $ 72 |
DAC - Rollforward of DAC Costs
DAC - Rollforward of DAC Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | |||
Balance, beginning of year | $ 477 | $ 471 | $ 555 |
Capitalization of commissions, sales and issue expenses | 122 | 95 | 108 |
Amortization: | |||
Impact of assumptions updates and model changes | (4) | (8) | (39) |
All other | (21) | (23) | (53) |
Total amortization | (25) | (31) | (92) |
Change in unrealized investment gains and losses | 63 | (58) | (100) |
Balance, end of year | $ 637 | $ 477 | $ 471 |
FAIR VALUE DISCLOSURES - Schedu
FAIR VALUE DISCLOSURES - Schedules Of Assets And Liabilities Measured On Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | $ 2,572 | $ 2,445 |
Fair Value, Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 2,572 | 2,445 |
Other equity investments | 23 | 0 |
Trading securities | 1 | 1 |
Other invested assets: | 4 | 4 |
Cash equivalents | 106 | 128 |
Separate Accounts assets | 3,391 | 2,598 |
Total Assets | 6,096 | 5,175 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total Liabilities | 132 | 131 |
Fair Value, Recurring | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 2 |
Other equity investments | 0 | 0 |
Trading securities | 1 | 1 |
Other invested assets: | 1 | 1 |
Cash equivalents | 106 | 128 |
Separate Accounts assets | 3,384 | 2,591 |
Total Assets | 3,491 | 2,722 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total Liabilities | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 2,561 | 2,429 |
Other equity investments | 23 | 0 |
Trading securities | 0 | 0 |
Other invested assets: | 3 | 3 |
Cash equivalents | 0 | 0 |
Separate Accounts assets | 7 | 7 |
Total Assets | 2,594 | 2,439 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total Liabilities | 132 | 131 |
Fair Value, Recurring | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 11 | 14 |
Other equity investments | 0 | 0 |
Trading securities | 0 | 0 |
Other invested assets: | 0 | 0 |
Cash equivalents | 0 | 0 |
Separate Accounts assets | 0 | 0 |
Total Assets | 11 | 14 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total Liabilities | 0 | 0 |
Corporate | Fair Value, Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 2,362 | 2,322 |
Corporate | Fair Value, Recurring | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Corporate | Fair Value, Recurring | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 2,351 | 2,308 |
Corporate | Fair Value, Recurring | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 11 | 14 |
U.S. Treasury, government and agency | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 66 | 63 |
U.S. Treasury, government and agency | Fair Value, Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 66 | 63 |
U.S. Treasury, government and agency | Fair Value, Recurring | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
U.S. Treasury, government and agency | Fair Value, Recurring | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 66 | 63 |
U.S. Treasury, government and agency | Fair Value, Recurring | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
States and political subdivisions | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 34 | 30 |
States and political subdivisions | Fair Value, Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 34 | 30 |
States and political subdivisions | Fair Value, Recurring | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
States and political subdivisions | Fair Value, Recurring | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 34 | 30 |
States and political subdivisions | Fair Value, Recurring | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Asset-backed | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 30 | 5 |
Asset-backed | Fair Value, Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 30 | 5 |
Asset-backed | Fair Value, Recurring | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Asset-backed | Fair Value, Recurring | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 30 | 5 |
Asset-backed | Fair Value, Recurring | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Commercial mortgage-backed | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 80 | 0 |
Commercial mortgage-backed | Fair Value, Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 80 | |
Commercial mortgage-backed | Fair Value, Recurring | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | |
Commercial mortgage-backed | Fair Value, Recurring | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 80 | |
Commercial mortgage-backed | Fair Value, Recurring | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | |
Redeemable preferred stock | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 25 |
Redeemable preferred stock | Fair Value, Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 25 |
Redeemable preferred stock | Fair Value, Recurring | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 2 |
Redeemable preferred stock | Fair Value, Recurring | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 23 |
Redeemable preferred stock | Fair Value, Recurring | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Options | Fair Value, Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Other invested assets: | 3 | 3 |
Options | Fair Value, Recurring | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Other invested assets: | 0 | 0 |
Options | Fair Value, Recurring | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Other invested assets: | 3 | 3 |
Options | Fair Value, Recurring | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Other invested assets: | 0 | 0 |
MSO and IUL indexed features’ liability | Fair Value, Recurring | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Liabilities | 132 | 131 |
MSO and IUL indexed features’ liability | Fair Value, Recurring | Level 1 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Liabilities | 0 | 0 |
MSO and IUL indexed features’ liability | Fair Value, Recurring | Level 2 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Liabilities | 132 | 131 |
MSO and IUL indexed features’ liability | Fair Value, Recurring | Level 3 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Liabilities | $ 0 | $ 0 |
FAIR VALUE DISCLOSURES - Narrat
FAIR VALUE DISCLOSURES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | |
Fair Value Inputs Assets Quantitative Information 1 [Line Items] | ||
AFS fixed maturities transferred from Level 3 to Level 2 | $ 5 | |
AFS fixed maturities transferred between Level 2 and 3 (percentage) | 0.60% | |
Level 3 | Fair Value, Nonrecurring | ||
Fair Value Inputs Assets Quantitative Information 1 [Line Items] | ||
Fair value measurements not included in quantitative information about level 3 fair value measurements | $ 8 | $ 2 |
FAIR VALUE DISCLOSURES - Fair V
FAIR VALUE DISCLOSURES - Fair Value Measurement Reconciliation For All Levels (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total gains and (losses), realized and unrealized, included in: | |||
Investment gains (losses), net | $ 4 | $ 1 | $ 0 |
Transfers into level 3 | 5 | ||
Level 3 | Corporate | |||
Total gains and (losses), realized and unrealized, included in: | |||
Beginning Balance | 14 | 10 | 11 |
Net investment income (loss) | 0 | 0 | 0 |
Investment gains (losses), net | 0 | 0 | 0 |
Subtotal | 0 | 0 | 0 |
Other comprehensive income (loss) | 0 | 0 | 0 |
Purchases | 1 | 0 | 0 |
Sales | (4) | (1) | (1) |
Transfers into level 3 | 0 | 5 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Closing Balance | 11 | 14 | 10 |
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period. | 0 | 0 | 0 |
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period. | 0 | 0 | 0 |
Level 3 | States and political subdivisions | |||
Total gains and (losses), realized and unrealized, included in: | |||
Beginning Balance | 0 | 0 | 1 |
Net investment income (loss) | 0 | 0 | 0 |
Investment gains (losses), net | 0 | 0 | 0 |
Subtotal | 0 | 0 | 0 |
Other comprehensive income (loss) | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 |
Sales | 0 | 0 | (1) |
Transfers into level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Closing Balance | $ 0 | $ 0 | $ 0 |
FAIR VALUE DISCLOSURES - Quanti
FAIR VALUE DISCLOSURES - Quantitative Information About Level 3 (Details) - Corporate - Level 3 - Matrix pricing model $ in Millions | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, fair value | $ 9 | $ 6 |
Spread over Benchmark | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, measurement input | 0.0195 | |
Spread over Benchmark | Minimum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, measurement input | 0.0070 | |
Spread over Benchmark | Maximum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, measurement input | 0.0145 | |
Spread over Benchmark | Weighted Average | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, measurement input | 0.0104 | 0.0195 |
FAIR VALUE DISCLOSURES - Carryi
FAIR VALUE DISCLOSURES - Carrying Values And Fair Values Of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Amounts [Abstract] | ||
Policy loans | $ 238 | $ 229 |
Policyholders’ liabilities: Investment contracts | 3,504 | 3,306 |
Carrying Value | ||
Consolidated Amounts [Abstract] | ||
Mortgage loans on real estate | 17 | 17 |
Policy loans | 238 | 229 |
Policyholders’ liabilities: Investment contracts | 120 | 129 |
Fair Value | ||
Consolidated Amounts [Abstract] | ||
Mortgage loans on real estate | 18 | 18 |
Policy loans | 292 | 291 |
Policyholders’ liabilities: Investment contracts | 124 | 142 |
Fair Value | Level 1 | ||
Consolidated Amounts [Abstract] | ||
Mortgage loans on real estate | 0 | 0 |
Policy loans | 0 | 0 |
Policyholders’ liabilities: Investment contracts | 0 | 0 |
Fair Value | Level 2 | ||
Consolidated Amounts [Abstract] | ||
Mortgage loans on real estate | 0 | 0 |
Policy loans | 0 | 0 |
Policyholders’ liabilities: Investment contracts | 0 | 0 |
Fair Value | Level 3 | ||
Consolidated Amounts [Abstract] | ||
Mortgage loans on real estate | 18 | 18 |
Policy loans | 292 | 291 |
Policyholders’ liabilities: Investment contracts | $ 124 | $ 142 |
INSURANCE LIABILITIES - Rollfor
INSURANCE LIABILITIES - Rollforward of Liability and Reinsurance Ceded (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
GMDB Direct | |||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross | |||
Balance, beginning of period | $ 4 | $ 5 | $ 5 |
Paid guarantee benefits | 0 | 0 | 0 |
Other changes in reserve | 1 | (1) | 0 |
Balance, end of period | 5 | 4 | 5 |
GMDB Ceded | |||
Guaranteed Minimum Death Benefit Reinsurance Ceded [Roll Forward] | |||
Balance, beginning of period | (4) | (5) | (5) |
Paid guarantee benefits | 0 | 0 | 0 |
Other changes in reserve | (1) | 1 | 0 |
Balance, end of period | (5) | (4) | (5) |
GMIB Direct | |||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross | |||
Balance, beginning of period | 1 | 2 | 2 |
Paid guarantee benefits | 0 | 0 | 0 |
Other changes in reserve | 0 | (1) | 0 |
Balance, end of period | 1 | 1 | 2 |
GMIB Ceded | |||
Guaranteed Minimum Death Benefit Reinsurance Ceded [Roll Forward] | |||
Balance, beginning of period | (1) | (2) | (2) |
Paid guarantee benefits | 0 | 0 | 0 |
Other changes in reserve | 0 | 1 | 0 |
Balance, end of period | $ (1) | $ (1) | $ (2) |
INSURANCE LIABILITIES - Variabl
INSURANCE LIABILITIES - Variable Annuity Contracts with GMDB and GMIB Features (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Net Amount at Risk by Product and Guarantee [Line Items] | ||
NAR, gross | $ 0 | |
Maximum | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
NAR, net of amounts reinsured | 1 | |
GMDB | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
General Account | 0 | |
Separate Accounts | 272 | $ 0 |
Net Amount At Risk By Product And Guarantee, Account Value | 272 | |
NAR, gross | 0 | |
NAR, net of amounts reinsured | $ 0 | |
Percentage of policyholders over age 70 | 11.30% | |
GMDB | Return of Premium | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
General Account | $ 0 | |
Separate Accounts | 216 | |
Net Amount At Risk By Product And Guarantee, Account Value | 216 | |
NAR, gross | 0 | |
NAR, net of amounts reinsured | $ 0 | |
Percentage of policyholders over age 70 | 10.70% | |
GMDB | Ratchet | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
General Account | $ 0 | |
Separate Accounts | 56 | |
Net Amount At Risk By Product And Guarantee, Account Value | 56 | |
NAR, gross | 0 | |
NAR, net of amounts reinsured | $ 0 | |
Percentage of policyholders over age 70 | 13.30% | |
GMDB | Roll-Up | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
General Account | $ 0 | |
Separate Accounts | 0 | |
Net Amount At Risk By Product And Guarantee, Account Value | 0 | |
NAR, gross | 0 | |
NAR, net of amounts reinsured | 0 | |
GMDB | Combo | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
General Account | 0 | |
Separate Accounts | 0 | |
Net Amount At Risk By Product And Guarantee, Account Value | 0 | |
NAR, gross | 0 | |
NAR, net of amounts reinsured | 0 | |
GMIB | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate Accounts | $ 270 | $ 0 |
Immediate Variable Annuity | GMDB | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Average attained age of policyholders (in years) | 59 years 9 months 18 days | |
Immediate Variable Annuity | GMDB | Return of Premium | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Average attained age of policyholders (in years) | 59 years 4 months 24 days | |
Immediate Variable Annuity | GMDB | Ratchet | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Average attained age of policyholders (in years) | 61 years 4 months 24 days | |
Immediate Variable Annuity | GMIB | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
General Account | $ 0 | |
Separate Accounts | 270 | |
Net Amount At Risk By Product And Guarantee, Account Value | 270 | |
NAR, gross | 0 | |
NAR, net of amounts reinsured | $ 0 | |
Average attained age of policyholders (in years) | 64 years 1 month 6 days | |
Weighted average years remaining until annuitization (in years) | 10 years | |
Range of contractually specified interest rates (as a percent) | 0.00% | |
Immediate Variable Annuity | GMIB | Return of Premium | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
General Account | $ 0 | |
Separate Accounts | 0 | |
Net Amount At Risk By Product And Guarantee, Account Value | 0 | |
NAR, gross | 0 | |
NAR, net of amounts reinsured | 0 | |
Immediate Variable Annuity | GMIB | Ratchet | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
General Account | 0 | |
Separate Accounts | 0 | |
Net Amount At Risk By Product And Guarantee, Account Value | 0 | |
NAR, gross | 0 | |
NAR, net of amounts reinsured | 0 | |
Immediate Variable Annuity | GMIB | Roll-Up | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
General Account | 0 | |
Separate Accounts | 270 | |
Net Amount At Risk By Product And Guarantee, Account Value | 270 | |
NAR, gross | 0 | |
NAR, net of amounts reinsured | $ 0 | |
Average attained age of policyholders (in years) | 64 years 1 month 6 days | |
Weighted average years remaining until annuitization (in years) | 10 years | |
Range of contractually specified interest rates (as a percent) | 0.00% | |
Immediate Variable Annuity | GMIB | Combo | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
General Account | $ 0 | |
Separate Accounts | 0 | |
Net Amount At Risk By Product And Guarantee, Account Value | 0 | |
NAR, gross | 0 | |
NAR, net of amounts reinsured | $ 0 |
INSURANCE LIABILITIES - Separat
INSURANCE LIABILITIES - Separate Account Investments, Hedging Programs and Variable and Interest-Sensitive Live Insurance Policies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Direct Liability | |||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross | |||
Balance, beginning of period | $ 6,000,000 | $ 4,000,000 | $ 4,000,000 |
Paid guaranteed benefits | 0 | 0 | 0 |
Other changes in reserve | 0 | 2,000,000 | 0 |
Balance, end of period | 6,000,000 | 6,000,000 | 4,000,000 |
Reinsurance Ceded | |||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross | |||
Balance, beginning of period | (3,000,000) | (2,000,000) | (2,000,000) |
Paid guaranteed benefits | 0 | 0 | 0 |
Other changes in reserve | 0 | (1,000,000) | 0 |
Balance, end of period | (3,000,000) | (3,000,000) | (2,000,000) |
Net | |||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross | |||
Balance, beginning of period | 3,000,000 | 2,000,000 | 2,000,000 |
Paid guaranteed benefits | 0 | 0 | 0 |
Other changes in reserve | 0 | 1,000,000 | 0 |
Balance, end of period | 3,000,000 | 3,000,000 | $ 2,000,000 |
Variable Insurance Trust Mutual Funds | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | 0 | ||
GMDB | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | 272,000,000 | 0 | |
GMDB | Equity | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | 27,000,000 | 0 | |
GMDB | Fixed income | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | 6,000,000 | 0 | |
GMDB | Balanced | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | 238,000,000 | 0 | |
GMDB | Other | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | 1,000,000 | 0 | |
GMIB | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | 270,000,000 | 0 | |
GMIB | Equity | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | 5,000,000 | 0 | |
GMIB | Fixed income | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | 2,000,000 | 0 | |
GMIB | Balanced | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | 263,000,000 | 0 | |
GMIB | Other | |||
Fair Value, Separate Account Investment [Line Items] | |||
Separate Accounts | $ 0 | $ 0 |
REINSURANCE - Effect of Reinsur
REINSURANCE - Effect of Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reinsurance Disclosures [Abstract] | |||
Direct premiums | $ 201 | $ 149 | $ 113 |
Reinsurance assumed | 0 | 1 | 1 |
Reinsurance ceded | (44) | (44) | (47) |
Premiums | 157 | 106 | 67 |
Direct charges and fee income | 333 | 323 | 307 |
Reinsurance ceded | (58) | (62) | (62) |
Policy charges and fee income | 275 | 261 | 245 |
Direct policyholders’ benefits | 402 | 360 | 238 |
Reinsurance ceded | (163) | (176) | (131) |
Policyholders’ benefits | 239 | 184 | 107 |
Direct interest credited to policyholders’ account balances | 139 | 148 | 154 |
Reinsurance ceded | (57) | (58) | (70) |
Interest credited to policyholders’ account balances | $ 82 | $ 90 | $ 84 |
REINSURANCE - Narrative (Detail
REINSURANCE - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Variable Universal Term Life Insurance Single Life | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Reinsurance retention policy, amount retained | $ 4 |
Variable Universal Term Life Insurance Single Life | Equitable Financial Life Insurance Company | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Policyholder contract deposits ceded | 20 |
Variable Universal Term Life Insurance Joint Life | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Reinsurance retention policy, amount retained | 6 |
Variable Universal Term Life Insurance Joint Life | Equitable Financial Life Insurance Company | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Policyholder contract deposits ceded | $ 25 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Millions | May 14, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Dividends | $ 61 | |||
Equitable Financial Services, LLC (EFS) | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, expenses from transactions with related party | 132 | $ 133 | $ 133 | |
Equitable Network, LLC | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, expenses from transactions with related party | 136 | 90 | 106 | |
Equitable Distributors, LLC | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, expenses from transactions with related party | 59 | 55 | 52 | |
Alliance Bernstein | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, expenses from transactions with related party | $ 2 | 2 | 2 | |
EQ AZ Life Re | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Reinsurance, quota, percentage | 90.00% | |||
Ceded premiums | $ 7 | $ 6 | $ 5 | |
Equitable Holdings Inc | Affiliated Entity | Letter of Credit | ||||
Related Party Transaction [Line Items] | ||||
Long-term line of credit | $ 45 | |||
Alliance Bernstein | Equitable Financial Services, LLC (EFS) | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Dividends | $ 61 |
SHARE-BASED COMPENSATION PROG_2
SHARE-BASED COMPENSATION PROGRAMS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |||
Compensation costs | $ 3 | $ 3 | $ 3 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Current (expense) benefit | $ 0 | $ 40 | $ (1) |
Deferred (expense) benefit | 5 | (11) | 14 |
Total | $ 5 | $ 29 | $ 13 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Effective Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Effective Income Tax Rate Reconciliation | |||
Expected income tax (expense) benefit | $ 4 | $ 8 | $ 12 |
Non-taxable investment income | 1 | 1 | 1 |
Tax settlements/uncertain tax position release | 0 | 8 | |
Change in tax law | 0 | 12 | |
Total | $ 5 | $ 29 | $ 13 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | Mar. 27, 2020 | Dec. 31, 2020 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | |||
CARES ACT, income benefit | $ 12 | ||
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 23 | $ 100 | |
Tax Year 2010 Through 2013 | |||
Income Tax Examination [Line Items] | |||
Unrecognized tax benefits, increase resulting from settlements with taxing authorities | $ 8 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Components of Deferred Tax Assets [Abstract] | ||
Net operating loss and credits | $ 24 | $ 7 |
Reserves and reinsurance | 193 | 189 |
Other | 24 | 24 |
Total | 241 | 220 |
Components of Deferred Tax Liabilities [Abstract] | ||
DAC | 66 | 43 |
Unrealized investment gains (losses) | 27 | 52 |
Investments | 131 | 128 |
Total | $ 224 | $ 223 |
INCOME TAXES - Unrecognized Def
INCOME TAXES - Unrecognized Deferred Tax Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at January 1, | $ 1 | $ 4 | $ 4 |
Additions for tax positions of prior years | 0 | 0 | 0 |
Reductions for tax positions of prior years | 0 | (3) | 0 |
Additions for tax positions of current year | 0 | 0 | 0 |
Settlements with tax authorities | 0 | 0 | 0 |
Balance at December 31, | 1 | 1 | 4 |
Unrecognized tax benefits that, if recognized, would impact the effective rate | $ 1 | $ 1 | $ 4 |
EQUITY - Components of AOCI (De
EQUITY - Components of AOCI (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Equity [Abstract] | ||
Unrealized gains (losses) on investments | $ 86 | $ 138 |
Accumulated other comprehensive income (loss) | $ 86 | $ 138 |
EQUITY - Changes in AOCI (Detai
EQUITY - Changes in AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other Comprehensive Income (Loss), Tax [Abstract] | |||
Net unrealized gains (losses) arising during the period | $ (90) | $ 117 | $ 125 |
(Gains) losses reclassified into net income (loss) during the period | (5) | (1) | 0 |
Net unrealized gains (losses) on investments | (95) | 116 | 125 |
Adjustments for policyholders’ liabilities, DAC, insurance liability loss recognition and other | 43 | (26) | (65) |
Other comprehensive income (loss), net of adjustments (net of deferred income tax expense (benefit) of, $(13), $24, and $16) | (52) | 90 | 60 |
Other comprehensive income (loss) | (52) | 90 | 60 |
Other Comprehensive Income (Loss), Tax, Parenthetical Disclosures [Abstract] | |||
Other comprehensive income (loss), deferred income tax expense (benefit) | (13) | 24 | 16 |
Unrealized gains (losses) on investments | |||
Other Comprehensive Income (Loss), Tax [Abstract] | |||
Reclassification from AOCI, current period, tax | $ 1 | $ 0 | $ 0 |
INSURANCE GROUP STATUTORY FIN_2
INSURANCE GROUP STATUTORY FINANCIAL INFORMATION - Narrative (Details) - USD ($) shares in Millions, $ in Millions | May 14, 2021 | Apr. 13, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | |||||
Statutory net income (loss) | $ (44) | $ (20) | $ (30) | ||
Statutory surplus, capital stock and asset valuation reserve | 338 | $ 457 | |||
Securities on deposit with such government or state agencies | 7 | ||||
Alliance Bernstein | |||||
Related Party Transaction [Line Items] | |||||
Dividend shares (in units) | 2.6 | ||||
Return of capital | $ 61 | ||||
Revolving Credit Facility | Holdings Revolving Credit Facility | EQ AZ Life Re | |||||
Related Party Transaction [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 45 |
UNPAID CLAIM AND CLAIM EXPENS_3
UNPAID CLAIM AND CLAIM EXPENSES - Rollforward of the Unpaid Claims and Claim Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Liability for Unpaid Claims and Claims Adjustment Expense, [Roll Forward] | ||
Gross balance | $ 40 | $ 29 |
Less Reinsurance | 15 | 12 |
Net balance | 25 | 17 |
Incurred Claims (net) Related to: | ||
Current Year | 139 | 78 |
Prior Year | 11 | (3) |
Total Incurred | 150 | 75 |
Paid Claims (net) Related to: | ||
Current Year | 101 | 57 |
Prior Year | 19 | 10 |
Total Paid | 120 | 67 |
Net balance | 55 | 25 |
Add Reinsurance | 23 | 15 |
Gross balance | $ 78 | $ 40 |
UNPAID CLAIM AND CLAIM EXPENS_4
UNPAID CLAIM AND CLAIM EXPENSES - Cumulative Claims Paid and Incurred Claims (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Claims Development [Line Items] | ||
IBNR | $ 5 | $ 3 |
2021 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 35 | |
2020 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 22 | 22 |
2019 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 13 | 13 |
2018 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 7 | 7 |
2017 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 2 | 2 |
2017 | ||
Claims Development [Line Items] | ||
Claim Frequency | 113 | 113 |
2017 | 2021 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 1 | |
2017 | 2020 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 2 | 2 |
2017 | 2019 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 2 | 2 |
2017 | 2018 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 2 | 2 |
2017 | 2017 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 2 | 2 |
2018 | ||
Claims Development [Line Items] | ||
Claim Frequency | 191 | 191 |
2018 | 2021 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 4 | |
2018 | 2020 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 4 | 4 |
2018 | 2019 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 4 | 4 |
2018 | 2018 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 5 | 5 |
2019 | ||
Claims Development [Line Items] | ||
Claim Frequency | 265 | 265 |
2019 | 2021 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 5 | |
2019 | 2020 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 6 | 6 |
2019 | 2019 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 7 | 7 |
2020 | ||
Claims Development [Line Items] | ||
IBNR | 3 | |
Claim Frequency | 371 | 345 |
2020 | 2021 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 9 | |
2020 | 2020 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 10 | $ 10 |
2021 | ||
Claims Development [Line Items] | ||
IBNR | 5 | |
Claim Frequency | 391 | |
2021 | 2021 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | $ 16 |
UNPAID CLAIM AND CLAIM EXPENS_5
UNPAID CLAIM AND CLAIM EXPENSES - Net Liability (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Undiscounted Incurred Claims, net of reinsurance | $ 150 | $ 75 | |
Subtract Cumulative LTD Paid Claims, net of reinsurance | (120) | (67) | |
Liability for unpaid claim and claim expense, net of reinsurance | 55 | 25 | $ 17 |
Reinsurance Recoverable on unpaid claims | 23 | 15 | 12 |
Liability for unpaid claim and claim expense | 78 | 40 | $ 29 |
Long-Term Disability | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Undiscounted Incurred Claims, net of reinsurance | 35 | 22 | |
Subtract Cumulative LTD Paid Claims, net of reinsurance | (12) | (7) | |
Subtract Impact of LTD Discounting, net of reinsurance | (3) | (2) | |
Liability for unpaid claim and claim expense, net of reinsurance | 20 | 13 | |
Reinsurance Recoverable on unpaid claims | 21 | 13 | |
Other short-duration contracts | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Liability for unpaid claim and claim expense, net of reinsurance | 35 | 12 | |
Reinsurance Recoverable on unpaid claims | $ 2 | $ 2 |
REVENUES FROM EXTERNAL CUSTOM_3
REVENUES FROM EXTERNAL CUSTOMERS - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total Revenues | $ 535 | $ 443 | $ 396 |
Individual Variable Annuity Products | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 5 | 3 | 2 |
Individual Variable Annuity Products | Premiums | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 0 | 0 | 0 |
Individual Variable Annuity Products | Fees | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 2 | 0 | 0 |
Individual Variable Annuity Products | Others | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 3 | 3 | 2 |
Life Insurance Products | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 312 | 287 | 266 |
Life Insurance Products | Premiums | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 0 | 1 | 1 |
Life Insurance Products | Fees | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 310 | 284 | 262 |
Life Insurance Products | Others | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 2 | 2 | 3 |
Employee Benefit Products | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 157 | 105 | 67 |
Employee Benefit Products | Premiums | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 157 | 105 | 66 |
Employee Benefit Products | Fees | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 0 | 0 | 0 |
Employee Benefit Products | Others | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 0 | 0 | 1 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 0 | 0 | 2 |
Other | Premiums | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 0 | 0 | 0 |
Other | Fees | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | 0 | 0 | 0 |
Other | Others | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues | $ 0 | $ 0 | $ 2 |
SCHEDULE I - SUMMARY OF INVES_2
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES (Details) $ in Millions | Dec. 31, 2021USD ($) |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | $ 2,739 |
Fair Value | 2,924 |
Carrying Value | 2,869 |
U.S. government, agencies and authorities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 66 |
Fair Value | 66 |
Carrying Value | 66 |
State, municipalities and political subdivisions | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 31 |
Fair Value | 34 |
Carrying Value | 34 |
Public utilities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 292 |
Fair Value | 303 |
Carrying Value | 303 |
All other corporate bonds | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,945 |
Fair Value | 2,059 |
Carrying Value | 2,059 |
Asset-backed | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 30 |
Fair Value | 30 |
Carrying Value | 30 |
Commercial mortgage-backed | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 80 |
Fair Value | 80 |
Carrying Value | 80 |
Fixed maturities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 2,444 |
Fair Value | 2,572 |
Carrying Value | 2,572 |
Mortgage loans on real estate | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 17 |
Fair Value | 18 |
Carrying Value | 17 |
Policy loans | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 238 |
Fair Value | 292 |
Carrying Value | 238 |
Other equity investments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 21 |
Fair Value | 23 |
Carrying Value | 23 |
Other invested assets | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 19 |
Fair Value | 19 |
Carrying Value | $ 19 |
SCHEDULE IV - REINSURANCE (Deta
SCHEDULE IV - REINSURANCE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Life insurance in-force | |||
Gross Amount | $ 93,301 | $ 82,162 | $ 76,120 |
Ceded to Other Companies | 18,697 | 22,785 | 24,343 |
Assumed from Other Companies | 0 | 766 | 420 |
Net Amount | $ 74,604 | $ 60,143 | $ 52,197 |
Percentage of Amount Assumed to Net | 0.00% | 1.30% | 0.80% |
Premiums: | |||
Gross Amount | $ 201 | $ 149 | $ 113 |
Ceded to Other Companies | 44 | 44 | 47 |
Assumed from Other Companies | 0 | 1 | 1 |
Premiums | $ 157 | $ 106 | $ 67 |
Percentage of Amount Assumed to Net | 0.00% | 0.90% | 1.50% |
Life insurance and annuities | |||
Premiums: | |||
Gross Amount | $ 85 | $ 77 | $ 71 |
Ceded to Other Companies | 24 | 30 | 37 |
Assumed from Other Companies | 0 | 1 | 1 |
Premiums | $ 61 | $ 48 | $ 35 |
Percentage of Amount Assumed to Net | 0.00% | 3.00% | 3.10% |
Accident and health | |||
Premiums: | |||
Gross Amount | $ 116 | $ 72 | $ 42 |
Ceded to Other Companies | 20 | 14 | 10 |
Assumed from Other Companies | 0 | 0 | 0 |
Premiums | $ 96 | $ 58 | $ 32 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |