United States securities and exchange commission logo
April 21, 2021
Andrew Bowden
Executive Vice President, General Counsel and Secretary
Jackson Financial Inc.
1 Corporate Way
Lansing, MI 48951
Re: Jackson Financial
Inc.
Amendment No. 1 to
Form 10
Filed April 16,
2021
File No. 001-40274
Dear Mr. Bowden:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response and any amendment you may file in
response to these
comments, we may have additional comments. Unless we note otherwise, our
references to prior
comments are to comments in our April 5, 2021 letter.
Amendment No. 1 to Form 10 Filed April 16, 2021
Exhibit 99.1
Risk Factors
Legal and Regulatory Risks
Legal and regulatory investigations and actions are increasingly common
in our industry and
could result in a material adverse effect..., page 70
1. We note your disclosure
related to allegations made by your former Chief Executive
Officer and former
Chief Financial Officer "relating to certain accounting and financial
reporting matters."
Please expand your disclosure to briefly describe the allegations
raised, and that you
investigated, or advise. Further, please provide similar disclosure and
describe the
circumstances resulting in the former officers' separation under Executive
Compensation
Separation Agreements, on page 269.
Andrew Bowden
FirstName LastNameAndrew Bowden
Jackson Financial Inc.
Comapany
April NameJackson Financial Inc.
21, 2021
April 221, 2021 Page 2
Page
FirstName LastName
Surplus Notes, page 157
2. Please refer to prior comment 1. Please revise your statement of cash
flows to disclose
information about the non-cash debt restructuring in accordance with
ASC 230-10-50-3.
Athene Reinsurance, page F-20
3. Please refer to prior comment 2. We note Section 6.02 (b) of the
Coinsurance Agreement,
dated as of June 18, 2020, by and between Jackson National Life
Insurance Company and
Athene Life Re Ltd states that "The Cedant shall retain, maintain,
control and own all
assets in the Funds Withheld Account." Please tell us how you
considered this contractual
right in your analysis of each condition of ASC 860-10-40-5 in your
derecognition of
assets accounting analysis for the Athene Reinsurance transaction.
4. Please also tell us how you determined if you had any continuing
involvement with the
transferred assets detailing any guidance you considered. If you do
not believe you have
any continuing involvement, please tell us how you considered the
guidance in ASC 860-
10 55-79B.
5. Please refer to prior comment 2. Please tell us if you obtained a true
sale opinion from an
attorney to support the conclusion that the transferred financial
assets in the Athene
Reinsurance transaction have been legally isolated. If so, please
provide it to us. If not,
please tell us how you concluded that the transferred financial assets
have been legally
isolated.
6. Please refer to prior comment 2. If you determine that the assets
should not have been
derecognized, please tell us how this determination would impact the
accounting for the
funds withheld coinsurance agreement with Athene. Specifically tell us
if you would
continue to recognize the entire realized gain on these assets as well
as the other items
disclosed on page F-20 in your income statement.
7. Please also tell us how you accounted for the activity related to the
annuity liabilities
subject to the reinsurance agreement subsequent to the reinsurance
transaction.
8. Please also tell us why the realized gain of $2,891.0 million does not
equal the reduction
in accumulated other comprehensive income of $2,815.8 million as
detailed in the journal
entry on page A-1 of Annex A.
9. Please refer to prior comment 2. We note that you recognized a Funds
Withheld Asset
related to the invested assets and did not derecognize them in your
unaudited pro forma
balance sheet included in Exhibit 99.1 of your Form 10 filed on
December 23, 2020.
Noting you did derecognize the invested assets in your audited
December 31, 2020
financial statements, please tell us all the facts and circumstances
which resulted in your
different accounting determination.
10. Please refer to prior comment 2. We note your analysis related to the
immediate
recognition of the cost of reinsurance in the income statement. Please
tell us why you
Andrew Bowden
Jackson Financial Inc.
April 21, 2021
Page 3
believe the fact that if the asset were recorded it would not be backed
by the insurance
contracts and, therefore, there would be no future cash flows is relevant
and persuasive
information to overcome the US GAAP guidance in ASC 944-40-25-33 that
states that
reinsurance contracts do not result in immediate recognition of gains. We
also note the
guidance in paragraph 52 of the basis for conclusions of SFAS 113
specifically addresses
coinsurance agreements in which all or substantially all of the risks
related to a line of
business are reinsured and clearly indicates that immediate recognition
is precluded.
11. Please also expand and clarify your basis to recognize the ceding
commission
immediately in the income statement and to write-off deferred acquisition
costs
immediately in the income statement considering the guidance in ASC
944-30-35-64 does
not appear to support immediate recognition in the income statement.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Michael Volley at 202-551-3437 or Amit Pande at
202-551-3423 if you
have questions regarding comments on the financial statements and related
matters. Please
contact David Gessert at 202-551-2326 or Susan Block at 202-551-3210 with any
other
questions.
Sincerely,
FirstName LastNameAndrew Bowden
Division of
Corporation Finance
Comapany NameJackson Financial Inc.
Office of Finance
April 21, 2021 Page 3
cc: Peter J. Loughran, Esq.
FirstName LastName