United States securities and exchange commission logo
August 17, 2022
Christopher Blunt
Chief Executive Officer
F&G Annuities & Life, Inc.
801 Grand Avenue, Suite 2600
Des Moines, IA 50309
Re: F&G Annuities &
Life, Inc.
Draft Registration
Statement on Form 10
Filed July 20, 2022
CIK No. 0001934850
Dear Mr. Blunt:
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.
Exhibit 99.1 Information Statement
Information Statement Summary, page 1
1. We note your disclosure
that you now operate in and source significant premiums from
five distinct channels,
versus a single channel prior to the acquisition by FNF in June of
2020. Consistent with
your disclosure on page 80 and elsewhere, please briefly disclose
here the three retail
channels and two institutional channels that comprise the five
channels to which you
refer, or provide a cross-reference to such disclosure for added
clarity.
2. Consistent with your
disclosure on page 25, please expand this section to disclose that
FNF may have interests
which differ from other stockholders of F&G, and discuss the
conflicts of interests
that may arise from certain of your officers and directors also serving
as officers and
directors of FNF or holding equity interests in FNF. Further, consistent
with your disclosure on
page 154, also discuss here that FNF will not have a duty to
Christopher Blunt
F&G Annuities & Life, Inc.
August 17, 2022
Page 2
refrain from engaging in the same or similar activities or lines of
business that F&G
engages in, and, except as set forth in F&G s charter, none of FNF
and FNF s officers and
directors will be liable to F&G or its shareholders for any breach of
any fiduciary duty due
to any such activities of FNF.
3. We note your disclosure on page 2 that FNF will retain control of F&G
through an
approximate 85% equity ownership stake. Consistent with your
disclosure on page 26,
please briefly discuss here your status as a controlled company
and that you plan to rely
on the controlled company exemptions from certain corporate
governance
requirements. Please also briefly summarize the potential conflicts of
interest
associated with having a controlling shareholder and the ability of
FNF to control the
outcome of matters put to a stockholder vote. Consistent with your
disclosure on pages
147 and F-69, also discuss here that an entity that is 50% owned by
affiliates of FNF's
chairman serves as a sub-advisor and receives a fee in connection with
your assets that are
managed by BISGA.
Overview, page 1
4. We note that your disclosed non-GAAP measures (i.e. net investment
spread and adjusted
net earnings) are not accompanied by an equally prominent disclosure
of the comparable
GAAP measures. This appears to cause your non-GAAP measures to be more
prominent
than the most directly comparable GAAP measures. Please revise to
present the most
directly comparable GAAP measures with equal or greater prominence.
Please refer to
Question 102.10 of the Compliance and Disclosure Interpretations on
Non-GAAP
Financial Measures for guidance.
Risks Related to Economic Conditions and Market Conditions, page 14
5. We note your disclosure on page 15 that high inflation rates are a
headwind for the
consumer and efforts by the Federal Reserve to stem inflation could
induce a recession
which would have an adverse impact on the consumer and potentially
increase
delinquencies to a higher level than what s assumed in your
underwriting, and your
disclosure on page 17 that we are now experiencing a period of higher
than normal
inflation. Please update these risk factors or include a new risk
factor if recent
inflationary pressures have materially impacted your operations. In
this regard, identify
the types of inflationary pressures you are facing and how your
business has been
affected.
Interest rate fluctuations could adversely affect our business, financial
condition, liquidity and
results of operations, page 15
FirstName LastNameChristopher Blunt
6. Please expand your discussion of rising interest rates in the third and
fourth paragraphs of
Comapany NameF&G
this risk factor toAnnuities & Life,
specifically Inc.the actual impact of recent
rate increases on your
identify
Augustoperations and how
17, 2022 Page 2 your business has been affected.
FirstName LastName
Christopher Blunt
FirstName LastNameChristopher Blunt
F&G Annuities & Life, Inc.
Comapany
August 17, NameF&G
2022 Annuities & Life, Inc.
August
Page 3 17, 2022 Page 3
FirstName LastName
F&G's amended and restated certificate of incorporation and bylaws will contain
exclusive
forum provisions, page 28
7. We note that your risk factor discusses the additional costs you could
incur
associated with resolving matters in other jurisdictions. Please also
describe the risk that
the exclusive forum provision may increase the costs for shareholders
to bring a claim.
We Play in Large and Growing Markets, page 46
8. We note your disclosure that you purchased a minority ownership stake
in a nearly 4,000
agent strong NMG that focuses on cultural markets. Please briefly
discuss when you
made the purchase, what ownership percentage you retain, and the
cultural markets
on which the NMG focuses.
Our Financial Goals, page 48
9. We note that over time you plan to use reinsurance to further
diversify your sources of
earnings into less capital-intensive adjacent products and services.
Please briefly discuss
the anticipated timeframe for implementing such goals and the adjacent
products and
service with which you hope to diversify.
The Products We Offer, page 48
10. Please revise to discuss the timing of customer payments for each
product, if different.
For example, discuss if the customer makes a single upfront payment,
periodic payments
over a fixed period, periodic payments for life, etc.
Pension Risk Transfer, page 50
11. Please revise to provide additional information describing the key
characteristic of a
pension risk transfer transaction including how they are structured.
For example, clarify if
the pension plan sponsor makes a payment upfront or over time to be
discharged from
their liability, clarify the types of insurance products you issue and
how they are different
from other products you provide and clarify your rights and
obligations.
Funding Agreements, page 51
12. Please revise to provide additional information describing the key
characteristics of a
funding agreement. For example, describe spread lending, the structure
of a funding
agreement backed note and any key differences between a FABN and
funding agreements
through the FHLB.
Our Investment Management Governance and Approach, page 53
13. Please disclose the material terms of your investment management
agreements with
BISGA, including the compensation structure with and historical fees
paid to the
investment manager, any minimum amount of assets required to be
covered under the
Christopher Blunt
FirstName LastNameChristopher Blunt
F&G Annuities & Life, Inc.
Comapany
August 17, NameF&G
2022 Annuities & Life, Inc.
August
Page 4 17, 2022 Page 4
FirstName LastName
agreement, and term and termination provisions.
Non-GAAP Measures, page 70
14. We note the presentation of Notable items included in adjusted
earnings in the table on
page 71 and the general description on page 83. Please revise to
provide quantitative
detail of all significant items included in this disclosure for each
period presented.
Additionally, please tell us why this disclosure is meaningful without
related discussion
and analysis of the amounts or linked to the discussion and analysis
of adjusted net
earnings on page 93.
15. Please revise to disclose the calculation of the Debt-to-Capital
ratio .
Summary Historical Consolidated Financial Information, page 70
16. Please tell us and revise to clarify where single premium immediate
annuity ("SPIA")
sales are included in the table on page 73 and quantify the amount, if
material.
Adjusted Net Earnings Attributable to Common Shareholders, page 82
17. Please provide us the calculation for the impact of market volatility
on the alternative
asset portfolio that differ from management's expectation of returns
over the life of these
assets for each period presented and explain how each key input is
determined.
18. Please tell us how you considered whether the adjustment for the
impact of market
volatility on the alternative asset portfolio that differ from
management's expectation of
returns over the life of these assets substitutes an individually
tailored recognition and
measurement method for those of GAAP which results in a misleading
non-GAAP
measure that violates Rule 100(b) of Regulation G. Please refer to
Question 100.04 of the
Compliance and Disclosure Interpretations on Non-GAAP Financial
Measures for
guidance.
19. We note your disclosure that adjustments to adjusted net earnings are
net of the
corresponding impact on amortization of intangibles, as appropriate.
Please revise to
show the impact on amortization of intangibles as a separate
adjustment with appropriate
explanation.
Return on Average Equity, page 84
20. Please revise to disclose the rationale behind using 5 points
throughout the period to
calculate average equity.
Adjusted Net Earnings, page 93
21. Please revise to provide quantitative detail of all significant items
included in the
recognized (gains) and losses, net adjustment for each period
presented.
22. Please revise to provide quantitative detail of all significant items
included in the
Christopher Blunt
FirstName LastNameChristopher Blunt
F&G Annuities & Life, Inc.
Comapany
August 17, NameF&G
2022 Annuities & Life, Inc.
August
Page 5 17, 2022 Page 5
FirstName LastName
transaction costs and other non-recurring items adjustment for
each period presented
and to the extent necessary fully explain why the adjustments are
relevant.
Liquidity and Capital Resources, page 104
23. We note your disclosure on pages 7 and F-58 related to maintaining
minimum ratings and
the potential impact of a ratings downgrade including requiring F&G to
collateralize
reserves, balances or obligations under reinsurance and derivatives
agreements. Please
revise to disclose the minimum ratings required and the incremental
collateral
requirements resulting from a potential credit rating downgrade.
Note B - Restatement and Reclassification of Previously Issued Financial
Statements, page F-23
24. We note your disclosure that you identified certain errors to
previously issued
consolidated financial statements of the Predecessor for the year
ended December 31,
2019 that were material. Please tell us all the facts and
circumstances related to the
identification and correction of the errors including what filings, if
any, filed by Fidelity
National Financial, Inc. included financial statements with errors.
Additionally, please tell
us how you considered if the errors were material to these financial
statements and
whether restatements and amendments were warranted. Please provide us
any materiality
analysis performed including how you considered the guidance in SAB
Topic 1M in
making your determinations.
Legal and Regulatory Contingencies, page F-60
25. We note your disclosure related to the materiality of your legal
contingencies. In
accordance with ASC 450-20-50, please revise to disclose the following
information for
your legal contingencies in the aggregate or individually:
The amount or range of reasonably possible losses in addition
to amounts accrued;
That reasonably possible losses cannot be estimated; or
That any reasonably possible losses in addition to the amounts
accrued are not
material to your financial statements.
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.
Christopher Blunt
F&G Annuities & Life, Inc.
August 17, 2022
Page 6
You may contact William Schroeder at 202-551-3294 or Michael Volley at
202-551-
3437 if you have questions regarding comments on the financial statements and
related
matters. Please contact John Stickel at 202-551-3324 or John Dana Brown at
202-551-3859 with
any other questions.
FirstName LastNameChristopher Blunt Sincerely,
Comapany NameF&G Annuities & Life, Inc.
Division of
Corporation Finance
August 17, 2022 Page 6 Office of Finance
FirstName LastName