v3.26.1
Reserves for Future Policy Benefits and Claims Payable
 3 Months Ended
Mar. 31, 2026
Insurance [Abstract]  
Reserves for Future Policy Benefits and Claims Payable Reserves for Future Policy Benefits and Claims Payable
Reserves for Future Policy Benefits

For non-participating traditional and limited-payment insurance contracts, the reserve for future policy benefits represents the present value of estimated future policy benefits to be paid to or on behalf of policyholders in future periods and certain related expenses less the present value of estimated future net premiums.

Reserves for future policy benefits for non-participating traditional and limited-payment insurance contracts are measured using the net premium ratio ("NPR") measurement model. The NPR measurement model accrues for future policy benefits in proportion to the premium revenue recognized. The reserve for future policy benefits is derived from the Company's best estimate of future net premium and future benefits and expenses, which is based on best estimate assumptions including mortality, persistency, claims expense, and discount rate. On an annual basis, or as circumstances warrant, we conduct a comprehensive review of our current best estimate assumptions based on our experience, industry benchmarking, and other factors, as applicable. Expense assumptions are updated based on estimates of expected non-level costs, such as termination or settlement costs, and costs after the premium-paying period and exclude acquisition costs or any costs that are required to be charged to expenses as incurred. Updates to assumptions are applied on a retrospective basis, and the change in the reserve for future policy benefits resulting from updates to assumptions is reported separately in the Condensed Consolidated Income Statements within the (gain) loss from updating future policy benefits cash flow assumptions, net. Each reporting period the reserve for future policy benefits is updated to reflect actual experience to date.

The Company establishes cohorts, which are groupings used to measure reserves for future policy benefits. In determining cohorts, the Company considers both qualitative and quantitative factors, including the issue year, type of product, product features, and legal entity.

The discount rate used to estimate reserves for future policy benefits is consistent with an upper-medium grade (low-credit risk) fixed-income corporate instrument yield, which has been interpreted to represent a single-A corporate instrument yield. This discount rate curve is determined by fitting a parametric function to yields to maturity and related times to maturity of market observable single-A rated corporate instruments. The discount rate used to recognize interest accretion on the reserves for future policy benefits is locked at the initial measurement of the cohort. Each reporting period thereafter, the reserve for future policy benefits is remeasured using the current discount rate. The difference between the reserve calculated using the current discount rate and the reserve calculated using the locked-in discount rate is recorded in OCI.
For limited-payment insurance contracts, premiums are paid over a period shorter than the period over which benefits are provided. Gross premiums received in excess of the net premium are deferred and recognized as a deferred profit liability ("DPL"). The DPL is included within the reserve for future policy benefits and profits are recognized in income as a component of benefit expenses on a constant relationship with the amount of expected future benefit payments. Interest is accreted on the balance of the DPL using the discount rate locked in at the initial measurement of the cohort. Measurement of the DPL uses best estimate assumptions for mortality. These assumptions are similarly subject to the annual review process discussed above.

Additional Liabilities – Universal Life-type

For universal life-type insurance contracts, a liability is recognized for the policyholder’s account value as discussed further in Note 10 - Other Contract Holder Funds of these Notes to Condensed Consolidated Financial Statements. Where these contracts provide additional benefits beyond the account balance or base insurance coverage that are not market risk benefits or embedded derivatives, liabilities in addition to the policyholder’s account value are recognized. These additional liabilities for annuitization, death and other insurance benefits are reported within reserves for future policy benefits and claims payable. The methodology uses a benefit ratio defined as a constant percentage of the assessment base. This ratio is multiplied by current period assessments to determine the reserve accrual for the period. The assumptions used in the measurement of the additional liabilities for annuitization, death and other insurance benefits are based on best estimate assumptions including mortality, persistency, investment returns, and discount rates. These assumptions are similarly subject to the annual review process discussed above. As available-for-sale debt securities are carried at fair value, an adjustment is made to these additional liabilities equal to the change in liability that would have occurred if such securities had been sold at their stated fair value and the proceeds reinvested at current yields. This adjustment, along with the change in net unrealized gains (losses) on available-for-sale debt securities, net of applicable tax, is credited or charged directly to equity as a component of OCI.

See Note 10 - Other Contract Holder Funds of these Notes to Condensed Consolidated Financial Statements for more information regarding other contract holder funds.

Other Future Policy Benefits and Claims Payable

In conjunction with a prior acquisition, the Company recorded a fair value adjustment at acquisition related to certain annuity and interest-sensitive liability blocks of business to reflect the cost of the interest guarantees within the in-force liabilities, based on the difference between the guaranteed interest rate and at purchase assumed new money guaranteed interest rate. This adjustment is included in other future policy benefits and claims payable as disclosed in the table below. This liability is remeasured at the end of each period, taking into account changes in the in-force block. Any resulting change in the liability is recorded as a gain (loss) from updating future policy benefits cash flow assumptions, net through the Condensed Consolidated Income Statements.

In addition, annuity and life claims liabilities in course of settlement are included in other future policy benefits and claims payable as disclosed in the table below.

The following table summarizes the Company’s reserves for future policy benefits and claims payable balances (in millions):
March 31,December 31,
20262025
Reserves for future policy benefits
Payout Annuities$1,156 $1,169 
Closed Block Life3,464 3,580 
Closed Block Annuity3,533 3,647 
Reserves for future policy benefits8,153 8,396 
Additional liabilities
Closed Block Life1,175 1,195 
Other future policy benefits and claims payable1,378 1,305 
Reserves for future policy benefits and claims payable$10,706 $10,896 

The following tables present the roll-forward of components of reserves for future policy benefits (in millions):
Present Value of Expected Net Premiums
Three Months Ended March 31,Year Ended December 31,
20262025
PayoutClosed BlockClosed BlockPayoutClosed BlockClosed Block
AnnuitiesLifeAnnuityAnnuitiesLifeAnnuity
Balance, beginning of period$— $998 $— $— $847 $— 
Beginning of period cumulative effect of changes in discount rate assumptions— 86 — — 125 — 
Beginning balance at original discount rate— 1,084 — — 972 — 
Effect of changes in cash flow assumptions— — — — 232 — 
Effect of actual variances from expected experience— (8)— — (33)— 
Balance adjusted for variances from expectation— 1,076 — — 1,171 — 
Issuances— 1 — — 2 — 
Interest accrual— 10 — — 35 — 
Net premiums collected— (32)— — (124)— 
Ending balance at original discount rate— 1,055 — — 1,084 — 
End of period cumulative effect of changes in discount rate assumptions— (97)— — (86)— 
Balance, end of period$— $958 $— $— $998 $— 

For the year ended December 31, 2025, the effect of actual variances from expected experience of $33 million was mainly attributed to slightly lower actual premiums versus expected premiums related to our closed block products, which are mostly reinsured, resulting in an immaterial net impact to the reserve balance.
Present Value of Expected Future Policy Benefits
Three Months Ended March 31,Year Ended December 31,
20262025
PayoutClosed BlockClosed BlockPayoutClosed BlockClosed Block
AnnuitiesLifeAnnuityAnnuitiesLifeAnnuity
Balance, beginning of period$1,169 $4,578 $3,647 $1,095 $4,425 $3,837 
Beginning of period cumulative effect of changes in discount rate assumptions58 671 157 100 806 255 
Beginning balance at original discount rate (including DPL of $110, nil and $546 in March 31, 2026, and $91, nil and $588 in December 31, 2025 for payout annuities, closed block life and closed block annuity, respectively)
1,227 5,249 3,804 1,195 5,231 4,092 
Effect of changes in cash flow assumptions— — — (20)414 (8)
Effect of actual variances from expected experience1 6 2 (16)(30)6 
Balance adjusted for variances from expectation1,228 5,255 3,806 1,159 5,615 4,090 
Issuances30 3 — 171 8 — 
Interest accrual12 39 40 47 150 169 
Benefits payments(43)(154)(111)(150)(524)(455)
Ending balance of original discount rate (including DPL of $106, nil and $534 in March 31, 2026, and $110, nil and $546 in December 31, 2025 for payout annuities, closed block life and closed block annuity, respectively)
1,227 5,143 3,735 1,227 5,249 3,804 
End of period cumulative effect of changes in discount rate assumptions(71)(721)(202)(58)(671)(157)
Balance, end of period$1,156 $4,422 $3,533 $1,169 $4,578 $3,647 
Reserves for future policy benefits1,156 3,464 3,533 1,169 3,580 3,647 
Less: Reinsurance recoverable129 1,952 4 128 2,012 4 
Reserves for future policy benefits, after reinsurance recoverable$1,027 $1,512 $3,529 $1,041 $1,568 $3,643 

The following table presents the weighted average duration of the reserves for future policy benefits. The weighted average duration represents average cohort-level duration weighted by the benefit reserves amount:

PayoutClosed BlockClosed Block
AnnuitiesLifeAnnuity
March 31, 2026
Weighted average duration (years)6.26.76.4
December 31, 2025
Weighted average duration (years)6.26.86.5

The discount rate assumption related to the single-A corporate instrument yield was updated based on current market data. Discount rates increased in 2026 compared to 2025, based on the duration of the liability. This resulted in a decrease in the liability. Refer to the roll-forward above for further details.
The following table presents the amount of undiscounted and discounted expected future gross premiums and expected future benefit payments for future policy benefits for non-participating traditional and limited-payment insurance contracts (in millions). The discounted premiums are calculated using the current discount rate, while the undiscounted cash flows represent the gross cash flows before any discounting is applied:

March 31, 2026December 31, 2025
UndiscountedDiscountedUndiscountedDiscounted
Payout Annuities
Expected future benefit payments$1,557 $1,050 $1,547 $1,059 
Expected future gross premiums— — — — 
Closed Block Life
Expected future benefit payments6,720 4,540 6,875 4,696 
Expected future gross premiums3,711 2,332 3,810 2,429 
Closed Block Annuity
Expected future benefit payments4,530 2,999 4,618 3,101 
Expected future gross premiums$— $— $— $— 

The following table presents the amount of revenue and interest related to non-participating traditional and limited-pay insurance contracts recognized in the Condensed Consolidated Income Statements (in millions):

Gross PremiumsInterest Expense
Three Months Ended March 31, 2026Year Ended December 31, 2025Three Months Ended March 31, 2026Year Ended December 31, 2025
Payout Annuities$6 $67 $12 $47 
Closed Block Life67 295 29 115 
Closed Block Annuity1 (2)40 169 
Total$74 $360 $81 $331 

The following table presents the weighted average interest rate for the reserves for future policy benefits at the cohort level for the locked-in discount rate (interest accretion rate), and current discount rate, weighted by the cohort's benefit reserve amount:

March 31, 2026December 31, 2025
Payout Annuities
Interest accretion rate4.29 %4.26 %
Current discount rate5.36 %5.10 %
Closed Block Life
Interest accretion rate3.08 %3.08 %
Current discount rate5.51 %5.31 %
Closed Block Annuity
Interest accretion rate4.40 %4.40 %
Current discount rate5.41 %5.16 %
The following table presents a roll-forward of Closed Block Life additional liabilities for annuitization, death and other insurance benefits (in millions):

Three Months Ended March 31, 2026Year Ended December 31, 2025
Balance, beginning of period$1,195 $1,184 
Beginning of period cumulative effect of changes in shadow adjustments14 23 
Beginning balance excluding shadow1,209 1,207 
Effect of changes in cash flow assumptions— 5 
Effect of actual variances from expected experience5 33 
Interest accrual14 58 
Net assessments collected(32)(94)
Ending balance excluding shadow1,196 1,209 
End of period cumulative effect of changes in shadow adjustments(21)(14)
Balance, end of period$1,175 $1,195 

The following table presents the weighted average duration of Closed Block Life additional liabilities for annuitization, death and other insurance benefits. The weighted average duration represents average cohort-level duration weighted by the benefit reserves amount:

March 31, 2026December 31, 2025
Weighted average duration (years)8.78.7

The following table presents assessments and interest expense of Closed Block Life additional liabilities for annuitization, death and other insurance benefits recognized in the Condensed Consolidated Income Statements (in millions):

AssessmentsInterest Expense
Three Months Ended March 31, 2026Year Ended December 31, 2025Three Months Ended March 31, 2026Year Ended December 31, 2025
Additional liability for annuitization, death and other insurance benefits$(32)$(94)$14 $58 

The following table presents the weighted average current discount rate of Closed Block Life additional liabilities for annuitization, death and other insurance benefits, applied at the cohort level weighted by reserve benefit amount:

March 31, 2026December 31, 2025
Weighted average current discount rate5.00 %5.00 %