Derivatives (Tables)

3 Months Ended

Mar. 31, 2026

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The following table presents the primary underlying risk exposure, gross notional amount, and estimated fair value of the Company’s derivatives, excluding embedded derivatives, held at:


		March 31, 2026						December 31, 2025
	Primary Underlying Risk Exposure			Estimated Fair Value				Gross Notional Amount		Estimated Fair Value
		Gross Notional Amount		Assets		Liabilities				Assets		Liabilities
		(In millions)
Derivatives Designated as Hedging Instruments:
Fair value hedges:
Interest rate swaps	Interest rate	$	4,283	$	924	$	644	$	4,446	$	923	$	667
Foreign currency swaps	Foreign currency exchange rate	2,303		56		13		959		33		8

Subtotal		6,586		980		657		5,405		956		675
Cash flow hedges:
Interest rate swaps	Interest rate	3,241		—		230		3,337		—		249

Foreign currency swaps	Foreign currency exchange rate	35,346		2,265		833		34,771		2,276		896

Subtotal		38,587		2,265		1,063		38,108		2,276		1,145
Total qualifying hedges		45,173		3,245		1,720		43,513		3,232		1,820
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate swaps	Interest rate	13,759		1,407		632		13,092		1,403		614
Interest rate floors	Interest rate	5,890		42		—		5,390		30		—
Interest rate caps	Interest rate	12,950		65		—		12,950		46		—
Interest rate futures	Interest rate	87		—		—		90		—		—
Interest rate options	Interest rate	19,541		96		66		20,368		99		85


Synthetic GICs	Interest rate	3,146		—		—		3,156		—		—
Foreign currency swaps	Foreign currency exchange rate	4,012		283		63		3,770		240		106
Foreign currency forwards	Foreign currency exchange rate	2,817		23		8		2,859		5		18
Credit default swaps — purchased	Credit	605		2		1		685		2		5
Credit default swaps — written	Credit	11,692		145		1		6,619		101		1
Equity futures	Equity market	342		1		10		393		3		—
Equity index options	Equity market	16,465		331		212		15,032		220		232
Equity variance swaps	Equity market	5		—		—		5		—		—
Equity total return swaps	Equity market	2,336		104		—		2,413		7		34
Total non-designated or nonqualifying derivatives		93,647		2,499		993		86,822		2,156		1,095
Total		$	138,820	$	5,744	$	2,713	$	130,335	$	5,388	$	2,915

The Effects of Derivatives on the Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

The following table presents the interim condensed consolidated financial statement location and amount of gain (loss) recognized on fair value, cash flow, nonqualifying hedging relationships and embedded derivatives:


	Three Months Ended March 31, 2026
	Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to PABs		OCI
	(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)	$	—	$	—	N/A		$	(6)	$	(13)	N/A
Hedged items	—		—		N/A		2		13		N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)	(9)		—		N/A		—		(7)		N/A
Hedged items	9		—		N/A		—		7		26
Subtotal	—		—		N/A		(4)		—		26
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		5
Amount of gains (losses) reclassified from AOCI into income	1		1		—		—		—		(2)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		142
Amount of gains (losses) reclassified from AOCI into income	1		(211)		—		—		—		210
Foreign currency transaction gains (losses) on hedged items	—		210		—		—		—		—
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		—

Subtotal	2		—		—		—		—		355




Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)	—		N/A		49		N/A		N/A		N/A
Foreign currency exchange rate derivatives (1)	—		N/A		124		N/A		N/A		N/A
Credit derivatives — purchased (1)	—		N/A		3		N/A		N/A		N/A
Credit derivatives — written (1)	—		N/A		(48)		N/A		N/A		N/A
Equity derivatives (1)	16		N/A		51		N/A		N/A		N/A
Foreign currency transaction gains (losses) on hedged items	—		N/A		(29)		N/A		N/A		N/A
Subtotal	16		N/A		150		N/A		N/A		N/A
Earned income on derivatives	85		—		54		7		(38)		—
Synthetic GICs	N/A		N/A		1		N/A		N/A		N/A
Embedded derivatives	N/A		N/A		195		N/A		N/A		N/A
Total	$	103	$	—	$	400	$	3	$	(38)	$	381


	Three Months Ended March 31, 2025
	Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to PABs		OCI
	(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)	$	—	$	—	N/A		$	75	$	37	N/A
Hedged items	—		—		N/A		(79)		(35)		N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)	(10)		—		N/A		—		36		N/A
Hedged items	10		—		N/A		—		(36)		N/A
Subtotal	—		—		N/A		(4)		2		N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		64
Amount of gains (losses) reclassified from AOCI into income	20		—		—		—		—		(20)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		120
Amount of gains (losses) reclassified from AOCI into income	1		348		—		—		—		(349)
Foreign currency transaction gains (losses) on hedged items	—		(348)		—		—		—		—
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		—
Amount of gains (losses) reclassified from AOCI into income	—		—		—		—		—		—
Subtotal	21		—		—		—		—		(185)




Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)	—		N/A		91		N/A		N/A		N/A
Foreign currency exchange rate derivatives (1)	—		N/A		(126)		N/A		N/A		N/A
Credit derivatives — purchased (1)	—		N/A		(5)		N/A		N/A		N/A
Credit derivatives — written (1)	—		N/A		(18)		N/A		N/A		N/A
Equity derivatives (1)	17		N/A		87		N/A		N/A		N/A
Foreign currency transaction gains (losses) on hedged items	—		N/A		63		N/A		N/A		N/A
Subtotal	17		N/A		92		N/A		N/A		N/A
Earned income on derivatives	92		—		53		2		(39)		—
Synthetic GICs	N/A		N/A		2		N/A		N/A		N/A
Embedded derivatives	N/A		N/A		(193)		N/A		N/A		N/A
Total	$	130	$	—	$	(46)	$	(2)	$	(37)	$	(185)

__________________

(1)Excludes earned income on derivatives.

Fair Value Hedges

The following table presents the balance sheet classification, carrying amount and cumulative fair value hedging adjustments for items designated and qualifying as hedged items in fair value hedges:


	March 31, 2026		December 31, 2025		March 31, 2026		December 31, 2025
Balance Sheet Line Item	Carrying Amount of the Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets/(Liabilities) (1)
	(In millions)
Fixed maturity securities AFS	$	1,346	$	120	$	—	$	—

FPBs	$	(2,473)	$	(2,509)	$	326	$	319
PABs	$	(2,355)	$	(2,498)	$	105	$	(35)

__________________

(1)Includes ($61) million and ($73) million of hedging adjustments on discontinued hedging relationships at March 31, 2026 and December 31, 2025, respectively.

Schedule of estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps

The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:


	March 31, 2026					December 31, 2025
Rating Agency Designation of Referenced Credit Obligations (1)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps		Weighted Average Years to Maturity (2)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps		Weighted Average Years to Maturity (2)
	(Dollars in millions)
Aaa/Aa/A

Credit default swaps referencing indices	$	36	$	3,777	1.1	$	45	$	3,777	1.4
Subtotal	36		3,777		1.1	45		3,777		1.4
Baa
Single name credit default swaps (3)	—		15		2.2	—		15		2.5
Credit default swaps referencing indices	96		7,626		6.0	49		2,714		4.9
Subtotal	96		7,641		6.0	49		2,729		4.9
Ba

Credit default swaps referencing indices	1		25		0.7	1		24		1.0
Subtotal	1		25		0.7	1		24		1.0
B

Credit default swaps referencing indices	12		234		4.4	6		74		3.0
Subtotal	12		234		4.4	6		74		3.0
Caa

Credit default swaps referencing indices	(1)		15		0.7	(1)		15		1.0
Subtotal	(1)		15		0.7	(1)		15		1.0
Total	$	144	$	11,692	4.4	$	100	$	6,619	2.8

__________________

(1)The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service, Inc. (“Moody’s”), Standard & Poor’s Global Ratings (“S&P”) and Fitch Ratings, Inc. If no rating is available from a rating agency, then an internally developed rating is used.

(2)The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.

(3)Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or municipals.

Offsetting Liabilities [Table Text Block]

The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:


	March 31, 2026				December 31, 2025
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement	Assets		Liabilities		Assets		Liabilities
	(In millions)
Gross estimated fair value of derivatives:
OTC-bilateral (1)	$	5,727	$	2,737	$	5,406	$	2,897
OTC-cleared (1)	114		4		66		11
Exchange-traded	1		10		3		—
Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)	5,842		2,751		5,475		2,908

Gross amounts not offset on the interim condensed consolidated balance sheets:
Gross estimated fair value of derivatives: (2)
OTC-bilateral	(2,006)		(2,006)		(2,006)		(2,006)
OTC-cleared	(2)		(2)		(5)		(5)
Exchange-traded	(1)		(1)		—		—
Cash collateral: (3), (4)
OTC-bilateral	(1,966)		—		(1,620)		—
OTC-cleared	(93)		—		(56)		—

Securities collateral: (5)
OTC-bilateral	(1,733)		(728)		(1,772)		(890)
OTC-cleared	—		(2)		—		(5)
Exchange-traded	—		(9)		—		—
Net amount after application of master netting agreements and collateral	$	41	$	3	$	16	$	2

__________________

(1)At March 31, 2026 and December 31, 2025, derivative assets included income (expense) accruals reported in accrued investment income or in other liabilities of $98 million and $87 million, respectively, and derivative liabilities included (income) expense accruals reported in accrued investment income or in other liabilities of $38 million and ($7) million, respectively.

(2)Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.

(3)Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives, where the central clearinghouse treats variation margin as collateral, is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet.

(4)The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At March 31, 2026 and December 31, 2025, the Company received excess cash collateral of $34 million and $4 million, respectively, and provided excess cash collateral of $2 million and $3 million, respectively, which are not included in the table above due to the foregoing limitation.

(5)Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at March 31, 2026, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At March 31, 2026 and December 31, 2025, the Company received excess securities collateral with an estimated fair value of $353 million and $336 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At March 31, 2026 and December 31, 2025, the Company provided excess securities collateral with an estimated fair value of $787 million and $798 million, respectively, for its OTC-bilateral derivatives, $481 million and $465 million, respectively, for its OTC-cleared derivatives, and $81 million and $93 million, respectively, for its exchange-traded derivatives, which is not included in the table above due to the foregoing limitation.

Offsetting Assets [Table Text Block]

The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:


	March 31, 2026				December 31, 2025
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement	Assets		Liabilities		Assets		Liabilities
	(In millions)
Gross estimated fair value of derivatives:
OTC-bilateral (1)	$	5,727	$	2,737	$	5,406	$	2,897
OTC-cleared (1)	114		4		66		11
Exchange-traded	1		10		3		—
Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)	5,842		2,751		5,475		2,908

Gross amounts not offset on the interim condensed consolidated balance sheets:
Gross estimated fair value of derivatives: (2)
OTC-bilateral	(2,006)		(2,006)		(2,006)		(2,006)
OTC-cleared	(2)		(2)		(5)		(5)
Exchange-traded	(1)		(1)		—		—
Cash collateral: (3), (4)
OTC-bilateral	(1,966)		—		(1,620)		—
OTC-cleared	(93)		—		(56)		—

Securities collateral: (5)
OTC-bilateral	(1,733)		(728)		(1,772)		(890)
OTC-cleared	—		(2)		—		(5)
Exchange-traded	—		(9)		—		—
Net amount after application of master netting agreements and collateral	$	41	$	3	$	16	$	2

__________________

(2)Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.

Estimated Fair Value of OTC-bilateral derivatives after considering effect of netting agreements

The following table presents the estimated fair value of the Company’s OTC-bilateral derivatives that were in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged.


	March 31, 2026						December 31, 2025
	Derivatives Subject to Financial Strength-Contingent Provisions		Derivatives Not Subject to Financial Strength-Contingent Provisions		Total		Derivatives Subject to Financial Strength-Contingent Provisions		Derivatives Not Subject to Financial Strength-Contingent Provisions		Total
	(In millions)
Estimated fair value of derivatives in a net liability position	$	717	$	14	$	731	$	881	$	10	$	891
Estimated fair value of collateral provided:
Fixed maturity securities AFS	$	1,149	$	14	$	1,163	$	1,279	$	10	$	1,289

The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:


	Balance Sheet Location	March 31, 2026		December 31, 2025
		(In millions)
Embedded derivatives within asset host contracts:
Assumed on affiliated reinsurance	Other invested assets	$	49	$	22
Funds withheld on affiliated assumed reinsurance	Other invested assets	(3)		31
Total		$	46	$	53
Embedded derivatives within liability host contracts:


Assumed on affiliated reinsurance	Other liabilities	$	—	$	53
Funds withheld on affiliated ceded reinsurance	Other liabilities	(353)		(281)
Fixed annuities with equity indexed returns	PABs	140		67
Funds withheld on unaffiliated ceded reinsurance	Other liabilities	(83)		(5)
Total		$	(296)	$	(166)

Embedded Derivatives


	March 31, 2026						December 31, 2025
	Derivatives Subject to Financial Strength-Contingent Provisions		Derivatives Not Subject to Financial Strength-Contingent Provisions		Total		Derivatives Subject to Financial Strength-Contingent Provisions		Derivatives Not Subject to Financial Strength-Contingent Provisions		Total
	(In millions)
Estimated fair value of derivatives in a net liability position	$	717	$	14	$	731	$	881	$	10	$	891
Estimated fair value of collateral provided:
Fixed maturity securities AFS	$	1,149	$	14	$	1,163	$	1,279	$	10	$	1,289

The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:


	Balance Sheet Location	March 31, 2026		December 31, 2025
		(In millions)
Embedded derivatives within asset host contracts:
Assumed on affiliated reinsurance	Other invested assets	$	49	$	22
Funds withheld on affiliated assumed reinsurance	Other invested assets	(3)		31
Total		$	46	$	53
Embedded derivatives within liability host contracts:


Assumed on affiliated reinsurance	Other liabilities	$	—	$	53
Funds withheld on affiliated ceded reinsurance	Other liabilities	(353)		(281)
Fixed annuities with equity indexed returns	PABs	140		67
Funds withheld on unaffiliated ceded reinsurance	Other liabilities	(83)		(5)
Total		$	(296)	$	(166)

- Definition

Tabular disclosure of credit derivatives which includes information by sellers of credit derivatives, about each credit derivative, or each group of similar credit derivatives, including (a) the nature of the credit derivative - its term, how it arose, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative; (b) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative; (c) the current fair value of the credit derivative; and (d) the nature of any recourse provisions under the credit derivative, and any assets held either as collateral or by third parties. A credit derivative is a derivative instrument (1) in which one or more of its underlyings are related to the credit risk of a specified entity (or a group of entities) or an index based on the credit risk of a group of entities and (2) that exposes the seller to potential loss from credit-risk-related events specified in the contract. Examples of credit derivatives within the scope of this paragraph include, but are not limited to, credit default swaps, credit spread options, and credit index products; also includes a hybrid instrument that has an embedded credit derivative (for example, but not limited to, a credit-linked note).

+ References + Details