Future Policy Benefits

3 Months Ended

Mar. 31, 2026

Liability for Future Policy Benefits and Unpaid Claims Disclosure

3. Future Policy Benefits

The Company establishes liabilities for amounts payable under insurance policies. These liabilities are comprised of traditional and limited-payment contracts and associated deferred profit liability (“DPL”), additional insurance liabilities, participating life and short-duration contracts.

The Company’s future policy benefits (“FPBs”) on the interim condensed consolidated balance sheets were as follows at:


	March 31, 2026		December 31, 2025
	(In millions)
Traditional and Limited-Payment Contracts:
Annuities	$	55,935	$	57,127
Long-term care	14,978		15,224
Deferred Profit Liabilities:
Annuities	3,070		3,075
Additional Insurance Liabilities:
Universal and variable universal life	2,158		2,127
Participating life	41,333		41,624
Other long-duration (1)	6,342		6,313
Short-duration and other	11,084		10,942
Total	$	134,900	$	136,432

__________________

(1) This balance represents liabilities for various smaller product lines.

Rollforwards - Traditional and Limited-Payment Contracts

The following information about the direct and assumed liability for FPBs includes disaggregated rollforwards of expected future net premiums and expected future benefits. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies. The adjusted balance in each disaggregated rollforward reflects the remeasurement (gains) losses. All amounts presented in the rollforwards and accompanying financial information do not include a reduction for amounts ceded to reinsurers, except with respect to ending net liability for FPB balances where applicable.

Annuities

The Company’s annuity products include pension risk transfers, certain structured settlements and certain institutional income annuities, which are mainly single premium spread-based products. The Company reinsures portions of certain pension risk transfers on a modified coinsurance basis. Information regarding these products was as follows:


	Three Months Ended March 31,
	2026			2025
	(Dollars in millions)
Present Value of Expected Net Premiums
Balance, beginning of period, at current discount rate at balance sheet date	$	—		$	—

Balance, beginning of period, at original discount rate	$	—		$	—

Effect of actual variances from expected experience (1)	—			1
Adjusted balance	—			1
Issuances	287			604
Net premiums collected	(287)			(605)
Ending balance at original discount rate	—			—
Balance, end of period, at current discount rate at balance sheet date	$	—		$	—

Present Value of Expected FPBs
Balance, beginning of period, at current discount rate at balance sheet date	$	57,446		$	47,910

Balance, beginning of period, at original discount rate	$	57,896		$	49,191

Effect of actual variances from expected experience (1)	(32)			(37)
Adjusted balance	57,864			49,154
Issuances	288			610
Interest accrual	714			613
Benefit payments	(1,259)			(1,158)
Ending balance at original discount rate	57,607			49,219
Effect of changes in discount rate assumptions	(1,346)			(1,005)
Balance, end of period, at current discount rate at balance sheet date	56,261			48,214

Cumulative amount of fair value hedging adjustments	(326)			(285)
Net liability for FPBs	$	55,935		$	47,929
Less: Reinsurance recoverables	4,259			—
Net liability for FPBs, net of reinsurance	$	51,676		$	47,929

Undiscounted - Expected future benefit payments	$	105,575		$	93,608
Discounted - Expected future benefit payments (at current discount rate at balance sheet date)	$	56,261		$	48,214
Weighted-average duration of the liability	8 years			9 years
Weighted-average interest accretion (original locked-in) rate	5.1		%	5.1		%
Weighted-average current discount rate at balance sheet date	5.6		%	5.6		%

__________________

(1)For the three months ended March 31, 2025, the net effect of actual variances from expected experience was largely offset by the corresponding impact in DPL associated with the Company’s annuity products of $24 million.

Long-term Care

The Company’s long-term care products offer protection against potentially high costs of long-term health care services. Information regarding these products was as follows:


	Three Months Ended March 31,
		2026			2025
		(Dollars in millions)
Present Value of Expected Net Premiums
Balance, beginning of period, at current discount rate at balance sheet date		$	5,548		$	5,475

Balance, beginning of period, at original discount rate		$	5,515		$	5,568

Effect of actual variances from expected experience		21			(22)
Adjusted balance		5,536			5,546
Interest accrual		71			71
Net premiums collected		(142)			(140)
Ending balance at original discount rate		5,465			5,477
Effect of changes in discount rate assumptions		(42)			(35)
Balance, end of period, at current discount rate at balance sheet date		$	5,423		$	5,442

Present Value of Expected FPBs
Balance, beginning of period, at current discount rate at balance sheet date		$	20,772		$	20,012

Balance, beginning of period, at original discount rate		$	21,490		$	21,024

Effect of actual variances from expected experience		44			(10)
Adjusted balance		21,534			21,014
Interest accrual		283			276
Benefit payments		(250)			(225)
Ending balance at original discount rate		21,567			21,065
Effect of changes in discount rate assumptions		(1,166)			(907)
Balance, end of period, at current discount rate at balance sheet date		20,401			20,158

Net liability for FPBs		$	14,978		$	14,716

Undiscounted:
Expected future gross premiums		$	10,229		$	10,450
Expected future benefit payments		$	44,517		$	44,745
Discounted (at current discount rate at balance sheet date):
Expected future gross premiums		$	6,824		$	6,932
Expected future benefit payments		$	20,401		$	20,158
Weighted-average duration of the liability		13 years			13 years
Weighted-average interest accretion (original locked-in) rate		5.4		%	5.4		%
Weighted-average current discount rate at balance sheet date		6.0		%	5.8		%

Rollforward - Additional Insurance Liabilities

The Company establishes additional insurance liabilities for annuitization, death or other insurance benefits for universal life, and variable universal life contract features whereby the Company guarantees to the contractholder either a secondary guarantee or a guaranteed paid-up benefit. The policy can remain in force, even if the base policy account value is zero, as long as contractual secondary guarantee requirements have been met.

The following information about the direct liability for additional insurance liabilities includes a disaggregated rollforward. The products grouped within the rollforward were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies. The adjusted balance in the disaggregated rollforward reflects the remeasurement (gains) losses. All amounts presented in the rollforward and accompanying financial information do not include a reduction for amounts ceded to reinsurers.

Universal and Variable Universal Life

The Company’s universal and variable universal life products provide a contract feature whereby the Company guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit. Information regarding these additional insurance liabilities was as follows:


	Three Months Ended March 31,
	2026			2025
	Universal and Variable Universal Life
	(Dollars in millions)
Balance, beginning of period	$	2,127		$	1,969
Less: Accumulated other comprehensive income (loss) (“AOCI”) adjustment	(13)			(17)
Balance, beginning of period, before AOCI adjustment	2,140			1,986

Effect of actual variances from expected experience	8			10
Adjusted balance	2,148			1,996
Assessments accrual	23			23
Interest accrual	27			25
Excess benefits paid	(26)			(24)
Balance, end of period, before AOCI adjustment	2,172			2,020
Add: AOCI adjustment	(14)			(15)
Balance, end of period	2,158			2,005
Less: Reinsurance recoverables	2,158			2,005
Balance, end of period, net of reinsurance	$	—		$	—

Weighted-average duration of the liability	15 years			16 years
Weighted-average interest accretion rate	5.2		%	5.2		%

The Company’s gross premiums or assessments and interest expense recognized in the interim condensed consolidated statements of operations and comprehensive income (loss) for long-duration contracts, excluding participating life contracts, were as follows:


	Three Months Ended March 31,
	2026				2025
	Gross Premiums or Assessments (1)		Interest Expense (2)		Gross Premiums or Assessments (1)		Interest Expense (2)
	(In millions)
Traditional and Limited-Payment Contracts:
Annuities	$	308	$	714	$	620	$	613
Long-term care	179		212		180		205
Deferred Profit Liabilities:
Annuities	N/A		38		N/A		38
Additional Insurance Liabilities:
Universal and variable universal life	82		27		91		25
Other long-duration	517		75		178		76
Total	$	1,086	$	1,066	$	1,069	$	957

__________________

(1)Gross premiums are related to traditional and limited-payment contracts and are included in premiums. Assessments are related to additional insurance liabilities and are included in universal life and investment-type product policy fees and net investment income.

(2)Interest expense is included in policyholder benefits and claims.

Liabilities for Unpaid Claims and Claim Expenses

Rollforward of Claims and Claim Adjustment Expenses

Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:


	Three Months Ended March 31,
	2026		2025
	(In millions)
Balance, beginning of period	$	11,956	$	11,698
Less: Reinsurance recoverables	1,946		2,004
Net balance, beginning of period	10,010		9,694
Incurred related to:
Current period	5,466		5,507
Prior periods (1)	(203)		(134)
Total incurred	5,263		5,373
Paid related to:
Current period	(2,236)		(2,180)
Prior periods	(2,752)		(2,823)
Total paid	(4,988)		(5,003)
Net balance, end of period	10,285		10,064
Add: Reinsurance recoverables	2,051		2,074
Balance, end of period (included in FPBs and other policy-related balances)	$	12,336	$	12,138

__________________

(1)For the three months ended March 31, 2026 and 2025, incurred claims and claim adjustment expenses associated with prior periods decreased due to favorable claims experience in the respective current period.