Deferred Policy Acquisition Costs

6 Months Ended

Jun. 30, 2026

10. Deferred Policy Acquisition Costs

Deferred policy acquisition costs (“DAC”) represent those costs that are incremental and directly related to the successful acquisition

of new or renewal of existing insurance contracts. We defer incremental costs that result directly from, and are essential to, the

acquisition or renewal of an insurance contract. Such DAC generally include agent or broker commissions and bonuses, and medical

fees that would not have been incurred if the insurance contract had not been acquired or renewed. Each cost is analyzed to assess

whether it is fully deferrable. We partially defer costs, including certain commissions, when we do not believe that the entire cost is

directly related to the acquisition or renewal of insurance contracts. Commissions that are not deferred to DAC are recorded in Non-

deferrable insurance commissions in the Condensed Consolidated Statements of Income (Loss).

We also defer a portion of employee total compensation and payroll-related fringe benefits directly related to time spent performing

specific acquisition or renewal activities, including costs associated with the time spent on underwriting, policy issuance and

processing, and sales force contract selling. The amounts deferred are derived based on successful efforts for each distribution

channel and/or cost center from which the cost originates.

DAC for all contracts, except for those with limited to no exposure to policyholder behavior risk, (i.e., certain investment contracts), is

grouped and amortized on a constant level basis (i.e., approximating straight line amortization with adjustments for expected

terminations) over the expected term of the related contracts.

The following table presents a rollforward of deferred policy acquisition costs related to long-duration contracts for the six

months ended June 30, 2026 and 2025:


	Individual Retirement	Group Retirement	Life Insurance	Institutional Markets	Corporate and Other	Total
(in millions)	Individual Retirement	Group Retirement	Life Insurance	Institutional Markets	Corporate and Other	Total
DAC:
Balance at January 1, 2026	$3,378	$1,053	$4,162	$118	$164	$8,875
Capitalization	343	43	193	29	—	608
Amortization expense	(260)	(55)	(166)	(11)	—	(492)
Other adjustments(a)	—	—	—	—	(164)	(164)
Balance at June 30, 2026(b)	$3,461	$1,041	$4,189	$136	$—	$8,827

Balance at January 1, 2025	$3,020	$1,049	$4,127	$95	$1,990	$10,281
Capitalization	417	42	183	14	36	692
Amortization expense	(224)	(43)	(168)	(8)	(106)	(549)
Other, including foreign exchange	—	—	—	—	—	—
Balance at June 30, 2025(b)	$3,213	$1,048	$4,142	$101	$1,920	$10,424

(a)Includes the impacts of the reinsurance agreement with CSLR. See Note 7 for additional information.

(b)Excludes value of business acquired (“VOBA”) of $9 million and $11 million at June 30, 2026 and 2025, respectively.

DEFERRED SALES INDUCEMENTS

We offer deferred sales inducements (“DSI”) which include enhanced crediting rates or bonus payments to contract holders (bonus

interest) on certain annuity and investment contract products. To qualify for accounting treatment as an asset, the bonus interest must

be explicitly identified in the contract at inception. We must also demonstrate that such amounts are incremental to amounts we credit

on similar contracts without bonus interest and are higher than the contracts’ expected ongoing crediting rates for periods after the

bonus period. DSI is reported in Other assets, while amortization related to DSI is recorded in Interest credited to policyholder account

balances. DSI amounts are deferred and amortized on a constant level basis over the life of the contract consistent with DAC.

The following table presents a rollforward of deferred sales inducement assets related to long-duration contracts for the six

months ended June 30, 2026 and 2025:


	Individual Retirement	Group Retirement	Corporate and Other	Total
(in millions)	Individual Retirement	Group Retirement	Corporate and Other	Total
Balance at January 1, 2026	$182	$140	$1	$323
Capitalization	—	—	—	—
Amortization expense	(16)	(7)	—	(23)
Other adjustments(a)	—	—	(1)	(1)
Balance at June 30, 2026	$166	$133	$—	$299
Other reconciling items(b)				4,767
Other assets, including restricted cash				$5,066

Balance at January 1, 2025	$218	$152	$70	$440
Capitalization	—	—	1	1
Amortization expense	(19)	(6)	(4)	(29)
Balance at June 30, 2025	$199	$146	$67	$412
Other reconciling items(b)				1,630
Other assets, including restricted cash				$2,042

(a)Includes the impacts of the reinsurance agreement with CSLR. See Note 7 for additional information.

(b)Other reconciling items include deposit assets, derivative assets, prepaid expenses, goodwill and any similar items.