v3.26.1
Derivative Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Notional Amounts of Outstanding Derivative Positions
The notional amounts and fair values of derivatives were as follows as of the dates indicated:
June 30, 2026December 31, 2025
Notional
Amount		Asset
Fair Value		Liability
Fair Value		Notional
Amount		Asset
Fair Value		Liability
Fair Value
Derivatives: Qualifying for hedge accounting(1)
Fair value hedges(2):
Interest rate contracts(3)
$— $— $— $— $— $— 
Foreign exchange contracts22 — — 22 — — 
Cash flow hedges:
Interest rate contracts10 — — 10 — — 
Foreign exchange contracts452 8 13 422 7 16 
Derivatives: Non-qualifying for hedge accounting(1)
Interest rate contracts13,541 142 191 12,031 147 215 
Foreign exchange contracts19 1 — 40 — 1 
Credit contracts59 — — 61 — — 
Embedded derivatives and Managed custody guarantees ("MCGs"):
Within fixed maturity investments(4)
N/A— 3 N/A1 — 
Within reinsurance agreements(5)
N/A15 — N/A23 — 
MCGs(6)
N/A— 1 N/A— — 
Stabilizer(6)
N/A— 7 N/A— 5 
Total$166 $215 $178 $237 
(1) Open derivative contracts are reported as Derivatives assets or liabilities at fair value on the Condensed Consolidated Balance Sheets.
(2) Total carrying amount of the hedged assets and liabilities was $202 and $213 as of June 30, 2026 and December 31, 2025, respectively.
(3) The cumulative amount of fair value hedging adjustments included in the carrying amount of hedged assets and liabilities was $1 and $2 as of June 30, 2026 and December 31, 2025, respectively, all of which is related to hedging adjustments on discontinued hedging relationships.
(4) Included in Fixed maturities, available-for-sale, at fair value on the Condensed Consolidated Balance Sheets.
(5) Included in Other assets on the Condensed Consolidated Balance Sheets.
(6) Included in Future policy benefits and contract owner account balances on the Condensed Consolidated Balance Sheets.
N/A - Not applicable
Offsetting Liabilities
The Company does not offset any derivative assets and liabilities in the Condensed Consolidated Balance Sheets. The disclosures set out in the table below include the fair values of Over-The-Counter ("OTC") and cleared derivatives excluding exchange traded contracts subject to master netting agreements or similar agreements as of the dates indicated:
Effect on Other Comprehensive Income (Loss)
The location and effect of derivatives qualifying for hedge accounting on the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income were as follows for the periods indicated:

20262025
Interest Rate ContractsForeign Exchange ContractsInterest Rate ContractsForeign Exchange Contracts
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (loss) Net investment income
Net investment income and Net gains (losses)
Net investment income
Net investment income and Net gains (losses)
Three Months Ended June 30,
Amount of Gain (Loss) Recognized in Other Comprehensive Income (loss)(1)
$— $(5)$— $(34)
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (loss) — 2 — 1 
Six Months Ended June 30,
Amount of Gain or (Loss) Recognized in Other Comprehensive Income (loss) $— $4 $— $(47)
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (loss)(1)
— 3 — 2 
(1) See Note 9, Accumulated Other Comprehensive Income (Loss) to these Condensed Consolidated Financial Statements for additional information
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The location and amount of gain (loss) recognized in the Condensed Consolidated Statements of Operations for derivatives qualifying for hedge accounting were as follows for the periods indicated:
20262025
Net investment incomeNet gains (losses)Net investment incomeNet gains (losses)
Three Months Ended June 30,
Total amounts of line items presented in the statements of operations in which the effects of fair value or cash flow hedges are recorded$407 $(56)$434 $(50)
Fair value hedges:
Interest rate contracts:
Hedged items— 2 — — 
Derivatives designated as hedging instruments— (2)— — 
Cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from Accumulated Other Comprehensive Income (Loss) into income2 — 1 — 
Six Months Ended June 30,
Total amounts of line items presented in the statements of operations in which the effects of fair value or cash flow hedges are recorded$840 $(107)$847 $(69)
Fair value hedges:
Interest rate contracts:
Hedged items— 1 — — 
Derivatives designated as hedging instruments— (1)— — 
Cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from Accumulated other comprehensive income (Loss) into income3 — 2 — 
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location
The location and effect of derivatives not designated as hedging instruments in the Condensed Consolidated Statements of Operations were as follows for the periods indicated:
Location of Gain (Loss) Recognized on DerivativeThree Months Ended June 30,Six Months Ended June 30,
2026202520262025
Derivatives: Non-qualifying for hedge accounting
Interest rate contractsNet gains (losses)$31 $(26)$48 $(64)
Foreign exchange contractsNet gains (losses)— (6)1 (5)
Credit contractsNet gains (losses)— (1)— (1)
Embedded derivatives and MCGs:
Within fixed maturity investmentsNet gains (losses)(3)2 (4)6 
Within reinsurance agreements
Net gains (losses)6 4 (8)16 
MCGs
Net gains (losses)(1)2 (1)1 
Stabilizer
Net gains (losses)— 1 (2)5 
Total$33 $(24)$34 $(42)
Derivatives Not Designated as Hedging Instruments Derivative Financial Instruments
The Company primarily enters into the following types of derivatives:

Interest rate swaps: The Company uses interest rate swaps primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets or liabilities. Interest rate swaps are also used to hedge the interest rate risk associated with the value of assets it owns or in anticipation of acquiring them. Using interest rate swaps, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest payments, calculated by reference to an agreed upon notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made to/from the counterparty at each due date. The Company utilizes these contracts in qualifying hedging relationships as well as non-qualifying hedging relationships.

Foreign exchange swaps: The Company uses foreign exchange or currency swaps to reduce the risk of change in the value, yield or cash flows associated with certain foreign denominated invested assets. Foreign exchange swaps represent contracts that require the exchange of foreign currency cash flows against U.S. dollar cash flows at regular periods, typically quarterly or semi-annually. The Company utilizes these contracts in qualifying hedging relationships as well as non-qualifying hedging relationships.

Futures: The Company uses interest rate futures contracts to hedge its exposure to market risks due to changes in interest rates. The Company enters into exchange traded futures through regulated futures commissions that are members of the exchange. The Company also posts initial and variation margins, with the exchange, on a daily basis. The Company utilizes exchange-traded futures in non-qualifying hedging relationships. The Company may also use futures contracts as a hedge against an increase in certain equity indices.

Embedded derivatives: The Company also invests in certain fixed maturity instruments and has issued certain products that contain embedded derivatives for which market value is at least partially determined by, among other things, levels of or changes in domestic and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates, equity rates or credit ratings/spreads. In addition, the Company has entered into coinsurance with funds withheld arrangements, which contain
embedded derivatives. These derivatives are generally considered total return swaps with contractual returns attributable to various assets and liabilities associated with these reinsurance agreements.

The Company utilizes derivative contracts mainly to hedge exposure to variability in cash flows, interest rate risk, credit risk, foreign exchange risk and equity market risk. The majority of derivatives used by the Company are designated as product hedges, which hedge the exposure arising from insurance liabilities or guarantees embedded in the contracts the Company offers through various product lines. The Company also uses derivatives contracts to hedge its exposure to various risks associated with the investment portfolio. The Company also uses credit default swaps coupled with other investments in order to produce the investment characteristics of otherwise permissible investments. Based on the notional amounts, a substantial portion of the Company's derivative positions was not designated or did not qualify for hedge accounting as part of a hedging relationship as outlined in ASC Topic 815 as of June 30, 2026 and December 31, 2025.

The notional amounts and fair values of derivatives were as follows as of the dates indicated:
June 30, 2026December 31, 2025
Notional
Amount		Asset
Fair Value		Liability
Fair Value		Notional
Amount		Asset
Fair Value		Liability
Fair Value
Derivatives: Qualifying for hedge accounting(1)
Fair value hedges(2):
Interest rate contracts(3)
$— $— $— $— $— $— 
Foreign exchange contracts22 — — 22 — — 
Cash flow hedges:
Interest rate contracts10 — — 10 — — 
Foreign exchange contracts452 8 13 422 7 16 
Derivatives: Non-qualifying for hedge accounting(1)
Interest rate contracts13,541 142 191 12,031 147 215 
Foreign exchange contracts19 1 — 40 — 1 
Credit contracts59 — — 61 — — 
Embedded derivatives and Managed custody guarantees ("MCGs"):
Within fixed maturity investments(4)
N/A— 3 N/A1 — 
Within reinsurance agreements(5)
N/A15 — N/A23 — 
MCGs(6)
N/A— 1 N/A— — 
Stabilizer(6)
N/A— 7 N/A— 5 
Total$166 $215 $178 $237 
(1) Open derivative contracts are reported as Derivatives assets or liabilities at fair value on the Condensed Consolidated Balance Sheets.
(2) Total carrying amount of the hedged assets and liabilities was $202 and $213 as of June 30, 2026 and December 31, 2025, respectively.
(3) The cumulative amount of fair value hedging adjustments included in the carrying amount of hedged assets and liabilities was $1 and $2 as of June 30, 2026 and December 31, 2025, respectively, all of which is related to hedging adjustments on discontinued hedging relationships.
(4) Included in Fixed maturities, available-for-sale, at fair value on the Condensed Consolidated Balance Sheets.
(5) Included in Other assets on the Condensed Consolidated Balance Sheets.
(6) Included in Future policy benefits and contract owner account balances on the Condensed Consolidated Balance Sheets.
N/A - Not applicable

See Note 4, Fair Value Measurements to these Condensed Consolidated Financial Statements for additional information on derivative asset and liability fair values.
The Company does not offset any derivative assets and liabilities in the Condensed Consolidated Balance Sheets. The disclosures set out in the table below include the fair values of Over-The-Counter ("OTC") and cleared derivatives excluding exchange traded contracts subject to master netting agreements or similar agreements as of the dates indicated:

Gross Amount Recognized
Counterparty Netting(1)
Cash Collateral Netting(1)
Securities Collateral Netting(1)
Net Receivables/ Payables
June 30, 2026
Derivative assets$151 $(145)$(4)$(1)$1 
Derivative liabilities204 (145)(47)(8)4 
December 31, 2025
Derivative assets154 (149)(4)— 1 
Derivative liabilities232 (149)(71)(11)1 
(1) Represents the netting of receivable with payable balances, net of collateral, for the same counterparty under eligible netting agreements.

Collateral

As of June 30, 2026, the Company held $5 and pledged $47 of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. As of December 31, 2025, the Company held $6 and delivered $71 of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. In addition, as of June 30, 2026, the Company delivered $199 of securities and held $3 securities as collateral. As of December 31, 2025, the Company delivered $174 of securities and held no securities as collateral.

The location and effect of derivatives qualifying for hedge accounting on the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income were as follows for the periods indicated:

20262025
Interest Rate ContractsForeign Exchange ContractsInterest Rate ContractsForeign Exchange Contracts
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (loss) Net investment income
Net investment income and Net gains (losses)
Net investment income
Net investment income and Net gains (losses)
Three Months Ended June 30,
Amount of Gain (Loss) Recognized in Other Comprehensive Income (loss)(1)
$— $(5)$— $(34)
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (loss) — 2 — 1 
Six Months Ended June 30,
Amount of Gain or (Loss) Recognized in Other Comprehensive Income (loss) $— $4 $— $(47)
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (loss)(1)
— 3 — 2 
(1) See Note 9, Accumulated Other Comprehensive Income (Loss) to these Condensed Consolidated Financial Statements for additional information.
The location and amount of gain (loss) recognized in the Condensed Consolidated Statements of Operations for derivatives qualifying for hedge accounting were as follows for the periods indicated:
20262025
Net investment incomeNet gains (losses)Net investment incomeNet gains (losses)
Three Months Ended June 30,
Total amounts of line items presented in the statements of operations in which the effects of fair value or cash flow hedges are recorded$407 $(56)$434 $(50)
Fair value hedges:
Interest rate contracts:
Hedged items— 2 — — 
Derivatives designated as hedging instruments— (2)— — 
Cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from Accumulated Other Comprehensive Income (Loss) into income2 — 1 — 
Six Months Ended June 30,
Total amounts of line items presented in the statements of operations in which the effects of fair value or cash flow hedges are recorded$840 $(107)$847 $(69)
Fair value hedges:
Interest rate contracts:
Hedged items— 1 — — 
Derivatives designated as hedging instruments— (1)— — 
Cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from Accumulated other comprehensive income (Loss) into income3 — 2 — 
The location and effect of derivatives not designated as hedging instruments in the Condensed Consolidated Statements of Operations were as follows for the periods indicated:
Location of Gain (Loss) Recognized on DerivativeThree Months Ended June 30,Six Months Ended June 30,
2026202520262025
Derivatives: Non-qualifying for hedge accounting
Interest rate contractsNet gains (losses)$31 $(26)$48 $(64)
Foreign exchange contractsNet gains (losses)— (6)1 (5)
Credit contractsNet gains (losses)— (1)— (1)
Embedded derivatives and MCGs:
Within fixed maturity investmentsNet gains (losses)(3)2 (4)6 
Within reinsurance agreements
Net gains (losses)6 4 (8)16 
MCGs
Net gains (losses)(1)2 (1)1 
Stabilizer
Net gains (losses)— 1 (2)5 
Total$33 $(24)$34 $(42)
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance
The location and effect of derivatives qualifying for hedge accounting on the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income were as follows for the periods indicated:

20262025
Interest Rate ContractsForeign Exchange ContractsInterest Rate ContractsForeign Exchange Contracts
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (loss) Net investment income
Net investment income and Net gains (losses)
Net investment income
Net investment income and Net gains (losses)
Three Months Ended June 30,
Amount of Gain (Loss) Recognized in Other Comprehensive Income (loss)(1)
$— $(5)$— $(34)
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (loss) — 2 — 1 
Six Months Ended June 30,
Amount of Gain or (Loss) Recognized in Other Comprehensive Income (loss) $— $4 $— $(47)
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (loss)(1)
— 3 — 2 
(1) See Note 9, Accumulated Other Comprehensive Income (Loss) to these Condensed Consolidated Financial Statements for additional information.
The location and amount of gain (loss) recognized in the Condensed Consolidated Statements of Operations for derivatives qualifying for hedge accounting were as follows for the periods indicated:
20262025
Net investment incomeNet gains (losses)Net investment incomeNet gains (losses)
Three Months Ended June 30,
Total amounts of line items presented in the statements of operations in which the effects of fair value or cash flow hedges are recorded$407 $(56)$434 $(50)
Fair value hedges:
Interest rate contracts:
Hedged items— 2 — — 
Derivatives designated as hedging instruments— (2)— — 
Cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from Accumulated Other Comprehensive Income (Loss) into income2 — 1 — 
Six Months Ended June 30,
Total amounts of line items presented in the statements of operations in which the effects of fair value or cash flow hedges are recorded$840 $(107)$847 $(69)
Fair value hedges:
Interest rate contracts:
Hedged items— 1 — — 
Derivatives designated as hedging instruments— (1)— — 
Cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from Accumulated other comprehensive income (Loss) into income3 — 2 — 
The location and effect of derivatives not designated as hedging instruments in the Condensed Consolidated Statements of Operations were as follows for the periods indicated:
Location of Gain (Loss) Recognized on DerivativeThree Months Ended June 30,Six Months Ended June 30,
2026202520262025
Derivatives: Non-qualifying for hedge accounting
Interest rate contractsNet gains (losses)$31 $(26)$48 $(64)
Foreign exchange contractsNet gains (losses)— (6)1 (5)
Credit contractsNet gains (losses)— (1)— (1)
Embedded derivatives and MCGs:
Within fixed maturity investmentsNet gains (losses)(3)2 (4)6 
Within reinsurance agreements
Net gains (losses)6 4 (8)16 
MCGs
Net gains (losses)(1)2 (1)1 
Stabilizer
Net gains (losses)— 1 (2)5 
Total$33 $(24)$34 $(42)