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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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(Exact name of registrant as specified in its charter)
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Bermuda
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98-0630022
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification Number)
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Large accelerated filer
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☑
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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•
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the accuracy of management’s assumptions and estimates;
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•
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variability in the amount of statutory capital that our insurance and reinsurance subsidiaries have or are required to hold;
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•
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interest rate and/or foreign currency fluctuations;
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•
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our potential need for additional capital in the future and the potential unavailability of such capital to us on favorable terms or at all;
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•
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changes in relationships with important parties in our product distribution network;
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•
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the activities of our competitors and our ability to grow our retail business in a highly competitive environment;
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•
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the impact of general economic conditions on our ability to sell our products and on the fair value of our investments;
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•
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our ability to successfully acquire new companies or businesses and/or integrate such acquisitions into our existing framework;
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•
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downgrades, potential downgrades or other negative actions by rating agencies;
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•
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our dependence on key executives and inability to attract qualified personnel, or the potential loss of Bermudian personnel as a result of Bermuda employment restrictions;
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•
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market and credit risks that could diminish the value of our investments;
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•
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the impact of changes to the creditworthiness of our reinsurance and derivative counterparties;
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•
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changes in consumer perception regarding the desirability of annuities as retirement savings products;
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•
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potential litigation (including class action litigation), enforcement investigations or regulatory scrutiny against us and our subsidiaries, which we may be required to defend against or respond to;
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•
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the impact of new accounting rules or changes to existing accounting rules on our business;
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•
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interruption or other operational failures in telecommunication and information technology and other operating systems, as well as our ability to maintain the security of those systems;
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•
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the termination by Athene Asset Management LLC (AAM) of its investment management agreements with us and limitations on our ability to terminate such arrangements;
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•
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AAM’s dependence on key executives and inability to attract qualified personnel;
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•
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increased regulation or scrutiny of alternative investment advisers and certain trading methods;
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•
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potential changes to regulations affecting, among other things, transactions with our affiliates, the ability of our subsidiaries to make dividend payments or distributions to AHL, acquisitions by or of us, minimum capitalization and statutory reserve requirements for insurance companies and fiduciary obligations on parties who distribute our products;
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•
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suspension or revocation of our subsidiaries’ insurance and reinsurance licenses or our inability to procure licenses associated with new products or services;
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•
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increases in our tax liability resulting from the Base Erosion and Anti-Abuse Tax (BEAT);
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•
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improper interpretation or application of Public Law no. 115-97, the Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (Tax Act) or subsequent changes to, clarifications of or guidance under the Tax Act that is counter to our interpretation and has retroactive effect;
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•
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AHL or any of its non-United States (U.S.) subsidiaries becoming subject to U.S. federal income taxation;
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•
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adverse changes in U.S. tax law;
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•
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our being subject to U.S. withholding tax under the Foreign Account Tax Compliance Act (FATCA);
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•
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our potential inability to pay dividends or distributions; and
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•
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other risks and factors listed in Part II–Item 1A. Risk Factors included in this report, Part I—Item 1A. Risk Factors included in our 2018 Annual Report and those discussed elsewhere in this report and in our 2018 Annual Report.
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Term or Acronym
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Definition
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A-A Mortgage
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A-A Mortgage Opportunities, L.P.
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AAA Investor
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AAA Guarantor – Athene, L.P.
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AAIA
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Athene Annuity and Life Company
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AAM
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Athene Asset Management LLC
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AARe
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Athene Annuity Re Ltd., a Bermuda reinsurance subsidiary
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ACRA
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Athene Co-Invest Reinsurance Affiliate 1A Ltd.
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ADIP
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Apollo/Athene Dedicated Investment Program
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AGM
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Apollo Global Management, LLC
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AHL
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Athene Holding Ltd.
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ALRe
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Athene Life Re Ltd., a Bermuda reinsurance subsidiary
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AmeriHome
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AmeriHome Mortgage Company, LLC
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Apollo
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Apollo Global Management, LLC, together with its subsidiaries
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Apollo Group
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(1) Apollo, (2) the AAA Investor, (3) any investment fund or other collective investment vehicle whose general partner or managing member is owned, directly or indirectly, by Apollo or one or more of Apollo’s subsidiaries, (4) BRH Holdings GP, Ltd. and its shareholders and (5) any affiliate of any of the foregoing (except that AHL and its subsidiaries and employees of AHL, its subsidiaries or AAM are not members of the Apollo Group)
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Athene USA
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Athene USA Corporation
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Athora
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Athora Holding Ltd., formerly known as AGER Bermuda Holding Ltd.
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BMA
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Bermuda Monetary Authority
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CoInvest VI
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AAA Investments (Co-Invest VI), L.P.
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CoInvest VII
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AAA Investments (Co-Invest VII), L.P.
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LIMRA
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Life Insurance and Market Research Association
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MidCap
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MidCap FinCo Designated Activity Company
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NAIC
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National Association of Insurance Commissioners
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NYSDFS
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New York State Department of Financial Services
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RLI
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ReliaStar Life Insurance Company
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Treasury
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United States Department of the Treasury
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Voya
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Voya Financial, Inc.
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VIAC
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Voya Insurance and Annuity Company
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Venerable
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Venerable Holdings, Inc., together with its subsidiaries
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Term or Acronym
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Definition
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ABS
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Asset-backed securities
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ACL
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Authorized control level RBC as defined by the model created by the National Association of Insurance Commissioners
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ALM
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Asset liability management
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ALRe RBC
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The risk-based capital ratio of ALRe, when applying the NAIC risk-based capital factors.
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Alternative investments
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Alternative investments, including investment funds, CLO equity positions and certain other debt instruments considered to be equity-like
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Base of earnings
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Earnings generated from our results of operations and the underlying profitability drivers of our business
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Bermuda capital
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The capital of ALRe calculated under U.S. statutory accounting principles, including that for policyholder reserve liabilities which are subjected to U.S. cash flow testing requirements, but excluding certain items that do not exist under our applicable Bermuda requirements, such as interest maintenance reserves
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Block reinsurance
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A transaction in which the ceding company cedes all or a portion of a block of previously issued annuity contracts through a reinsurance agreement
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BSCR
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Bermuda Solvency Capital Requirement
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CAL
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Company action level risk-based capital as defined by the model created by the National Association of Insurance Commissioners
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CLO
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Collateralized loan obligation
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CMBS
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Commercial mortgage-backed securities
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CML
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Commercial mortgage loans
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Cost of crediting
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The interest credited to the policyholders on our fixed annuities, including, with respect to our fixed indexed annuities, option costs, as well as institutional costs related to institutional products, presented on an annualized basis for interim periods
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Cost of funds
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Cost of funds includes liability costs related to cost of crediting on both deferred annuities and institutional products, as well as other liability costs. Cost of funds is computed as the total liability costs divided by the average invested assets for the relevant period. Presented on an annualized basis for interim periods.
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DAC
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Deferred acquisition costs
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Deferred annuities
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Fixed indexed annuities, annual reset annuities and multi-year guaranteed annuities
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DSI
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Deferred sales inducement
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Excess capital
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Capital in excess of the level management believes is needed to support our current operating strategy
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FIA
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Fixed indexed annuity, which is an insurance contract that earns interest at a crediting rate based on a specified index on a tax-deferred basis
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Fixed annuities
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FIAs together with fixed rate annuities
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Fixed rate annuity
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An insurance contract that offers tax-deferred growth and the opportunity to produce a guaranteed stream of retirement income for the lifetime of its policyholder
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Flow reinsurance
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A transaction in which the ceding company cedes a portion of newly issued policies to the reinsurer
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GAAP
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Accounting principles generally accepted in the United States of America
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GLWB
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Guaranteed lifetime withdrawal benefit
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GMDB
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Guaranteed minimum death benefit
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IMA
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Investment management agreement
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IMO
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Independent marketing organization
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Invested assets
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The sum of (a) total investments on the consolidated balance sheet with available-for-sale securities at amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) consolidated variable interest entities’ assets, liabilities and noncontrolling interest and (f) policy loans ceded (which offset the direct policy loans in total investments). Invested assets includes investments supporting assumed funds withheld and modco agreements and excludes assets associated with funds withheld liabilities related to business exited through reinsurance agreements and derivative collateral (offsetting the related cash positions)
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Investment margin
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Investment margin applies to deferred annuities and is the excess of our net investment earned rate over the cost of crediting to our policyholders, presented on an annualized basis for interim periods
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Liability outflows
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The aggregate of withdrawals on our deferred annuities, maturities of our funding agreements, payments on payout annuities, and pension risk benefit payments
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MMS
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Minimum margin of solvency
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Modco
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Modified coinsurance
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Term or Acronym
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Definition
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MVA
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Market value adjustment
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MYGA
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Multi-year guaranteed annuity
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Net investment earned rate
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Income from our invested assets divided by the average invested assets for the relevant period, presented on an annualized basis for interim periods
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Net investment spread
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Net investment spread measures our investment performance less the total cost of our liabilities, presented on an annualized basis for interim periods
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Other liability costs
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Other liability costs include DAC, DSI and VOBA amortization, rider reserves, institutional costs, the cost of liabilities on products other than deferred annuities including offsets for premiums, product charges and other revenues
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OTTI
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Other-than-temporary impairment
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Payout annuities
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Annuities with a current cash payment component, which consist primarily of single premium immediate annuities, supplemental contracts and structured settlements
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Policy loan
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A loan to a policyholder under the terms of, and which is secured by, a policyholder’s policy
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PRT
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Pension risk transfer
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RBC
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Risk-based capital
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Reserve liabilities
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The sum of (a) interest sensitive contract liabilities, (b) future policy benefits, (c) dividends payable to policyholders, and (d) other policy claims and benefits, offset by reinsurance recoverable, excluding policy loans ceded. Reserve liabilities also includes the reserves related to assumed modco agreements in order to appropriately match the costs incurred in the consolidated statements of income with the liabilities. Reserve liabilities is net of the ceded liabilities to third-party reinsurers as the costs of the liabilities are passed to such reinsurers and therefore we have no net economic exposure to such liabilities, assuming our reinsurance counterparties perform under our agreements
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Rider reserves
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Guaranteed lifetime withdrawal benefits and guaranteed minimum death benefits reserves
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RMBS
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Residential mortgage-backed securities
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RML
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Residential mortgage loan
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Sales
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All money paid into an individual annuity, including money paid into new contracts with initial purchase occurring in the specified period and existing contracts with initial purchase occurring prior to the specified period (excluding internal transfers)
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SPIA
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Single premium immediate annuity
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Surplus assets
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Assets in excess of policyholder obligations, determined in accordance with the applicable domiciliary jurisdiction’s statutory accounting principles
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TAC
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Total adjusted capital as defined by the model created by the NAIC
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U.S. RBC Ratio
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The CAL RBC ratio for AADE, our parent U.S. insurance company
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VIE
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Variable interest entity
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VOBA
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Value of business acquired
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(In millions)
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June 30, 2019
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December 31, 2018
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Assets
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Investments
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Available-for-sale securities, at fair value (amortized cost: 2019 – $63,949 and 2018 – $60,025)
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$
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66,878
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$
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59,265
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Trading securities, at fair value
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2,381
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|
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1,949
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Equity securities, at fair value
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336
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|
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216
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|
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Mortgage loans, net of allowances (portion at fair value: 2019 – $32 and 2018 – $32)
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11,912
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|
|
10,340
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|
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Investment funds (portion at fair value: 2019 – $163 and 2018 – $182)
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722
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|
|
703
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|
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Policy loans
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480
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|
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488
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Funds withheld at interest (portion at fair value: 2019 – $704 and 2018 – $57)
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15,307
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|
15,023
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Derivative assets
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2,299
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|
|
1,043
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|
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Short-term investments, at fair value
|
288
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|
|
191
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|
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Other investments (portion at fair value: 2019 – $52 and 2018 – $52)
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119
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|
|
122
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|
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Total investments
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100,722
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|
|
89,340
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Cash and cash equivalents
|
4,847
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2,911
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Restricted cash
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391
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|
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492
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Investments in related parties
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Available-for-sale securities, at fair value (amortized cost: 2019 – $1,725 and 2018 – $1,462)
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1,740
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1,437
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Trading securities, at fair value
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311
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249
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Equity securities, at fair value
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344
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120
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Mortgage loans
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287
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291
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Investment funds (portion at fair value: 2019 – $241 and 2018 – $201)
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2,578
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2,232
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Funds withheld at interest (portion at fair value: 2019 – $501 and 2018 – $(110))
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13,737
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13,577
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Other investments
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387
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386
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Accrued investment income (related party: 2019 – $22 and 2018 – $25)
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758
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|
682
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Reinsurance recoverable (related party: 2019 – $335 and 2018 – $344; portion at fair value: 2019 – $1,834 and 2018 – $1,676)
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5,678
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5,534
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Deferred acquisition costs, deferred sales inducements and value of business acquired
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5,324
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5,907
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Other assets (related party: 2019 – $3 and 2018 – $357)
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1,224
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1,635
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Assets of consolidated variable interest entities
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Investments
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Trading securities, at fair value (related party: 2019 – $1 and 2018 – $35)
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21
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35
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Equity securities, at fair value – related party
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6
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50
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Investment funds (related party: 2019 – $593 and 2018 – $583; portion at fair value: 2019 – $568 and 2018 – $567)
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612
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|
624
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Cash and cash equivalents
|
1
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|
2
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Other assets
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12
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|
1
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Total assets
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$
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138,980
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$
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125,505
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(In millions, except per share data)
|
June 30, 2019
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December 31, 2018
|
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Liabilities and Equity
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Liabilities
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Interest sensitive contract liabilities (related party: 2019 – $16,112 and 2018 – $16,850; portion at fair value: 2019 – $10,956 and 2018 – $8,901)
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$
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100,291
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$
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96,610
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Future policy benefits (related party: 2019 – $1,429 and 2018 – $1,259; portion at fair value: 2019 – $2,304 and 2018 – $2,173)
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20,089
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16,704
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Other policy claims and benefits (related party: 2019 – $6 and 2018 – $10)
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147
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142
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Dividends payable to policyholders
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116
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|
118
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Long-term debt
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991
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991
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Derivative liabilities
|
80
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|
|
85
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Payables for collateral on derivatives
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2,183
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|
|
969
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Funds withheld liability (related party: 2019 – $346 and 2018 – $337; portion at fair value: 2019 – $24 and 2018 – $(1))
|
759
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|
721
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|
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Other liabilities (related party: 2019 – $76 and 2018 – $59)
|
1,958
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|
|
888
|
|
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Liabilities of consolidated variable interest entities
|
1
|
|
|
1
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|
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Total liabilities
|
126,615
|
|
|
117,229
|
|
||
Commitments and Contingencies (Note 9)
|
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|
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Equity
|
|
|
|
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Preferred stock – par value $1 per share; $863 aggregate liquidation preference; authorized, issued and outstanding: 2019 and 2018 – 0.0 shares
|
—
|
|
|
—
|
|
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Common stock
|
|
|
|
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Class A – par value $0.001 per share; authorized: 2019 and 2018 – 425.0 shares; issued and outstanding: 2019 – 153.0 and 2018 – 162.4 shares
|
—
|
|
|
—
|
|
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Class B – par value $0.001 per share; convertible to Class A; authorized: 2019 and 2018 – 325.0 shares; issued and outstanding: 2019 – 25.4 and 2018 – 25.4 shares
|
—
|
|
|
—
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|
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Class M-1 – par value $0.001 per share; convertible to Class A; authorized: 2019 and 2018 – 7.1 shares; issued and outstanding: 2019 – 3.3 and 2018 – 3.4 shares
|
—
|
|
|
—
|
|
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Class M-2 – par value $0.001 per share; convertible to Class A; authorized: 2019 and 2018 – 5.0 shares; issued and outstanding: 2019 – 0.8 and 2018 – 0.8 shares
|
—
|
|
|
—
|
|
||
Class M-3 – par value $0.001 per share; convertible to Class A; authorized: 2019 and 2018 – 7.5 shares; issued and outstanding: 2019 – 1.0 and 2018 – 1.0 shares
|
—
|
|
|
—
|
|
||
Class M-4 – par value $0.001 per share; convertible to Class A; authorized: 2019 and 2018 – 7.5 shares; issued and outstanding: 2019 – 4.0 and 2018 – 4.1 shares
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
4,144
|
|
|
3,462
|
|
||
Retained earnings
|
6,461
|
|
|
5,286
|
|
||
Accumulated other comprehensive income (loss) (related party: 2019 – $14 and 2018 – $(25))
|
1,760
|
|
|
(472
|
)
|
||
Total shareholders’ equity
|
12,365
|
|
|
8,276
|
|
||
Total liabilities and equity
|
$
|
138,980
|
|
|
$
|
125,505
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions, except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Premiums (related party of $56 and $582 for the three months ended and $122 and $582 for the six months ended June 30, 2019 and 2018, respectively)
|
$
|
733
|
|
|
$
|
731
|
|
|
$
|
2,699
|
|
|
$
|
1,009
|
|
Product charges (related party of $14 and $5 for the three months ended and $28 and $5 for the six months ended June 30, 2019 and 2018, respectively)
|
132
|
|
|
106
|
|
|
257
|
|
|
202
|
|
||||
Net investment income (related party investment income of $134 and $100 for the three months ended and $317 and $176 for the six months ended June 30, 2019 and 2018, respectively, and related party investment expense of $94 and $86 for the three months ended and $186 and $169 for the six months ended June 30, 2019 and 2018, respectively)
|
1,161
|
|
|
958
|
|
|
2,227
|
|
|
1,813
|
|
||||
Investment related gains (losses) (related party of $429 and $(59) for the three months ended and $746 and $(42) for the six months ended June 30, 2019 and 2018, respectively)
|
1,316
|
|
|
(2
|
)
|
|
3,088
|
|
|
(238
|
)
|
||||
Other-than-temporary impairment investment losses
|
|
|
|
|
|
|
|
||||||||
Other-than-temporary impairment losses
|
(7
|
)
|
|
—
|
|
|
(9
|
)
|
|
(3
|
)
|
||||
Other-than-temporary impairment losses reclassified to (from) other comprehensive income
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Net other-than-temporary impairment losses
|
(6
|
)
|
|
—
|
|
|
(7
|
)
|
|
(3
|
)
|
||||
Other revenues
|
9
|
|
|
6
|
|
|
21
|
|
|
12
|
|
||||
Revenues of consolidated variable interest entities
|
|
|
|
|
|
|
|
||||||||
Net investment income (related party of $20 and $14 for the three months ended and $36 and $24 for the six months ended June 30, 2019 and 2018, respectively)
|
21
|
|
|
14
|
|
|
37
|
|
|
24
|
|
||||
Investment related gains (losses) (related party of $2 and $(11) for the three months ended and $6 and $(6) for the six months ended June 30, 2019 and 2018, respectively)
|
3
|
|
|
(11
|
)
|
|
8
|
|
|
(6
|
)
|
||||
Total revenues
|
3,369
|
|
|
1,802
|
|
|
8,330
|
|
|
2,813
|
|
||||
Benefits and expenses
|
|
|
|
|
|
|
|
||||||||
Interest sensitive contract benefits (related party of $114 and $16 for the three months ended and $297 and $16 for the six months ended June 30, 2019 and 2018, respectively)
|
1,094
|
|
|
342
|
|
|
2,610
|
|
|
373
|
|
||||
Amortization of deferred sales inducements
|
13
|
|
|
23
|
|
|
18
|
|
|
43
|
|
||||
Future policy and other policy benefits (related party of $91 and $580 for the three months ended and $197 and $580 for the six months ended June 30, 2019 and 2018, respectively)
|
1,057
|
|
|
864
|
|
|
3,352
|
|
|
1,265
|
|
||||
Amortization of deferred acquisition costs and value of business acquired
|
261
|
|
|
89
|
|
|
492
|
|
|
171
|
|
||||
Dividends to policyholders
|
9
|
|
|
9
|
|
|
18
|
|
|
22
|
|
||||
Policy and other operating expenses (related party of $12 and $3 for the three months ended and $20 and $5 for the six months ended June 30, 2019 and 2018, respectively)
|
185
|
|
|
154
|
|
|
350
|
|
|
296
|
|
||||
Total benefits and expenses
|
2,619
|
|
|
1,481
|
|
|
6,840
|
|
|
2,170
|
|
||||
Income before income taxes
|
750
|
|
|
321
|
|
|
1,490
|
|
|
643
|
|
||||
Income tax expense
|
30
|
|
|
64
|
|
|
62
|
|
|
109
|
|
||||
Net income
|
$
|
720
|
|
|
$
|
257
|
|
|
$
|
1,428
|
|
|
$
|
534
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share
|
|
|
|
|
|
|
|
||||||||
Basic – Classes A, B, M-1, M-2, M-3 and M-4
|
$
|
3.76
|
|
|
$
|
1.30
|
|
|
$
|
7.43
|
|
|
$
|
2.71
|
|
Diluted – Class A
|
3.75
|
|
|
1.30
|
|
|
7.41
|
|
|
2.70
|
|
||||
Diluted – Class B
|
3.76
|
|
|
1.30
|
|
|
7.43
|
|
|
2.71
|
|
||||
Diluted – Class M-1
|
3.76
|
|
|
1.30
|
|
|
7.43
|
|
|
2.71
|
|
||||
Diluted – Class M-2
|
3.76
|
|
|
1.29
|
|
|
7.43
|
|
|
2.68
|
|
||||
Diluted – Class M-3
|
3.76
|
|
|
1.30
|
|
|
7.43
|
|
|
2.68
|
|
||||
Diluted – Class M-4
|
3.28
|
|
|
1.02
|
|
|
6.45
|
|
|
1.98
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
720
|
|
|
$
|
257
|
|
|
$
|
1,428
|
|
|
$
|
534
|
|
Other comprehensive income (loss), before tax
|
|
|
|
|
|
|
|
||||||||
Unrealized investment gains (losses) on available-for-sale securities
|
1,262
|
|
|
(702
|
)
|
|
2,740
|
|
|
(1,593
|
)
|
||||
Noncredit component of other-than-temporary impairment losses on available-for-sale securities
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Unrealized gains on hedging instruments
|
55
|
|
|
101
|
|
|
47
|
|
|
45
|
|
||||
Pension adjustments
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
3
|
|
||||
Foreign currency translation adjustments
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Other comprehensive income (loss), before tax
|
1,315
|
|
|
(603
|
)
|
|
2,784
|
|
|
(1,555
|
)
|
||||
Income tax expense (benefit) related to other comprehensive income (loss)
|
261
|
|
|
(116
|
)
|
|
552
|
|
|
(295
|
)
|
||||
Other comprehensive income (loss)
|
1,054
|
|
|
(487
|
)
|
|
2,232
|
|
|
(1,260
|
)
|
||||
Comprehensive income (loss)
|
$
|
1,774
|
|
|
$
|
(230
|
)
|
|
$
|
3,660
|
|
|
$
|
(726
|
)
|
|
Three months ended
|
||||||||||||||||||||||
(In millions)
|
Preferred stock
|
|
Common stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
|
Total shareholders’ equity
|
||||||||||||
Balance at March 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,485
|
|
|
$
|
4,568
|
|
|
$
|
634
|
|
|
$
|
8,687
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
257
|
|
|
—
|
|
|
257
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(487
|
)
|
|
(487
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Retirement or repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Balance at June 30, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,492
|
|
|
$
|
4,823
|
|
|
$
|
147
|
|
|
$
|
8,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at March 31, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,448
|
|
|
$
|
5,963
|
|
|
$
|
706
|
|
|
$
|
10,117
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
720
|
|
|
—
|
|
|
720
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,054
|
|
|
1,054
|
|
||||||
Issuance of preferred shares, net of expenses
|
—
|
|
|
—
|
|
|
839
|
|
|
—
|
|
|
—
|
|
|
839
|
|
||||||
Issuance of common shares, net of expenses
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||||
Retirement or repurchase of shares
|
—
|
|
|
—
|
|
|
(154
|
)
|
|
(222
|
)
|
|
—
|
|
|
(376
|
)
|
||||||
Balance at June 30, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,144
|
|
|
$
|
6,461
|
|
|
$
|
1,760
|
|
|
$
|
12,365
|
|
|
Six months ended
|
||||||||||||||||||||||
(In millions)
|
Preferred stock
|
|
Common stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
|
Total shareholders’ equity
|
||||||||||||
Balance at December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,472
|
|
|
$
|
4,255
|
|
|
$
|
1,449
|
|
|
$
|
9,176
|
|
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
(42
|
)
|
|
(3
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
534
|
|
|
—
|
|
|
534
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,260
|
)
|
|
(1,260
|
)
|
||||||
Issuance of common shares, net of expenses
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||||
Retirement or repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||||
Balance at June 30, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,492
|
|
|
$
|
4,823
|
|
|
$
|
147
|
|
|
$
|
8,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,462
|
|
|
$
|
5,286
|
|
|
$
|
(472
|
)
|
|
$
|
8,276
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,428
|
|
|
—
|
|
|
1,428
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,232
|
|
|
2,232
|
|
||||||
Issuance of preferred shares, net of expenses
|
—
|
|
|
—
|
|
|
839
|
|
|
—
|
|
|
—
|
|
|
839
|
|
||||||
Issuance of common shares, net of expenses
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||
Retirement or repurchase of shares
|
—
|
|
|
—
|
|
|
(174
|
)
|
|
(253
|
)
|
|
|
|
|
(427
|
)
|
||||||
Balance at June 30, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,144
|
|
|
$
|
6,461
|
|
|
$
|
1,760
|
|
|
$
|
12,365
|
|
|
Six months ended June 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
1,428
|
|
|
$
|
534
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Amortization of deferred acquisition costs and value of business acquired
|
492
|
|
|
171
|
|
||
Amortization of deferred sales inducements
|
18
|
|
|
43
|
|
||
Accretion of net investment premiums, discounts and other
|
(54
|
)
|
|
(99
|
)
|
||
Payment at inception of reinsurance agreements, net (related party: 2019 – $0 and 2018 – $(407))
|
—
|
|
|
(394
|
)
|
||
Net investment (income) loss (related party: 2019 – $(52) and 2018 – $(50))
|
(47
|
)
|
|
(32
|
)
|
||
Net recognized (gains) losses on investments and derivatives (related party: 2019 – $(9) and 2018 – $(18))
|
(1,518
|
)
|
|
161
|
|
||
Policy acquisition costs deferred
|
(354
|
)
|
|
(304
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accrued investment income (related party: 2019 – $3 and 2018 – $(14))
|
(76
|
)
|
|
(47
|
)
|
||
Interest sensitive contract liabilities (related party: 2019 – $264 and 2018 – $11)
|
2,397
|
|
|
34
|
|
||
Future policy benefits, other policy claims and benefits, dividends payable to policyholders and reinsurance recoverable (related party: 2019 – $162 and 2018 – $15)
|
921
|
|
|
262
|
|
||
Funds withheld assets and liabilities (related party: 2019 – $(953) and 2018 – $23)
|
(1,886
|
)
|
|
(32
|
)
|
||
Other assets and liabilities
|
271
|
|
|
124
|
|
||
Consolidated variable interest entities related:
|
|
|
|
||||
Net recognized (gains) losses on investments and derivatives (related party: 2019 – $(6) and 2018 – $5)
|
(8
|
)
|
|
5
|
|
||
Other operating activities, net
|
(1
|
)
|
|
1
|
|
||
Net cash provided by operating activities
|
1,583
|
|
|
427
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Sales, maturities and repayments of:
|
|
|
|
||||
Available-for-sale securities (related party: 2019 – $73 and 2018 – $101)
|
5,567
|
|
|
6,309
|
|
||
Trading securities (related party: 2019 – $27 and 2018 – $22)
|
110
|
|
|
281
|
|
||
Equity securities
|
19
|
|
|
2
|
|
||
Mortgage loans (related party: 2019 – $4 and 2018 – $0)
|
994
|
|
|
686
|
|
||
Investment funds (related party: 2019 – $116 and 2018 – $143)
|
181
|
|
|
252
|
|
||
Derivative instruments and other invested assets
|
653
|
|
|
1,062
|
|
||
Short-term investments
|
163
|
|
|
161
|
|
||
Purchases of:
|
|
|
|
||||
Available-for-sale securities (related party: 2019 – $(436) and 2018 – $(266))
|
(7,813
|
)
|
|
(8,854
|
)
|
||
Trading securities (related party: 2019 – $(6) and 2018 – $0)
|
(382
|
)
|
|
(17
|
)
|
||
Equity securities (related party: 2019 – $(213) and 2018 – $0)
|
(332
|
)
|
|
(62
|
)
|
||
Mortgage loans (related party: 2019 – $0 and 2018 – $(389))
|
(2,558
|
)
|
|
(1,924
|
)
|
||
Investment funds (related party: 2019 – $(390) and 2018 – $(620))
|
(479
|
)
|
|
(718
|
)
|
||
Derivative instruments and other invested assets (related party: 2019 – $0 and 2018 – $(150))
|
(581
|
)
|
|
(659
|
)
|
||
Short-term investments (related party: 2019 – $0 and 2018 – $(121))
|
(259
|
)
|
|
(370
|
)
|
||
Consolidated variable interest entities related:
|
|
|
|
||||
Sales, maturities and repayments of investments (related party: 2019 – $84 and 2018 – $103)
|
89
|
|
|
103
|
|
||
Purchases of investments (related party: 2019 – $(12) and 2018 – $0)
|
(21
|
)
|
|
(52
|
)
|
||
Deconsolidation of Athora Holding Ltd.
|
—
|
|
|
(296
|
)
|
||
Other investing activities, net
|
631
|
|
|
284
|
|
||
Net cash used in investing activities
|
(4,018
|
)
|
|
(3,812
|
)
|
||
|
|
|
(Continued)
|
|
|||
See accompanying notes to the unaudited condensed consolidated financial statements
|
|
|
|
|
Six months ended June 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from short-term debt
|
$
|
—
|
|
|
$
|
183
|
|
Proceeds from long-term debt
|
—
|
|
|
998
|
|
||
Deposits on investment-type policies and contracts (related party: 2019 – $117 and 2018 – $128)
|
5,972
|
|
|
4,375
|
|
||
Withdrawals on investment-type policies and contracts (related party: 2019 – $(225) and 2018 – $(37))
|
(3,275
|
)
|
|
(2,839
|
)
|
||
Payments for coinsurance agreements on investment-type contracts, net
|
(31
|
)
|
|
(12
|
)
|
||
Net change in cash collateral posted for derivative transactions
|
1,214
|
|
|
(577
|
)
|
||
Issuance of preferred stock, net of expenses
|
839
|
|
|
—
|
|
||
Repurchase of common stock
|
(427
|
)
|
|
(5
|
)
|
||
Other financing activities, net
|
(23
|
)
|
|
53
|
|
||
Net cash provided by financing activities
|
4,269
|
|
|
2,176
|
|
||
Net increase (decrease) in cash and cash equivalents
|
1,834
|
|
|
(1,209
|
)
|
||
Cash and cash equivalents at beginning of year1
|
3,405
|
|
|
4,997
|
|
||
Cash and cash equivalents at end of period1
|
$
|
5,239
|
|
|
$
|
3,788
|
|
|
|
|
|
||||
Supplementary information
|
|
|
|
||||
Non-cash transactions
|
|
|
|
||||
Deposits on investment-type policies and contracts through reinsurance agreements (related party: 2019 – $108 and 2018 – $17,525)
|
$
|
423
|
|
|
$
|
18,247
|
|
Withdrawals on investment-type policies and contracts through reinsurance agreements (related party: 2019 – $910 and 2018 – $155)
|
1,873
|
|
|
341
|
|
||
Investments received from settlements on reinsurance agreements
|
31
|
|
|
8
|
|
||
Investments received from pension risk transfer premiums
|
1,918
|
|
|
92
|
|
||
Investment in Athora Holding Ltd. received upon deconsolidation
|
—
|
|
|
108
|
|
||
|
|
|
|
||||
1 Includes cash and cash equivalents, restricted cash, and cash and cash equivalents of consolidated variable interest entities.
|
•
|
Our non-U.S. reinsurance subsidiaries, to which AHL’s other insurance subsidiaries and third-party ceding companies directly and indirectly reinsure a portion of their liabilities, including Athene Life Re Ltd. (ALRe), a Bermuda exempted company; and
|
•
|
Athene USA Corporation, an Iowa corporation (together with its subsidiaries, Athene USA).
|
•
|
The update requires cash flow assumptions used to measure the liability for future policy benefits to be updated at least annually and no longer allows a provision for adverse deviation. The remeasurement of the liability associated with the update of assumptions is required to be recognized in net income. Loss recognition testing is eliminated for traditional and limited-payment contracts. The update also requires the discount rate utilized in measuring the liability to be an upper-medium grade fixed-income instrument yield, which is to be updated at each reporting date. The change in liability due to changes in the discount rate is to be recognized in other comprehensive income.
|
•
|
The update simplifies the amortization of deferred acquisition costs and other balances amortized in proportion to premiums, gross profits, or gross margins, requiring such balances to be amortized on a constant level basis over the expected term of the contracts. Deferred costs are required to be written off for unexpected contract terminations but are not subject to impairment testing.
|
•
|
The update requires certain contract features meeting the definition of market risk benefits to be measured at fair value. Among the features included in this definition are the guaranteed lifetime withdrawal benefits (GLWB) and guaranteed minimum death benefit (GMDB) riders attached to the Company’s annuity products. The change in fair value of the market risk benefits is to be recognized in net income, excluding the portion attributable to changes in instrument-specific credit risk which is recognized in other comprehensive income.
|
•
|
The update also introduces disclosure requirements around the liability for future policy benefits, policyholder account balances, market risk benefits, separate account liabilities, and deferred acquisition costs. This includes disaggregated rollforwards of these balances and information about significant inputs, judgments, assumptions and methods used in their measurement.
|
|
June 30, 2019
|
||||||||||||||||||
(In millions)
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
OTTI
in AOCI
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agencies
|
$
|
57
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
U.S. state, municipal and political subdivisions
|
1,202
|
|
|
208
|
|
|
(3
|
)
|
|
1,407
|
|
|
—
|
|
|||||
Foreign governments
|
306
|
|
|
18
|
|
|
—
|
|
|
324
|
|
|
—
|
|
|||||
Corporate
|
40,712
|
|
|
2,386
|
|
|
(298
|
)
|
|
42,800
|
|
|
—
|
|
|||||
CLO
|
6,760
|
|
|
14
|
|
|
(133
|
)
|
|
6,641
|
|
|
—
|
|
|||||
ABS
|
5,117
|
|
|
142
|
|
|
(27
|
)
|
|
5,232
|
|
|
2
|
|
|||||
CMBS
|
2,703
|
|
|
94
|
|
|
(7
|
)
|
|
2,790
|
|
|
7
|
|
|||||
RMBS
|
7,092
|
|
|
544
|
|
|
(12
|
)
|
|
7,624
|
|
|
12
|
|
|||||
Total AFS securities
|
63,949
|
|
|
3,409
|
|
|
(480
|
)
|
|
66,878
|
|
|
21
|
|
|||||
AFS securities – related party
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|||||
CLO
|
793
|
|
|
1
|
|
|
(12
|
)
|
|
782
|
|
|
—
|
|
|||||
ABS
|
929
|
|
|
26
|
|
|
—
|
|
|
955
|
|
|
—
|
|
|||||
Total AFS securities – related party
|
1,725
|
|
|
27
|
|
|
(12
|
)
|
|
1,740
|
|
|
—
|
|
|||||
Total AFS securities including related party
|
$
|
65,674
|
|
|
$
|
3,436
|
|
|
$
|
(492
|
)
|
|
$
|
68,618
|
|
|
$
|
21
|
|
|
December 31, 2018
|
||||||||||||||||||
(In millions)
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
OTTI
in AOCI
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agencies
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
—
|
|
U.S. state, municipal and political subdivisions
|
1,183
|
|
|
117
|
|
|
(7
|
)
|
|
1,293
|
|
|
—
|
|
|||||
Foreign governments
|
162
|
|
|
2
|
|
|
(3
|
)
|
|
161
|
|
|
—
|
|
|||||
Corporate
|
38,018
|
|
|
394
|
|
|
(1,315
|
)
|
|
37,097
|
|
|
1
|
|
|||||
CLO
|
5,658
|
|
|
2
|
|
|
(299
|
)
|
|
5,361
|
|
|
—
|
|
|||||
ABS
|
4,915
|
|
|
53
|
|
|
(48
|
)
|
|
4,920
|
|
|
—
|
|
|||||
CMBS
|
2,390
|
|
|
27
|
|
|
(60
|
)
|
|
2,357
|
|
|
7
|
|
|||||
RMBS
|
7,642
|
|
|
413
|
|
|
(36
|
)
|
|
8,019
|
|
|
11
|
|
|||||
Total AFS securities
|
60,025
|
|
|
1,008
|
|
|
(1,768
|
)
|
|
59,265
|
|
|
19
|
|
|||||
AFS securities – related party
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
587
|
|
|
—
|
|
|
(25
|
)
|
|
562
|
|
|
—
|
|
|||||
ABS
|
875
|
|
|
4
|
|
|
(4
|
)
|
|
875
|
|
|
—
|
|
|||||
Total AFS securities – related party
|
1,462
|
|
|
4
|
|
|
(29
|
)
|
|
1,437
|
|
|
—
|
|
|||||
Total AFS securities including related party
|
$
|
61,487
|
|
|
$
|
1,012
|
|
|
$
|
(1,797
|
)
|
|
$
|
60,702
|
|
|
$
|
19
|
|
|
June 30, 2019
|
||||||
(In millions)
|
Amortized Cost
|
|
Fair Value
|
||||
AFS securities
|
|
|
|
||||
Due in one year or less
|
$
|
1,127
|
|
|
$
|
1,129
|
|
Due after one year through five years
|
8,977
|
|
|
9,235
|
|
||
Due after five years through ten years
|
10,780
|
|
|
11,226
|
|
||
Due after ten years
|
21,393
|
|
|
23,001
|
|
||
CLO, ABS, CMBS and RMBS
|
21,672
|
|
|
22,287
|
|
||
Total AFS securities
|
63,949
|
|
|
66,878
|
|
||
AFS securities – related party
|
|
|
|
||||
Due after five years through ten years
|
3
|
|
|
3
|
|
||
CLO and ABS
|
1,722
|
|
|
1,737
|
|
||
Total AFS securities – related party
|
1,725
|
|
|
1,740
|
|
||
Total AFS securities including related party
|
$
|
65,674
|
|
|
$
|
68,618
|
|
|
June 30, 2019
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||
(In millions)
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Gross
Unrealized Losses |
||||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and agencies
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
U.S. state, municipal and political subdivisions
|
42
|
|
|
—
|
|
|
43
|
|
|
(3
|
)
|
|
85
|
|
|
(3
|
)
|
||||||
Foreign governments
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||||
Corporate
|
2,466
|
|
|
(104
|
)
|
|
3,587
|
|
|
(194
|
)
|
|
6,053
|
|
|
(298
|
)
|
||||||
CLO
|
3,122
|
|
|
(65
|
)
|
|
1,527
|
|
|
(68
|
)
|
|
4,649
|
|
|
(133
|
)
|
||||||
ABS
|
408
|
|
|
(9
|
)
|
|
287
|
|
|
(18
|
)
|
|
695
|
|
|
(27
|
)
|
||||||
CMBS
|
178
|
|
|
(3
|
)
|
|
142
|
|
|
(4
|
)
|
|
320
|
|
|
(7
|
)
|
||||||
RMBS
|
523
|
|
|
(10
|
)
|
|
141
|
|
|
(2
|
)
|
|
664
|
|
|
(12
|
)
|
||||||
Total AFS securities
|
6,772
|
|
|
(191
|
)
|
|
5,729
|
|
|
(289
|
)
|
|
12,501
|
|
|
(480
|
)
|
||||||
AFS securities – related party
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
CLO
|
438
|
|
|
(7
|
)
|
|
99
|
|
|
(5
|
)
|
|
537
|
|
|
(12
|
)
|
||||||
Total AFS securities – related party
|
438
|
|
|
(7
|
)
|
|
99
|
|
|
(5
|
)
|
|
537
|
|
|
(12
|
)
|
||||||
Total AFS securities including related party
|
$
|
7,210
|
|
|
$
|
(198
|
)
|
|
$
|
5,828
|
|
|
$
|
(294
|
)
|
|
$
|
13,038
|
|
|
$
|
(492
|
)
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||
(In millions)
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
||||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and agencies
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
—
|
|
U.S. state, municipal and political subdivisions
|
139
|
|
|
(2
|
)
|
|
82
|
|
|
(5
|
)
|
|
221
|
|
|
(7
|
)
|
||||||
Foreign governments
|
97
|
|
|
(2
|
)
|
|
15
|
|
|
(1
|
)
|
|
112
|
|
|
(3
|
)
|
||||||
Corporate
|
20,213
|
|
|
(942
|
)
|
|
4,118
|
|
|
(373
|
)
|
|
24,331
|
|
|
(1,315
|
)
|
||||||
CLO
|
5,054
|
|
|
(297
|
)
|
|
90
|
|
|
(2
|
)
|
|
5,144
|
|
|
(299
|
)
|
||||||
ABS
|
1,336
|
|
|
(23
|
)
|
|
506
|
|
|
(25
|
)
|
|
1,842
|
|
|
(48
|
)
|
||||||
CMBS
|
932
|
|
|
(27
|
)
|
|
497
|
|
|
(33
|
)
|
|
1,429
|
|
|
(60
|
)
|
||||||
RMBS
|
1,417
|
|
|
(31
|
)
|
|
140
|
|
|
(5
|
)
|
|
1,557
|
|
|
(36
|
)
|
||||||
Total AFS securities
|
29,220
|
|
|
(1,324
|
)
|
|
5,450
|
|
|
(444
|
)
|
|
34,670
|
|
|
(1,768
|
)
|
||||||
AFS securities – related party
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
CLO
|
534
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
534
|
|
|
(25
|
)
|
||||||
ABS
|
306
|
|
|
(2
|
)
|
|
116
|
|
|
(2
|
)
|
|
422
|
|
|
(4
|
)
|
||||||
Total AFS securities – related party
|
840
|
|
|
(27
|
)
|
|
116
|
|
|
(2
|
)
|
|
956
|
|
|
(29
|
)
|
||||||
Total AFS securities including related party
|
$
|
30,060
|
|
|
$
|
(1,351
|
)
|
|
$
|
5,566
|
|
|
$
|
(446
|
)
|
|
$
|
35,626
|
|
|
$
|
(1,797
|
)
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Beginning balance
|
$
|
11
|
|
|
$
|
7
|
|
|
$
|
10
|
|
|
$
|
14
|
|
Initial impairments – credit loss OTTI recognized on securities not previously impaired
|
2
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Additional impairments – credit loss OTTI recognized on securities previously impaired
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Reduction in impairments from securities sold, matured or repaid
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||
Ending balance
|
$
|
13
|
|
|
$
|
7
|
|
|
$
|
13
|
|
|
$
|
7
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
AFS securities
|
$
|
763
|
|
|
$
|
719
|
|
|
$
|
1,516
|
|
|
$
|
1,387
|
|
Trading securities
|
49
|
|
|
54
|
|
|
91
|
|
|
98
|
|
||||
Equity securities
|
4
|
|
|
2
|
|
|
7
|
|
|
4
|
|
||||
Mortgage loans
|
159
|
|
|
104
|
|
|
310
|
|
|
195
|
|
||||
Investment funds
|
102
|
|
|
58
|
|
|
112
|
|
|
123
|
|
||||
Funds withheld at interest
|
134
|
|
|
86
|
|
|
297
|
|
|
132
|
|
||||
Other
|
45
|
|
|
23
|
|
|
84
|
|
|
46
|
|
||||
Investment revenue
|
1,256
|
|
|
1,046
|
|
|
2,417
|
|
|
1,985
|
|
||||
Investment expenses
|
(95
|
)
|
|
(88
|
)
|
|
(190
|
)
|
|
(172
|
)
|
||||
Net investment income
|
$
|
1,161
|
|
|
$
|
958
|
|
|
$
|
2,227
|
|
|
$
|
1,813
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
AFS securities
|
|
|
|
|
|
|
|
||||||||
Gross realized gains on investment activity
|
$
|
56
|
|
|
$
|
51
|
|
|
$
|
73
|
|
|
$
|
72
|
|
Gross realized losses on investment activity
|
(4
|
)
|
|
(37
|
)
|
|
(17
|
)
|
|
(43
|
)
|
||||
Net realized investment gains on AFS securities
|
52
|
|
|
14
|
|
|
56
|
|
|
29
|
|
||||
Net recognized investment gains (losses) on trading securities
|
79
|
|
|
(76
|
)
|
|
128
|
|
|
(165
|
)
|
||||
Net recognized investment gains on equity securities
|
1
|
|
|
3
|
|
|
19
|
|
|
4
|
|
||||
Derivative gains (losses)
|
1,181
|
|
|
46
|
|
|
2,873
|
|
|
(138
|
)
|
||||
Other gains
|
3
|
|
|
11
|
|
|
12
|
|
|
32
|
|
||||
Investment related gains (losses)
|
$
|
1,316
|
|
|
$
|
(2
|
)
|
|
$
|
3,088
|
|
|
$
|
(238
|
)
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Trading securities
|
$
|
98
|
|
|
$
|
(41
|
)
|
|
$
|
169
|
|
|
$
|
(110
|
)
|
Trading securities – related party
|
(13
|
)
|
|
(4
|
)
|
|
(16
|
)
|
|
(6
|
)
|
||||
VIE trading securities – related party
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Equity securities
|
2
|
|
|
4
|
|
|
20
|
|
|
4
|
|
||||
Equity securities – related party
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
VIE equity securities – related party
|
(2
|
)
|
|
(14
|
)
|
|
(2
|
)
|
|
(39
|
)
|
|
June 30, 2019
|
||||||
(In millions)
|
Fixed maturity securities
|
|
Mortgage loans
|
||||
Contractually required payments receivable
|
$
|
92
|
|
|
$
|
1,035
|
|
Cash flows expected to be collected
|
74
|
|
|
1,010
|
|
||
Fair value
|
64
|
|
|
800
|
|
|
Three months ended June 30, 2019
|
|
Six months ended June 30, 2019
|
||||||||||||
(In millions)
|
Fixed maturity securities
|
|
Mortgage loans
|
|
Fixed maturity securities
|
|
Mortgage loans
|
||||||||
Beginning balance
|
$
|
1,576
|
|
|
$
|
712
|
|
|
$
|
1,677
|
|
|
$
|
697
|
|
Purchases of PCI investments, net of sales
|
(2
|
)
|
|
113
|
|
|
6
|
|
|
153
|
|
||||
Accretion
|
(81
|
)
|
|
(29
|
)
|
|
(172
|
)
|
|
(61
|
)
|
||||
Net reclassification from (to) non-accretable difference
|
(111
|
)
|
|
64
|
|
|
(129
|
)
|
|
71
|
|
||||
Ending balance at June 30
|
$
|
1,382
|
|
|
$
|
860
|
|
|
$
|
1,382
|
|
|
$
|
860
|
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Commercial mortgage loans
|
$
|
8,022
|
|
|
$
|
7,217
|
|
Commercial mortgage loans under development
|
95
|
|
|
80
|
|
||
Total commercial mortgage loans
|
8,117
|
|
|
7,297
|
|
||
Residential mortgage loans
|
4,082
|
|
|
3,334
|
|
||
Mortgage loans, net of allowances
|
$
|
12,199
|
|
|
$
|
10,631
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except for percentages)
|
Net Carrying Value
|
|
Percentage of Total
|
|
Net Carrying Value
|
|
Percentage of Total
|
||||||
Property type
|
|
|
|
|
|
|
|
||||||
Office building
|
$
|
2,650
|
|
|
32.6
|
%
|
|
$
|
2,221
|
|
|
30.5
|
%
|
Retail
|
1,553
|
|
|
19.1
|
%
|
|
1,660
|
|
|
22.7
|
%
|
||
Hotels
|
959
|
|
|
11.8
|
%
|
|
1,040
|
|
|
14.3
|
%
|
||
Industrial
|
1,246
|
|
|
15.4
|
%
|
|
1,196
|
|
|
16.4
|
%
|
||
Apartment
|
1,352
|
|
|
16.7
|
%
|
|
791
|
|
|
10.8
|
%
|
||
Other commercial
|
357
|
|
|
4.4
|
%
|
|
389
|
|
|
5.3
|
%
|
||
Total commercial mortgage loans
|
$
|
8,117
|
|
|
100.0
|
%
|
|
$
|
7,297
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
U.S. Region
|
|
|
|
|
|
|
|
||||||
East North Central
|
$
|
895
|
|
|
11.0
|
%
|
|
$
|
855
|
|
|
11.7
|
%
|
East South Central
|
169
|
|
|
2.1
|
%
|
|
295
|
|
|
4.0
|
%
|
||
Middle Atlantic
|
1,488
|
|
|
18.3
|
%
|
|
1,131
|
|
|
15.5
|
%
|
||
Mountain
|
675
|
|
|
8.3
|
%
|
|
616
|
|
|
8.4
|
%
|
||
New England
|
349
|
|
|
4.3
|
%
|
|
374
|
|
|
5.1
|
%
|
||
Pacific
|
1,813
|
|
|
22.4
|
%
|
|
1,540
|
|
|
21.1
|
%
|
||
South Atlantic
|
1,729
|
|
|
21.3
|
%
|
|
1,468
|
|
|
20.2
|
%
|
||
West North Central
|
177
|
|
|
2.2
|
%
|
|
173
|
|
|
2.4
|
%
|
||
West South Central
|
822
|
|
|
10.1
|
%
|
|
845
|
|
|
11.6
|
%
|
||
Total U.S. Region
|
8,117
|
|
|
100.0
|
%
|
|
7,297
|
|
|
100.0
|
%
|
||
Total commercial mortgage loans
|
$
|
8,117
|
|
|
100.0
|
%
|
|
$
|
7,297
|
|
|
100.0
|
%
|
|
June 30, 2019
|
|
December 31, 2018
|
||
U.S. States
|
|
|
|
||
California
|
29.6
|
%
|
|
30.3
|
%
|
Florida
|
13.6
|
%
|
|
16.3
|
%
|
Texas
|
5.5
|
%
|
|
3.3
|
%
|
New York
|
3.8
|
%
|
|
7.7
|
%
|
Other1
|
36.9
|
%
|
|
42.4
|
%
|
Total U.S. residential mortgage loan percentage
|
89.4
|
%
|
|
100.0
|
%
|
International residential mortgage loan percentage
|
10.6
|
%
|
|
—
|
%
|
Total residential mortgage loan percentage
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
||
1Represents all other states, with each individual state comprising less than 5% of the portfolio.
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Less than 50%
|
$
|
2,110
|
|
|
$
|
1,883
|
|
50% to 60%
|
2,138
|
|
|
1,988
|
|
||
61% to 70%
|
3,024
|
|
|
2,394
|
|
||
71% to 80%
|
747
|
|
|
898
|
|
||
81% to 100%
|
3
|
|
|
54
|
|
||
Commercial mortgage loans
|
$
|
8,022
|
|
|
$
|
7,217
|
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Greater than 1.20x
|
$
|
7,220
|
|
|
$
|
6,576
|
|
1.00x – 1.20x
|
394
|
|
|
474
|
|
||
Less than 1.00x
|
408
|
|
|
167
|
|
||
Commercial mortgage loans
|
$
|
8,022
|
|
|
$
|
7,217
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
(In millions)
|
Carrying Value
|
|
Maximum Loss Exposure
|
|
Carrying Value
|
|
Maximum Loss Exposure
|
||||||||
Investment funds
|
$
|
722
|
|
|
$
|
1,274
|
|
|
$
|
703
|
|
|
$
|
1,329
|
|
Investment in related parties – investment funds
|
2,578
|
|
|
4,527
|
|
|
2,232
|
|
|
4,331
|
|
||||
Assets of consolidated VIEs – investment funds
|
612
|
|
|
703
|
|
|
624
|
|
|
727
|
|
||||
Investment in fixed maturity securities
|
22,833
|
|
|
22,218
|
|
|
21,188
|
|
|
21,139
|
|
||||
Investment in related parties – fixed maturity securities
|
2,048
|
|
|
2,110
|
|
|
1,686
|
|
|
1,788
|
|
||||
Investment in related parties – equity securities
|
344
|
|
|
344
|
|
|
120
|
|
|
120
|
|
||||
Total non-consolidated investments
|
$
|
29,137
|
|
|
$
|
31,176
|
|
|
$
|
26,553
|
|
|
$
|
29,434
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||
|
Notional Amount
|
|
Fair Value
|
|
Notional Amount
|
|
Fair Value
|
||||||||||||||
(In millions)
|
|
Assets
|
|
Liabilities
|
|
|
Assets
|
|
Liabilities
|
||||||||||||
Derivatives designated as hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency swaps
|
2,487
|
|
|
$
|
124
|
|
|
$
|
48
|
|
|
2,041
|
|
|
$
|
83
|
|
|
$
|
55
|
|
Foreign currency forwards
|
246
|
|
|
—
|
|
|
1
|
|
|
85
|
|
|
—
|
|
|
1
|
|
||||
Total derivatives designated as hedges
|
|
|
124
|
|
|
49
|
|
|
|
|
83
|
|
|
56
|
|
||||||
Derivatives not designated as hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity options
|
49,351
|
|
|
2,153
|
|
|
19
|
|
|
49,821
|
|
|
942
|
|
|
11
|
|
||||
Futures
|
7
|
|
|
6
|
|
|
1
|
|
|
4
|
|
|
9
|
|
|
3
|
|
||||
Total return swaps
|
60
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
3
|
|
||||
Foreign currency swaps
|
38
|
|
|
3
|
|
|
1
|
|
|
38
|
|
|
3
|
|
|
2
|
|
||||
Interest rate swaps
|
310
|
|
|
—
|
|
|
1
|
|
|
326
|
|
|
—
|
|
|
1
|
|
||||
Credit default swaps
|
10
|
|
|
—
|
|
|
4
|
|
|
10
|
|
|
—
|
|
|
4
|
|
||||
Foreign currency forwards
|
2,645
|
|
|
13
|
|
|
5
|
|
|
646
|
|
|
6
|
|
|
5
|
|
||||
Embedded derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Funds withheld including related party
|
—
|
|
|
1,205
|
|
|
24
|
|
|
—
|
|
|
(53
|
)
|
|
(1
|
)
|
||||
Interest sensitive contract liabilities
|
—
|
|
|
—
|
|
|
9,905
|
|
|
—
|
|
|
—
|
|
|
7,969
|
|
||||
Total derivatives not designated as hedges
|
|
|
3,380
|
|
|
9,960
|
|
|
|
|
907
|
|
|
7,997
|
|
||||||
Total derivatives
|
|
|
$
|
3,504
|
|
|
$
|
10,009
|
|
|
|
|
$
|
990
|
|
|
$
|
8,053
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Equity options
|
$
|
439
|
|
|
$
|
89
|
|
|
$
|
1,288
|
|
|
$
|
(53
|
)
|
Futures
|
(3
|
)
|
|
1
|
|
|
(14
|
)
|
|
(4
|
)
|
||||
Swaps
|
11
|
|
|
(9
|
)
|
|
29
|
|
|
(7
|
)
|
||||
Foreign currency forwards
|
(1
|
)
|
|
14
|
|
|
5
|
|
|
7
|
|
||||
Embedded derivatives on funds withheld
|
735
|
|
|
(49
|
)
|
|
1,565
|
|
|
(81
|
)
|
||||
Amounts recognized in investment related gains (losses)
|
1,181
|
|
|
46
|
|
|
2,873
|
|
|
(138
|
)
|
||||
Embedded derivatives in indexed annuity products1
|
(638
|
)
|
|
44
|
|
|
(1,655
|
)
|
|
291
|
|
||||
Total gains (losses) on derivatives not designated as hedges
|
$
|
543
|
|
|
$
|
90
|
|
|
$
|
1,218
|
|
|
$
|
153
|
|
|
|
|
|
|
|
|
|
||||||||
1 Included in interest sensitive contract benefits.
|
|
|
|
|
Gross amounts not offset on the condensed consolidated balance sheets
|
|
|
|
|
|
|
||||||||||||||
(In millions)
|
Gross amount recognized1
|
|
Financial instruments2
|
|
Collateral received/pledged
|
|
Net amount
|
|
Off-balance sheet securities collateral3
|
|
Net amount after securities collateral
|
|||||||||||||
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Derivative assets
|
$
|
2,299
|
|
|
$
|
(64
|
)
|
|
$
|
(2,183
|
)
|
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
52
|
|
|
Derivative liabilities
|
(80
|
)
|
|
64
|
|
|
10
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Derivative assets
|
$
|
1,043
|
|
|
$
|
(52
|
)
|
|
$
|
(969
|
)
|
|
$
|
22
|
|
|
$
|
(4
|
)
|
|
$
|
18
|
|
|
Derivative liabilities
|
(85
|
)
|
|
52
|
|
|
24
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
1
|
The gross amounts of recognized derivative assets and derivative liabilities are reported on the condensed consolidated balance sheets. As of June 30, 2019 and December 31, 2018, amounts not subject to master netting or similar agreements were immaterial.
|
|||||||||||||||||||||||
2
|
Represents amounts offsetting derivative assets and derivative liabilities that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative assets or gross derivative liabilities for presentation on the condensed consolidated balance sheets.
|
|||||||||||||||||||||||
3
|
For non-cash collateral received, we do not recognize the collateral on our balance sheet unless the obligor (transferor) has defaulted under the terms of the secured contract and is no longer entitled to redeem the pledged asset. Amounts do not include any excess of collateral pledged or received.
|
•
|
Quoted prices for similar assets or liabilities in active markets,
|
•
|
Observable inputs other than quoted market prices, and
|
•
|
Observable inputs derived principally from market data through correlation or other means.
|
|
June 30, 2019
|
||||||||||||||||||
(In millions)
|
Total
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agencies
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. state, municipal and political subdivisions
|
1,407
|
|
|
—
|
|
|
—
|
|
|
1,367
|
|
|
40
|
|
|||||
Foreign governments
|
324
|
|
|
—
|
|
|
—
|
|
|
324
|
|
|
—
|
|
|||||
Corporate
|
42,800
|
|
|
—
|
|
|
—
|
|
|
41,979
|
|
|
821
|
|
|||||
CLO
|
6,641
|
|
|
—
|
|
|
—
|
|
|
6,441
|
|
|
200
|
|
|||||
ABS
|
5,232
|
|
|
—
|
|
|
—
|
|
|
3,836
|
|
|
1,396
|
|
|||||
CMBS
|
2,790
|
|
|
—
|
|
|
—
|
|
|
2,584
|
|
|
206
|
|
|||||
RMBS
|
7,624
|
|
|
—
|
|
|
—
|
|
|
7,624
|
|
|
—
|
|
|||||
Total AFS securities
|
66,878
|
|
|
—
|
|
|
60
|
|
|
64,155
|
|
|
2,663
|
|
|||||
Trading securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agencies
|
5
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|||||
U.S. state, municipal and political subdivisions
|
134
|
|
|
—
|
|
|
—
|
|
|
134
|
|
|
—
|
|
|||||
Foreign governments
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|||||
Corporate
|
1,666
|
|
|
—
|
|
|
—
|
|
|
1,660
|
|
|
6
|
|
|||||
CLO
|
35
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
7
|
|
|||||
ABS
|
91
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|
6
|
|
|||||
CMBS
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|||||
RMBS
|
369
|
|
|
—
|
|
|
—
|
|
|
323
|
|
|
46
|
|
|||||
Total trading securities
|
2,381
|
|
|
—
|
|
|
3
|
|
|
2,313
|
|
|
65
|
|
|||||
Equity securities
|
336
|
|
|
—
|
|
|
47
|
|
|
286
|
|
|
3
|
|
|||||
Mortgage loans
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|||||
Investment funds
|
163
|
|
|
138
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Funds withheld at interest – embedded derivative
|
704
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704
|
|
|||||
Derivative assets
|
2,299
|
|
|
—
|
|
|
6
|
|
|
2,293
|
|
|
—
|
|
|||||
Short-term investments
|
288
|
|
|
—
|
|
|
56
|
|
|
187
|
|
|
45
|
|
|||||
Other investments
|
52
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|||||
Cash and cash equivalents
|
4,847
|
|
|
—
|
|
|
4,847
|
|
|
—
|
|
|
—
|
|
|||||
Restricted cash
|
391
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
—
|
|
|||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|||||
CLO
|
782
|
|
|
—
|
|
|
—
|
|
|
745
|
|
|
37
|
|
|||||
ABS
|
955
|
|
|
—
|
|
|
—
|
|
|
556
|
|
|
399
|
|
|||||
Total AFS securities – related party
|
1,740
|
|
|
—
|
|
|
—
|
|
|
1,304
|
|
|
436
|
|
|||||
Trading securities
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
93
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
74
|
|
|||||
ABS
|
218
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
218
|
|
|||||
Total trading securities – related party
|
311
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
292
|
|
|||||
Equity securities
|
344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
344
|
|
|||||
Investment funds
|
241
|
|
|
114
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|||||
Funds withheld at interest – embedded derivative
|
501
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
501
|
|
|||||
Reinsurance recoverable
|
1,834
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,834
|
|
|||||
Assets of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading securities
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||
Equity securities
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Investment funds
|
568
|
|
|
554
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||
Cash and cash equivalents
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Total assets measured at fair value
|
$
|
83,938
|
|
|
$
|
806
|
|
|
$
|
5,411
|
|
|
$
|
70,609
|
|
|
$
|
7,112
|
|
|
|
|
|
|
|
|
|
|
(Continued)
|
|
|
June 30, 2019
|
||||||||||||||||||
(In millions)
|
Total
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest sensitive contract liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Embedded derivative
|
$
|
9,905
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,905
|
|
Universal life benefits
|
1,051
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,051
|
|
|||||
Future policy benefits
|
|
|
|
|
|
|
|
|
|
||||||||||
AmerUs Life Insurance Company (AmerUs) Closed Block
|
1,535
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,535
|
|
|||||
Indianapolis Life Insurance Company (ILICO) Closed Block and life benefits
|
769
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
769
|
|
|||||
Derivative liabilities
|
80
|
|
|
—
|
|
|
1
|
|
|
75
|
|
|
4
|
|
|||||
Funds withheld liability – embedded derivative
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|||||
Total liabilities measured at fair value
|
$
|
13,364
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
99
|
|
|
$
|
13,264
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
|
|
|
December 31, 2018
|
||||||||||||||||||
(In millions)
|
Total
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agencies
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
3
|
|
|
$
|
—
|
|
U.S. state, municipal and political subdivisions
|
1,293
|
|
|
—
|
|
|
—
|
|
|
1,293
|
|
|
—
|
|
|||||
Foreign governments
|
161
|
|
|
—
|
|
|
—
|
|
|
161
|
|
|
—
|
|
|||||
Corporate
|
37,097
|
|
|
—
|
|
|
—
|
|
|
36,199
|
|
|
898
|
|
|||||
CLO
|
5,361
|
|
|
—
|
|
|
—
|
|
|
5,254
|
|
|
107
|
|
|||||
ABS
|
4,920
|
|
|
—
|
|
|
—
|
|
|
3,305
|
|
|
1,615
|
|
|||||
CMBS
|
2,357
|
|
|
—
|
|
|
—
|
|
|
2,170
|
|
|
187
|
|
|||||
RMBS
|
8,019
|
|
|
—
|
|
|
—
|
|
|
7,963
|
|
|
56
|
|
|||||
Total AFS securities
|
59,265
|
|
|
—
|
|
|
54
|
|
|
56,348
|
|
|
2,863
|
|
|||||
Trading securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agencies
|
5
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|||||
U.S. state, municipal and political subdivisions
|
126
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|||||
Corporate
|
1,287
|
|
|
—
|
|
|
—
|
|
|
1,287
|
|
|
—
|
|
|||||
CLO
|
9
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
1
|
|
|||||
ABS
|
87
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|||||
CMBS
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
—
|
|
|||||
RMBS
|
386
|
|
|
—
|
|
|
—
|
|
|
252
|
|
|
134
|
|
|||||
Total trading securities
|
1,949
|
|
|
—
|
|
|
3
|
|
|
1,811
|
|
|
135
|
|
|||||
Equity securities
|
216
|
|
|
—
|
|
|
40
|
|
|
173
|
|
|
3
|
|
|||||
Mortgage loans
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|||||
Investment funds
|
182
|
|
|
153
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
Funds withheld at interest – embedded derivative
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|||||
Derivative assets
|
1,043
|
|
|
—
|
|
|
9
|
|
|
1,034
|
|
|
—
|
|
|||||
Short-term investments
|
191
|
|
|
—
|
|
|
66
|
|
|
125
|
|
|
—
|
|
|||||
Other investments
|
52
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|||||
Cash and cash equivalents
|
2,911
|
|
|
—
|
|
|
2,911
|
|
|
—
|
|
|
—
|
|
|||||
Restricted cash
|
492
|
|
|
—
|
|
|
492
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
(Continued)
|
|
|
December 31, 2018
|
||||||||||||||||||
(In millions)
|
Total
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
562
|
|
|
—
|
|
|
—
|
|
|
562
|
|
|
—
|
|
|||||
ABS
|
875
|
|
|
—
|
|
|
—
|
|
|
547
|
|
|
328
|
|
|||||
Total AFS securities – related party
|
1,437
|
|
|
—
|
|
|
—
|
|
|
1,109
|
|
|
328
|
|
|||||
Trading securities
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
100
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
78
|
|
|||||
ABS
|
149
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149
|
|
|||||
Total trading securities – related party
|
249
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
227
|
|
|||||
Equity securities
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|||||
Investment funds
|
201
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|||||
Funds withheld at interest – embedded derivative
|
(110
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|||||
Reinsurance recoverable
|
1,676
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,676
|
|
|||||
Assets of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading securities
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|||||
Equity securities
|
50
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
13
|
|
|||||
Investment funds
|
567
|
|
|
552
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|||||
Cash and cash equivalents
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||
Total assets measured at fair value
|
$
|
70,617
|
|
|
$
|
801
|
|
|
$
|
3,614
|
|
|
$
|
60,674
|
|
|
$
|
5,528
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest sensitive contract liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Embedded derivative
|
$
|
7,969
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,969
|
|
Universal life benefits
|
932
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
932
|
|
|||||
Future policy benefits
|
|
|
|
|
|
|
|
|
|
||||||||||
AmerUs Closed Block
|
1,443
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,443
|
|
|||||
ILICO Closed Block and life benefits
|
730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
730
|
|
|||||
Derivative liabilities
|
85
|
|
|
—
|
|
|
3
|
|
|
78
|
|
|
4
|
|
|||||
Funds withheld liability – embedded derivative
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
Total liabilities measured at fair value
|
$
|
11,158
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
77
|
|
|
$
|
11,078
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Trading securities
|
$
|
78
|
|
|
$
|
(75
|
)
|
|
$
|
128
|
|
|
$
|
(164
|
)
|
Mortgage loans
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Investment funds
|
4
|
|
|
13
|
|
|
—
|
|
|
15
|
|
||||
Future policy benefits
|
(52
|
)
|
|
51
|
|
|
(92
|
)
|
|
135
|
|
||||
Total gains (losses)
|
$
|
31
|
|
|
$
|
(11
|
)
|
|
$
|
37
|
|
|
$
|
(14
|
)
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Unpaid principal balance
|
$
|
29
|
|
|
$
|
30
|
|
Mark to fair value
|
3
|
|
|
2
|
|
||
Fair value
|
$
|
32
|
|
|
$
|
32
|
|
|
Three months ended June 30, 2019
|
||||||||||||||||||||||||||||||
|
|
|
Total realized and unrealized gains (losses)
|
|
|
|
Transfers
|
|
|
|
|
||||||||||||||||||||
(In millions)
|
Beginning Balance
|
|
Included in income
|
|
Included in OCI
|
|
Net purchases, issuances, sales and settlements
|
|
In
|
|
(Out)
|
|
Ending Balance
|
|
Total gains (losses) included in earnings1
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. state, municipal and political subdivisions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
Corporate
|
1,035
|
|
|
3
|
|
|
12
|
|
|
32
|
|
|
1
|
|
|
(262
|
)
|
|
821
|
|
|
—
|
|
||||||||
CLO
|
110
|
|
|
—
|
|
|
—
|
|
|
122
|
|
|
—
|
|
|
(32
|
)
|
|
200
|
|
|
—
|
|
||||||||
ABS
|
1,614
|
|
|
2
|
|
|
19
|
|
|
120
|
|
|
—
|
|
|
(359
|
)
|
|
1,396
|
|
|
—
|
|
||||||||
CMBS
|
174
|
|
|
—
|
|
|
1
|
|
|
39
|
|
|
—
|
|
|
(8
|
)
|
|
206
|
|
|
—
|
|
||||||||
RMBS
|
57
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate
|
10
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
6
|
|
|
1
|
|
||||||||
CLO
|
8
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
6
|
|
||||||||
ABS
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||||
RMBS
|
86
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(39
|
)
|
|
46
|
|
|
2
|
|
||||||||
Equity securities
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
1
|
|
||||||||
Mortgage loans
|
32
|
|
|
1
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
||||||||
Investment funds
|
25
|
|
|
2
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
25
|
|
|
2
|
|
||||||||
Funds withheld at interest – embedded derivative
|
446
|
|
|
258
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704
|
|
|
—
|
|
||||||||
Short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
||||||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
||||||||
ABS
|
497
|
|
|
—
|
|
|
13
|
|
|
(8
|
)
|
|
—
|
|
|
(103
|
)
|
|
399
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
55
|
|
|
(1
|
)
|
|
—
|
|
|
(10
|
)
|
|
30
|
|
|
—
|
|
|
74
|
|
|
(1
|
)
|
||||||||
ABS
|
138
|
|
|
(7
|
)
|
|
—
|
|
|
(17
|
)
|
|
104
|
|
|
—
|
|
|
218
|
|
|
(14
|
)
|
||||||||
Equity securities
|
301
|
|
|
7
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
344
|
|
|
(3
|
)
|
||||||||
Investment funds
|
124
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
3
|
|
||||||||
Funds withheld at interest – embedded derivative
|
214
|
|
|
287
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
501
|
|
|
—
|
|
||||||||
Reinsurance recoverable
|
1,737
|
|
|
97
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,834
|
|
|
—
|
|
||||||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading securities
|
34
|
|
|
(1
|
)
|
|
—
|
|
|
(37
|
)
|
|
25
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||||||
Equity securities
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(2
|
)
|
||||||||
Investment funds
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
(1
|
)
|
||||||||
Total Level 3 assets
|
$
|
6,726
|
|
|
$
|
649
|
|
|
$
|
48
|
|
|
$
|
396
|
|
|
$
|
161
|
|
|
$
|
(868
|
)
|
|
$
|
7,112
|
|
|
$
|
(6
|
)
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest sensitive contract liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Embedded derivative
|
$
|
(9,106
|
)
|
|
$
|
(638
|
)
|
|
$
|
—
|
|
|
$
|
(161
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9,905
|
)
|
|
$
|
—
|
|
Universal life benefits
|
(979
|
)
|
|
(72
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,051
|
)
|
|
—
|
|
||||||||
Future policy benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AmerUs Closed Block
|
(1,483
|
)
|
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,535
|
)
|
|
—
|
|
||||||||
ILICO Closed Block and life benefits
|
(743
|
)
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(769
|
)
|
|
—
|
|
||||||||
Derivative liabilities
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||||||
Total Level 3 liabilities
|
$
|
(12,315
|
)
|
|
$
|
(788
|
)
|
|
$
|
—
|
|
|
$
|
(161
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(13,264
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
1 Related to instruments held at end of period.
|
|
Three months ended June 30, 2018
|
||||||||||||||||||||||||||||||
|
|
|
Total realized and unrealized gains (losses)
|
|
|
|
Transfers
|
|
|
|
|
||||||||||||||||||||
(In millions)
|
Beginning Balance
|
|
Included in income
|
|
Included in OCI
|
|
Net purchases, issuances, sales and settlements
|
|
In
|
|
(Out)
|
|
Ending Balance
|
|
Total gains (losses) included in earnings1
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate
|
$
|
681
|
|
|
$
|
(8
|
)
|
|
$
|
(5
|
)
|
|
$
|
290
|
|
|
$
|
28
|
|
|
$
|
(24
|
)
|
|
$
|
962
|
|
|
$
|
—
|
|
CLO
|
167
|
|
|
—
|
|
|
—
|
|
|
211
|
|
|
32
|
|
|
(129
|
)
|
|
281
|
|
|
—
|
|
||||||||
ABS
|
1,290
|
|
|
3
|
|
|
(9
|
)
|
|
273
|
|
|
—
|
|
|
(110
|
)
|
|
1,447
|
|
|
—
|
|
||||||||
CMBS
|
63
|
|
|
—
|
|
|
1
|
|
|
152
|
|
|
—
|
|
|
(19
|
)
|
|
197
|
|
|
—
|
|
||||||||
RMBS
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
7
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. state, municipal and political subdivisions
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
||||||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||||
CLO
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
(1
|
)
|
|
26
|
|
|
—
|
|
||||||||
ABS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
—
|
|
|
89
|
|
|
—
|
|
||||||||
RMBS
|
321
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
304
|
|
|
3
|
|
||||||||
Equity securities
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||||||
Mortgage loans
|
41
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
||||||||
Investment funds
|
25
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
6
|
|
||||||||
Funds withheld at interest – embedded derivative
|
207
|
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|
—
|
|
||||||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
62
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
(61
|
)
|
|
39
|
|
|
—
|
|
||||||||
ABS
|
4
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
91
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
114
|
|
|
1
|
|
||||||||
ABS
|
171
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
164
|
|
|
(7
|
)
|
||||||||
Investment funds
|
111
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
(6
|
)
|
||||||||
Funds withheld at interest – embedded derivative
|
—
|
|
|
162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
|
—
|
|
||||||||
Short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||||||
Reinsurance recoverable
|
1,713
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,717
|
|
|
—
|
|
||||||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading securities
|
47
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
1
|
|
||||||||
Equity securities
|
28
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
(2
|
)
|
||||||||
Investment funds
|
20
|
|
|
(3
|
)
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(3
|
)
|
||||||||
Total Level 3 assets
|
$
|
5,098
|
|
|
$
|
76
|
|
|
$
|
(13
|
)
|
|
$
|
1,006
|
|
|
$
|
199
|
|
|
$
|
(375
|
)
|
|
$
|
5,991
|
|
|
$
|
(6
|
)
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest sensitive contract liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Embedded derivative
|
$
|
(7,220
|
)
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
(912
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8,088
|
)
|
|
$
|
—
|
|
Universal life benefits
|
(934
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(943
|
)
|
|
—
|
|
||||||||
Future policy benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AmerUs Closed Block
|
(1,541
|
)
|
|
51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,490
|
)
|
|
—
|
|
||||||||
ILICO Closed Block and life benefits
|
(764
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(759
|
)
|
|
—
|
|
||||||||
Derivative liabilities
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||||||||
Total Level 3 liabilities
|
$
|
(10,464
|
)
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
(912
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11,285
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
1 Related to instruments held at end of period.
|
|
Six months ended June 30, 2019
|
||||||||||||||||||||||||||||||
|
|
|
Total realized and unrealized gains (losses)
|
|
|
|
Transfers
|
|
|
|
|
||||||||||||||||||||
(In millions)
|
Beginning Balance
|
|
Included in income
|
|
Included in OCI
|
|
Net purchases, issuances, sales and settlements
|
|
In
|
|
(Out)
|
|
Ending Balance
|
|
Total gains (losses) included in earnings1
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. state, municipal and political subdivisions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
Corporate
|
898
|
|
|
1
|
|
|
10
|
|
|
47
|
|
|
—
|
|
|
(135
|
)
|
|
821
|
|
|
—
|
|
||||||||
CLO
|
107
|
|
|
—
|
|
|
3
|
|
|
121
|
|
|
—
|
|
|
(31
|
)
|
|
200
|
|
|
—
|
|
||||||||
ABS
|
1,615
|
|
|
4
|
|
|
36
|
|
|
129
|
|
|
—
|
|
|
(388
|
)
|
|
1,396
|
|
|
—
|
|
||||||||
CMBS
|
187
|
|
|
1
|
|
|
4
|
|
|
32
|
|
|
—
|
|
|
(18
|
)
|
|
206
|
|
|
—
|
|
||||||||
RMBS
|
56
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||||
CLO
|
1
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
6
|
|
||||||||
ABS
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||||
RMBS
|
134
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(85
|
)
|
|
46
|
|
|
5
|
|
||||||||
Equity securities
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||||
Mortgage loans
|
32
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
32
|
|
|
1
|
|
||||||||
Investment funds
|
29
|
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
25
|
|
|
(2
|
)
|
||||||||
Funds withheld at interest – embedded derivative
|
57
|
|
|
647
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704
|
|
|
—
|
|
||||||||
Short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
||||||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
||||||||
ABS
|
328
|
|
|
—
|
|
|
13
|
|
|
161
|
|
|
—
|
|
|
(103
|
)
|
|
399
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
78
|
|
|
(2
|
)
|
|
—
|
|
|
(10
|
)
|
|
21
|
|
|
(13
|
)
|
|
74
|
|
|
2
|
|
||||||||
ABS
|
149
|
|
|
(18
|
)
|
|
—
|
|
|
(17
|
)
|
|
104
|
|
|
—
|
|
|
218
|
|
|
(17
|
)
|
||||||||
Equity securities
|
120
|
|
|
11
|
|
|
—
|
|
|
213
|
|
|
—
|
|
|
—
|
|
|
344
|
|
|
—
|
|
||||||||
Investment funds
|
105
|
|
|
3
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
3
|
|
||||||||
Funds withheld at interest – embedded derivative
|
(110
|
)
|
|
611
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
501
|
|
|
—
|
|
||||||||
Reinsurance recoverable
|
1,676
|
|
|
158
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,834
|
|
|
—
|
|
||||||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading securities
|
35
|
|
|
(1)
|
|
|
—
|
|
|
(38
|
)
|
|
25
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||||||
Equity securities
|
13
|
|
|
(2
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(2
|
)
|
||||||||
Investment funds
|
15
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
(1
|
)
|
||||||||
Total Level 3 assets
|
$
|
5,528
|
|
|
$
|
1,406
|
|
|
$
|
69
|
|
|
$
|
777
|
|
|
$
|
165
|
|
|
$
|
(833
|
)
|
|
$
|
7,112
|
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest sensitive contract liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Embedded derivative
|
$
|
(7,969
|
)
|
|
$
|
(1,655
|
)
|
|
$
|
—
|
|
|
$
|
(281
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9,905
|
)
|
|
$
|
—
|
|
Universal life benefits
|
(932
|
)
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,051
|
)
|
|
—
|
|
||||||||
Future policy benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AmerUs Closed Block
|
(1,443
|
)
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,535
|
)
|
|
—
|
|
||||||||
ILICO Closed Block and life benefits
|
(730
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(769
|
)
|
|
—
|
|
||||||||
Derivative liabilities
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||||||
Total Level 3 liabilities
|
$
|
(11,078
|
)
|
|
$
|
(1,905
|
)
|
|
$
|
—
|
|
|
$
|
(281
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(13,264
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
1 Related to instruments held at end of period.
|
|
Six months ended June 30, 2018
|
||||||||||||||||||||||||||||||
|
|
|
Total realized and unrealized gains (losses)
|
|
|
|
Transfers
|
|
|
|
|
||||||||||||||||||||
(In millions)
|
Beginning balance
|
|
Included in income
|
|
Included in OCI
|
|
Net purchases, issuances, sales and settlements
|
|
In
|
|
Out
|
|
Ending balance
|
|
Total gains (losses) included in earnings1
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AFS Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate
|
$
|
578
|
|
|
$
|
(3
|
)
|
|
$
|
(9
|
)
|
|
$
|
340
|
|
|
$
|
64
|
|
|
$
|
(8
|
)
|
|
$
|
962
|
|
|
$
|
—
|
|
CLO
|
64
|
|
|
—
|
|
|
2
|
|
|
226
|
|
|
17
|
|
|
(28
|
)
|
|
281
|
|
|
—
|
|
||||||||
ABS
|
1,457
|
|
|
5
|
|
|
(17
|
)
|
|
157
|
|
|
—
|
|
|
(155
|
)
|
|
1,447
|
|
|
—
|
|
||||||||
CMBS
|
137
|
|
|
1
|
|
|
(3
|
)
|
|
152
|
|
|
—
|
|
|
(90
|
)
|
|
197
|
|
|
—
|
|
||||||||
RMBS
|
301
|
|
|
3
|
|
|
(8
|
)
|
|
(19
|
)
|
|
7
|
|
|
(277
|
)
|
|
7
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. state, municipal and political subdivisions
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
||||||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||||
CLO
|
17
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
26
|
|
|
—
|
|
||||||||
ABS
|
77
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
89
|
|
|
(3
|
)
|
||||||||
RMBS
|
342
|
|
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
304
|
|
|
2
|
|
||||||||
Equity Securities
|
8
|
|
|
1
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||||
Mortgage loans
|
41
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
||||||||
Investment funds
|
41
|
|
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
31
|
|
|
(3
|
)
|
||||||||
Funds withheld at interest – embedded derivative
|
312
|
|
|
(162
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|
—
|
|
||||||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AFS Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
||||||||
ABS
|
4
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
—
|
|
||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO
|
105
|
|
|
(2
|
)
|
|
—
|
|
|
(18
|
)
|
|
29
|
|
|
—
|
|
|
114
|
|
|
1
|
|
||||||||
ABS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
164
|
|
|
—
|
|
|
164
|
|
|
—
|
|
||||||||
Investment funds
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
108
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
(3
|
)
|
||||||||
Funds withheld at interest – embedded derivative
|
—
|
|
|
162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
|
—
|
|
||||||||
Short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||||||
Reinsurance recoverable
|
1,824
|
|
|
(107
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,717
|
|
|
—
|
|
||||||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading securities
|
48
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
48
|
|
|
1
|
|
||||||||
Equity securities
|
28
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
(2
|
)
|
||||||||
Investment funds
|
21
|
|
|
(3
|
)
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(3
|
)
|
||||||||
Total Level 3 assets
|
$
|
5,422
|
|
|
$
|
(155
|
)
|
|
$
|
(35
|
)
|
|
$
|
1,010
|
|
|
$
|
307
|
|
|
$
|
(558
|
)
|
|
$
|
5,991
|
|
|
$
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest sensitive contract liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Embedded derivative
|
$
|
(7,411
|
)
|
|
$
|
291
|
|
|
$
|
—
|
|
|
$
|
(968
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8,088
|
)
|
|
$
|
—
|
|
Universal life benefits
|
(1,005
|
)
|
|
62
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(943
|
)
|
|
—
|
|
||||||||
Future policy benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AmerUs Closed Block
|
(1,625
|
)
|
|
135
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,490
|
)
|
|
—
|
|
||||||||
ILICO Closed Block and life benefits
|
(803
|
)
|
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(759
|
)
|
|
—
|
|
||||||||
Derivative liabilities
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||||||||
Total Level 3 liabilities
|
$
|
(10,849
|
)
|
|
$
|
532
|
|
|
$
|
—
|
|
|
$
|
(968
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11,285
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
1 Related to instruments held at end of period.
|
|
Three months ended June 30, 2019
|
||||||||||||||||||
(In millions)
|
Purchases
|
|
Issuances
|
|
Sales
|
|
Settlements
|
|
Net purchases, issuances, sales and settlements
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. state, municipal and political subdivisions
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
Corporate
|
59
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
32
|
|
|||||
CLO
|
122
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122
|
|
|||||
ABS
|
155
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
120
|
|
|||||
CMBS
|
73
|
|
|
—
|
|
|
(2
|
)
|
|
(32
|
)
|
|
39
|
|
|||||
Mortgage loans
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Investment funds
|
—
|
|
|
1
|
|
|
—
|
|
|
(3
|
)
|
|
(2
|
)
|
|||||
Short-term investments
|
48
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
45
|
|
|||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|||||
ABS
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|||||
Trading securities
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
ABS
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
(17
|
)
|
|||||
Equity securities
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading securities
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
(37
|
)
|
|||||
Total Level 3 assets
|
$
|
570
|
|
|
$
|
1
|
|
|
$
|
(49
|
)
|
|
$
|
(126
|
)
|
|
$
|
396
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest sensitive contract liabilities – embedded derivative
|
$
|
—
|
|
|
$
|
(301
|
)
|
|
$
|
—
|
|
|
$
|
140
|
|
|
$
|
(161
|
)
|
Total Level 3 liabilities
|
$
|
—
|
|
|
$
|
(301
|
)
|
|
$
|
—
|
|
|
$
|
140
|
|
|
$
|
(161
|
)
|
|
Three months ended June 30, 2018
|
||||||||||||||||||
(In millions)
|
Purchases
|
|
Issuances
|
|
Sales
|
|
Settlements
|
|
Net purchases, issuances, sales and settlements
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
$
|
300
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(8
|
)
|
|
$
|
290
|
|
CLO
|
211
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
211
|
|
|||||
ABS
|
347
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|
273
|
|
|||||
CMBS
|
152
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
152
|
|
|||||
Trading securities, Corporate
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Equity securities
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Mortgage loans
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||
ABS
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Trading securities, CLO
|
30
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|||||
Short-term investments
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment funds
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(16
|
)
|
|||||
Total Level 3 assets
|
$
|
1,139
|
|
|
$
|
—
|
|
|
$
|
(48
|
)
|
|
$
|
(85
|
)
|
|
$
|
1,006
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest sensitive contract liabilities – embedded derivative
|
$
|
—
|
|
|
$
|
(1,004
|
)
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
(912
|
)
|
Total Level 3 liabilities
|
$
|
—
|
|
|
$
|
(1,004
|
)
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
(912
|
)
|
|
Six months ended June 30, 2019
|
||||||||||||||||||
(In millions)
|
Purchases
|
|
Issuances
|
|
Sales
|
|
Settlements
|
|
Net purchases, issuances, sales and settlements
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. state, municipal and political subdivisions
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
Corporate
|
147
|
|
|
—
|
|
|
(2
|
)
|
|
(98
|
)
|
|
47
|
|
|||||
CLO
|
121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
121
|
|
|||||
ABS
|
296
|
|
|
—
|
|
|
(33
|
)
|
|
(134
|
)
|
|
129
|
|
|||||
CMBS
|
73
|
|
|
—
|
|
|
(3
|
)
|
|
(38
|
)
|
|
32
|
|
|||||
RMBS
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Trading securities, ABS
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Mortgage loans
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Investment funds
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||
Short-term investments
|
48
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
45
|
|
|||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|||||
ABS
|
170
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
161
|
|
|||||
Trading securities
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
ABS
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
(17
|
)
|
|||||
Equity securities
|
213
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
213
|
|
|||||
Investment funds
|
—
|
|
|
20
|
|
|
—
|
|
|
(1
|
)
|
|
19
|
|
|||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading securities
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
(38
|
)
|
|||||
Equity securities
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Total Level 3 assets
|
$
|
1,152
|
|
|
$
|
20
|
|
|
$
|
(91
|
)
|
|
$
|
(304
|
)
|
|
$
|
777
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest sensitive contract liabilities – embedded derivative
|
$
|
—
|
|
|
$
|
(534
|
)
|
|
$
|
—
|
|
|
$
|
253
|
|
|
$
|
(281
|
)
|
Total Level 3 liabilities
|
$
|
—
|
|
|
$
|
(534
|
)
|
|
$
|
—
|
|
|
$
|
253
|
|
|
$
|
(281
|
)
|
|
Six months ended June 30, 2018
|
||||||||||||||||||
(In millions)
|
Purchases
|
|
Issuances
|
|
Sales
|
|
Settlements
|
|
Net purchases, issuances, sales and settlements
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
$
|
358
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
(13
|
)
|
|
$
|
340
|
|
CLO
|
231
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
226
|
|
|||||
ABS
|
356
|
|
|
—
|
|
|
(21
|
)
|
|
(178
|
)
|
|
157
|
|
|||||
CMBS
|
153
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
152
|
|
|||||
RMBS
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|||||
Trading securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
CLO
|
7
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|||||
Equity securities
|
1
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Mortgage loans
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||
Investment funds
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
||||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
||||||||||
CLO
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|||||
ABS
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Trading securities, CLO
|
30
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Investment funds
|
108
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|||||
Short-term investments
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Investments of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading securities
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Investment funds
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||||
Total Level 3 assets
|
$
|
1,343
|
|
|
$
|
—
|
|
|
$
|
(112
|
)
|
|
$
|
(221
|
)
|
|
$
|
1,010
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest sensitive contract liabilities – embedded derivative
|
$
|
—
|
|
|
$
|
(1,130
|
)
|
|
$
|
—
|
|
|
$
|
162
|
|
|
$
|
(968
|
)
|
Total Level 3 liabilities
|
$
|
—
|
|
|
$
|
(1,130
|
)
|
|
$
|
—
|
|
|
$
|
162
|
|
|
$
|
(968
|
)
|
1.
|
Nonperformance risk – For contracts we issue, we use the credit spread, relative to the U.S. Department of the Treasury (Treasury) curve, based on our public credit rating as of the valuation date. This represents our credit risk for use in the estimate of the fair value of embedded derivatives.
|
2.
|
Option budget – We assume future hedge costs in the derivative’s fair value estimate. The level of option budgets determines the future costs of the options and impacts future policyholder account value growth.
|
3.
|
Policyholder behavior – We regularly review the lapse and withdrawal assumptions (surrender rate). These are based on our initial pricing assumptions updated for actual experience. Actual experience may be limited for recently issued products.
|
|
June 30, 2019
|
|||||||||
(In millions, except for percentages)
|
Fair value
|
Valuation technique
|
Unobservable inputs
|
Input/range of
inputs |
Impact of an increase in the input on fair value
|
|||||
Interest sensitive contract liabilities – fixed indexed annuities embedded derivatives
|
$
|
9,905
|
|
Option budget method
|
Nonperformance risk
|
0.0
|
%
|
–
|
1.2%
|
Decrease
|
|
|
|
Option budget
|
0.7
|
%
|
–
|
3.7%
|
Increase
|
||
|
|
|
Surrender rate
|
3.5
|
%
|
–
|
7.7%
|
Decrease
|
|
December 31, 2018
|
|||||||||
(In millions, except for percentages)
|
Fair value
|
Valuation technique
|
Unobservable inputs
|
Input/range of
inputs |
Impact of an increase in the input on fair value
|
|||||
Interest sensitive contract liabilities – fixed indexed annuities embedded derivatives
|
$
|
7,969
|
|
Option budget method
|
Nonperformance risk
|
0.3
|
%
|
–
|
1.5%
|
Decrease
|
|
|
|
Option budget
|
0.7
|
%
|
–
|
3.7%
|
Increase
|
||
|
|
|
Surrender rate
|
3.6
|
%
|
–
|
7.3%
|
Decrease
|
|
June 30, 2019
|
||||||||||||||||||||||
(In millions)
|
Carrying Value
|
|
Fair Value
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans
|
$
|
11,880
|
|
|
$
|
12,233
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,233
|
|
Investment funds
|
559
|
|
|
559
|
|
|
559
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Policy loans
|
480
|
|
|
480
|
|
|
—
|
|
|
—
|
|
|
480
|
|
|
—
|
|
||||||
Funds withheld at interest
|
14,603
|
|
|
14,603
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,603
|
|
||||||
Other investments
|
67
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
||||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans
|
287
|
|
|
288
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
288
|
|
||||||
Investment funds
|
2,337
|
|
|
2,337
|
|
|
2,337
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Funds withheld at interest
|
13,236
|
|
|
13,236
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,236
|
|
||||||
Other investments
|
387
|
|
|
393
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
393
|
|
||||||
Assets of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment funds
|
44
|
|
|
44
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total financial assets not carried at fair value
|
$
|
43,880
|
|
|
$
|
44,241
|
|
|
$
|
2,940
|
|
|
$
|
—
|
|
|
$
|
480
|
|
|
$
|
40,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest sensitive contract liabilities
|
$
|
55,732
|
|
|
$
|
56,124
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56,124
|
|
Long-term debt
|
991
|
|
|
1,009
|
|
|
—
|
|
|
—
|
|
|
1,009
|
|
|
—
|
|
||||||
Funds withheld liability
|
735
|
|
|
735
|
|
|
—
|
|
|
—
|
|
|
735
|
|
|
—
|
|
||||||
Total financial liabilities not carried at fair value
|
$
|
57,458
|
|
|
$
|
57,868
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,744
|
|
|
$
|
56,124
|
|
|
December 31, 2018
|
||||||||||||||||||||||
(In millions)
|
Carrying Value
|
|
Fair Value
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans
|
$
|
10,308
|
|
|
$
|
10,424
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,424
|
|
Investment funds
|
521
|
|
|
521
|
|
|
521
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Policy loans
|
488
|
|
|
488
|
|
|
—
|
|
|
—
|
|
|
488
|
|
|
—
|
|
||||||
Funds withheld at interest
|
14,966
|
|
|
14,966
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,966
|
|
||||||
Other investments
|
70
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70
|
|
||||||
Investments in related parties
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans
|
291
|
|
|
290
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
290
|
|
||||||
Investment funds
|
2,031
|
|
|
2,031
|
|
|
2,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Funds withheld at interest
|
13,687
|
|
|
13,687
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,687
|
|
||||||
Other investments
|
386
|
|
|
361
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
361
|
|
||||||
Assets of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment funds
|
57
|
|
|
57
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total financial assets not carried at fair value
|
$
|
42,805
|
|
|
$
|
42,895
|
|
|
$
|
2,609
|
|
|
$
|
—
|
|
|
$
|
488
|
|
|
$
|
39,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest sensitive contract liabilities
|
$
|
54,655
|
|
|
$
|
51,655
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,655
|
|
Long-term debt
|
991
|
|
|
910
|
|
|
—
|
|
|
—
|
|
|
910
|
|
|
—
|
|
||||||
Funds withheld liability
|
722
|
|
|
722
|
|
|
—
|
|
|
—
|
|
|
722
|
|
|
—
|
|
||||||
Total financial liabilities not carried at fair value
|
$
|
56,368
|
|
|
$
|
53,287
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,632
|
|
|
$
|
51,655
|
|
(In millions)
|
DAC
|
|
DSI
|
|
VOBA
|
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
3,921
|
|
|
$
|
799
|
|
|
$
|
1,187
|
|
|
$
|
5,907
|
|
Additions
|
354
|
|
|
130
|
|
|
—
|
|
|
484
|
|
||||
Amortization
|
(472
|
)
|
|
(18
|
)
|
|
(20
|
)
|
|
(510
|
)
|
||||
Impact of unrealized investment (gains) losses
|
(300
|
)
|
|
(98
|
)
|
|
(159
|
)
|
|
(557
|
)
|
||||
Balance at June 30, 2019
|
$
|
3,503
|
|
|
$
|
813
|
|
|
$
|
1,008
|
|
|
$
|
5,324
|
|
(In millions)
|
DAC
|
|
DSI
|
|
VOBA
|
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
1,375
|
|
|
$
|
520
|
|
|
$
|
1,077
|
|
|
$
|
2,972
|
|
Additions
|
1,600
|
|
|
120
|
|
|
—
|
|
|
1,720
|
|
||||
Amortization
|
(76
|
)
|
|
(43
|
)
|
|
(95
|
)
|
|
(214
|
)
|
||||
Impact of unrealized investment (gains) losses
|
94
|
|
|
42
|
|
|
140
|
|
|
276
|
|
||||
Balance at June 30, 2018
|
$
|
2,993
|
|
|
$
|
639
|
|
|
$
|
1,122
|
|
|
$
|
4,754
|
|
|
Three months ended June 30, 2019
|
||||||||||||||||||||||
(In millions, except per share data)
|
Class A
|
|
Class B
|
|
Class M-1
|
|
Class M-2
|
|
Class M-3
|
|
Class M-4
|
||||||||||||
Net income – basic and diluted
|
$
|
596
|
|
|
$
|
96
|
|
|
$
|
13
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average shares outstanding
|
158.5
|
|
|
25.4
|
|
|
3.3
|
|
|
0.8
|
|
|
1.0
|
|
|
2.2
|
|
||||||
Dilutive effect of stock compensation plans
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||
Diluted weighted average shares outstanding
|
158.8
|
|
|
25.4
|
|
|
3.3
|
|
|
0.8
|
|
|
1.0
|
|
|
2.5
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
3.76
|
|
|
$
|
3.76
|
|
|
$
|
3.76
|
|
|
$
|
3.76
|
|
|
$
|
3.76
|
|
|
$
|
3.76
|
|
Diluted
|
$
|
3.75
|
|
|
$
|
3.76
|
|
|
$
|
3.76
|
|
|
$
|
3.76
|
|
|
$
|
3.76
|
|
|
$
|
3.28
|
|
|
Three months ended June 30, 2018
|
||||||||||||||||||||||
(In millions, except share and per share data)
|
Class A
|
|
Class B
|
|
Class M-1
|
|
Class M-2
|
|
Class M-3
|
|
Class M-4
|
||||||||||||
Net income – basic and diluted
|
$
|
214
|
|
|
$
|
33
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average shares outstanding
|
164.5
|
|
|
25.5
|
|
|
3.4
|
|
|
0.8
|
|
|
1.0
|
|
|
2.1
|
|
||||||
Dilutive effect of stock compensation plans
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
||||||
Diluted weighted average shares outstanding
|
164.8
|
|
|
25.5
|
|
|
3.4
|
|
|
0.8
|
|
|
1.0
|
|
|
2.7
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
1.30
|
|
|
$
|
1.30
|
|
|
$
|
1.30
|
|
|
$
|
1.30
|
|
|
$
|
1.30
|
|
|
$
|
1.30
|
|
Diluted
|
$
|
1.30
|
|
|
$
|
1.30
|
|
|
$
|
1.30
|
|
|
$
|
1.29
|
|
|
$
|
1.30
|
|
|
$
|
1.02
|
|
|
Six months ended June 30, 2019
|
||||||||||||||||||||||
(In millions, except share and per share data)
|
Class A
|
|
Class B
|
|
Class M-1
|
|
Class M-2
|
|
Class M-3
|
|
Class M-4
|
||||||||||||
Net income – basic and diluted
|
$
|
1,184
|
|
|
$
|
189
|
|
|
$
|
25
|
|
|
$
|
6
|
|
|
$
|
8
|
|
|
$
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average shares outstanding
|
159.4
|
|
|
25.4
|
|
|
3.3
|
|
|
0.8
|
|
|
1.0
|
|
|
2.2
|
|
||||||
Dilutive effect of stock compensation plans
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||
Diluted weighted average shares outstanding
|
159.7
|
|
|
25.4
|
|
|
3.3
|
|
|
0.8
|
|
|
1.0
|
|
|
2.5
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
7.43
|
|
|
$
|
7.43
|
|
|
$
|
7.43
|
|
|
$
|
7.43
|
|
|
$
|
7.43
|
|
|
$
|
7.43
|
|
Diluted
|
$
|
7.41
|
|
|
$
|
7.43
|
|
|
$
|
7.43
|
|
|
$
|
7.43
|
|
|
$
|
7.43
|
|
|
$
|
6.45
|
|
|
Six months ended June 30, 2018
|
||||||||||||||||||||||
(In millions, except per share data)
|
Class A
|
|
Class B
|
|
Class M-1
|
|
Class M-2
|
|
Class M-3
|
|
Class M-4
|
||||||||||||
Net income – basic and diluted
|
$
|
424
|
|
|
$
|
90
|
|
|
$
|
9
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average shares outstanding
|
156.6
|
|
|
33.3
|
|
|
3.4
|
|
|
0.8
|
|
|
1.0
|
|
|
2.1
|
|
||||||
Dilutive effect of stock compensation plans
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||||
Diluted weighted average shares outstanding
|
157.0
|
|
|
33.3
|
|
|
3.4
|
|
|
0.8
|
|
|
1.0
|
|
|
2.9
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
2.71
|
|
|
$
|
2.71
|
|
|
$
|
2.71
|
|
|
$
|
2.71
|
|
|
$
|
2.71
|
|
|
$
|
2.71
|
|
Diluted
|
$
|
2.70
|
|
|
$
|
2.71
|
|
|
$
|
2.71
|
|
|
$
|
2.68
|
|
|
$
|
2.68
|
|
|
$
|
1.98
|
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
AFS securities
|
$
|
2,965
|
|
|
$
|
(766
|
)
|
DAC, DSI, VOBA and future policy benefits adjustments on AFS securities
|
(837
|
)
|
|
154
|
|
||
Noncredit component of OTTI losses on AFS securities
|
(21
|
)
|
|
(19
|
)
|
||
Hedging instruments
|
98
|
|
|
51
|
|
||
Pension adjustments
|
(3
|
)
|
|
(2
|
)
|
||
Foreign currency translation adjustments
|
(3
|
)
|
|
(3
|
)
|
||
Accumulated other comprehensive income (loss), before taxes
|
2,199
|
|
|
(585
|
)
|
||
Deferred income taxes
|
(439
|
)
|
|
113
|
|
||
Accumulated other comprehensive income (loss)
|
$
|
1,760
|
|
|
$
|
(472
|
)
|
(1)
|
a base management fee equal to the sum of (i) 0.225% per year of the lesser of (A) the aggregate market value of substantially all of the assets in substantially all of the investment accounts of or relating to us (collectively, the Accounts) on December 31, 2018 (Backbook Value) and (B) the aggregate market value of substantially all of the assets in the Accounts at the end of the respective month, plus (ii) 0.15% per year of the amount, if any (Incremental Value), by which the aggregate market value of substantially all of the assets in the Accounts at the end of the respective month exceeds the Backbook Value; plus
|
(2)
|
with respect to each asset in an Account, subject to certain exceptions, that is managed by Apollo and that belongs to a specified asset class tier (Core, Core Plus, Yield, and High Alpha), a sub-allocation fee as follows, which will, in the case of assets acquired after January 1, 2019, be subject to a cap of 10% of the applicable asset’s gross book yield:
|
(i)
|
0.065% of the market value of Core assets, which include public investment grade corporate bonds, municipal securities, agency RMBS or CMBS, and obligations of governmental agencies or government sponsored entities that are not expressly backed by the U.S. government;
|
(ii)
|
0.13% of the market value of Core Plus assets, which include private investment grade corporate bonds, fixed rate first lien commercial mortgage loans (CML), and certain obligations issued or assumed by financial institutions and determined by Apollo to be “Tier 2 Capital” under Basel III, a set of recommendations for international banking regulations developed by the Bank for International Settlements;
|
(iii)
|
0.375% of the market value of Yield assets, which include non-agency RMBS, investment grade CLO, CMBS and other ABS (other than RMBS and CLO), emerging market investments, below investment grade corporate bonds, subordinated debt obligations, hybrid securities or surplus notes issued or assumed by a financial institution, rated preferred equity, residential mortgage loans (RML), bank loans, investment grade infrastructure debt, and floating rate CMLs on slightly transitional or stabilized traditional real estate;
|
(iv)
|
0.70% of the market value of High Alpha assets, which include subordinated CML, below investment grade CLO, unrated preferred equity, debt obligations originated by MidCap, CMLs for redevelopment or construction loans or secured by non-traditional real estate, below investment grade infrastructure debt, certain loans originated directly by Apollo (other than MidCap loans), and agency mortgage derivatives; and
|
(v)
|
0.00% of the market value of cash and cash equivalents, U.S. treasuries, non-preferred equities and alternatives.
|
(In millions)
|
June 30, 2019
|
|
Percent of Total
|
|||
Core
|
$
|
30,612
|
|
|
26.5
|
%
|
Core Plus
|
30,008
|
|
|
25.9
|
%
|
|
Yield
|
42,161
|
|
|
36.4
|
%
|
|
High Alpha
|
4,588
|
|
|
4.0
|
%
|
|
Other
|
8,327
|
|
|
7.2
|
%
|
|
Total sub-allocation assets
|
$
|
115,696
|
|
|
100.0
|
%
|
(In millions, except for percentages)
|
December 31, 2018
|
||
AFS securities
|
|
||
Foreign governments
|
$
|
153
|
|
Corporate
|
3,398
|
|
|
CLO
|
5,703
|
|
|
ABS
|
663
|
|
|
CMBS
|
880
|
|
|
Trading securities
|
87
|
|
|
Equity securities
|
2
|
|
|
Mortgage loans
|
3,507
|
|
|
Investment funds
|
157
|
|
|
Funds withheld at interest
|
4,126
|
|
|
Other investments
|
70
|
|
|
Total assets sub-advised by Apollo affiliates
|
$
|
18,746
|
|
Percent of assets sub-advised by Apollo affiliates to total AAM-managed assets
|
18
|
%
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
AFS securities
|
$
|
7,293
|
|
|
$
|
5,439
|
|
Trading securities
|
342
|
|
|
68
|
|
||
Equity securities
|
2
|
|
|
2
|
|
||
Mortgage loans
|
2,196
|
|
|
1,830
|
|
||
Investment funds
|
61
|
|
|
53
|
|
||
Derivative assets
|
83
|
|
|
24
|
|
||
Short-term investments
|
61
|
|
|
77
|
|
||
Other investments
|
47
|
|
|
47
|
|
||
Restricted cash
|
391
|
|
|
492
|
|
||
Total restricted assets
|
$
|
10,476
|
|
|
$
|
8,032
|
|
•
|
Change in fair values of derivatives and embedded derivatives – index annuities, net of offsets;
|
•
|
Investment gains (losses), net of offsets;
|
•
|
VIE expenses and noncontrolling interest; and
|
•
|
Other adjustments to revenues.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Retirement Services
|
$
|
2,248
|
|
|
$
|
1,873
|
|
|
$
|
5,554
|
|
|
$
|
3,130
|
|
Corporate and Other
|
24
|
|
|
26
|
|
|
56
|
|
|
53
|
|
||||
Non-operating adjustments
|
|
|
|
|
|
|
|
||||||||
Change in fair values of derivatives and embedded derivatives – index annuities, net of offsets
|
466
|
|
|
97
|
|
|
1,406
|
|
|
(61
|
)
|
||||
Investment gains (losses), net of offsets
|
682
|
|
|
(149
|
)
|
|
1,395
|
|
|
(255
|
)
|
||||
VIE expenses and noncontrolling interest
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Other adjustments to revenues
|
(51
|
)
|
|
(47
|
)
|
|
(81
|
)
|
|
(56
|
)
|
||||
Total revenues
|
$
|
3,369
|
|
|
$
|
1,802
|
|
|
$
|
8,330
|
|
|
$
|
2,813
|
|
•
|
Investment gains (losses), net of offsets;
|
•
|
Change in fair values of derivatives and embedded derivatives – index annuities, net of offsets;
|
•
|
Integration, restructuring and other non-operating expenses;
|
•
|
Stock-based compensation, excluding the long-term incentive plan (LTIP); and
|
•
|
Income tax (expense) benefit – non-operating.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Retirement Services
|
$
|
376
|
|
|
$
|
287
|
|
|
$
|
662
|
|
|
$
|
526
|
|
Corporate and Other
|
(6
|
)
|
|
1
|
|
|
(5
|
)
|
|
3
|
|
||||
Non-operating adjustments
|
|
|
|
|
|
|
|
||||||||
Investment gains (losses), net of offsets
|
417
|
|
|
(74
|
)
|
|
875
|
|
|
(107
|
)
|
||||
Change in fair values of derivatives and embedded derivatives – index annuities, net of offsets
|
(57
|
)
|
|
68
|
|
|
(84
|
)
|
|
154
|
|
||||
Integration, restructuring and other non-operating expenses
|
(11
|
)
|
|
(8
|
)
|
|
(12
|
)
|
|
(16
|
)
|
||||
Stock-based compensation, excluding LTIP
|
(3
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|
(5
|
)
|
||||
Income tax (expense) benefit – non-operating
|
4
|
|
|
(15
|
)
|
|
(2
|
)
|
|
(21
|
)
|
||||
Net income
|
$
|
720
|
|
|
$
|
257
|
|
|
$
|
1,428
|
|
|
$
|
534
|
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Retirement Services
|
$
|
136,565
|
|
|
$
|
123,498
|
|
Corporate and Other
|
2,415
|
|
|
2,007
|
|
||
Total assets
|
$
|
138,980
|
|
|
$
|
125,505
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Retail sales
|
$
|
1,909
|
|
|
$
|
2,038
|
|
|
$
|
3,725
|
|
|
$
|
3,324
|
|
Flow reinsurance
|
1,125
|
|
|
473
|
|
|
2,145
|
|
|
677
|
|
||||
Funding agreements
|
299
|
|
|
125
|
|
|
299
|
|
|
425
|
|
||||
Pension risk transfer
|
706
|
|
|
54
|
|
|
2,629
|
|
|
320
|
|
||||
Total organic deposits
|
4,039
|
|
|
2,690
|
|
|
8,798
|
|
|
4,746
|
|
||||
Inorganic deposits
|
—
|
|
|
19,104
|
|
|
—
|
|
|
19,104
|
|
||||
Total deposits
|
$
|
4,039
|
|
|
$
|
21,794
|
|
|
$
|
8,798
|
|
|
$
|
23,850
|
|
•
|
Investment Gains (Losses), Net of Offsets—Investment gains (losses), net of offsets, consist of the realized gains and losses on the sale of AFS securities, the change in fair value of reinsurance assets, unrealized gains and losses, impairments, and other investment gains and losses. Unrealized, impairments and other investment gains and losses are comprised of the fair value adjustments of trading securities (other than CLOs) and investments held under the fair value option, derivative gains and losses not hedging FIA index credits, and the net other-than-temporary impairment (OTTI) impacts recognized in operations net of the change in AmerUs Closed Block fair value reserve related to the corresponding change in fair value of investments and the change in unit-linked reserves related to the corresponding trading securities. Investment gains and losses are net of offsets related to DAC, DSI, and VOBA amortization and changes to guaranteed lifetime withdrawal benefit (GLWB) and guaranteed minimum death benefit (GMDB) reserves (together, GLWB and GMDB reserves represent rider reserves) as well as the market value adjustments (MVA) associated with surrenders or terminations of contracts.
|
•
|
Change in Fair Values of Derivatives and Embedded Derivatives – FIAs, Net of Offsets—Impacts related to the fair value accounting for derivatives hedging the FIA index credits and the related embedded derivative liability fluctuations from period to period. The index reserve is measured at fair value for the current period and all periods beyond the current policyholder index term. However, the FIA hedging derivatives are purchased to hedge only the current index period. Upon policyholder renewal at the end of the period, new FIA hedging derivatives are purchased to align with the new term. The difference in duration between the FIA hedging derivatives and the index credit reserves creates a timing difference in earnings. This timing difference of the FIA hedging derivatives and index credit reserves is included as a non-operating adjustment, net of offsets related to DAC, DSI, and VOBA amortization and changes to rider reserves.
|
•
|
Integration, Restructuring, and Other Non-operating Expenses—Integration, restructuring, and other non-operating expenses consist of restructuring and integration expenses related to acquisitions and block reinsurance costs as well as certain other expenses which are not predictable or related to our underlying profitability drivers.
|
•
|
Stock Compensation Expense—Stock compensation expenses associated with our share incentive plans, excluding our long-term incentive plan, are not related to our underlying profitability drivers and fluctuate from time to time due to the structure of our plans.
|
•
|
Bargain Purchase Gain—Bargain purchase gains associated with acquisitions are adjustments to net income as they are not related to our underlying profitability drivers.
|
•
|
Income Tax (Expense) Benefit – Non-operating—The non-operating income tax expense represents the income tax effect of non-operating adjustments and is computed by applying the appropriate jurisdiction’s tax rate to the non-operating adjustments that are subject to income tax.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions, except percentages)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues
|
$
|
3,369
|
|
|
$
|
1,802
|
|
|
$
|
8,330
|
|
|
$
|
2,813
|
|
Benefits and expenses
|
2,619
|
|
|
1,481
|
|
|
6,840
|
|
|
2,170
|
|
||||
Income before income taxes
|
750
|
|
|
321
|
|
|
1,490
|
|
|
643
|
|
||||
Income tax expense
|
30
|
|
|
64
|
|
|
62
|
|
|
109
|
|
||||
Net income
|
$
|
720
|
|
|
$
|
257
|
|
|
$
|
1,428
|
|
|
$
|
534
|
|
|
|
|
|
|
|
|
|
||||||||
ROE
|
25.6
|
%
|
|
12.0
|
%
|
|
27.7
|
%
|
|
12.1
|
%
|
||||
Adjusted ROE
|
17.1
|
%
|
|
17.3
|
%
|
|
15.9
|
%
|
|
17.2
|
%
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions, except percentages)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
720
|
|
|
$
|
257
|
|
|
$
|
1,428
|
|
|
$
|
534
|
|
|
|
|
|
|
|
|
|
||||||||
Non-operating adjustments
|
|
|
|
|
|
|
|
||||||||
Realized gains (losses) on sale of AFS securities
|
41
|
|
|
11
|
|
|
53
|
|
|
28
|
|
||||
Unrealized, impairments and other investment gains (losses)
|
10
|
|
|
10
|
|
|
39
|
|
|
16
|
|
||||
Change in fair value of reinsurance assets
|
570
|
|
|
(129
|
)
|
|
1,186
|
|
|
(207
|
)
|
||||
Offsets to investment gains (losses)
|
(204
|
)
|
|
34
|
|
|
(403
|
)
|
|
56
|
|
||||
Investment gains (losses), net of offsets
|
417
|
|
|
(74
|
)
|
|
875
|
|
|
(107
|
)
|
||||
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets
|
(57
|
)
|
|
68
|
|
|
(84
|
)
|
|
154
|
|
||||
Integration, restructuring and other non-operating expenses
|
(11
|
)
|
|
(8
|
)
|
|
(12
|
)
|
|
(16
|
)
|
||||
Stock compensation expense
|
(3
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|
(5
|
)
|
||||
Income tax (expense) benefit – non-operating
|
4
|
|
|
(15
|
)
|
|
(2
|
)
|
|
(21
|
)
|
||||
Less: Total non-operating adjustments
|
350
|
|
|
(31
|
)
|
|
771
|
|
|
5
|
|
||||
Adjusted operating income
|
$
|
370
|
|
|
$
|
288
|
|
|
$
|
657
|
|
|
$
|
529
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted operating income (loss) by segment
|
|
|
|
|
|
|
|
||||||||
Retirement Services
|
$
|
376
|
|
|
$
|
287
|
|
|
$
|
662
|
|
|
$
|
526
|
|
Corporate and Other
|
(6
|
)
|
|
1
|
|
|
(5
|
)
|
|
3
|
|
||||
Adjusted operating income
|
$
|
370
|
|
|
$
|
288
|
|
|
$
|
657
|
|
|
$
|
529
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted operating ROE
|
16.2
|
%
|
|
14.2
|
%
|
|
14.6
|
%
|
|
13.3
|
%
|
||||
Retirement Services adjusted operating ROE
|
18.9
|
%
|
|
19.8
|
%
|
|
17.1
|
%
|
|
18.6
|
%
|
|
Three months ended June 30,
|
||||
|
2019
|
|
2018
|
||
Net investment earned rate
|
4.63
|
%
|
|
4.74
|
%
|
Cost of funds
|
2.95
|
%
|
|
2.84
|
%
|
Net investment spread
|
1.68
|
%
|
|
1.90
|
%
|
|
Three months ended June 30,
|
||||
|
2019
|
|
2018
|
||
Net investment earned rate
|
4.63
|
%
|
|
4.74
|
%
|
Cost of crediting on deferred annuities
|
1.98
|
%
|
|
1.92
|
%
|
Investment margin on deferred annuities
|
2.65
|
%
|
|
2.82
|
%
|
|
Six months ended June 30,
|
||||
|
2019
|
|
2018
|
||
Net investment earned rate
|
4.42
|
%
|
|
4.68
|
%
|
Cost of funds
|
2.90
|
%
|
|
2.83
|
%
|
Net investment spread
|
1.52
|
%
|
|
1.85
|
%
|
|
Six months ended June 30,
|
||||
|
2019
|
|
2018
|
||
Net investment earned rate
|
4.42
|
%
|
|
4.68
|
%
|
Cost of crediting on deferred annuities
|
1.98
|
%
|
|
1.89
|
%
|
Investment margin on deferred annuities
|
2.44
|
%
|
|
2.79
|
%
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Carrying Value
|
|
Percent of Total
|
|
Carrying Value
|
|
Percent of Total
|
||||||
AFS securities, at fair value
|
$
|
66,878
|
|
|
55.7
|
%
|
|
$
|
59,265
|
|
|
55.1
|
%
|
Trading securities, at fair value
|
2,381
|
|
|
2.0
|
%
|
|
1,949
|
|
|
1.8
|
%
|
||
Equity securities, at fair value
|
336
|
|
|
0.3
|
%
|
|
216
|
|
|
0.2
|
%
|
||
Mortgage loans, net of allowances
|
11,912
|
|
|
9.9
|
%
|
|
10,340
|
|
|
9.6
|
%
|
||
Investment funds
|
722
|
|
|
0.6
|
%
|
|
703
|
|
|
0.6
|
%
|
||
Policy loans
|
480
|
|
|
0.4
|
%
|
|
488
|
|
|
0.4
|
%
|
||
Funds withheld at interest
|
15,307
|
|
|
12.7
|
%
|
|
15,023
|
|
|
14.0
|
%
|
||
Derivative assets
|
2,299
|
|
|
1.9
|
%
|
|
1,043
|
|
|
1.0
|
%
|
||
Short-term investments, at fair value
|
288
|
|
|
0.2
|
%
|
|
191
|
|
|
0.2
|
%
|
||
Other investments
|
119
|
|
|
0.1
|
%
|
|
122
|
|
|
0.1
|
%
|
||
Total investments
|
100,722
|
|
|
83.8
|
%
|
|
89,340
|
|
|
83.0
|
%
|
||
Investment in related parties
|
|
|
|
|
|
|
|
||||||
AFS securities, at fair value
|
1,740
|
|
|
1.5
|
%
|
|
1,437
|
|
|
1.3
|
%
|
||
Trading securities, at fair value
|
311
|
|
|
0.3
|
%
|
|
249
|
|
|
0.2
|
%
|
||
Equity securities, at fair value
|
344
|
|
|
0.3
|
%
|
|
120
|
|
|
0.1
|
%
|
||
Mortgage loans
|
287
|
|
|
0.3
|
%
|
|
291
|
|
|
0.3
|
%
|
||
Investment funds
|
2,578
|
|
|
2.1
|
%
|
|
2,232
|
|
|
2.1
|
%
|
||
Funds withheld at interest
|
13,737
|
|
|
11.4
|
%
|
|
13,577
|
|
|
12.6
|
%
|
||
Other investments
|
387
|
|
|
0.3
|
%
|
|
386
|
|
|
0.4
|
%
|
||
Total related party investments
|
19,384
|
|
|
16.2
|
%
|
|
18,292
|
|
|
17.0
|
%
|
||
Total investments including related party
|
$
|
120,106
|
|
|
100.0
|
%
|
|
$
|
107,632
|
|
|
100.0
|
%
|
|
June 30, 2019
|
|||||||||||||||||
(In millions, except percentages)
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
|
Percent of Total
|
|||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. government and agencies
|
$
|
57
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
0.1
|
%
|
U.S. state, municipal and political subdivisions
|
1,202
|
|
|
208
|
|
|
(3
|
)
|
|
1,407
|
|
|
2.0
|
%
|
||||
Foreign governments
|
306
|
|
|
18
|
|
|
—
|
|
|
324
|
|
|
0.5
|
%
|
||||
Corporate
|
40,712
|
|
|
2,386
|
|
|
(298
|
)
|
|
42,800
|
|
|
62.4
|
%
|
||||
CLO
|
6,760
|
|
|
14
|
|
|
(133
|
)
|
|
6,641
|
|
|
9.7
|
%
|
||||
ABS
|
5,117
|
|
|
142
|
|
|
(27
|
)
|
|
5,232
|
|
|
7.6
|
%
|
||||
CMBS
|
2,703
|
|
|
94
|
|
|
(7
|
)
|
|
2,790
|
|
|
4.1
|
%
|
||||
RMBS
|
7,092
|
|
|
544
|
|
|
(12
|
)
|
|
7,624
|
|
|
11.1
|
%
|
||||
Total AFS securities
|
63,949
|
|
|
3,409
|
|
|
(480
|
)
|
|
66,878
|
|
|
97.5
|
%
|
||||
AFS securities – related party
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
0.0
|
%
|
||||
CLO
|
793
|
|
|
1
|
|
|
(12
|
)
|
|
782
|
|
|
1.1
|
%
|
||||
ABS
|
929
|
|
|
26
|
|
|
—
|
|
|
955
|
|
|
1.4
|
%
|
||||
Total AFS securities – related party
|
1,725
|
|
|
27
|
|
|
(12
|
)
|
|
1,740
|
|
|
2.5
|
%
|
||||
Total AFS securities including related party
|
$
|
65,674
|
|
|
$
|
3,436
|
|
|
$
|
(492
|
)
|
|
$
|
68,618
|
|
|
100.0
|
%
|
|
December 31, 2018
|
|||||||||||||||||
(In millions, except percentages)
|
Cost or Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
|
Percent of Total
|
|||||||||
AFS securities
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. government and agencies
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
0.1
|
%
|
U.S. state, municipal and political subdivisions
|
1,183
|
|
|
117
|
|
|
(7
|
)
|
|
1,293
|
|
|
2.1
|
%
|
||||
Foreign governments
|
162
|
|
|
2
|
|
|
(3
|
)
|
|
161
|
|
|
0.3
|
%
|
||||
Corporate
|
38,018
|
|
|
394
|
|
|
(1,315
|
)
|
|
37,097
|
|
|
61.1
|
%
|
||||
CLO
|
5,658
|
|
|
2
|
|
|
(299
|
)
|
|
5,361
|
|
|
8.8
|
%
|
||||
ABS
|
4,915
|
|
|
53
|
|
|
(48
|
)
|
|
4,920
|
|
|
8.1
|
%
|
||||
CMBS
|
2,390
|
|
|
27
|
|
|
(60
|
)
|
|
2,357
|
|
|
3.9
|
%
|
||||
RMBS
|
7,642
|
|
|
413
|
|
|
(36
|
)
|
|
8,019
|
|
|
13.2
|
%
|
||||
Total AFS securities
|
60,025
|
|
|
1,008
|
|
|
(1,768
|
)
|
|
59,265
|
|
|
97.6
|
%
|
||||
AFS securities – related party
|
|
|
|
|
|
|
|
|
|
|||||||||
CLO
|
587
|
|
|
—
|
|
|
(25
|
)
|
|
562
|
|
|
0.9
|
%
|
||||
ABS
|
875
|
|
|
4
|
|
|
(4
|
)
|
|
875
|
|
|
1.5
|
%
|
||||
Total AFS securities – related party
|
1,462
|
|
|
4
|
|
|
(29
|
)
|
|
1,437
|
|
|
2.4
|
%
|
||||
Total AFS securities including related party
|
$
|
61,487
|
|
|
$
|
1,012
|
|
|
$
|
(1,797
|
)
|
|
$
|
60,702
|
|
|
100.0
|
%
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Fair Value
|
|
Percent of Total
|
|
Fair Value
|
|
Percent of Total
|
||||||
Corporate
|
|
|
|
|
|
|
|
||||||
Industrial other1
|
$
|
13,470
|
|
|
19.6
|
%
|
|
$
|
11,706
|
|
|
19.3
|
%
|
Financial
|
13,633
|
|
|
19.9
|
%
|
|
11,809
|
|
|
19.5
|
%
|
||
Utilities
|
10,614
|
|
|
15.5
|
%
|
|
9,055
|
|
|
14.9
|
%
|
||
Communication
|
2,482
|
|
|
3.6
|
%
|
|
2,313
|
|
|
3.8
|
%
|
||
Transportation
|
2,604
|
|
|
3.8
|
%
|
|
2,214
|
|
|
3.6
|
%
|
||
Total corporate
|
42,803
|
|
|
62.4
|
%
|
|
37,097
|
|
|
61.1
|
%
|
||
Other government-related securities
|
|
|
|
|
|
|
|
||||||
U.S. state, municipal and political subdivisions
|
1,407
|
|
|
2.0
|
%
|
|
1,293
|
|
|
2.1
|
%
|
||
Foreign governments
|
324
|
|
|
0.5
|
%
|
|
161
|
|
|
0.3
|
%
|
||
U.S. government and agencies
|
60
|
|
|
0.1
|
%
|
|
57
|
|
|
0.1
|
%
|
||
Total non-structured securities
|
44,594
|
|
|
65.0
|
%
|
|
38,608
|
|
|
63.6
|
%
|
||
Structured securities
|
|
|
|
|
|
|
|
||||||
CLO
|
7,423
|
|
|
10.8
|
%
|
|
5,923
|
|
|
9.8
|
%
|
||
ABS
|
6,187
|
|
|
9.0
|
%
|
|
5,795
|
|
|
9.5
|
%
|
||
CMBS
|
2,790
|
|
|
4.1
|
%
|
|
2,357
|
|
|
3.9
|
%
|
||
RMBS
|
|
|
|
|
|
|
|
||||||
Agency
|
19
|
|
|
0.0
|
%
|
|
59
|
|
|
0.1
|
%
|
||
Non-agency
|
7,605
|
|
|
11.1
|
%
|
|
7,960
|
|
|
13.1
|
%
|
||
Total structured securities
|
24,024
|
|
|
35.0
|
%
|
|
22,094
|
|
|
36.4
|
%
|
||
Total AFS securities including related party
|
$
|
68,618
|
|
|
100.0
|
%
|
|
$
|
60,702
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
1 Includes securities within various industry segments including capital goods, basic industry, consumer cyclical, consumer non-cyclical, industrial and technology.
|
NAIC designation
|
|
NRSRO equivalent rating
|
1
|
|
AAA/AA/A
|
2
|
|
BBB
|
3
|
|
BB
|
4
|
|
B
|
5
|
|
CCC
|
6
|
|
CC and lower
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||
(In millions, except percentages)
|
Amortized Cost
|
|
Fair Value
|
|
Percent of Total
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of Total
|
||||||||||
NAIC designation
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
1
|
$
|
33,417
|
|
|
$
|
35,333
|
|
|
51.5
|
%
|
|
$
|
31,106
|
|
|
$
|
31,311
|
|
|
51.6
|
%
|
2
|
28,717
|
|
|
29,768
|
|
|
43.4
|
%
|
|
26,682
|
|
|
25,871
|
|
|
42.6
|
%
|
||||
Total investment grade
|
62,134
|
|
|
65,101
|
|
|
94.9
|
%
|
|
57,788
|
|
|
57,182
|
|
|
94.2
|
%
|
||||
3
|
2,654
|
|
|
2,655
|
|
|
3.9
|
%
|
|
2,866
|
|
|
2,746
|
|
|
4.5
|
%
|
||||
4
|
741
|
|
|
712
|
|
|
1.0
|
%
|
|
591
|
|
|
533
|
|
|
0.9
|
%
|
||||
5
|
128
|
|
|
130
|
|
|
0.2
|
%
|
|
235
|
|
|
232
|
|
|
0.4
|
%
|
||||
6
|
17
|
|
|
20
|
|
|
0.0
|
%
|
|
7
|
|
|
9
|
|
|
0.0
|
%
|
||||
Total below investment grade
|
3,540
|
|
|
3,517
|
|
|
5.1
|
%
|
|
3,699
|
|
|
3,520
|
|
|
5.8
|
%
|
||||
Total AFS securities including related party
|
$
|
65,674
|
|
|
$
|
68,618
|
|
|
100.0
|
%
|
|
$
|
61,487
|
|
|
$
|
60,702
|
|
|
100.0
|
%
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Fair Value
|
|
Percent of Total
|
|
Fair Value
|
|
Percent of Total
|
||||||
NRSRO rating agency designation
|
|
|
|
|
|
|
|
||||||
AAA/AA/A
|
$
|
24,216
|
|
|
35.3
|
%
|
|
$
|
19,690
|
|
|
32.4
|
%
|
BBB
|
26,780
|
|
|
39.0
|
%
|
|
23,326
|
|
|
38.4
|
%
|
||
Non-rated1
|
9,692
|
|
|
14.1
|
%
|
|
9,624
|
|
|
15.9
|
%
|
||
Total investment grade
|
60,688
|
|
|
88.4
|
%
|
|
52,640
|
|
|
86.7
|
%
|
||
BB
|
2,910
|
|
|
4.2
|
%
|
|
2,670
|
|
|
4.4
|
%
|
||
B
|
889
|
|
|
1.3
|
%
|
|
875
|
|
|
1.4
|
%
|
||
CCC
|
2,229
|
|
|
3.3
|
%
|
|
2,340
|
|
|
3.9
|
%
|
||
CC and lower
|
1,235
|
|
|
1.8
|
%
|
|
1,296
|
|
|
2.1
|
%
|
||
Non-rated1
|
667
|
|
|
1.0
|
%
|
|
881
|
|
|
1.5
|
%
|
||
Total below investment grade
|
7,930
|
|
|
11.6
|
%
|
|
8,062
|
|
|
13.3
|
%
|
||
Total AFS securities including related party
|
$
|
68,618
|
|
|
100.0
|
%
|
|
$
|
60,702
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
1 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. With respect to loan-backed and structured securities, the NAIC designation methodology differs in significant respects from the NRSRO rating methodology.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Fair Value
|
|
Percent of Total
|
|
Fair Value
|
|
Percent of Total
|
||||||
NAIC designation
|
|
|
|
|
|
|
|
||||||
1
|
$
|
6,959
|
|
|
91.3
|
%
|
|
$
|
7,415
|
|
|
92.5
|
%
|
2
|
316
|
|
|
4.1
|
%
|
|
269
|
|
|
3.3
|
%
|
||
Total investment grade
|
7,275
|
|
|
95.4
|
%
|
|
7,684
|
|
|
95.8
|
%
|
||
3
|
209
|
|
|
2.7
|
%
|
|
207
|
|
|
2.6
|
%
|
||
4
|
118
|
|
|
1.6
|
%
|
|
106
|
|
|
1.3
|
%
|
||
5
|
21
|
|
|
0.3
|
%
|
|
22
|
|
|
0.3
|
%
|
||
6
|
1
|
|
|
0.0
|
%
|
|
—
|
|
|
—
|
%
|
||
Total below investment grade
|
349
|
|
|
4.6
|
%
|
|
335
|
|
|
4.2
|
%
|
||
Total AFS RMBS
|
$
|
7,624
|
|
|
100.0
|
%
|
|
$
|
8,019
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
NRSRO rating agency designation
|
|
|
|
|
|
|
|
||||||
AAA/AA/A
|
$
|
444
|
|
|
5.8
|
%
|
|
$
|
487
|
|
|
6.1
|
%
|
BBB
|
261
|
|
|
3.4
|
%
|
|
220
|
|
|
2.7
|
%
|
||
Non-rated1
|
2,810
|
|
|
36.9
|
%
|
|
2,932
|
|
|
36.6
|
%
|
||
Total investment grade
|
3,515
|
|
|
46.1
|
%
|
|
3,639
|
|
|
45.4
|
%
|
||
BB
|
315
|
|
|
4.1
|
%
|
|
332
|
|
|
4.1
|
%
|
||
B
|
267
|
|
|
3.5
|
%
|
|
301
|
|
|
3.8
|
%
|
||
CCC
|
2,119
|
|
|
27.8
|
%
|
|
2,259
|
|
|
28.2
|
%
|
||
CC and lower
|
1,221
|
|
|
16.0
|
%
|
|
1,292
|
|
|
16.1
|
%
|
||
Non-rated1
|
187
|
|
|
2.5
|
%
|
|
196
|
|
|
2.4
|
%
|
||
Total below investment grade
|
4,109
|
|
|
53.9
|
%
|
|
4,380
|
|
|
54.6
|
%
|
||
Total AFS RMBS
|
$
|
7,624
|
|
|
100.0
|
%
|
|
$
|
8,019
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
1 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designations. With respect to loan-backed and structured securities, the NAIC designation methodology differs in significant respects from the NRSRO rating methodology.
|
|
June 30, 2019
|
||||||||||||||||||||
(In millions, except percentages)
|
Amortized Cost of AFS Securities with Unrealized Loss
|
|
Gross Unrealized Losses
|
|
Fair Value of AFS Securities with Unrealized Loss
|
|
Fair Value to Amortized Cost Ratio
|
|
Fair Value of Total AFS Securities
|
|
Gross Unrealized Losses to Total AFS Fair Value
|
||||||||||
NAIC designation
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
1
|
$
|
4,880
|
|
|
$
|
(122
|
)
|
|
$
|
4,758
|
|
|
97.5
|
%
|
|
$
|
35,333
|
|
|
(0.3
|
)%
|
2
|
7,005
|
|
|
(244
|
)
|
|
6,761
|
|
|
96.5
|
%
|
|
29,768
|
|
|
(0.8
|
)%
|
||||
Total investment grade
|
11,885
|
|
|
(366
|
)
|
|
11,519
|
|
|
96.9
|
%
|
|
65,101
|
|
|
(0.6
|
)%
|
||||
3
|
1,129
|
|
|
(69
|
)
|
|
1,060
|
|
|
93.9
|
%
|
|
2,655
|
|
|
(2.6
|
)%
|
||||
4
|
425
|
|
|
(53
|
)
|
|
372
|
|
|
87.5
|
%
|
|
712
|
|
|
(7.4
|
)%
|
||||
5
|
79
|
|
|
(3
|
)
|
|
76
|
|
|
96.2
|
%
|
|
130
|
|
|
(2.3
|
)%
|
||||
6
|
12
|
|
|
(1
|
)
|
|
11
|
|
|
91.7
|
%
|
|
20
|
|
|
(5.0
|
)%
|
||||
Total below investment grade
|
1,645
|
|
|
(126
|
)
|
|
1,519
|
|
|
92.3
|
%
|
|
3,517
|
|
|
(3.6
|
)%
|
||||
Total
|
$
|
13,530
|
|
|
$
|
(492
|
)
|
|
$
|
13,038
|
|
|
96.4
|
%
|
|
$
|
68,618
|
|
|
(0.7
|
)%
|
|
December 31, 2018
|
||||||||||||||||||||
(In millions, except percentages)
|
Amortized Cost of AFS Securities with Unrealized Loss
|
|
Gross Unrealized Losses
|
|
Fair Value of AFS Securities with Unrealized Loss
|
|
Fair Value to Amortized Cost Ratio
|
|
Fair Value of Total AFS Securities
|
|
Gross Unrealized Losses to Total AFS Fair Value
|
||||||||||
NAIC designation
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
1
|
$
|
15,373
|
|
|
$
|
(545
|
)
|
|
$
|
14,828
|
|
|
96.5
|
%
|
|
$
|
31,311
|
|
|
(1.7
|
)%
|
2
|
19,152
|
|
|
(1,035
|
)
|
|
18,117
|
|
|
94.6
|
%
|
|
25,871
|
|
|
(4.0
|
)%
|
||||
Total investment grade
|
34,525
|
|
|
(1,580
|
)
|
|
32,945
|
|
|
95.4
|
%
|
|
57,182
|
|
|
(2.8
|
)%
|
||||
3
|
2,308
|
|
|
(147
|
)
|
|
2,161
|
|
|
93.6
|
%
|
|
2,746
|
|
|
(5.4
|
)%
|
||||
4
|
500
|
|
|
(65
|
)
|
|
435
|
|
|
87.0
|
%
|
|
533
|
|
|
(12.2
|
)%
|
||||
5
|
88
|
|
|
(5
|
)
|
|
83
|
|
|
94.3
|
%
|
|
232
|
|
|
(2.2
|
)%
|
||||
6
|
2
|
|
|
—
|
|
|
2
|
|
|
100.0
|
%
|
|
9
|
|
|
—
|
%
|
||||
Total below investment grade
|
2,898
|
|
|
(217
|
)
|
|
2,681
|
|
|
92.5
|
%
|
|
3,520
|
|
|
(6.2
|
)%
|
||||
Total
|
$
|
37,423
|
|
|
$
|
(1,797
|
)
|
|
$
|
35,626
|
|
|
95.2
|
%
|
|
$
|
60,702
|
|
|
(3.0
|
)%
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||
(In millions, except percentages)
|
Amortized Cost
|
|
Fair Value
|
|
Percent of Total
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of Total
|
||||||||||
Country of risk
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ireland
|
$
|
692
|
|
|
$
|
706
|
|
|
3.3
|
%
|
|
$
|
578
|
|
|
$
|
552
|
|
|
3.0
|
%
|
Italy
|
6
|
|
|
7
|
|
|
0.0
|
%
|
|
36
|
|
|
35
|
|
|
0.2
|
%
|
||||
Spain
|
66
|
|
|
70
|
|
|
0.3
|
%
|
|
62
|
|
|
62
|
|
|
0.4
|
%
|
||||
Total Ireland, Italy, Greece, Spain and Portugal1
|
764
|
|
|
783
|
|
|
3.6
|
%
|
|
676
|
|
|
649
|
|
|
3.6
|
%
|
||||
Other Europe
|
6,665
|
|
|
6,845
|
|
|
31.9
|
%
|
|
6,335
|
|
|
6,133
|
|
|
33.3
|
%
|
||||
Total Europe
|
7,429
|
|
|
7,628
|
|
|
35.5
|
%
|
|
7,011
|
|
|
6,782
|
|
|
36.9
|
%
|
||||
Non-U.S. North America
|
10,576
|
|
|
10,608
|
|
|
49.4
|
%
|
|
9,261
|
|
|
8,906
|
|
|
48.4
|
%
|
||||
Australia & New Zealand
|
1,863
|
|
|
1,947
|
|
|
9.1
|
%
|
|
1,731
|
|
|
1,696
|
|
|
9.2
|
%
|
||||
Central & South America
|
430
|
|
|
456
|
|
|
2.1
|
%
|
|
448
|
|
|
445
|
|
|
2.4
|
%
|
||||
Africa & Middle East
|
272
|
|
|
290
|
|
|
1.4
|
%
|
|
228
|
|
|
226
|
|
|
1.2
|
%
|
||||
Asia/Pacific
|
520
|
|
|
543
|
|
|
2.5
|
%
|
|
351
|
|
|
345
|
|
|
1.9
|
%
|
||||
Total
|
$
|
21,090
|
|
|
$
|
21,472
|
|
|
100.0
|
%
|
|
$
|
19,030
|
|
|
$
|
18,400
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
1 As of each of the respective periods, we had no holdings in Greece or Portugal.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Net Carrying Value
|
|
Percent of Total
|
|
Net Carrying Value
|
|
Percent of Total
|
||||||
Property type
|
|
|
|
|
|
|
|
||||||
Office building
|
$
|
2,650
|
|
|
21.7
|
%
|
|
$
|
2,221
|
|
|
20.9
|
%
|
Retail
|
1,553
|
|
|
12.7
|
%
|
|
1,660
|
|
|
15.6
|
%
|
||
Hotels
|
959
|
|
|
7.9
|
%
|
|
1,040
|
|
|
9.8
|
%
|
||
Industrial
|
1,246
|
|
|
10.2
|
%
|
|
1,196
|
|
|
11.2
|
%
|
||
Apartment
|
1,352
|
|
|
11.1
|
%
|
|
791
|
|
|
7.4
|
%
|
||
Other commercial1
|
357
|
|
|
2.9
|
%
|
|
389
|
|
|
3.7
|
%
|
||
Total net commercial mortgage loans
|
8,117
|
|
|
66.5
|
%
|
|
7,297
|
|
|
68.6
|
%
|
||
Residential loans
|
4,082
|
|
|
33.5
|
%
|
|
3,334
|
|
|
31.4
|
%
|
||
Total mortgage loans, net of allowances
|
$
|
12,199
|
|
|
100.0
|
%
|
|
$
|
10,631
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
1 Other commercial loans include investments in nursing homes, other healthcare institutions, parking garages, storage facilities and other commercial properties.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Carrying Value
|
|
Percent of Total
|
|
Carrying Value
|
|
Percent of Total
|
||||||
Assets of consolidated VIEs
|
|
|
|
|
|
|
|
||||||
Investments
|
|
|
|
|
|
|
|
||||||
Trading securities
|
$
|
21
|
|
|
3.2
|
%
|
|
$
|
35
|
|
|
4.9
|
%
|
Equity securities
|
6
|
|
|
0.9
|
%
|
|
50
|
|
|
7.0
|
%
|
||
Investment funds
|
612
|
|
|
93.9
|
%
|
|
624
|
|
|
87.7
|
%
|
||
Cash and cash equivalents
|
1
|
|
|
0.2
|
%
|
|
2
|
|
|
0.3
|
%
|
||
Other assets
|
12
|
|
|
1.8
|
%
|
|
1
|
|
|
0.1
|
%
|
||
Total assets of consolidated VIEs
|
$
|
652
|
|
|
100.0
|
%
|
|
$
|
712
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
Liabilities of consolidated VIEs
|
|
|
|
|
|
|
|
||||||
Other liabilities
|
$
|
1
|
|
|
100.0
|
%
|
|
$
|
1
|
|
|
100.0
|
%
|
Total liabilities of consolidated VIEs
|
$
|
1
|
|
|
100.0
|
%
|
|
$
|
1
|
|
|
100.0
|
%
|
|
June 30, 2019
|
|
December 31, 20181
|
||||||||||
(In millions, except percentages)
|
Carrying Value
|
|
Percent of Total
|
|
Carrying Value
|
|
Percent of Total
|
||||||
Investment funds
|
|
|
|
|
|
|
|
||||||
Real estate
|
$
|
249
|
|
|
6.4
|
%
|
|
$
|
215
|
|
|
6.0
|
%
|
Credit funds
|
169
|
|
|
4.3
|
%
|
|
172
|
|
|
4.8
|
%
|
||
Private equity
|
246
|
|
|
6.3
|
%
|
|
253
|
|
|
7.1
|
%
|
||
Real assets
|
57
|
|
|
1.5
|
%
|
|
56
|
|
|
1.6
|
%
|
||
Natural resources
|
1
|
|
|
0.0
|
%
|
|
4
|
|
|
0.1
|
%
|
||
Other
|
—
|
|
|
—
|
%
|
|
3
|
|
|
0.1
|
%
|
||
Total investment funds
|
722
|
|
|
18.5
|
%
|
|
703
|
|
|
19.7
|
%
|
||
Investment funds – related parties
|
|
|
|
|
|
|
|
||||||
Differentiated investments
|
|
|
|
|
|
|
|
||||||
AmeriHome
|
452
|
|
|
11.6
|
%
|
|
463
|
|
|
13.0
|
%
|
||
Catalina
|
262
|
|
|
6.7
|
%
|
|
233
|
|
|
6.5
|
%
|
||
Athora
|
127
|
|
|
3.3
|
%
|
|
105
|
|
|
3.0
|
%
|
||
Venerable
|
98
|
|
|
2.5
|
%
|
|
92
|
|
|
2.6
|
%
|
||
Other
|
221
|
|
|
5.6
|
%
|
|
196
|
|
|
5.5
|
%
|
||
Total differentiated investments
|
1,160
|
|
|
29.7
|
%
|
|
1,089
|
|
|
30.6
|
%
|
||
Real estate
|
614
|
|
|
15.7
|
%
|
|
497
|
|
|
14.0
|
%
|
||
Credit funds
|
352
|
|
|
9.0
|
%
|
|
316
|
|
|
8.9
|
%
|
||
Private equity
|
67
|
|
|
1.7
|
%
|
|
18
|
|
|
0.5
|
%
|
||
Real assets
|
150
|
|
|
3.8
|
%
|
|
145
|
|
|
4.1
|
%
|
||
Natural resources
|
144
|
|
|
3.7
|
%
|
|
104
|
|
|
2.9
|
%
|
||
Public equities
|
91
|
|
|
2.3
|
%
|
|
63
|
|
|
1.8
|
%
|
||
Total investment funds – related parties
|
2,578
|
|
|
65.9
|
%
|
|
2,232
|
|
|
62.8
|
%
|
||
Investment funds owned by consolidated VIEs
|
|
|
|
|
|
|
|
||||||
MidCap
|
554
|
|
|
14.2
|
%
|
|
553
|
|
|
15.5
|
%
|
||
Real estate
|
41
|
|
|
1.0
|
%
|
|
30
|
|
|
0.8
|
%
|
||
Real assets
|
17
|
|
|
0.4
|
%
|
|
41
|
|
|
1.2
|
%
|
||
Total investment funds owned by consolidated VIEs
|
612
|
|
|
15.6
|
%
|
|
624
|
|
|
17.5
|
%
|
||
Total investment funds, including related parties and funds owned by consolidated VIEs
|
$
|
3,912
|
|
|
100.0
|
%
|
|
$
|
3,559
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
1 Certain reclassifications have been made to conform with current year presentation.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Carrying Value
|
|
Percent of Total
|
|
Carrying Value
|
|
Percent of Total
|
||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
||||||
U.S. government and agencies
|
$
|
17
|
|
|
0.1
|
%
|
|
$
|
77
|
|
|
0.3
|
%
|
U.S. state, municipal and political subdivisions
|
549
|
|
|
1.9
|
%
|
|
563
|
|
|
2.0
|
%
|
||
Foreign governments
|
176
|
|
|
0.6
|
%
|
|
145
|
|
|
0.5
|
%
|
||
Corporate
|
15,418
|
|
|
53.1
|
%
|
|
16,267
|
|
|
56.9
|
%
|
||
CLO
|
2,523
|
|
|
8.7
|
%
|
|
1,990
|
|
|
7.0
|
%
|
||
ABS
|
2,120
|
|
|
7.3
|
%
|
|
1,601
|
|
|
5.6
|
%
|
||
CMBS
|
736
|
|
|
2.5
|
%
|
|
575
|
|
|
2.0
|
%
|
||
RMBS
|
1,672
|
|
|
5.8
|
%
|
|
1,876
|
|
|
6.6
|
%
|
||
Equity securities
|
221
|
|
|
0.7
|
%
|
|
66
|
|
|
0.2
|
%
|
||
Mortgage loans
|
4,428
|
|
|
15.2
|
%
|
|
3,815
|
|
|
13.3
|
%
|
||
Investment funds
|
687
|
|
|
2.4
|
%
|
|
660
|
|
|
2.3
|
%
|
||
Derivative assets
|
186
|
|
|
0.6
|
%
|
|
77
|
|
|
0.3
|
%
|
||
Short-term investments
|
223
|
|
|
0.8
|
%
|
|
641
|
|
|
2.2
|
%
|
||
Cash and cash equivalents
|
440
|
|
|
1.5
|
%
|
|
455
|
|
|
1.6
|
%
|
||
Other assets and liabilities
|
(352
|
)
|
|
(1.2
|
)%
|
|
(208
|
)
|
|
(0.8
|
)%
|
||
Total funds withheld at interest including related party
|
$
|
29,044
|
|
|
100.0
|
%
|
|
$
|
28,600
|
|
|
100.0
|
%
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Invested Asset Value1
|
|
Percent of Total
|
|
Invested Asset Value1
|
|
Percent of Total
|
||||||
Corporate
|
$
|
56,651
|
|
|
48.6
|
%
|
|
$
|
55,772
|
|
|
50.2
|
%
|
CLO
|
9,627
|
|
|
8.2
|
%
|
|
8,275
|
|
|
7.5
|
%
|
||
Credit
|
66,278
|
|
|
56.8
|
%
|
|
64,047
|
|
|
57.7
|
%
|
||
RMBS
|
8,990
|
|
|
7.7
|
%
|
|
9,814
|
|
|
8.9
|
%
|
||
Mortgage loans
|
16,533
|
|
|
14.2
|
%
|
|
14,423
|
|
|
13.0
|
%
|
||
CMBS
|
3,358
|
|
|
2.9
|
%
|
|
3,018
|
|
|
2.7
|
%
|
||
Real estate
|
28,881
|
|
|
24.8
|
%
|
|
27,255
|
|
|
24.6
|
%
|
||
ABS
|
8,413
|
|
|
7.2
|
%
|
|
7,706
|
|
|
6.9
|
%
|
||
Alternative investments
|
5,194
|
|
|
4.5
|
%
|
|
4,492
|
|
|
4.1
|
%
|
||
State, municipal, political subdivisions and foreign government
|
2,253
|
|
|
1.9
|
%
|
|
2,122
|
|
|
1.9
|
%
|
||
Equity securities
|
485
|
|
|
0.4
|
%
|
|
467
|
|
|
0.4
|
%
|
||
Short-term investments
|
455
|
|
|
0.4
|
%
|
|
765
|
|
|
0.7
|
%
|
||
U.S. government and agencies
|
74
|
|
|
0.1
|
%
|
|
134
|
|
|
0.1
|
%
|
||
Other investments
|
16,874
|
|
|
14.5
|
%
|
|
15,686
|
|
|
14.1
|
%
|
||
Cash and equivalents
|
3,434
|
|
|
2.9
|
%
|
|
2,881
|
|
|
2.6
|
%
|
||
Policy loans and other
|
1,204
|
|
|
1.0
|
%
|
|
1,165
|
|
|
1.0
|
%
|
||
Total invested assets
|
$
|
116,671
|
|
|
100.0
|
%
|
|
$
|
111,034
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
1 See Key Operating and Non-GAAP Measures for the definition of invested assets.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except percentages)
|
Invested Asset Value
|
|
Percent of Total
|
|
Invested Asset Value
|
|
Percent of Total
|
||||||
Retirement Services
|
|
|
|
|
|
|
|
||||||
Differentiated investments
|
|
|
|
|
|
|
|
||||||
AmeriHome
|
$
|
554
|
|
|
10.7
|
%
|
|
$
|
568
|
|
|
12.6
|
%
|
MidCap
|
554
|
|
|
10.7
|
%
|
|
553
|
|
|
12.3
|
%
|
||
Catalina
|
262
|
|
|
5.0
|
%
|
|
232
|
|
|
5.2
|
%
|
||
Venerable
|
98
|
|
|
1.9
|
%
|
|
92
|
|
|
2.1
|
%
|
||
Other
|
211
|
|
|
4.1
|
%
|
|
229
|
|
|
5.1
|
%
|
||
Total differentiated investments
|
1,679
|
|
|
32.4
|
%
|
|
1,674
|
|
|
37.3
|
%
|
||
Real estate
|
1,116
|
|
|
21.5
|
%
|
|
1,015
|
|
|
22.6
|
%
|
||
Credit
|
1,022
|
|
|
19.7
|
%
|
|
537
|
|
|
11.9
|
%
|
||
Private equity
|
323
|
|
|
6.2
|
%
|
|
279
|
|
|
6.2
|
%
|
||
Real assets
|
330
|
|
|
6.3
|
%
|
|
276
|
|
|
6.2
|
%
|
||
Natural resources
|
57
|
|
|
1.1
|
%
|
|
55
|
|
|
1.2
|
%
|
||
Other
|
46
|
|
|
0.9
|
%
|
|
4
|
|
|
0.1
|
%
|
||
Total Retirement Services alternative investments
|
4,573
|
|
|
88.1
|
%
|
|
3,840
|
|
|
85.5
|
%
|
||
Corporate and Other
|
|
|
|
|
|
|
|
||||||
Athora
|
133
|
|
|
2.6
|
%
|
|
130
|
|
|
2.9
|
%
|
||
Credit
|
146
|
|
|
2.8
|
%
|
|
203
|
|
|
4.5
|
%
|
||
Natural resources
|
251
|
|
|
4.8
|
%
|
|
213
|
|
|
4.8
|
%
|
||
Public equities1
|
91
|
|
|
1.7
|
%
|
|
100
|
|
|
2.2
|
%
|
||
Other
|
—
|
|
|
—
|
%
|
|
6
|
|
|
0.1
|
%
|
||
Total Corporate and Other alternative investments
|
621
|
|
|
11.9
|
%
|
|
652
|
|
|
14.5
|
%
|
||
Total alternative investments
|
$
|
5,194
|
|
|
100.0
|
%
|
|
$
|
4,492
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
1 As of June 30, 2019, public equities primarily includes an investment in OneMain Holdings, Inc. (ticker: OMF).
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Total shareholders’ equity
|
$
|
12,365
|
|
|
$
|
8,276
|
|
Less: Preferred stock
|
839
|
|
|
—
|
|
||
Total common shareholders’ equity
|
11,526
|
|
|
8,276
|
|
||
Less: AOCI
|
1,760
|
|
|
(472
|
)
|
||
Less: Accumulated change in fair value of reinsurance assets
|
639
|
|
|
(75
|
)
|
||
Total adjusted common shareholders’ equity
|
$
|
9,127
|
|
|
$
|
8,823
|
|
|
|
|
|
||||
Segment adjusted common shareholders’ equity
|
|
|
|
||||
Retirement Services
|
$
|
7,704
|
|
|
$
|
7,807
|
|
Corporate and Other
|
1,423
|
|
|
1,016
|
|
||
Total adjusted common shareholders’ equity
|
$
|
9,127
|
|
|
$
|
8,823
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Average shareholders’ equity
|
$
|
11,241
|
|
|
$
|
8,575
|
|
|
$
|
10,321
|
|
|
$
|
8,819
|
|
Less: Average preferred stock
|
420
|
|
|
—
|
|
|
420
|
|
|
—
|
|
||||
Less: Average AOCI
|
1,233
|
|
|
391
|
|
|
644
|
|
|
798
|
|
||||
Less: Average accumulated change in fair value of reinsurance assets
|
474
|
|
|
60
|
|
|
282
|
|
|
86
|
|
||||
Average adjusted common shareholders’ equity
|
$
|
9,114
|
|
|
$
|
8,124
|
|
|
$
|
8,975
|
|
|
$
|
7,935
|
|
|
|
|
|
|
|
|
|
||||||||
Segment average adjusted common shareholders’ equity
|
|
|
|
|
|
|
|
||||||||
Retirement Services
|
$
|
7,952
|
|
|
$
|
5,772
|
|
|
$
|
7,755
|
|
|
$
|
5,644
|
|
Corporate and Other
|
1,162
|
|
|
2,352
|
|
|
1,220
|
|
|
2,291
|
|
||||
Average adjusted common shareholders’ equity
|
$
|
9,114
|
|
|
$
|
8,124
|
|
|
$
|
8,975
|
|
|
$
|
7,935
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
720
|
|
|
$
|
257
|
|
|
$
|
1,428
|
|
|
$
|
534
|
|
Change in fair value of reinsurance assets
|
(330
|
)
|
|
95
|
|
|
(714
|
)
|
|
149
|
|
||||
Adjusted net income
|
$
|
390
|
|
|
$
|
352
|
|
|
$
|
714
|
|
|
$
|
683
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
(In millions, except percentages)
|
Dollar
|
|
Rate
|
|
Dollar
|
|
Rate
|
|
Dollar
|
|
Rate
|
|
Dollar
|
|
Rate
|
||||||||||||
GAAP net investment income
|
$
|
1,161
|
|
|
4.03
|
%
|
|
$
|
958
|
|
|
4.47
|
%
|
|
$
|
2,227
|
|
|
3.91
|
%
|
|
$
|
1,813
|
|
|
4.44
|
%
|
Change in fair value of reinsurance assets
|
161
|
|
|
0.56
|
%
|
|
72
|
|
|
0.34
|
%
|
|
293
|
|
|
0.52
|
%
|
|
117
|
|
|
0.29
|
%
|
||||
Net VIE earnings
|
24
|
|
|
0.09
|
%
|
|
1
|
|
|
0.00
|
%
|
|
45
|
|
|
0.08
|
%
|
|
16
|
|
|
0.04
|
%
|
||||
Alternative income gain (loss)
|
12
|
|
|
0.04
|
%
|
|
(1
|
)
|
|
0.00
|
%
|
|
7
|
|
|
0.01
|
%
|
|
—
|
|
|
—
|
%
|
||||
Held for trading amortization
|
(13
|
)
|
|
(0.05
|
)%
|
|
(21
|
)
|
|
(0.10
|
)%
|
|
(24
|
)
|
|
(0.04
|
)%
|
|
(44
|
)
|
|
(0.11
|
)%
|
||||
Total adjustments to arrive at net investment earnings/earned rate
|
184
|
|
|
0.64
|
%
|
|
51
|
|
|
0.24
|
%
|
|
321
|
|
|
0.57
|
%
|
|
89
|
|
|
0.22
|
%
|
||||
Total net investment earnings/earned rate
|
$
|
1,345
|
|
|
4.67
|
%
|
|
$
|
1,009
|
|
|
4.71
|
%
|
|
$
|
2,548
|
|
|
4.48
|
%
|
|
$
|
1,902
|
|
|
4.66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retirement Services
|
$
|
1,321
|
|
|
4.63
|
%
|
|
$
|
983
|
|
|
4.74
|
%
|
|
$
|
2,492
|
|
|
4.42
|
%
|
|
$
|
1,849
|
|
|
4.68
|
%
|
Corporate and Other
|
24
|
|
|
8.39
|
%
|
|
26
|
|
|
3.71
|
%
|
|
56
|
|
|
10.05
|
%
|
|
53
|
|
|
4.01
|
%
|
||||
Total net investment earnings/earned rate
|
$
|
1,345
|
|
|
4.67
|
%
|
|
$
|
1,009
|
|
|
4.71
|
%
|
|
$
|
2,548
|
|
|
4.48
|
%
|
|
$
|
1,902
|
|
|
4.66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retirement Services average invested assets
|
114,059
|
|
|
|
|
82,879
|
|
|
|
|
112,711
|
|
|
|
|
79,000
|
|
|
|
||||||||
Corporate and Other average invested assets
|
1,162
|
|
|
|
|
2,848
|
|
|
|
|
1,113
|
|
|
|
|
2,646
|
|
|
|
||||||||
Consolidated average invested assets
|
$
|
115,221
|
|
|
|
|
$
|
85,727
|
|
|
|
|
$
|
113,824
|
|
|
|
|
$
|
81,646
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
(In millions, except percentages)
|
Dollar
|
|
Rate
|
|
Dollar
|
|
Rate
|
|
Dollar
|
|
Rate
|
|
Dollar
|
|
Rate
|
||||||||||||
GAAP interest sensitive contract benefits
|
$
|
1,094
|
|
|
3.84
|
%
|
|
$
|
342
|
|
|
1.65
|
%
|
|
$
|
2,610
|
|
|
4.63
|
%
|
|
$
|
373
|
|
|
0.94
|
%
|
Interest credited other than deferred annuities and institutional products
|
50
|
|
|
0.18
|
%
|
|
9
|
|
|
0.04
|
%
|
|
105
|
|
|
0.19
|
%
|
|
16
|
|
|
0.04
|
%
|
||||
FIA option costs
|
280
|
|
|
0.98
|
%
|
|
206
|
|
|
0.99
|
%
|
|
558
|
|
|
0.99
|
%
|
|
380
|
|
|
0.96
|
%
|
||||
Product charges (strategy fees)
|
(29
|
)
|
|
(0.10
|
)%
|
|
(23
|
)
|
|
(0.11
|
)%
|
|
(57
|
)
|
|
(0.10
|
)%
|
|
(45
|
)
|
|
(0.11
|
)%
|
||||
Reinsurance embedded derivative impacts
|
14
|
|
|
0.05
|
%
|
|
3
|
|
|
0.02
|
%
|
|
29
|
|
|
0.05
|
%
|
|
6
|
|
|
0.02
|
%
|
||||
Change in fair value of embedded derivatives – FIAs
|
(868
|
)
|
|
(3.05
|
)%
|
|
(178
|
)
|
|
(0.85
|
)%
|
|
(2,179
|
)
|
|
(3.86
|
)%
|
|
(57
|
)
|
|
(0.14
|
)%
|
||||
Negative VOBA amortization
|
7
|
|
|
0.02
|
%
|
|
7
|
|
|
0.03
|
%
|
|
19
|
|
|
0.03
|
%
|
|
17
|
|
|
0.04
|
%
|
||||
Other changes in interest sensitive contract liabilities
|
(1
|
)
|
|
0.00
|
%
|
|
2
|
|
|
0.01
|
%
|
|
(3
|
)
|
|
(0.01
|
)%
|
|
—
|
|
|
—
|
%
|
||||
Total adjustments to arrive at cost of crediting
|
(547
|
)
|
|
(1.92
|
)%
|
|
26
|
|
|
0.13
|
%
|
|
(1,528
|
)
|
|
(2.71
|
)%
|
|
317
|
|
|
0.81
|
%
|
||||
Retirement Services cost of crediting
|
$
|
547
|
|
|
1.92
|
%
|
|
$
|
368
|
|
|
1.78
|
%
|
|
$
|
1,082
|
|
|
1.92
|
%
|
|
$
|
690
|
|
|
1.75
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retirement Services cost of crediting on deferred annuities
|
$
|
448
|
|
|
1.98
|
%
|
|
$
|
318
|
|
|
1.92
|
%
|
|
$
|
892
|
|
|
1.98
|
%
|
|
$
|
593
|
|
|
1.89
|
%
|
Retirement Services cost of crediting on institutional products
|
99
|
|
|
3.76
|
%
|
|
50
|
|
|
3.16
|
%
|
|
190
|
|
|
3.73
|
%
|
|
97
|
|
|
3.15
|
%
|
||||
Retirement Services cost of crediting
|
$
|
547
|
|
|
1.92
|
%
|
|
$
|
368
|
|
|
1.78
|
%
|
|
$
|
1,082
|
|
|
1.92
|
%
|
|
$
|
690
|
|
|
1.75
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retirement Services average invested assets
|
$
|
114,059
|
|
|
|
|
$
|
82,879
|
|
|
|
|
$
|
112,711
|
|
|
|
|
$
|
79,000
|
|
|
|
||||
Average account value on deferred annuities
|
90,675
|
|
|
|
|
66,241
|
|
|
|
|
90,261
|
|
|
|
|
62,694
|
|
|
|
||||||||
Average institutional reserve liabilities
|
10,470
|
|
|
|
|
6,341
|
|
|
|
|
10,140
|
|
|
|
|
6,148
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
GAAP benefits and expenses
|
$
|
2,619
|
|
|
$
|
1,481
|
|
|
$
|
6,840
|
|
|
$
|
2,170
|
|
Premiums
|
(733
|
)
|
|
(731
|
)
|
|
(2,699
|
)
|
|
(1,009
|
)
|
||||
Product charges
|
(132
|
)
|
|
(106
|
)
|
|
(257
|
)
|
|
(202
|
)
|
||||
Other revenues
|
(9
|
)
|
|
(6
|
)
|
|
(21
|
)
|
|
(12
|
)
|
||||
Cost of crediting
|
(253
|
)
|
|
(159
|
)
|
|
(495
|
)
|
|
(304
|
)
|
||||
Change in fair value of embedded derivatives – FIA, net of offsets
|
(817
|
)
|
|
(237
|
)
|
|
(2,077
|
)
|
|
(171
|
)
|
||||
DAC, DSI and VOBA amortization related to investment gains and losses
|
(181
|
)
|
|
26
|
|
|
(354
|
)
|
|
46
|
|
||||
Rider reserves related to investment gains and losses
|
(24
|
)
|
|
6
|
|
|
(52
|
)
|
|
7
|
|
||||
Policy and other operating expenses, excluding policy acquisition expenses
|
(117
|
)
|
|
(98
|
)
|
|
(220
|
)
|
|
(195
|
)
|
||||
AmerUs closed block fair value liability
|
(59
|
)
|
|
36
|
|
|
(112
|
)
|
|
90
|
|
||||
Other
|
1
|
|
|
8
|
|
|
2
|
|
|
8
|
|
||||
Total adjustments to arrive at other liability costs
|
(2,324
|
)
|
|
(1,261
|
)
|
|
(6,285
|
)
|
|
(1,742
|
)
|
||||
Other liability costs
|
$
|
295
|
|
|
$
|
220
|
|
|
$
|
555
|
|
|
$
|
428
|
|
|
|
|
|
|
|
|
|
||||||||
Retirement Services
|
$
|
295
|
|
|
$
|
220
|
|
|
$
|
555
|
|
|
$
|
428
|
|
Corporate and Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Consolidated other liability costs
|
$
|
295
|
|
|
$
|
220
|
|
|
$
|
555
|
|
|
$
|
428
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
GAAP policy and other operating expenses
|
$
|
185
|
|
|
$
|
154
|
|
|
$
|
350
|
|
|
$
|
296
|
|
Interest expense
|
(15
|
)
|
|
(16
|
)
|
|
(32
|
)
|
|
(29
|
)
|
||||
Policy acquisition expenses, net of deferrals
|
(69
|
)
|
|
(58
|
)
|
|
(131
|
)
|
|
(103
|
)
|
||||
Integration, restructuring and other non-operating expenses
|
(11
|
)
|
|
(8
|
)
|
|
(12
|
)
|
|
(16
|
)
|
||||
Stock compensation expenses
|
(3
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|
(5
|
)
|
||||
Total adjustments to arrive at operating expenses
|
(98
|
)
|
|
(84
|
)
|
|
(181
|
)
|
|
(153
|
)
|
||||
Operating expenses
|
$
|
87
|
|
|
$
|
70
|
|
|
$
|
169
|
|
|
$
|
143
|
|
|
|
|
|
|
|
|
|
||||||||
Retirement Services
|
$
|
68
|
|
|
$
|
56
|
|
|
$
|
130
|
|
|
$
|
114
|
|
Corporate and Other
|
19
|
|
|
14
|
|
|
39
|
|
|
29
|
|
||||
Consolidated operating expenses
|
$
|
87
|
|
|
$
|
70
|
|
|
$
|
169
|
|
|
$
|
143
|
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Total investments, including related parties
|
$
|
120,106
|
|
|
$
|
107,632
|
|
Derivative assets
|
(2,299
|
)
|
|
(1,043
|
)
|
||
Cash and cash equivalents (including restricted cash)
|
5,238
|
|
|
3,403
|
|
||
Accrued investment income
|
758
|
|
|
682
|
|
||
Payables for collateral on derivatives
|
(2,183
|
)
|
|
(969
|
)
|
||
Reinsurance funds withheld and modified coinsurance
|
(1,236
|
)
|
|
223
|
|
||
VIE and VOE assets, liabilities and noncontrolling interest
|
656
|
|
|
718
|
|
||
Unrealized (gains) losses
|
(3,084
|
)
|
|
808
|
|
||
Ceded policy loans
|
(280
|
)
|
|
(281
|
)
|
||
Net investment receivables (payables)
|
(1,005
|
)
|
|
(139
|
)
|
||
Total adjustments to arrive at invested assets
|
(3,435
|
)
|
|
3,402
|
|
||
Total invested assets
|
$
|
116,671
|
|
|
$
|
111,034
|
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Investment funds, including related parties and VIEs
|
$
|
3,912
|
|
|
$
|
3,559
|
|
Nonredeemable preferred stock included in equity securities
|
455
|
|
|
—
|
|
||
CLO equities included in trading securities
|
111
|
|
|
125
|
|
||
Investment funds within funds withheld at interest
|
687
|
|
|
660
|
|
||
Royalties and other assets included in other investments
|
68
|
|
|
71
|
|
||
Net assets of the VIE, excluding investment funds
|
(7
|
)
|
|
50
|
|
||
Unrealized (gains) losses and other adjustments
|
(32
|
)
|
|
27
|
|
||
Total adjustments to arrive at alternative investments
|
1,282
|
|
|
933
|
|
||
Alternative investments
|
$
|
5,194
|
|
|
$
|
4,492
|
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Total liabilities
|
$
|
126,615
|
|
|
$
|
117,229
|
|
Long-term debt
|
(991
|
)
|
|
(991
|
)
|
||
Derivative liabilities
|
(80
|
)
|
|
(85
|
)
|
||
Payables for collateral on derivatives
|
(2,183
|
)
|
|
(969
|
)
|
||
Funds withheld liability
|
(759
|
)
|
|
(721
|
)
|
||
Other liabilities
|
(1,958
|
)
|
|
(888
|
)
|
||
Liabilities of consolidated VIEs
|
(1
|
)
|
|
(1
|
)
|
||
Reinsurance ceded receivables
|
(5,678
|
)
|
|
(5,534
|
)
|
||
Policy loans ceded
|
(280
|
)
|
|
(281
|
)
|
||
Other
|
(5
|
)
|
|
(27
|
)
|
||
Total adjustments to arrive at reserve liabilities
|
(11,935
|
)
|
|
(9,497
|
)
|
||
Total reserve liabilities
|
$
|
114,680
|
|
|
$
|
107,732
|
|
•
|
our projected net cumulative cash flows, including both new business and target levels of new investments under a “plan scenario” and a “moderately severe scenario” event, are non-negative over a rolling 12-month horizon;
|
•
|
we hold enough cash, cash equivalents and other discounted liquid limit assets to cover 12 months of AHL’s and Athene USA’s projected obligations, including debt servicing costs
|
▪
|
minimum of 50% of expenses and 100% of debt servicing to be held in cash and cash equivalents at AHL operating accounts
|
▪
|
minimum of 50% of any required AHL – Athene USA inter-company loan commitments to be held in cash and cash equivalents by AHL
|
▪
|
dividends from ALRe sufficient to support the ongoing operations of AHL must be available under moderate and substantial stress scenarios
|
▪
|
for purposes of administering this test, liquid limit assets are discounted by 25% and include public corporate bonds rated A- or above, liquid ABS (defined as prime auto, auto floorplan, Tier 1 subprime auto, auto lease, prime credit cards, equipment lease or utility stranded assets); RMBS with weighted average lives less than three years rated A- or above and CMBS with weighted average lives less than three years rated AAA- or above
|
•
|
we seek to maintain sufficient capital and surplus at ALRe to meet the following collateral and capital maintenance calls under a substantial stress event, such as the failure of a major financial institution (Lehman event):
|
▪
|
collateral calls from modco and third-party reinsurance contracts
|
▪
|
Athene Annuity Re Ltd. (AARe) capital maintenance calls arising from AARe collateral calls from modco reinsurance contracts; and
|
▪
|
U.S. regulated entity capital maintenance calls from nonmodco activity.
|
|
Six months ended June 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Net income
|
$
|
1,428
|
|
|
$
|
534
|
|
Payment at inception of reinsurance agreements, net
|
—
|
|
|
(394
|
)
|
||
Non-cash revenues and expenses
|
155
|
|
|
287
|
|
||
Net cash provided by operating activities
|
1,583
|
|
|
427
|
|
||
Sales, maturities and repayments of investments
|
7,776
|
|
|
8,856
|
|
||
Purchases of investments
|
(12,425
|
)
|
|
(12,656
|
)
|
||
Deconsolidation of Athora Holding Ltd.
|
—
|
|
|
(296
|
)
|
||
Other investing activities
|
631
|
|
|
284
|
|
||
Net cash used in investing activities
|
(4,018
|
)
|
|
(3,812
|
)
|
||
Deposits on investment-type policies and contracts
|
5,972
|
|
|
4,375
|
|
||
Withdrawals on investment-type policies and contracts
|
(3,275
|
)
|
|
(2,839
|
)
|
||
Net change in cash collateral posted for derivative transactions
|
1,214
|
|
|
(577
|
)
|
||
Net proceeds and repayment of debt
|
—
|
|
|
1,181
|
|
||
Issuance of preferred stock, net of expenses
|
839
|
|
|
—
|
|
||
Repurchase of common stock
|
(427
|
)
|
|
(5
|
)
|
||
Other financing activities
|
(54
|
)
|
|
41
|
|
||
Net cash provided by financing activities
|
4,269
|
|
|
2,176
|
|
||
Net increase (decrease) in cash and cash equivalents1
|
$
|
1,834
|
|
|
$
|
(1,209
|
)
|
|
|
|
|
||||
1 Includes cash and cash equivalents, restricted cash, and cash and cash equivalents of consolidated VIEs.
|
•
|
fair value of investments;
|
•
|
impairment of investments and valuation allowances;
|
•
|
future policy benefit reserves;
|
•
|
derivatives valuation, including embedded derivatives;
|
•
|
deferred acquisition costs, deferred sales inducements and value of business acquired;
|
•
|
stock-based compensation;
|
•
|
consolidation of VIEs; and
|
•
|
valuation allowances on deferred tax assets.
|
(1)
|
a base management fee equal to the sum of (i) 0.225% per annum of the lesser of (A) the aggregate market value of substantially all of the assets in substantially all of the investment accounts of or relating to us (collectively, the Accounts) on December 31, 2018 (Backbook Value) and (B) the aggregate market value of substantially all of the assets in the Accounts at the end of the respective month, plus (ii) 0.15% per annum of the amount, if any (Incremental Value), by which the aggregate market value of substantially all of the assets in the Accounts at the end of the respective month exceeds the Backbook Value; plus
|
(2)
|
with respect to each asset in an Account, subject to certain exceptions, that is managed by Apollo and that belongs to a specified asset class tier, a sub-allocation fee as follows, which will, in the case of assets acquired after January 1, 2019, be subject to a cap of 10% of the applicable asset’s gross book yield, as further described in the Fee Agreement:
|
(i)
|
0.065% of the market value of Core assets, which include public investment grade corporate bonds, municipal securities, agency RMBS or CMBS, and obligations of governmental agencies or government sponsored entities that are not expressly backed by the U.S. government;
|
(ii)
|
0.13% of the market value of Core Plus assets, which include private investment grade corporate bonds, fixed rate first lien CML, and certain obligations issued or assumed by financial institutions and determined by Apollo to be “Tier 2 Capital” under Basel III, a set of recommendations for international banking regulations developed by the Bank for International Settlements;
|
(iii)
|
0.375% of the market value of Yield assets, which include non-agency RMBS, investment grade CLO, CMBS and other ABS (other than RMBS and CLO), emerging market investments, below investment grade corporate bonds, subordinated debt obligations, hybrid securities or surplus notes issued or assumed by a financial institution, rated preferred equity, RML, bank loans, investment grade infrastructure debt, and floating rate CMLs on slightly transitional or stabilized traditional real estate;
|
(iv)
|
0.70% of the market value of High Alpha assets, which include subordinated CML, below investment grade CLO, unrated preferred equity, debt obligations originated by MidCap, CMLs for redevelopment or construction loans or secured by non-traditional real estate, below investment grade infrastructure debt, certain loans originated directly by Apollo (other than MidCap loans), and agency mortgage derivatives; and
|
(v)
|
0.00% of the market value of cash and cash equivalents, U.S. treasuries, non-preferred equities and alternatives.
|
Period
|
(a) Total number of shares purchased1
|
(b) Average price paid per share
|
(c) Total number of shares purchased as part of publicly announced programs1,2
|
(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs2
|
||||||
April 1 – April 30, 2019
|
1,136
|
|
$
|
42.71
|
|
—
|
|
$
|
102,632,284
|
|
May 1 – May 31, 2019
|
2,793,562
|
|
$
|
43.20
|
|
2,793,553
|
|
$
|
229,352,721
|
|
June 1 – June 30, 2019
|
5,974,518
|
|
$
|
42.71
|
|
5,974,518
|
|
$
|
94,257,312
|
|
|
|
|
|
|
||||||
1 Differences in amounts between column (a) and (c) relate to shares withheld (under the terms of employee stock-based compensation plans) to offset tax withholding obligations that occur upon the delivery of outstanding shares underlying equity awards or upon the exercise of stock options.
|
||||||||||
2 On December 10, 2018, we announced that our board of directors had approved an authorization for the repurchase of up to $250 million of our Class A shares (Previous Authorization). On May 7, 2019, we announced that our board of directors had approved an authorization for the repurchase of up to $350 million of our Class A shares, inclusive of the remaining shares authorized for repurchase under the Previous Authorization. On June 10, 2019, we announced that our board of directors had approved an additional $120 million authorization for the repurchase our Class A shares. On August 5, 2019, we announced that our board of directors had approved an additional $350 million authorization for the repurchase of our Class A shares. None of the authorizations have a definitive expiration date, but may be terminated at any time at the sole discretion of our board of directors. See Note 7 – Equity to the condensed consolidated financial statements for more information.
|
Exhibit No.
|
Description
|
3.1
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
|
10.5
|
|
10.6
|
|
10.7
|
|
10.8
|
|
10.9
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101.INS
|
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH
|
XBRL Taxonomy Extension Schema.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
ATHENE HOLDING LTD.
|
|
|
Date: August 5, 2019
|
/s/ Martin P. Klein
|
|
Martin P. Klein
|
|
Executive Vice President and Chief Financial Officer
|
|
(principal financial officer and duly authorized signatory)
|
Parties:
|
Each of the entities which has signed the letter to which this Annex A is attached or which has joined by signing a copy of such letter at a later date (each, a “Company”, and collectively, the “Companies”), and [Director Name] (“Director”) of [Director Address].
|
Interpretation:
|
For purposes of this Annex A (this “Agreement”), “Subsidiary” shall mean all direct and indirect subsidiaries of the relevant Company.
|
|
For purposes of this Annex A, “affiliate” of any Company shall include all Subsidiaries of such Company and Athene Asset Management LLC.
|
|
For purposes of this Annex A, “applicable law” shall mean, with respect to any Company, the laws of the jurisdiction of formation of such Company.
|
Term:
|
Director shall hold office for such term as the shareholder(s) of the relevant Company may determine or, in the absence of such determination, in such manner as is consistent with this Agreement, applicable law, any applicable shareholders agreement, bye-laws or other definitive governing document of such Company (in each case, as may be amended, restated or otherwise modified from time to time). Director may be removed from office and Director’s office as a director shall be vacated in such manner as is consistent with this Agreement, applicable law, any applicable shareholders agreement, bye-laws or other definitive governing document of such Company (in each case, as may be amended, restated or otherwise modified from time to time).
|
|
Further, Director agrees to resign his or her office as a director of any Company (a) if, by virtue of holding the office of director, Director causes such Company or any affiliate of such Company to be subject to an adverse tax consequence, (b) in the event that he or she shall be convicted of a felony, or (c) in the event that a determination shall be made by such Company, or any affiliate thereof, as the case may be, that the continued appointment of Director may result in adverse regulatory or legal consequences to, or would be adverse to the reputation of, such Company or its affiliates.
|
Fees and Expenses:
|
Each of the Companies agrees to pay Director the fees and expenses set forth opposite that Company on Schedule I (as modified from time to time), with all cash fees and expenses to be paid in U.S. Dollars. It is understood and agreed that all fees and expenses to be paid to Director hereunder will be paid (i) by Athene Holding Ltd. (“AHL”), which may be reimbursed by the relevant Company through separate shared service arrangements or (ii) if not reimbursed by the relevant Company through such arrangements, directly by the relevant Company.
|
|
No additional or separate compensation will be paid to Director for:
|
|
(i) attendance at shareholder meetings of any Company or its Subsidiaries; or
|
|
(ii) any other service reasonably attendant to the services described in this Annex A.
|
|
Each Company shall pay or reimburse Director for all documented out-of-pocket expenses reasonably incurred by Director in connection with the performance of his or her duties or obligations as a Director or committee member of such Company, including, but not limited to travel, lodging and transportation expenses incurred in connection with attendance at meetings, with such reimbursements in accordance with the policies of the Company in effect from time to time.
All incremental fees payable as a result of the retroactive application of the letter to the Effective Date, if any, will be paid in connection with the first regularly scheduled payment to the Director immediately following the date of the letter. The Director will not be required to reimburse the Company for any cash deficiency arising from or relating to the retroactive application of the letter to the Effective Date.
|
Duties, Time Commitment:
|
Director shall use reasonable best efforts to attend all board, committee, and if requested, shareholder meetings of any entity on which he or she serves as a director or committee member.
|
|
Director’s duties associated with serving as a member of any committee of any board of which Director shall be a member will be as set forth in the relevant committee charter and will include attendance at such committee’s meetings.
|
|
During the continuance of Director’s appointment, Director will be expected to:
|
|
(i) faithfully, efficiently, competently and diligently perform his or her duties and exercise such powers as are appropriate to his or her role as a director;
|
|
(ii) promptly declare, so far as he or she is aware, the nature of any interest, whether direct or indirect, in any contract or proposed contract entered into or to be entered into between Director and the Company, and/or any affiliate of the Company or any Related Party Transaction (as defined in AHL’s Related Party Transactions Policy, as amended from time to time, “Related Party Transaction”) or proposed Related Party Transaction involving Director;
|
|
(iii) take into consideration any potential conflicts of interest when accepting appointment to other boards;
|
|
(iv) comply with all reasonable requests, instructions and regulations made or given by any board of which he or she is a member (or by any duly authorized committee thereof), and give to each board or committee such explanations, information and assistance as they may reasonably require;
|
|
(v) act in the best interests of the Company and its Subsidiaries; and
|
|
(vi) use commercially reasonable efforts to promote and extend the interests and reputation of the Company and its Subsidiaries, including assisting their respective boards in relation to public and corporate affairs and bringing to bear for the benefit of the relevant board, Director’s particular knowledge and experience.
|
|
It is hereby understood and agreed that if Director is classified as an independent director by the board of any Company, Director shall promptly inform such board of any circumstances that would likely affect such independent status.
|
|
Director shall inform each board on which he or she serves as a member, within 10 business days, of any (direct or indirect) personal interests, whether now existing or hereafter arising, which may conflict with Director’s duties to the Company and/or its affiliates, or with any of their respective businesses. Director undertakes that during the term of his or her appointment as a Director of the Company, he or she will promptly disclose in writing any new directorship or appointment, any conflict of interest or any situation that may reasonably be expected to result in an appearance of a conflict of interest, including any business relationship or interest in a business entity which is likely to compete with the Company, any contract between Director (on the one hand) and the Company and/or affiliates of the Company (on the other hand) and any Related Party Transaction involving Director.
|
Fiduciary Obligations:
|
Director acknowledges and understands that the structure, practices and committees of their respective boards, including matters relating to the size, independence and composition of their boards, the election and removal of directors, requirements relating to board action, the powers delegated to board committees and the appointment of executive officers, are governed by applicable law and the shareholders agreements, bye-laws or other definitive governing documents of the applicable entity (in each case, as may be amended, restated or otherwise modified from time to time).
|
|
Director hereby acknowledges that he or she has been provided a copy of the Operating Guidelines applicable to AHL and its affiliates (the “Operating Guidelines”) and agrees at all times to comply with the same (as such may be amended or modified from time to time) in connection with all services to be performed as a Director and committee member.
|
Confidential Information:
|
Director agrees that both during and after his or her time as a director of any Company, Director will not use for his or her own, or for another’s benefit, or disclose or permit the disclosure of any confidential information relating to such Company, or its affiliates, including, without limitation, any information about any board deliberations or any other information with respect to Athene Asset Management LLC.
|
|
The restriction shall cease to apply to any confidential information which may (other than by reason of Director’s breach of Director’s obligations) become available to the public generally or which is required to be disclosed by a subpoena or other legally compelling procedure.
|
|
Director also agrees during his or her appointment that he or she will not, other than for the benefit of such Company or its affiliates, and in connection with his or her service as a director, make any notes, memoranda, electronic records, tape records, films, photographs, plans, drawings or any form of record relating to any matter within the scope of the business or concerning the dealings or affairs of such Company or its affiliates, and will promptly return any such items at any time upon request.
|
Insurance:
|
Each Company is a beneficiary under an insurance policy under which the directors and officers of such Company and its affiliates are insured, subject to the limits of the policy, against certain losses arising from claims made against such directors and officers by reason of any acts or omissions covered under the policy in their respective capacities as directors or officers, including certain liabilities under securities laws.
|
Several Obligations of the Companies
|
Each Company shall be liable severally (and not jointly) for its obligations to Director hereunder and no Company shall be responsible for any obligation of any other Company hereunder.
|
Miscellaneous:
|
This letter does not create any relationship of employee and employer between Director, on the one hand, and any Company and/or its affiliates, on the other hand.
|
Governing Law and Jurisdiction:
|
This appointment and the terms hereunder are governed under the laws of the jurisdiction of formation of the relevant Company. The courts in such jurisdiction shall have non-exclusive jurisdiction to settle any dispute, and the parties to this Agreement hereby agree to submit to the non-exclusive jurisdiction of such courts.
|
Notices:
|
Any notice to be given under the terms of this letter shall, in the case of notice to any Company be deemed to be given if left at the address on Schedule I, or sent by facsimile transmission to the facsimile number on Schedule I (in each case, addressed to the Chairman) or in the case of notice to Director, if handed to him or her personally or left at, or sent by air courier or facsimile transmission to, his or her last-known address or facsimile number, as set forth in the relevant Company’s records. Any such notice shall be deemed to be given at the time of its delivery or dispatch by facsimile transmission.
|
Prior Agreements:
|
All prior agreements relating to the service of the Director as a director of the Companies are superseded and otherwise terminated in favor of this Agreement.
|
Schedule I
|
Company, address and facsimile
|
Jurisdiction of Formation
|
Compensation (pro-rata for any service over a period which is less than the full period set forth below)
|
Athene Holding Ltd.
Chesney House, 96 Pitts Bay Road, P.O. Box HM 1386, Hamilton HM FX, Bermuda
Fax: 441 279-8401
|
Bermuda
|
$120,000 cash retainer per year, payable quarterly in advance.
$150,000 annual restricted stock grant, payable in advance as of the close of business of the first trading day of the year.*
$36,750 annual fee for serving as lead director of the board of directors of the Company, $18,375 of which is payable in cash on a quarterly basis in advance and $18,375 of which is payable in restricted stock in one installment as of the close of business of the first trading day of the year.*
$15,750 annual cash fee for serving as a member (but not the chairperson) of the audit committee of the board of directors of the Company, payable quarterly in advance.
$10,500 annual cash fee (per committee) for serving as a member (but not the chairperson) of any other committee of the board of directors of the Company, payable quarterly in advance.
$31,500 annual cash fee for serving as the chairperson of the audit committee of the board of directors of the Company, payable quarterly in advance.
$21,000 annual cash fee (per committee) for serving as the chairperson of the compensation committee or risk committee of the board of directors of the Company, payable quarterly in advance.
$15,750 annual cash fee for serving as the chairperson of the nominating and corporate governance committee of the board of directors of the Company, payable quarterly in advance.
* All restricted stock grants vest in full on the first anniversary of the vesting commencement date, provided that the director is then serving as a director of the Company.
|
Athene Life Re Ltd.
Chesney House, 96 Pitts Bay Road, P.O. Box HM 1386, Hamilton HM FX, Bermuda
|
Bermuda
|
$5,000 cash retainer per year, paid on a quarterly basis.
|
Athene Annuity & Life Assurance Company
7700 Mills Civic Parkway
West Des Moines, IA 50266-3862
|
Delaware
|
$10,000 cash retainer per year, paid on a quarterly basis.
|
Athene Annuity and Life Company
7700 Mills Civic Parkway
West Des Moines, IA 50266-3862
|
Iowa
|
$7,000 cash retainer per year, paid on a quarterly basis.
|
Athene Annuity & Life Assurance Company of New York
7700 Mills Civic Parkway
West Des Moines, IA 50266-3862
|
New York
|
$5,000 cash retainer per year, paid on a quarterly basis.
|
Athene Life Insurance Company of New York
7700 Mills Civic Parkway
West Des Moines, IA 50266-3862
|
New York
|
$3,000 cash retainer per year, paid on a quarterly basis.
|
Shares Subject to Award:
|
[Number of Awards Granted] Class A common shares, par value $0.001 per share, of the Company (the “Common Shares”), subject to adjustment as provided in Section 6.2 of the Agreement. The purchase price is $0.001 per share (the “Purchase Price”). You agree to allow the Company to deduct the Purchase Price from any amount then or thereafter payable by the Company to you, as a condition to receipt of the Restricted Shares.
|
Grant Date:
|
[Grant Date]
|
Vesting Inception Date:
|
January 1 of the year of grant
|
Vesting Schedule:
|
Except as otherwise provided in the Plan, the Agreement or any other agreement between you and the Company or any of its Subsidiaries, the Award shall vest on the one-year anniversary of the Vesting Inception Date with respect to one hundred percent (100%) of the number of Common Shares subject thereto on the Grant Date, provided you have not experienced a Termination of Relationship prior to such date.
|
Shares Subject to Award:
|
[Number of Awards Granted] Class A common shares, par value $0.001 per share, of the Company (the “Common Shares”), subject to adjustment as provided in Section 6.2 of the Agreement. The purchase price is $0.001 per share (the “Purchase Price”). You agree to allow the Company to deduct the Purchase Price from any amount then or thereafter payable by the Company to you, in a lump sum cash payment payable to the Company, as a condition to receipt of the Restricted Shares.
|
Grant Date:
|
[Grant Date]
|
Vesting Inception Date:
|
January 1 of the year of grant
|
Vesting Schedule:
|
Except as otherwise provided in the Plan, the Agreement or any other agreement between you and the Company or any of its Subsidiaries, the Award shall vest (i) on the one-year anniversary of the Vesting Inception Date with respect to one-half of the number of Common Shares subject thereto on the Grant Date, and (ii) on the two-year anniversary of the Vesting Inception Date with respect to the remaining one-half of the number of Common Shares subject thereto on the Grant Date, in each case, provided you have not experienced a Termination of Relationship prior to such date.
|
Definitions:
|
For purposes of this Agreement, the following definitions shall apply:
|
1)
|
“Cause” means: (i) if at the time of termination you are a party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a Termination of Relationship by the Company, any of its Subsidiaries or the Asset Management Company based on (A) your commission of a felony or a crime of moral turpitude (under the laws of the United States or any relevant state, or a similar crime or offense under the applicable laws of any relevant foreign jurisdiction); (B) your commission of a willful and material act of dishonesty involving the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates; (C) your material non-curable breach of the your obligations under the Plan, this Agreement or any other agreement entered into between you and the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates; (D) your breach of the Company’s policies or procedures (or the policies or procedures of any of its Subsidiaries, the Asset Management Company or any of the Company’s or their respective Affiliates which are applicable) that causes material harm to the Company, any of its Subsidiaries, the Asset Management Company, any of their respective Affiliates or any of their business reputations; (E) your willful misconduct or gross negligence which causes material harm to the Company, any of its Subsidiaries, the Asset Management Company, any of their respective Affiliates or any of their business reputations;
|
2)
|
“Disability” means: (i) if at the time of termination you are party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a physical or mental impairment which, as reasonably determined by the Committee, renders you unable to perform the essential functions of your employment with your employer, even with reasonable accommodation that does not impose an undue hardship on your employer, for more than 90 days in any 180-day period, unless a longer period is required by federal or state law, in which case that longer period would apply.
|
3)
|
“Good Reason” means: (i) if at the time of termination you are a party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a Termination of Relationship by you following: (A) a reduction of greater than 10% in your annual base salary or bonus potential under any bonus plan maintained by the Asset Management Company (if you are employed by the Asset Management Company), the Company or any of its Subsidiaries that employs you (but not including any diminution related to a broader compensation reduction that is not limited to any particular employee or executive); or (B) any material adverse change in your title, authority, duties, or responsibilities or the assignment to you of any duties or responsibilities inconsistent in any material respect with those customarily associated with your position; provided, however, that none of the events described in the foregoing clauses (A) and (B) shall constitute Good Reason unless you shall have notified the Company in writing describing the events which constitute Good Reason within 45 days after the occurrence of such events and then only if the relevant employer shall have failed to cure such events within 60 days after the Company’s receipt of such written notice.
|
RSU Award:
|
Subject to the terms and conditions of the Plan and this Agreement, this Award entitles you to receive [Number of Awards Granted] Class A common shares, par value $0.001 per share, of the Company (the “Common Shares”) if the Company achieves the target level of performance with respect to the Performance Measures set forth below (the “Target Common Shares”). The actual number of Common Shares you are entitled to receive shall be based on the attainment of the applicable Performance Measures and your continued employment through the Vesting Date, each as described below. References in the Agreement to Common Shares shall also include references to the cash equivalent thereof.
|
If the Company achieves the following level of performance:
|
Then, you will become vested in the following percentage of the Target Common Shares:
|
Minimum
|
50%
|
Target
|
100%
|
Maximum
|
150%
|
Grant Date:
|
[Grant Date]
|
Performance Period:
|
The three (3) consecutive fiscal years of the Company beginning on January 1, 20[__].
|
Performance Measures:
|
With respect to 33.33% of the Target Common Shares, the Performance Measure will be based on the average Adjusted Operating Return on Equity for the Performance Period (calculated as the simple average of the Adjusted Operating Return on Equity for each fiscal year of the Company included in the Performance Period) (the “ROE Performance Measure”). With respect to another 33.33% of the Target Common Shares, the Performance Measure will be based on the cumulative Adjusted Operating Income over the Performance Period (the “Operating Income Performance Measure”). With respect to the final 33.34% of the Target Common Shares, the Performance Measure will be based on the Adjusted Book Value Per Share as of the end of the Performance Period (the “Adjusted Book Value Performance Measure”).
|
Vesting Conditions:
|
Except as otherwise provided in the Plan, the Agreement or any other agreement between you and the Company or any of its Subsidiaries, the number of Common Shares subject to the Award shall vest, if at all, on the February 28th immediately following the end of the Performance Period (the “Vesting Date”) based on the attainment of the Performance Measures during the Performance Period as set forth below and provided that you have not had a Termination of Relationship prior to the Vesting Date. The number of Common Shares subject to the Award that vest upon the attainment of Performance Measures between Minimum, Target and Maximum levels shall be determined by interpolation between the applicable performance levels.
|
Applicable Performance Measures
|
If the Company attains the following level of performance,
|
Then, you will become vested in the following percentage of Target Common Shares subject to the applicable Performance Measure
|
With respect to the 33.33% of the Target Common Shares subject to the ROE Performance Measure
|
Minimum of [__]%
|
50%
|
Target of [__]%
|
100%
|
|
Maximum of [__]%
|
150%
|
|
|
||
With respect to the 33.33% of the Target Common Shares subject to the Operating Income Performance Measure
|
Minimum of $[__]
|
50%
|
Target of $[__]
|
100%
|
|
Maximum of $[__]
|
150%
|
|
|
||
With respect to the 33.34% of the Target Common Shares subject to the Adjusted Book Value Performance Measure
|
Minimum of $[__]
|
50%
|
Target of $[__]
|
100%
|
|
Maximum of $[__]
|
150%
|
1)
|
Death or Disability. If your Termination of Relationship is due to your death or Disability (as defined below), the Award shall become immediately and fully vested as of the effective date of such Termination of Relationship with respect to the Target Common Shares; provided, however, if you experience a Termination of Relationship due to death or Disability following the conclusion of the Performance Period but prior to the Vesting Date, the Award shall become vested based on the actual level of performance measured through the end of the Performance Period, as calculated above;
|
2)
|
Retirement. If your Termination of Relationship is due to your Retirement (as defined below), the Performance Period shall continue through the last day thereof and you will be eligible for a prorated Award, payable no later than the March 15th immediately following the end of the Performance Period. The Award shall become vested based on actual performance as set forth in the table above and shall be prorated based on the number of days that have elapsed between the first day of the Performance Period and the date of your Termination of Relationship relative to the total number of days in the Performance Period; and
|
3)
|
Change in Control. If your Termination of Relationship occurs within eighteen (18) months following a Change in Control and is due to (i) an involuntary termination by the Company without Cause (as defined below) or (ii) a resignation by you for Good Reason (as defined below), the Award shall become vested as of the effective date of such Termination of Relationship with respect to the Target Common Shares; provided, however, if you experience such a Termination of Relationship following the conclusion of the Performance Period but prior to the Vesting Date, the Award shall become vested based on the greater of (a) target level of performance and (b) actual level of performance measured through the end of the Performance Period, as calculated above.
|
Definitions:
|
For purposes of this Agreement, the following definitions shall apply:
|
1)
|
“Cause” means: (i) if at the time of termination you are a party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a Termination of Relationship by the Company, any of its Subsidiaries or the Asset Management Company based on (A) your commission of a felony or a crime of moral turpitude (under the laws of the United States or any relevant state, or a similar crime or offense under the applicable laws of any relevant foreign jurisdiction); (B) your commission of a willful and material act of dishonesty involving the Company,
|
2)
|
“Disability” means: (i) if at the time of termination you are party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a physical or mental impairment which, as reasonably determined by the Committee, renders you unable to perform the essential functions of your employment with your employer, even with reasonable accommodation that does not impose an undue hardship on your employer, for more than 90 days in any 180-day period, unless a longer period is required by federal or state law, in which case that longer period would apply.
|
3)
|
“Good Reason” means: (i) if at the time of termination you are a party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a Termination of Relationship by you following: (A) a reduction of greater than 10% in your annual base salary or bonus potential under any bonus plan maintained by the Asset Management Company (if you are employed by the Asset Management Company), the Company or any of its Subsidiaries that employs you (but not including any diminution related to a broader compensation reduction that is not limited to any particular employee or executive); or (B) any material adverse change in your title, authority, duties, or responsibilities or the assignment to you of any duties or responsibilities inconsistent in any material respect with those customarily associated with your position; provided, however, that none of the events described in the foregoing clauses (A) and (B) shall constitute Good Reason unless you shall have notified the Company in writing describing the events which constitute Good Reason within 45 days after the occurrence of such events and then only if the relevant employer shall have failed to cure such events within 60 days after the Company’s receipt of such written notice.
|
4)
|
“Retirement” means: a Termination of Relationship other than for Cause on or after your attainment of age 60 with at least five (5) consecutive years of employment or service with the Company or its affiliates immediately prior to your Retirement.
|
RSU Award:
|
Subject to the terms and conditions of the Plan and this Agreement, this Award entitles you to receive [Number of Awards Granted] Class A common shares, par value $0.001 per share, of the Company (the “Common Shares”), subject to adjustment as provided in Section 5.2 of the Agreement.
|
Grant Date:
|
[Grant Date]
|
Vesting Inception Date:
|
January 1 of the year of grant
|
Vesting Schedule:
|
Except as otherwise provided in the Plan, the Agreement or any other agreement between you and the Company or any of its Subsidiaries, the Award shall vest (i) on the one-year anniversary of the Vesting Inception Date with respect to one-third of the number of Common Shares subject thereto on the Grant Date, (ii) on the two-year anniversary of the Vesting Inception Date with respect to an additional one-third of the number of Common Shares subject thereto on the Grant Date and (iii) on the three-year anniversary of the Vesting Inception Date with respect to the remaining one-third of the number of Common Shares subject thereto on the Grant Date, in each case, provided you have not experienced a Termination of Relationship prior to such date.
|
Definitions:
|
For purposes of this Agreement, the following definitions shall apply:
|
1)
|
“Cause” means: (i) if at the time of termination you are a party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a Termination of Relationship by the Company, any of its Subsidiaries or the Asset Management Company based on (A) your commission of a felony or a crime of moral turpitude (under the laws of the United States or any relevant state, or a similar crime or offense under the applicable laws of any relevant foreign jurisdiction); (B) your commission of a willful and material act of dishonesty involving the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates; (C) your material non-curable breach of the your obligations under the Plan, this Agreement or any other agreement entered into between you and the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates; (D) your breach of the Company’s policies or procedures (or the policies or procedures of any of its Subsidiaries, the Asset Management Company or any of the Company’s or their respective Affiliates which are applicable) that causes material harm to the Company, any of its Subsidiaries, the Asset Management Company, any of their respective Affiliates or any of their business reputations; (E) your willful misconduct or gross negligence which causes material harm to the Company, any of its Subsidiaries, the Asset Management Company, any of their respective Affiliates or any of their business reputations; (F) your violation of a fiduciary duty of loyalty to the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates that causes material harm to the Company, any of its Subsidiaries, the Asset Management Company, any of their respective Affiliates or any of their business reputations;
|
2)
|
“Disability” means: (i) if at the time of termination you are party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a physical or mental impairment which, as reasonably determined by the Committee, renders you unable to perform the essential functions of your employment with your employer, even with reasonable accommodation that does not impose an undue hardship on your employer, for more than 90 days in any 180-day period, unless a longer period is required by federal or state law, in which case that longer period would apply.
|
3)
|
“Good Reason” means: (i) if at the time of termination you are a party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a Termination of Relationship by you following: (A) a reduction of greater than 10% in your annual base salary or bonus potential under any bonus plan maintained by the Asset Management Company (if you are employed by the Asset Management Company), the Company or any of its Subsidiaries that employs you (but not including any diminution related to a broader compensation reduction that is not limited to any particular employee or executive); or (B) any material adverse change in your title, authority, duties, or responsibilities or the assignment to you of any duties or responsibilities inconsistent in any material respect with those customarily associated with your position; provided, however, that none of the events described in the foregoing clauses (A) and (B) shall constitute Good Reason unless you shall have notified the Company in writing describing the events which constitute Good Reason within 45 days after the occurrence of such events and then only if the relevant employer shall have failed to cure such events within 60 days after the Company’s receipt of such written notice.
|
Option:
|
You have been awarded an Option to purchase from the Company [Number of Awards Granted] Class A common shares, par value $0.001 per share (the “Common Shares”), subject to adjustment as provided in Section 4.2 of the Agreement.
|
Option Date:
|
[Grant Date]
|
Vesting Inception Date:
|
January 1 of the year of grant
|
Exercise Price:
|
$[Grant Date FMV] per share, subject to adjustment as provided in Section 4.2 of the Agreement.
|
Vesting Schedule:
|
Except as otherwise provided in the Plan, the Agreement or any other agreement between you and the Company or any of its Subsidiaries, the Option shall vest and become exercisable on (i) the one-year anniversary of the Vesting Inception Date with respect to one-third of the number of shares subject thereto on the Option Date, (ii) on the two-year anniversary of the Vesting Inception Date with respect to an additional one-third of the number of shares subject thereto on the Option Date and (iii) on the three-year anniversary of the Vesting Inception Date with respect to the remaining one-third of the number of shares subject thereto on the Option Date, in each case, provided you have not experienced a Termination of Relationship prior to such date.
|
Expiration Date:
|
Except to the extent earlier terminated pursuant to Section 2.2 of the Agreement or earlier exercised pursuant to Section 2.3 of the Agreement, the Option shall terminate at 5:00 p.m., U.S. Central time, on the ten-year anniversary of the Option Date.
|
Shares Subject to Award:
|
[Number of Awards Granted] Class A common shares, par value $0.001 per share, of the Company, which are subject to the terms and conditions of the Plan and this Agreement (the “Restricted Shares”). You agree to allow the Company to deduct the Purchase Price from any amount then or thereafter payable by the Company to you, as a condition to receipt of the Restricted Shares. The “Purchase Price” is $0.001 per Restricted Share. The actual number of Restricted Shares that shall vest shall be based on the attainment of the applicable Performance Measures and your continued employment through the Vesting Date, each as described below.
|
If the Company achieves the following level of performance:
|
Then, you will become vested in the following percentage of the Target Restricted Shares:
|
Minimum
|
50%
|
Target
|
100%
|
Maximum
|
150%
|
Grant Date:
|
[Grant Date]
|
Performance Period:
|
The three (3) consecutive fiscal years of the Company beginning on January 1, 20[__].
|
Performance Measures:
|
With respect to 33.33% of the Restricted Shares, the Performance Measure will be based on the average Adjusted Operating Return on Equity for the Performance Period (calculated as the simple average of the Adjusted Operating Return on Equity for each fiscal year of the Company included in the Performance Period) (the “ROE Performance Measure”). With respect to another 33.33% of the Restricted Shares, the Performance Measure will be based on the cumulative Adjusted Operating Income over the Performance Period (the “Operating Income Performance Measure”). With respect to the final 33.34% of the Restricted Shares, the Performance Measure will be based on the Adjusted Book Value Per Share as of the end of the Performance Period (the “Adjusted Book Value Performance Measure”).
|
Vesting Conditions:
|
Except as otherwise provided in the Plan, the Agreement or any other agreement between you and the Company or any of its Subsidiaries, the number of Restricted Shares shall vest, if at all, on the February 28th immediately following the end of the Performance Period (the “Vesting Date”), based on the attainment of the Performance Measures during the Performance Period as set forth below, and provided that you have not had a Termination of Relationship prior to the Vesting Date. The number of Restricted Shares that vest upon the attainment of Performance Measures between Minimum, Target and Maximum performance levels shall be determined by interpolation between the applicable performance levels.
|
Applicable Performance Measures
|
If the Company attains the following level of performance,
|
Then, you will become vested in the following percentage of Target Restricted Shares subject to the applicable Performance Measure
|
With respect to the 33.33% of the Restricted Shares subject to the ROE Performance Measure
|
Minimum of [___]%
|
50%
|
Target of [___]%
|
100%
|
|
Maximum of [___]%
|
150%
|
|
|
||
With respect to the 33.33% of the Restricted Shares subject to the Operating Income Performance Measure
|
Minimum of $[___]
|
50%
|
Target of $[___]
|
100%
|
|
Maximum of $[___]
|
150%
|
|
|
||
With respect to the 33.34% of the Restricted Shares subject to the Adjusted Book Value Per Share Performance Measure
|
Minimum of $[___]
|
50%
|
Target of $[___]
|
100%
|
|
Maximum of $[___]
|
150%
|
1)
|
Death or Disability. If your Termination of Relationship is due to your death or Disability (as defined below), the Award shall become immediately and fully vested, at the target level of performance, as of the effective date of such Termination of Relationship with respect to the Restricted Shares; provided, however, if you experience a Termination of Relationship due to death or Disability following the conclusion of the Performance Period but prior to the Vesting Date, the Award shall become vested based on the actual level of performance measured through the end of the Performance Period, as calculated above;
|
2)
|
Retirement. If your Termination of Relationship is due to your Retirement (as defined below), the Performance Period shall continue through the last day thereof and you shall be eligible for a prorated Award based on actual performance as set forth in the table above and shall be prorated based on the number of days that have elapsed between the first day of the Performance Period and the date of your Termination of Relationship relative to the total number of days in the Performance Period; and
|
3)
|
Change in Control. If your Termination of Relationship occurs within eighteen (18) months following a Change in Control and is due to (i) an involuntary termination by the Company without Cause (as defined below) or (ii) a resignation by you for Good Reason (as defined below), the Award shall become vested, at the target level of performance, as of the effective date
|
Definitions:
|
For purposes of this Agreement, the following definitions shall apply:
|
1)
|
“Cause” means: (i) if at the time of termination you are a party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a Termination of Relationship by the Company, any of its Subsidiaries or the Asset Management Company based on (A) your commission of a felony or a crime of moral turpitude (under the laws of the United States or any relevant state, or a similar crime or offense under the applicable laws of any relevant foreign jurisdiction); (B) your commission of a willful and material act of dishonesty involving the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates; (C) your material non-curable breach of the your obligations under the Plan, this Agreement or any other agreement entered into between you and the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates; (D) your breach of the Company’s policies or procedures (or the policies or procedures of any of its Subsidiaries, the Asset Management Company or any of the Company’s or their respective Affiliates which are applicable) that causes material harm to the Company, any of its Subsidiaries, the Asset Management Company, any of their respective Affiliates or any of their business reputations; (E) your willful misconduct or gross negligence which causes material harm to the Company, any of its Subsidiaries, the Asset Management Company, any of their respective Affiliates or any of their business reputations; (F) your violation of a fiduciary duty of loyalty to the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates that causes material harm to the Company, any of its Subsidiaries, the Asset Management Company, any of their respective Affiliates or any of their business reputations; (G) your knowing attempt to obstruct or knowing failure to cooperate with any investigation authorized by the Company, any of its Subsidiaries, the Asset Management Company, any of their respective Affiliates or any governmental or self-regulatory entity; (H) your disqualification or bar by any governmental or self-regulatory authority or the loss of any governmental or self-regulatory license that is reasonably necessary for you to perform your duties to the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates; (I) any directive made by any governmental or self-regulatory authority to terminate your services; or (J) your failure to cure a material breach of your obligations under the Plan, this Agreement or any other agreement entered into between you and the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates within 30 days after written notice of such breach. For the avoidance of doubt, the termination of your service with the Company, any of its Subsidiaries, the Asset Management Company or any of their respective Affiliates for Cause shall constitute Cause under this Agreement.
|
2)
|
“Disability” means: (i) if at the time of termination you are party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a physical or mental impairment which, as reasonably determined by the Committee, renders you unable to perform the essential functions of your employment with your employer, even with reasonable accommodation that does not impose an undue hardship on your employer, for more than 90 days in any 180-day period, unless a longer period is required by federal or state law, in which case that longer period would apply.
|
3)
|
“Good Reason” means: (i) if at the time of termination you are a party to a written employment agreement with the Company, any of its Subsidiaries or the Asset Management Company which defines such term, the meaning given in such employment agreement; and (ii) in all other cases, a Termination of Relationship by you following: (A) a reduction of greater than 10% in your annual base salary or bonus potential under any bonus plan maintained by the Asset Management Company (if you are employed by the Asset Management Company), the Company or any of its Subsidiaries that employs you (but not including any diminution related to a broader compensation reduction that is not limited to any particular employee or executive); or (B) any material adverse change in your title, authority, duties, or responsibilities or the assignment to you of any duties or responsibilities inconsistent in any material respect with those customarily
|
4)
|
“Retirement” means: a Termination of Relationship other than for Cause on or after your attainment of age 60 with at least five (5) consecutive years of employment or service with the Company or its affiliates immediately prior to your Retirement.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Athene Holding Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: August 5, 2019
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/s/ James R. Belardi
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James R. Belardi
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Chairman, Chief Executive Officer and Chief Investment Officer
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(principal executive officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Athene Holding Ltd.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: August 5, 2019
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/s/ Martin P. Klein
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Martin P. Klein
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Executive Vice President and Chief Financial Officer
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(principal financial officer)
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Date: August 5, 2019
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/s/ James R. Belardi
|
|
James R. Belardi
|
|
Chairman, Chief Executive Officer and Chief Investment Officer
|
|
(principal executive officer)
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|
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Date: August 5, 2019
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/s/ Martin P. Klein
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|
Martin P. Klein
|
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Executive Vice President and Chief Financial Officer
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(principal financial officer)
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